Common Sense Tips on Buying a Business and Selling a Business

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Information on buying a business in Canada . Acquisition financing is a large part of a successful purchase of a company . Ensuring the right valuation and financing for buyout funding is critical - here's why !

We are often asked by clients for assistance in validating the price they are going to pay to purchase a small / medium enterprise. Business people should of course rely on their trusted advisors for professional help in that area, but this article will hopefully give them insight and advice into their challenge.

We also encourage our clients to talk to either their own peers, or in some cases our clients with respect to others experience in this area. This may help alleviate some of the concern around those business people who are ' non - financial ' in background and somewhat overwhelmed by discussion of terms such as EBITDA, intangible assets, capitalization and discount rates, etc!

We would point out that as technically overwhelming as some of those issues might be, there is even a whole additional layer of complexity around longer term issues down the road. These would include:

- Owner and management compensation

- insurance planning

- estate planning

- exit strategy

With reference to our last point on ' exit strategy ' imagine the look on some purchasors faces when they have not even completed the deal and are encourage to talk about an ' exit strategy '!

At the heart of the matter around the final price paid for a business is the concept that both parties feel they have reached a fair deal. As we all know the buyers and sellers perception of the same deal might vary greatly. Ultimately all the technical jargon around buying a business comes down to a term such as 'reasonable market value'. As common sense as this may sound it also has its challenges since is it only a hypothetical value based on all the difference financial elements related to the purchase of a business.

The most commonly used valuation of a business is know as ' value of future earnings '.. Accountants and financial advisors often project earnings out as far as ten years and try and then place some value and normalcy around those future profits. Our on piece of advice in this area is simply that owners should not focus solely on future earnings potential, there are other factors to be taken into consideration.

Some of those other factors of course include the true value of the current business assets, such as equipment, real estate, fixtures and leaseholds, etc. We can only say that as critical as those assets are they must be supported by the company's ability to generate the cash flow to support those assets and grow the business. Buyers and sellers frequently disagree on the total purchase price, with all sorts of psychology kicking in around prices being set artificially high for negotiations purposes, the buyers focus on a low- ball offer, etc. We would also point out the buy/sell challenge is accentuated when it relates to a ' service' firm as opposed to a product firm.

Many experts agree that ultimately the valuation of the business was so far out of whack that this clouded any possible attempts to negotiate a fair price for buyer and seller.

In summary, buying or selling a small to medium enterprise has its challenges. If owners are aware of the key basics around the technical aspects of the matter they can successfully utilize third party assistance ( accountant, lawyer, trusted financial advisor ) to consummate a successful transaction. Buyers and sellers must focus on tangible issues as well as all the intangibles that come into play in order to assist in a proper, ( and a successful ) buy or sell.


Stan Prokop - founder of 7 Park Avenue Financial –

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing. Info & Contact Details :
http://www.7parkavenuefinancial.com




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 '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.


Stan Prokop


Article Source: http://EzineArticles.com/3459268

Business Financing In Canada : Tips To Secure Loans And Other Cash Flow & Asset Based Lending Solutions

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Canadian Business Financing - No Jaw Dropping Solutions - Just Common Sense Real World Finance Results Your Firm Can Achieve

Information on business financing in Canada . Solutions such as traditional cash flow and term loans can be complemented with alternative asset based lending facilities that provide your firm with the capital and funding it needs

Business financing is a challenge anytime, from the entrepreneur's dream of a small start up to major corporate needs. The current economic downturn makes the above noted challenge even more daunting. Whether a firm is established and doing well, or experiencing financial distress or working capital or growth needs - the challenge remains the same. Let's dig in.


What is the 'challenge'? Simply speaking it is identifying the proper financing solution , determining whether the solutions is a short term fix or a long term solution , and then, most importantly executing with experience the proper financing solution.
The business owner must be able to properly position the current shortcoming as both an opportunity and risk appropriate.
Proper financing begins with the owners and his advisors ability to identify the current financing challenge. The owner and advisors must provide a compelling reason for the lender to assist in an appropriate financial solution.


Who are these 'advisors'? Typically they are internal financial staff, i.e. CFO/Controller, etc, or alternately third part accountants and experienced financial intermediaries with a track record of success.


Business Financing is complex - However at the end of the day the financing solutions are actually very well defined - They are as follows:


Leases and Term Loans

Working Capital Loans

Asset Based Lines of Credit

Bank credit lines

Non bank credit lines

Receivables purchasing

Inventory Lines of Credit

Purchase Order Financing

Commercial mortgages

Tax Credit financing


The business owner, and their advisor, should have a very clear focus - That focus is as follows: What is the best financing solution on either a short term or an intermediate/long term basis for the business. Does the business owner or executive clearly understand all the financial options available - what are the criteria for these different options - what are the rates/terms and structures for each option. 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 business finance needs.



Stan Prokop - founder of 7 Park Avenue Financial –

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing. Info & Contact Details :

http://www.7parkavenuefinancial.com


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 '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.



Stan Prokop


Article Source: http://EzineArticles.com/3000189

Purchase Order Financing Canada : A Great Canadian Business Alternative Finance Solution To The Working Capital Challenge

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P O / Contract Financing In Canada – Use This Asset Based Lending Solution As Directed!

OVERVIEW - Information on purchase order financing in Canada. P O funding is a solid alternative business finance solution for working capital need . Here’s how your firm can access this alternative finance solution to the cash flow challenge

Purchase Order financing, as well as inventory financing are two relatively new alternative financing solutions in the Canadian business environment. These two solutions provide additional flexibility when combined with traditional financing sources provided by your Canadian chartered bank or independent finance firm. Let’s dig in.

Traditional business financing in the context of working capital and cash flow revolves of course around the traditional current assets of receivable and inventory. Even if your firm is well financed and has a traditional bank line of operating credit you may have challenges in fulfilling large orders and contracts. This challenge becomes equally daunting when you don’t have traditional financing, so the ability to generate cash to fulfill larger orders and contracts becomes seemingly impossible.

Purchase order financing can provide you with the capital to fill those large orders and contracts, and, if properly put in place; can be very complimentary to your current financing.

As we have noted the concept of purchase order financing, aka ‘P.O. Financing ‘is a relatively speaking, new phenomenon in Canada.

So how does it work? Simply speaking financing is put in place to cover your material costs and direct labor costs, which are of course a significant part of your order or contract. We can safely say in many businesses that is 60-70% of the total order or contract based on most gross margins in any industry.

Your firm therefore has the working capital to finance your production .What’s left of course is essentially the profit on your P.O. or contract.

While it sounds relatively simply and easy we would point out some key critical issues that will allow the Canadian business owner and financial manager to determine if his or her firm qualifies for such financing. We can first of all say there has to be sufficient proof that your purchase order or contract is with a valid, credit worthy party. Naturally if there is any doubt that your order might not get paid, or that the customer is not credit worthy that precludes successful completion of any purchase order financing.

You should also not view the purchase order financing as a long term financing solution, it is not that. The funds are generally repaid immediately when you have completed your order / contract.

There are also some technical issues that need to be addressed if you have secured financing arrangements in place already. For example, if your firm has a bank line of credit they would be required to acknowledge the security that is taken in the Purchase order and resulting receivables that you create out of that order.

In our own experience Purchase order financing frankly works best when there is not a secured lender in place already, but that’s just our firm’s observation. Additionally on occasion certain other collateral or personal guarantees might be required. We would hasten to add that if you have already provided guarantees to the bank or other firms it would seem logical that you would provide them on the purchase order financing, which is somewhat of a riskier transaction for the lender.

Another very critical point is the whole issue of gross margin. The issues are that you need good gross margins to complete purchase order financing! A firm that is in low margin very commodity oriented business is not a strong candidate for P.O. Financing , because the combination of cost of goods, labor, overhead costs, and financing costs of the financing leave very little for the business owner . So categorically good gross margins make a much better P.O. Financing deal.

So why has this type of financing become popular – that’s fairly easy to understand. First of all the current Canadian business financing environment is challenging – therefore any alternative financing vehicle has a strong chance of being embraced and becoming more popular . After that it simply makes sense that p.o. financing can be very successful for your firm if it gives your company working capital you didn’t have, , it allows you to grow and profit at greater levels , and overall improves your competitive positioning within your industry .

We strongly recommend that if you consider Purchase order financing that you enlist the services of a trusted, credible and experienced Canadian business Financing Advisor with a track record of success
who can assist in maximizing your cash flow and working capital with this unique innovative type of financing.




Stan Prokop - founder of 7 Park Avenue Financial –

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing. Info & Contact Details :
http://www.7parkavenuefinancial.com

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 '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.


Stan Prokop

Can Business Application Software Be Financed ? Yes Software Leasing & Financing Exists !

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Did You Forget Business Software Applications Can Be Financed & Leased ?

 

Information on software leasing and financing in Canada. Business application software solutions can be easily financed as part of your overall technology finance strategy

Software Leasing and Finance ... Many businesses, both small and large do not realize that software can be leased or financed. Although software financing is unique in some manner, in general it has many similarities to equipment leasing.


It is also proper to ensure that right finance firm is utilized, as many lenders are somewhat risk averse to financing this asset. However, many others are looking for business in this area!
Contrary to popular opinion software as an asset in many cases has more value that a depreciating hard asset. It has also been confusing for lenders when it comes to the registration of collateral under Canadian PPSA (PERSONAL PROPERTY SECURITY ACT) legislation.


In its broadest term the financing or leasing of software that can't be transferred to another user. The business owner does also of course not own any development rights in the software. Software financing is treated as a financing mechanism, it is not a true lease per se.


Some additional key points around the technicality of software leasing/finance are as follows:
The right of a customer to use the software gives the company no right in the intellectual property surrounding the developers rights in the software code. The best example of this is when we look at our EXCEL spreadsheets that we use in finance and home matters. We use the software, but Microsoft of course owns it.


The problem in the past around the financing of software revolved around the fact that lenders did not know how to collateralize and register their security. Under current PPSA legislation intangibles and software can be collateralized. Therefore the software financing lender/lessor can be very confident that the software can be collateralized.


At the heart of the software financing issue is the true value of the software to the business owner. He runs his business on it, i.e CRM programs, office software, manufacturing software, etc. Software lease payments tend to be made since the asset is indispensable to the value and on going concern of the business. Unless companies are liquidated in total bankruptcy most lessors and finance firms recover fully on their software leasing - Source - Journal of Equipment Leasing

In many business bankruptcies the software lessor or lender is treated as a secured creditor.


Also key to the software financing issue is that many software firms offer maintenance, support, and updates around their product. This enhances the lenders asset as it is used for longer lengths of time, and often constantly upgraded. Quite frankly it becomes less obsolete than computer hardware!
Many software lessors and lenders also finance the service and maintenance contracts associated with their customers software acqusition.


We do acknowledge in this article that it is more difficult to finance customized software although it is possible based on the overall credit strength of the borrower. Many customized software deals are done with only investment grade borrowers where credit risk is minimal. Many smaller ticket lessors and lenders however do now lease software. In general these transactions are full payout capital leases.


In summary, software lease financing is available and should be considered by every business owner in the same context as a capital equipment finance transaction. The computer hardware industry has grown with leasing, and the software industry is doing that also. The same considerations an owner gives to lease vs buy apply to a software finance acquisition.


Stan Prokop - founder of 7 Park Avenue Financial –
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.

Info & Contact Details :

http://www.7parkavenuefinancial.com

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


Stan Prokop

Article Source: http://EzineArticles.com/3441338

Are SRED ( SR&ED ) Tax Credits Are Dead ? We Hope Not! SRED Financing For Your SR ED Credit Claims Is Alive & Well !

Sweating Bullets ? SRED Loans and Financing for SR&ED Claims – Financing Today For Your Filed or Unfiled Claim!

Information on SR&ED loans in Canada. SR ED Financing via a bridge loan for your refundable tax credit is a solid way to monetize your firms investment in R&D Capital

SRED Credits ? Sweating bullets is one of our favorite expressions for some serious worrying. That surely must be the case for thousands of Canadian firms and the industry consultants who file SRED (SR&ED) claims in Canada for their non refundable tax credit monies for their R&D processes.

We're not going to weigh in on whether this tax credit program is justified, not justified, or who screwed things up in the past , but we will say one thing - Your Sred financing is still alive and well! In fact in some ways it just got better, and we'll talk about that also.

Thousands of Canadian firms receive a total of billions of dollars every year from the Government of Canada for their research and development costs. A large portion of their total costs in several categories of R&D, i.e. labor, comes back to them in the form of a refundable cheque.

Naturally getting monies back for your SRED claim is a huge and positive issue for thousands and firms who are either start up, pre revenue, or who simply... you guessed it... need the cash. Many of our clients actually book the claim they file as a receivable, in effect non refundable monies coming back into their company .The claim is, of course, a combination of funds from both the federal and provincial government. Sred claims are separate from other grants and schemes such as IRAP, etc.

So, getting back to the one thing we want to emphasize today, and that’s ' cash flow '! Naturally it’s a free country and if you want to wait to get your funds back from the government by all means do that. But consider also that you have another option, which is to finance your claim. In Canada SRED claims of almost any size can be financed. While larger claims make more economic sense claims generally in the 80k and higher range certainly are financeable.

So how does the financing work? You should consider this as quite a ' normal ' business financing. (Is any business financing normal these days?!) . The basic application involves info on your firm such as your financial, projections, etc, info on the owners, and copies of the actual claim itself.

SRED claims have tended to be prepared by a group of people in Canada who term themselves SRED consultants. They work on either a contingency basis or a fee basis. We've been watching the SRED battle from a distance and some people are making the claim that the sred consultants themselves have become a part of the problem in the industry.

Let’s use 2 Billion dollars an example. If the federal government gave out 2 Billion dollars it’s the SRED consultants who worked on contingency that receive anywhere from 15- 30% of all these funds as fees. That makes a case for not a lot of value for the country from a pure R&D perspective. Anyway, we promised not to weigh in on that one, so we won’t.

What we are saying is that if your claim is properly prepared, by either yourself or a qualified sred consultant then it’s financeable.

SRED Financing claims are financed at, in general 70% loan to value. We spoke of new developments in the industry as far as financing the sred credit .The good news is that most claims are now financeable as your spend, prior to filing, This is called Accrual sred finance, and gives you cash flow reimbursement as you spend .

Is there a bottom line today? As always, there is. It’s simply that we kind of hope the sred program stays around for all those legitimate firms and consultants who see the true value of the program. And consider financing your tax credit for increased working capital and cash flow. Speak to a trusted, credible and experienced Canadian business financing advisor on Sred Tax Credit finance today.


Stan Prokop - founder of 7 Park Avenue Financial –

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing. Info & Contact Details :
http://www.7parkavenuefinancial.com

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 '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.


Stan Prokop

Business Finance Solutions In Canada : Cash Flow Financing for Working Capital Is Not Pay What You Want : Here's Why!

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The Magic Number ? What is the Right Amount of Capital For Your Business?

Information on cash flow financing solutions in Canada. Business finance success depends on the right amount of working capital to run and grow your business - here's your why and how !

Business Finance Challenges ? Every business, new or existing, is continually attempting to determine what the right mix of ' capital ' is for that particular business. New business owners, unfortunately, are often misguided by literature around ' low down payments ', or low owner equity injection.

The whole premise around the business dream is quite often pitched as putting the minimum amount down, or into the company, and thereby reaping large rewards on asset and profit appreciation in the firm. The arithmetic is appealing - the less you put in the greater will be your per centage appreciation or return on investment. Let's dig in!

Business owners either invest their own funds, or borrow from banks and other related finance firms. New business owners have additional challenges as traditionally the banks have not stepped up to the table to fund the small business environment. They of course prefer external collateral, which in most cases is unavailable, or based around the owners reluctance to pledge personal assets for a business venture.

So the crux of the matter is simple - how much to borrow, how much to put in or invest. Whats the right mix? Commonly this is known as the ' debt' or ' equity ' conundrum.

Bankers and financial personnel have addressed this business owner challenge in a number of ways. One common way is to simply compare the relationship, or ' ratio ' of debt to equity in any firm, either new or existing. If a firm has higher debt levels they are termed highly ' leveraged. Each business owner or corporation eventually determines the right mix of debt or equity. There are always extremes of course. Many large, successful, and well known corporations carry large amounts of debt but are still of course profitable and growing. Interest payments are tax deductible. On the other hand firms with little or no debt simply divide the profits up among the owners of the firm, as debt payments in their case are either non existent or nominal.

What is the right mix of total capital for the business. The answer is simply as follows: there is no right answer. Two companies or business owners can have completely different outlooks and philosophies of how to achieve the final company goals in revenues and profits. Since future results are never known it is incumbent on the business owner or their financial advisor to perform some level of proper analysis around the right ' operating leverage '., i.e. our main focus in this article: ' What is the right amount of equity and debt for my firm?'

No perfect calculation or debt to equity ratio exists. And lets be realistic, even a firm with no debt can fail if it loses market share or is in a failing industry.

There are however 4 ratios, we have called them ' relationships' calculating optimal leverage regarding debt and equity. They are as follows:

Debt/equity

Debt/total assets

Long term debt/total assets

Current assets/Current liabilities

By using the current actual numbers, and projecting what these ratios might look like in great, good, or bad times will assist any owner or financial manager in determine what the optimal relationship for debt and equity is in their firm.

In summary, any new, existing, or even public firm must continually weight the right amount of debt and equity in the company. More equity means less profits to be shared by more owners; more debt means that future alternatives have limitations and the firm can make less mistakes given its debt load. Careful analysis of the right mix of equity and debt capital is a must for all companies of any size. 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 the right business financing solution.



Stan Prokop - founder of 7 Park Avenue Financial –

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing. Info & Contact Details :
http://www.7parkavenuefinancial.com

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 '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.


Stan Prokop

Equipment Financing In Canada : Your Hot Tip On Leasing Assets & Winning Lease Finance Strategies

We’ve Hacked Into The Equipment Financing Tips & Strategies Database ! Take A Look

OVERVIEW - Information on equipment financing in Canada. Leasing strategies are explored and tips are provided on lease finance and asset acquisition solutions for Canadian business owners

Equipment Financing Problems? Canadian business owners and financial managers continue to view lease equipment financing as a solid alternative for equipment and asset acquisition in Canada. Let’s dig in.


Leasing and equipment financing have been key to Canadian business for well over 60 years, if not longer. It is simply the method of acquiring assets and paying for those assets over a period of time – A current popular ‘buzzword’ on leasing is ‘profiting through use of equipment ‘. As a general rule most business owners would like to use assets, not necessarily own them. That brings us to one last buzzword, which is ‘if it appreciates buy it, if it depreciates, lease it! Let’s dig in.


When we meet with business owners they often ask us for strategies and ‘how to ‘with respect to financing their assets. If the vendor or manufacturer you are working with does NOT offer financing then your job is to simply focus on obtaining the best price and delivery date for the asset you are acquiring.


We referenced above the manufacturer not offering financing - We categorically encourage any company to take advantage of vendor financing or manufacturer financing that is available, if it is available! Why is that? Manufacturers and vendors either set up captive finance companies, or work with others to implement financing of their products for some very specific reasons. Primarily the reason is that companies do not wish to lose sales and profits by not offering a financing option.


Also, when you lease through a manufacturer you are in effect under their control for a number of years with respect to their ability to offer service, upgrades, maintenance, etc. So the bottom line is that if you can take advantage of manufacturer financing, you should!


One of the only reasons you might not be able to take advantage of manufacturer financing is that your firm does not meet the financial and credit criteria of the vendor. In that case you simply need to work with a trusted, credible and experienced leasing advisor who can source the appropriate financing for the asset with a rate, term and structure that approximates your credit quality. In general we advise customers that when a vendor or manufacturer has a financing offering the credit criteria to qualify in general is quite high.


Because leasing in Canada has the potential to be viewed as complex we try and approach working with customer in a very consultative manner.
Why can Leasing in Canada be viewed as Complex? We are of the opinion that if a lease transaction is a good transaction it creates a win win environment for both your firm and the lease company. To do that various aspects of business need to be tabled - those aspects are:

Taxes

Accounting

Credit

Rate/Term/ and Structure of the lease itself

When your firm has properly addressed all of these issues at least in a very basic manner your business will have created a proper lease transaction. When all of the above issues are addressed then your firm is in a position to benefit from a lease financing scenario. The benefits of leasing are generally well known – they are:

Flexible and lower monthly payments -in cases where you utilize an operating lease these payments would be significantly lower than a term loan

Ability to upgrade and return equipment

Maintenance and service are many times included in a lease financing

Little or no cash down payment

Discussing these issues with out customers usually brings out the clear fact that not all the benefits of leasing in general apply to every firm. Quite frankly some are more important than others to each Canadian business.

In summary, when contemplating Canadian Equipment Financing work with atrusted, credible and experienced Canadian business Financing Advisor with a track record of success
.

Determine what your financing needs are and focus in on which benefits you need to maximize to make your financing work to optimal advantage . And then, as we said, you will ‘Profit through use, not ownership’!




Stan Prokop - founder of 7 Park Avenue Financial –

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing. Info & Contact Details :
http://www.7parkavenuefinancial.com

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 '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.


Stan Prokop