Business Loan Alternatives : Eliminating the Curiosity Gap On Alternative Sources Of Financing in Canada

What Scares You About Alternative Financing ?


OVERVIEW – Information on alternative sources of financing in Canada . Business loan finance can be achieved via a variety of different methods of asset monetization. The non bank alternative is gaining in popularity in Canada and here is why

Alternative sources of financing in Canada
seems to sometimes conjure up images of the unknown to Canadian business owners/financial managers. Is there anything to really be afraid of when considering this method of business loan finance? Hardly. Let's dig in.


The ongoing struggle for businesses in the small and mid market size to secure financing for their firms is leaving many more options to explore these days. It's the rise of alternate forms of financing as benchmarked to traditional Canadian chartered bank financing.

One kind of hybrid example is always worth exploring - it’s alternative finance but offered by the banks. We're referring to the Govt guaranteed business loan program, which offers term loans to borrowers who otherwise cannot access a loan based on bank traditional criteria. Well worth examining.

Alternative lenders are essentially commercial finance firms that are not funded like our banks, i.e. deposits. They are therefore ' unregulated' and operate under their own risk and lending models. More often than not these firms specialize in offering financing for certain specific types of loans or working capital solutions.

Here is a list of various forms of alternate finance:

A/R Receivable Financing

Inventory Finance

SR&ED Tax Credit Financing

Working Capital Loans

Equipment financing - Sale leaseback

Non bank Asset based business lines of credit

Sales/Royalty financing

Purchase Order Financing


All of the above solutions offer tremendous flexibility in how funding can be derived. Naturally that flexibility will almost always come with higher finance costs Because lending standards are less restrictive than the banks it allows your firm to access the finance it needs.

Really the best way to look at these forms of financing is to consider the fact that they are heavily ' asset ' based, and much lighter on things such as covenants and other restrictions. Traditional lending has almost always focused on pure cash flow generation.

For firms that had bank financing but suddenly find themselves in some form of distress or business challenge the alternative finance vehicle is a tremendous way to refinance your business when a work out with the bank cannot be established.

One key factor to assess when you’re e considering business loan finance of an alternate nature is to ensure you understand any reporting requirements. Essentially that reporting becomes the ' communication vehicle ' between yourself and the lender. In many cases that reporting can also work positively in that in can help identify additional or other types of financing you might need. Being ' self aware ‘in your overall financial condition is important, and a disciplined reporting system helps that cause.

In summary , ensure you are ' self aware ' of your businesses overall financial health , and if you're looking to explore alternative sources of financing seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success
who can assist you in eliminating the curiosity gap in choices .


Stan Prokop - 7 Park Avenue Financial :
http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :


7 PARK AVENUE FINANCIAL = CANADIAN ALTERNATIVE FINANCING EXPERTISE









Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop

Account Receivable Cash Flow : Visualizing Cash Flow Via A Receivable Financing Solution

Is Receivable Financing and Business Cash Flow All That Important?

OVERVIEW – Information on the cost of Not utilizing effective receivable financing for Canadian business. An account receivable cash flow is essential to the patients health!

Receivable financing and the management of that asset is a key source of business success. A solid account receivable cash flow strategy allows the business owner to actually ' visualize’ success. What options are available to owners /business managers and how to external methods of financing you A/R work? Let's dig in.


It's very safe to say that nothing should ever be taken for granted when it comes to financing your business - especially for those firms in the small to mid market (SME) commercial area. Knowing the criteria that is set by banks or other commercial lenders is key.

Some of those factors include:

The amount of equity or investment you have in your business

Industry risk issues

The ability to generate profits

Management experience

A solid business plan or at a minimum a reasonable and realistic cash flow forecast

Again, very safe to say that if business assets/personal collateral don't meet minimum requirements or if the sales projections are too unrealistic we can only assume financing will be very difficult to achieve .

Understanding the relationships in your numbers is key - This can be done easily without getting to technical. Key areas to focus on are debt to equity, working capital and cash flow ratios, and asset turnover relationships such as collections and inventory turns.


How does a solid receivable financing strategy help ensure cash flow then? For a starter it provides maximum flexibility around how you run and grow your business. As businesses grow they are, whether they like it or not, forced to invest more funds A/R. . . When managed properly your receivables often become your largest source of working capital.

The ' battlefield'

for working capital revolves around your payment terms and the ability of your business to manage those terms while at the same time extending credit and growing sales. What many business owners don't realize is that carrying A/R too long will over time diminish return on equity. The key here is your ability to collect, or finance a receivable and then reinvest it in the business.






When you finance your receivables those ' numbers relationships all of a sudden make sense: Your cash conversion cycle comes down, your days sales outstanding improve, and new found cash begins earning more profits

The key to understanding the costs and benefits of an A/R finance solutions revolves around understanding that a solid facility no longer limits your firm’s ability to grow.

Receivable financing comes in the form of bank facilities or commercial non bank facilities. When bank financing can't be achieved our recommendations is a CONFIDENTIAL RECEIVABLE FINANCING facility that allows you to bill and collect and finance your own receivables without any notice to customers, suppliers, competitors, etc.

If you're visualizing ' cash flow ' seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with your needs.



Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :


7 PARK AVENUE FINANCIAL = CANADIAN RECEIVABLE FINANCING EXPERTISE




Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience

Stan Prokop

Business Credit Line Rebirth Via An ABL Asset Based Lender

Is A Business Credit Line Your Brewing Problem ?

OVERVIEW – Information on an alternative business credit line in Canada . The ABL facility, as offered by the asset based lender provides high liquidity and can easily be compared to a Canadian chartered bank facility in terms of cost, more borrowing power, and reporting

The business credit line in Canada
has gone through a bit or transition over the last number of years - That transition comes via the Asset Based Lending (‘ ABL ' ) facility via the Asset Based lender . Let's examine why this ' rebirth ' of a traditional revolving credit facility (most commonly offered by banks) has taken Canada by somewhat of a storm. Let's dig in.

When it comes to spotting warning signs in a businesses financial situation many circumstance involves the business credit line. It quite simple really - your business either has no credit lines in place an needs working capital, or in some cases you have traditional bank financing but it cannot satisfy the needs for growth and operations . A final common scenario is the profile of firms that have had bank financing but for some reason are now self financing or , even worse, in ' special loans ' with an exit needed as quickly as possible in order to save the company .

When you're in a position to access Canadian chartered bank financing you're clearly part of the ' cash flow crowd'. ABL, the alternative borrowing scenario turns all that upside down - the total focus is on ... Assets. Almost always these are receivables, inventory, equipment, and real estate if that’s part of the mix.

That's the real trade off here - when you consider an asset based revolving facility you're no longer dependant in any big way on leverage, ratios, and covenants. Those almost always disappear in a true ABL facility.

The trade offs between bank financing and a non bank asset based line of credit are very clear. The extremes in focus between the two don't make the decision process all that difficult. Bank credit facilities are monitored much less , so while you can almost expect a major increase in borrowing power when it comes to an asset based lender the one thing you can also expect is more reporting requirements .

With respect to that increased borrowing power it's achieved simply through more generous margining on A/R and inventory. AR is typically 90% and inventory ranges from 25-75% - dependent on the liquidation value and turnover history of your firms inventory.

Also, for very large corporations the actual cost of an ABL credit line is equal to or even better than bank rates. However for the thousands of small to mid size borrowers the increased borrowing power that come with an asset based credit line will almost always mean higher borrowing costs.

Top experts in corporate finance are quickly realizing the true value of the asset based credit line. It is also used in a number of scenarios to facilitate purchase and takeover of a business.

Is the business credit line challenge ‘a brewing ' problem for your business? If you're looking for the know how, experience and knowledge of your cash flow needs seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success
who can ensure proper financing is put in place to accommodate your needs.


Stan Prokop - 7 Park Avenue Financial :
http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS CREDIT LINE EXPERTISE


Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop

Sred Tax Credit Incentives : The Unstoppable Rise of The ( SR&ED ) SR ED Loan In Canada

SR&ED Loan Crisis Hotline : Press #1 For SR&ED Tax Credit R&D Financing Now

OVERVIEW – Information on financing sred tax incentives in Canada . A SR ED loan for your r&d claim simply accelerates the cash flow you’re looking for in your SR&ED refundable credit

Sred tax credit incentives in Canada often have many business owners/financial managers feeling like they wish they had access to a ' hotline' of sorts, if only for the reason of knowing when they will receive their refund and what sort of timelines are involved . Let's examine why SR&ED financing has increased, providing an instant solution to your hotline call! Let's dig in.


The thousands of firms that file ' SHRED’ claims annually are hardly ' complainers’. They no doubt appreciate any legitimate Canadian govt program that proves billions of dollars annually every year, allowing business to recoup valuable dollars spent on research and development of products and processes. And your firm ability to maximize a refund simply allows to you accelerate next years spend to maintain your competitive stance.

At the point that any business owners conjures up the idea determining when the SR ED claim will be funded a lot of the hard work has of course been done . As a very general rule most firms recoup in the area of 35% of their R&D spend. That sred claim becomes a ' refundable tax credit' once you file your annual financial statements. The question of whether the amount of work required to file a claim is worth it is often debated. We'll raise two points on the issue -

- Among the 3000-4000 firms annually that file there are no doubt some of your competitors

- The actual claim itself for the vast majority of the program is prepared by a third party consultant. These ' SRED CONSULTANTS' have geared their industry towards a ' no claim / no charge' business model. So while they take a percentage of the final refund (this has come down dramatically in the last few years) your firm has no financial risk. And naturally any firm that has filed in the past successfully builds up a track record with both CRA and the consultants themselves.

The govt has done their share of streamlining things over the last few years. While some expenses claimed have in fact been removed ( capital expenditures relating to the r and d for example ), the whole application process is now online, forcing SR&ED consultants to be very precise with the limited amount of info the provide to back up and document your claim.

As we've noted, the solution to eliminating all the waiting in your refund lies in SR ED Loan financing. This financing is among the most flexible in Canada. While the main collateral for your loan is simple the proceeds of your refund, the loan structure itself is very appealing.

SRED Finance loans are structured as ' bridge loans’. You receive approximately 70%of the full amount of your combined fed/prov claim as an immediate advance. By the way that advance can be accomplished prior to actually filing your claim as long as a basic SRED loan application is submitted. The balance of your refund, i.e. the 30% is returned to you when the govt processes your claim - less financing costs. The bottom line - no monthly payments!

Many clients often ask us how they handle the proceeds of the claim - the answer is that the funds can be used for any business purpose - i.e. working capital/cash flow needs, re-starting next years research, reducing payables, etc.

To eliminate your need to call a SR ED hotline consider financing your SR&ED tax credit incentives - seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with your needs . Become part of the ' unstoppable rise ' of SRED finance in Canada.




Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :


7 PARK AVENUE FINANCIAL = CANADIAN SR&ED LOAN FINANCE EXPERTISE






Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop

Business Capital : You’re In The Right Place For Loan Financing And Other Corporate Credit Needs

Looking to Fast Forward To Successful Business Financing ?

OVERVIEW – Information on accessing business capital successfully in Canada . Whether its loan financing or asset monetization , accessing the right solution is knowing your alternatives and what’s required to move forward

Business capital . It's almost always time to step outside when it comes to loan financing and other debt and cash flow facilities available to Canadian business. And ' step outside ‘ ? We of course referring to ' External Financing '! Let's dig in.

While it's certainly possible to be 100% self financing (many are but not by choice!) the reality is that any business with growth plans or asset needs will at some time require ongoing external financing. In the case of those businesses having ongoing losses some level of capital is needed to replace those funds.

How should the business owner/financial manager look at external financing? It simply a three pronged choice:

Equity Capital

Debt

Asset Monetization

We've noted in the past that many firms spend just a little too much time chasing down equity given that only the smallest amount of firms even qualify for consideration, let alone approval, for private equity, VC money, etc . Be realistic on your chances and focus on achievable.

Earlier stage firms are often in the most challenging area - needing loan and asset financing the most but being in the ' least able to qualify ' category. However, many alternative forms of financing can address business capital needs at this stage - they include:

P O / Contract Financing

Receivable Financing

Equipment Finance - (Lease financing can address all forms of credit quality)

Non bank asset based lending facilities

Sale Leasebacks

Tax Credit Refund Financing - Sr&Ed loans

Govt Guaranteed Small Business Loans



Not being able to access the type and amount of business capital the firm needs forces many owners to be in the unfortunate situation of mixing business and personal credit - i.e. credit card debt, collateral home mortgages, collapsing savings.

Top experts tell us that 90% of all business loans made to firms in the SME COMMERCIAL area are made by banks and commercial finance companies. That's where the business owner should be focusing. The other 10% of loans and financing is provided by credit unions, government programmes, and credit card borrowing.

To best access the right amount of loan / asset financing you need it's critical to have a clear loan package available. That includes potentially (but not always) a business plan we well as financial statements, cash flow projection. That cash flow by the way is probably most required and least provided by most!

If you're looking to a good ' fast forward ' towards successful business capital and loan financing seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success .
At that point you're in the right place!


Stan Prokop - 7 Park Avenue Financial :
http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS CAPITAL & LOAN FINANCING EXPERTISE







Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop

Takeover Financing In Canada : Grown Up Business Acquisitions Solutions

Financing Your Takeover In The SME Commercial Finance Sector In Canada : Valuation Financing Done Right



OVERVIEW – Information on takeover financing in Canada . Business acquisitions finance in small to medium enterprise area comes with numerous obstacles that can be overcome with the right solutions

Takeover financing in Canada , when it comes to lower end of the corporate market still requires ' grown up ' finance similar to that used by the ' big boys ' .

What motivates the business owner/manager to consider business acquisitions and what challenges come from understanding how to finance fixed assets, receivables and inventory, and intangibles? Let's dig in.


The takeovers, mergers and acquisitions we read about daily are more often than not larger companies that in many cases are public. A very significant amount of information is available on these deals, so given the relatively easier way to value and finance those firms the questions becomes: How do you value and finance a private company in Canada?

Market expansion is really the ' catch all ' reason most use for contemplating a takeover. The ' subset ‘reasons include:

Adding new products
Maximizing economies of scale
Reduce competition

In many takeover cases certain assets can be sold to help finance the acquisition. On an ongoing basis the acquiring firm will always try to focus on speeding up the deal and not incurring unneeded expenses.

At the heart of the takeover need is the ability to assess value of assets, as well as cash flow and profit analysis.

The whole area of “Asset Valuation ' comes with the need to understand that both fixed, current, and goodwill assets must be viewed in different ways. Fixed assets represent earning power so the often large differences in value relative to book value, market value, replacement cost, etc must be thoroughly assessed.

Receivables and Inventory represent operating cash flow and should be analyzed in the context of day’s sales outstanding and inventory turns respectively. If these two assets are not ‘turning ' properly a lot more time should be spent in analyzing why.

Ways to finance your takeover? They include various types of asset based lending, commercial bank loans, sale leaseback strategies, unsecured cash flow loans, as well as the Govt Small Business loan for small transactions. The ability to minimize debt and arrange the right type of asset financing for short and long term needs is key.


Growing organically is of course great - growing via an acquisition or merger is great also - and often quicker! SME Commercial firms in Canada are probably in the thousands, with many of those firms have underutilized and under managed assets of all types - equipment, real estate, etc. If you're looking to investigate and execute on takeover financing to expand your business seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with ' grown up ' finance solutions.

Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS ACQUISTIONS FINANCING EXPERTISE





Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop

Equipment Finance In Canada : Remain In Control

A 2-FER! You May Have Had This Wrong On Equipment Finance Until Now : Plus More Benefits You Can Capitalize On

OVERVIEW – Information on equipment finance in Canada . Maximize your use of leasing assets with this information , including misinformation clarified

Equipment financing in Canada , similar to other industries, clearly has its own ' lingo ‘. Knowing some of those terms maximizes your ability to increases benefits of equipt leasing through selection and negotiation of leases that make sense for your firm. It's your version of a finance gravy train!

Let's dig in.

Most people agree the economy is firing on all, (if not most!) cylinders. Lower rates and the needs to acquire or upgrade assets almost always make leasing the # 1 choice in asset financing . That investment can be a huge cash flow drain on your financials and asset financing address that cash outflow. Top experts tell us that 7 out of 10 businesses will have some type of lease financing need in the coming year.

The ability of owners to expand their businesses is key to remaining competitive - Certain asset categories are always in demand relative to financing needs - they include office technologies, plant machinery, telecom equipment and transportation ' rolling stock ‘. The good news is that really almost any asset your business needs is financeable.

One of the ways that many firms in Canada utilize leasing is simply as an alternative source of capital - It's all about not putting all your ' credit eggs' in one basket. While many Canadian banks do offer asset leasing it should be clear to owners/managers that any borrowing facility within a bank will be part of your total credit line with the bank. In fact the majority of borrowers prefer to use our chartered banks for their operating facilities and other misc services.

Where can the busines owner ' trip up ' on when it comes to improperly assessing or understanding your finance options. By the way, we're the first to acknowledge that loans, bridge loans, sale leasebacks, and other forms of venture debt can also be used to acquire assets.

Focusing in on the type of lease you need will save your firm a lot of time and potential financial loss. The bottom line is that you have two choices - a lease to own, or a lease to use option. In industry terms they are known as ‘capital ‘and ' operating’ leases respectively. Understanding issues such as advance payments, how lease companies make money (cash flow timing, interest rate, residual value of asset) and accounting issues around acquiring assets are all important.

If you want to make sure you’re both exploring and maximizing asset finance needs properly seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with your equipment leasing needs.










Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS EQUIPMENT FINANCE EXPERTISE





Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '