Business Finance In Canada : Can These Loans & Asset Financing Solutions Help & Save Your Company

Tweet




Is Your Firm Aware of these 5 ( Count ‘em) Types Of Business Financing Loans

OVERVIEW – Information on different types of loans and asset financing in Canada . Various business finance solutions offer different rates, terms and structures when it comes to growth and survival

Business finance loans in Canada require that the business owner/financial mgr has a clear understanding of the various types of asset financing that can bring survival and success to the company . In fact there are at least 5 types of business loans that can be tailored to company needs. Let's dig in.

At the heart of the matter is the requirement that you understand whether the solution will be asset based or cash flow based.

The revolving business credit line is a common solution for most firms. These loans follow the ongoing growth of assets in your business - primarily those ' current assets ' - i.e. receivables, inventories. When it comes to these lines of credit Canadian banks look to stability in the assets and the overall health of the company.

When your firm cannot fully demonstrate that capability the alternative option is an 'ABL ' - it's the same asset based credit line, but focuses instead very much on the asset quality and turnover. Inventory is often the ' elephant in the room ' in revolving credit lines, given its true turnover and quality.

An offshoot of asset based financing is ' A/R Financing ‘, generally called ' factoring'. Its total focus is on your receivables and is utilized by thousands of firms in Canada - large and small.

Receivables are typically generated from contracts and purchase orders your firm receives. Not all owners/mgrs know that the actual Purchase Order itself can be financed. In PO Financing the focus shifts to the quality of your customer and your company’s ability to fully satisfy and complete the order. While typically a more expensive form of financing it allows many businesses to take on business much larger than their current financial profile will allow.

Commercial mortgages and sale leasebacks on existing properties are viable ways to bring cash flow into your business. In acquiring a property your company turns rent checks into real equity, and sale leasebacks on property already owned can generate valuable working capital while retaining ownership in the building or property.

True cash flow loans can also enhance a company's liquidity and survival. They can be secured or unsecured but always come back to your firm’s ability to prove cash flow generation. Lenders call that ' cash flow coverage’. While in the past typically these loans have been for larger firms numerous short term working capital loans are available today that might fit your current cash flow conundrum.

When cash flow loans are ' unsecured' they are often called ' mezzanine ' solutions. While they come with covenant and ratio requirements if your company has a track record of success this type of financing will enhance growth and profitability.

That's the roundup. So would any of the following solutions help your company?

Business credit lines
Inventory Finance
Purchase Order financing
A/R finance
Cash flow loans

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with solutions that work.





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 Financing In Canada : The Not So Secret Truth On Interest Rates & Loans

Tweet





The Easy Way To Understand Business Finance Interest Rates In Canada

OVERVIEW – Information on business financing solutions in Canada and how interest rates are priced for loans by traditional and alternative lenders

Business Financing interest rates in Canada are often both misunderstood by business owners and financial managers. Is there an easy way to understand how finance solutions are priced? It's certainly not always only about ' fixed' or 'variable ' - that's for sure. We think so. Let's dig in.

Fundamentally it's all about your risk profile but don't forget also there are a variety of both traditional and alternative lenders in Canada- all of whom have different lending guidelines and structures.

Companies who qualify for bank financing in Canada (Spoiler alert - not everyone does!) tend to focus on amortized life of loans and the fixed/variable conundrum. The current low rate environment is a boon for those who qualify for bank financing.

Covenants, ratios and documentation required should always be a part of any commercial borrower’s consideration. Whether it's a bank or a commercial finance company we've certainly observed that the majority of borrowers tend to prefer to deal with a lender with a local presence.

Is size everything? Quite frankly when it come to loans or cash flow finance solutions ' size ' does play an important role in both rate and approval . Interest rate pricing will vary based on credit facility/loan size as well as the amount and type of debt you have on your balance sheet.

It's important to understand that different types of financing in Canada support different goals - that might be one of combinations of growth, working capital, expansion, and even acquisition. In many cases firms opt for a complete refinancing of existing facilities.

What then are different types of business financing that support your firm’s goals? Note also they all have different rates and structures. Solutions for your business include:

A/R Financing

Inventory loans

Sale Leasebacks

Equipment financing

SR&ED Tax credit financing

Commercial mortgages

Non bank asset based lines of credit

Bank credit lines / term loans

Royalty financing

Unsecured Cash flow loans

Your company’s track record and financials will play a key role in obtaining any commercial financing Note also that you firm might have a ' Senior lender ' - typically a bank or commercial finance company, as well as utilizing the financing services of other ' niche ' based lenders, some of whom are profiled above in our list .

While some may view alternative finance solutions as ' expensive' remember also that they will always be cheaper than surrendering equity ownership? Alternative financing solutions can help firms who are challenged or on the verge of distress, which obviously is a key factor in higher rates

It's always about the ' risk ' undertaken by our traditional or alternative lender. If you want to better understand the not so secret truth about business finance interest rates 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 best loans and finance solutions that match your firm’s 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


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 '

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 Capital Sources In Canada : Financing Your Cash Flow Needs

Tweet






The Boy Scouts Had It Right : BE PREPARED when it comes to Business Financing Needs

Information on business capital sources in Canada . Financing needs for Canadian companies come in the form of loans and cash flow solutions tailored to your needs

Businesses that are growing require sources of capital. The capital in a company of course comes from the owner or borrowed funds. Generally speaking business owners prefer to borrow rather than sell equity in the company, as that sale of equity dilutes the ownership position, i.e. they own less of the pie! New equity can come from friends and family, venture capital firms, and angel investors. These parties are looking for good management, integrity, owner financial stake, and growth potential.

However, in the current difficult financial environment many lenders are in fact insisting that business owners put more of their own money into the company. There is never an easy answer when it comes to the debt or equity question.

When businesses borrow funds there is a cost to that capital - as interest on that debt reduces over-all profits. New equity in the company of course does not reduce those earnings, however the profits are distributed more widely and the earnings are proportionately reduced.

Borrowing funds of course comes with risk, as those loans must be repaid. Business owners sometimes get caught in the trap of financing long term projects with short term money - they are therefore at the mercy of having to always roll over that debt, and potentially also seeing rates go up, sometimes dramatically. Also, a business can carry only so much debt, at which point cash flow becomes a potential problem if the company is over leveraged.

Currently rates are very low for businesses that have access to capital. Therefore in many cases it might make sense to lock into longer term loans in the current attractive rate environment.

When the business owner has made the decision to purse business loans the old Boy Scout model works very well - BE PREPARED ! Business owners that do their homework will usually be successful. Lets not forget the banks and finance firms are actually in business to loan funds. Naturally collateral, or additional collateral certainly improves the chances of debt financing success and loan approval.

Debt and equity financing as a sources of capital should be used for the right reasons - expansion, seasonality of business, increased inventory and working capital that will increase sales. Funds that need to address business inadequacies such as poor management, financial losses, falling sales, etc are very difficult to come by!

In summary, business owners should carefully consider the positive and negative effects of additional debt or equity capital. Once they have made an informed decision, either on their own or with a trusted business advisor they should consider the cost of that capital and how it is best achieved.


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

Government Loans In Canada : Govt Small Business Loan Eligibility Explained

Tweet





Is Your Business Eligible For A Govt Guaranteed Business Loan ? Answer : Probably

OVERVIEW – Information on government loans in Canada . The Govt Small Business Loan Program is a great financing solution for many companies. Eligibility is explored and clarified

The Govt Small Business Loan in Canada (by the way, it’s not that small) is misunderstood by many business people and entrepreneurs. Are government loans right for your business? Are you eligible? We're cutting through the chaff for those answers. Let's dig in.

Whether you are starting a business or already growing one the government loan program is potentially an excellent way to achieve that goal. Unlike traditional bank and alternative financing solutions they have the backstopping of Industry Canada, who sponsors and monitors the program.

The govt is a guarantor for the majority of your loan!

What is often misunderstood is that the Govt/Industry Canada is not involved in the daily admin or approval of individual loans. They have chartered our banks to run the program. Major misconception: Removed!

What does the business owner/entrepreneur need to consider when considering a Govt guaranteed small business loan. Issues to consider are:

What will the funds be used for (This program is only for equipment/fixed assets, leasehold improvements, and real estate)

The amount of the loan requirement - (The program was recently increased to 1 Million dollars!)

Term of the loan - (typical terms tend to be 3-5 years, occasionally 7 years for longer life assets)

Qualifications of the program - ( The owner must be able to commit to a partial equity/down payment position in the loan - Typically there is no other ' senior lender' in place - Owners must have decent personal credit and are often judged on their business experience and past business expertise)

Always remember that these loans are not the only alternative for business owners and financial mgrs to consider. Both traditional and alternative financing is available for many of your business needs - These other solutions include:

A/R Financing

Inventory loans

Non bank asset based lines of credit

Equipment financing

Sale leasebacks

Commercial mtge refinancing

SR&ED Tax Credit Loans

Royalty Finance

Unsecured cash flow loans

Working capital loans

The attraction of the Government guaranteed Small Business Loan is of course the guarantee of the govt on your loan. Without the aid of an advisor many business people find the process cumbersome with the expertise of an expert.

Both the attractive rates of the Small business loan program as well as the uses of funds make these loans very desirable. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your loan and cash flow 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

Working Capital Solutions & Factoring In Canada : Breaking the Receivable Finance Mystery !

Tweet





Our Canadian Business Financing 'Dear John ' Letter ? !

Information on working capital financing in Canada . Factoring and other related receivable finance solutions might just not be what you thought. Here's why !

Dear John - Working Capital Factoring is not what you thought it was, so I have heard. When I heard that you were disappointed in your working capital factoring facility I wanted to try and provide you with proper information and insights into what will in fact get you the cash flow and working capital that you anticipated with your new Canadian working capital factoring facility.

So John, what went wrong after we initially talked. You wanted business financing that would allow your business to grow in order to be more competitive in your business and grow those profits and sales.  Factoring seemed like a great solution, and you indicated it is not up to expectations.

Let's backtrack a bit. I think at the end of all this you will see a viable way to achieve ALL of your business financing goals!

Here's where we think things went wrong for your firm. You need to understand that factoring came to Canada from the U.S. and Europe. Their method of doing business there is somewhat more ' abrupt ' if we can use that word. As a result you entered into a U.S. model type of factoring with a branch of a U.S.  Factoring firm. Under that facility you do receive immediate cash for your receivables but you found out only later the factor firm more or less bill, collects, and follows up with your customer directly.  Many Canadian business owners don’t like that method of doing business.

So, John, the solution, and I remind you it’s the one we proposed, is a non-notification factor facility. Guess what, under this facility you of course still get same day cash, but you bill and collect your own receivables. Now we're talking, right!

You just achieved total financing control, you are getting all the cash flow you need, (i.e. not waiting 30-60, or 90 days) and you're able to re invest in more inventory, sales, etc.

John - you said that you were considering going back to your bank - just remember that all the financing that you need is, in our opinion, not going to be achieved by either a bank term loan, or a Canadian chartered bank line of credit. You will have a great interest rate , but you business will not have the cash flow and working capital that is required for your current sales and contracts .

So whats the bottom line John - it is as follows - work with a trusted, experienced , and knowledgeable business advisor - put a working capital factoring facility in place that runs the way you want it to, and then focus on your business growth and let the cash flow and working capital work for you to those goals . Investigate non notification factoring / Confidential Receivable Financing - It’s a Canadian alternative to everything you didn’t like about factoring, with all the benefits!



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 :

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

http://www.7parkavenuefinancial.com

Working Capital Financing In Canada : Avoiding Deathy By Cash Flow Finance & Business Loan Shortage !

Tweet








Working Capital & Cash Flow Financing - Whenever You Need It ? !

Information on working capital financing in Canada . The essence of cash flow finance success for your firm is the proper assessment of business loan and funding needs. Here's why and how !

Working Capital Financing remains a strong priority for Canadian business owners and financial managers that feel they are emerging from the recent recession and still require working capital to grow.

We continually between with Canadian business owners who want to understand their working capital options. Working capital facilities consist of either cash term loans, or receivable and inventory financing facilities.

As a Canadian business owner you need to understand the problem before you address the solution – that is why we constantly recommend that you sit down with a trusted and experience business financing advisor who has credibility in delivering financial solutions for your cash flow needs.

If working capita financing was a challenge prior to the recession you can pretty well multiply that challenge by 100% in the current business environment. There is not a day when we don’t see an article or a television story surrounding the challenges of Canadian business financing, or, on the unfortunate side, the demise of a great Canadian business due to the current difficult financial environment.

Business owners in Canada see themselves as unique of course, and quite frankly we would agree that every business has its own business model, operating cycle, cash conversion cycle, and unique financing needs.

When a business owner asks us for working capital advice we point out that working capital is both permanent in nature, and temporary. By permanent we mean cash working capital term loans – this loan injects long term working capital into your business, is paid off over several years, and is paid at usually a fixed rate on a monthly basis . We currently are aware of only two options for term working capital loans; both of these options are unsecured in nature. That is to say they rank behind any current secured or senior lenders you might have in place currently.

On a term working capital loan rates vary with respect to your overall credit quality and size of transaction. In some cases no owner guarantees are required, depending on the overall structure. One of these type of loans is in effect underwritten by a government crown corporation, which brings with it significant rate advantages, as the government entities price their transaction to current low yielding bond rates .

We hasten to say that if your firm is contemplating a fixed term working capital loan (also called a ‘mezz ‘loan or ‘cash flow loan ‘that you clearly have to be able to demonstrate that you can service the debt. Service the debt is finance lingo for ‘being able to make the payment! Typical criteria in approving such a facility are cash flow coverage, ebitda analysis, and on occasion the guarantee of shareholders.

In summary, working capital loans vary in nature, they can be fixed cash term loans, or also revolving facilities focusing on current asset collateral such as receivables and inventory.

The bottom line is of course to understand your needs before you search for a solution. If you don’t have full expertise in this area work with a trusted business financing advisor to ensure you can maximize on the best solution for your working capital 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

Unsecured Cash Flow Loans In Canada : Signs You Might Benefit From This Business Loan

Tweet







Your 'What Is'&' How To ' For Unsecured Cash Flow & Mezzanine Loans

OVERVIEW - Information on unsecured cash flow loans in Canada. Often called Mezzanine financing, this type of business loan can help many companies grow and prosper

Unsecured cash flow loans are an appealing segment of business financing in Canada. It's this type of business loan that can allow a company to grow when traditional term loans don't make sense from both your perspective... and the lenders. Let's dig in.

That financing appeal arises when the business owner/ financial mgr realizes their company has the potential to grow sales and earnings but doesn't necessarily qualify for funding from a regular bank type facility.

The typical weaknesses of the firm at this point in time revolve around absence of hard collateral and debt to equity ratios that just don't work for traditional lending criteria. Enter unsecured cash flow financing!

Typical structures for these types of loans, often called ' mezzanine' are three to five year terms. Typically at the end of the term there is a refinancing of the existing loan, or in many cases, a ' take out ' to more traditional finance solutions.

How does one recognize whether their company is a candidate for an unsecured cash flow loan? The essential requirement is your ability to prove strong cash flow - typically other financing is already in place and the company collateral is already pledged. That's why cash flow is so critical.

What are some of the uses of this type of financing? Typical reasons your company might consider this type of business loan are:

Acquiring another company or exploring a mgmt buyout

Expanding into new markets

Refinancing the business

Enhancing working capital to support growth in sales, receivables, inventory, etc

Buying new assets

Naturally it goes with saying (but we'll say it anyway) that not every business is a candidate for mezzanine unsecured financing. Start ups can't really prove their cash flow satisfactorily, and this financing is not really ' equity' finance. Companies that are severely challenged and in some sort of ' death spiral ' need not apply.

In many cases the current ' senior ' lender to your business will often suggest a complimentary unsecured cash flow loan as a part of your total financing package. You already might have a line of credit or asset based revolving facility in place - the unsecured cash flow loan provides a more long term working capital component.

If your firm would benefit from this type of cash flow financing seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your finance needs.


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