Business Financing In Canada: The Do’s & Don’ts Of Working Capital Loans & Debt Finance

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We’re Doing Some Fact Checking On Canadian Business Financing

OVERVIEW – Information on business financing needs in Canada. Business Owners and financial mgr’s need to know the right type of working capital loans and debt finance specific to their growth and funding needs

Business Financing in Canada , when it comes to working capital loans and debt finance solutions comes with a lot of... do's and don'ts! We've been doing some fact checking, (which seems to be happening a lot these days!) so let's dig in.

Most business owners / financial mgr's recognize that the search for capital and funding for their business is never ending.

Two key facts clearly emerge:

1. Working capital needs are both short term and long term - It's key to know which one (or both?) that your company needs

2. Once your company has determined the type of working capital or debt you need what are your options and how to do pursue those successfully and in the least amount of time?



We've stated that working capital is both a short term and a long term need. Let's examine that key point. When we talk to clients about working capital needs it becomes apparent they are often confused by 'textbook issues 'as compared to real world issues. The textbook of course tells us that working capital is a simple calculation - go to your balance sheet, subtract current liabilities from current assets, and , voila! There's your working capital. The perfect answer, right? The reality is that business owners must consider two key elements not often covered off in the textbook.

They need to know their cash flow needs based on past issues, current and future needs. Also, turnover of current assets is critical and many Canadian business owners and financial managers don't know how to measure turnover. If A/R and inventory isn't turning properly your working capital is going to feel ' sluggish'!

And if those two assets are building up not in relation to sales that's a bigger problem.








We're talking about short term needs vs. long term needs as we have stated. You may have had historically enough cash flow for working capital to satisfy your overall sales growth needs. But what if you have a large new order or contract you need to fulfill. That more often than not necessitates a short term need for cash flow to fulfill purchase orders, contracts, etc.

The good news is that, with the right help and knowledge it's relatively simple to measure cash flow needs. Don't forget though that sales and profits rarely relate perfectly to cash flow! When that issue becomes painfully obvious it's somewhat too late to put the proper fix in place.

Two options are in fact available for your firm when considering a working capital solution. One of those options is to take on more debt, and enter in a working capital term loan - this is simply a cash term loan with a fixed repayment and term - typically three to five years.

For larger firms this might be called subordinated debt, or mezzanine financing, but for smaller and medium sized companies in Canada we can simply say 'it's a working capital loan '! This type of financing puts permanent working capital into your business and allows you to feel comfortable that you can meet short term obligations such as lease payments, etc. If there is a disadvantage to this type of financing its simply that in reality you are adding more debt to the balance sheet, as the working capital loan is debt .

You can also monetize existing assets to maximize cash flow. Typically these assets are A/R, inventory and fixed assets. Yes you are leveraging those assets, but the reality is that your balance sheet ratios stay intact.

For smaller and medium sized firms in Canada these solutions come under several names, working capital facilities, asset based lines of credit, or even a standard operating line of credit with a Canadian chartered bank that allows you to margin receivables and inventory .
In summary, we have covered off the need for business owners to determine what type of working capital they need, albeit short term or long term .

Ensure you're aware of the important do's and don'ts in business financing solutions available. Do your fact checking, and consider seeking out and speaking to a trusted, credible and experienced Canadian business financing advisor for finance leverage.





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 Sources In Canada: Are Cash Flow & Capital Loans What Your Company Needs Today?

Business Financing More Confusing Than A Fun House Mirror ? Here’s Some Solutions

OVERVIEW – Information on business financing sources in Canada. The cash flow and capital from the right loans helps grow sales and profits

Business Financing Sources must seem like a ' fun house mirror' for Canadian business owners and financial mgrs. They want to know the potential sources of working capital financing & other funding so they can profit from sales and growth opportunities. The challenge? Knowing what's available and what's appropriate for their company! Let's dig in.

Operating capital is viewed as one of the most critical aspects of ongoing financial liquidity; simply put, the ability to meet your short term and long term obligations. The solution for that more often than not is a traditional (or alternative finance!) business credit line. The more access you have to this type of financing helps guarantee chances of overall financial success. It's a simple bottom line - accessing capital and cash flow to expand and grow.

The textbooks of course to a great job of defining working capital. However the real world use and understanding of that term differs somewhat!

Finance books tell us working capital is calculated by subtracting current liabilities from your current assets. The major current assets are receivables and inventory. When we meet with clients to discuss their working capital needs we focus more so on two issues within those working capital components that the finance textbooks don't really often touch on!

They are:

- Turnover of working capital

- Margining of working capital

So the key point for business owners is not really what the text books says, it is that you need to be able to understand how to convert these assets into cash ! We do of course agree thought that positive working capital (what you have) is better than negative working capital (what you owe)!

Sitting down and working through changes in their working capital is one of the most valuable tools in understanding your current and future cash flow needs.

A fine balancing act is created, one in which you are liquidating your receivables and inventory on an ongoing basis, but at the same time managing to keep your short term obligations to suppliers current.
Another hard reality of business financing is that working capital varies by company and in general by industry. The amount of turnover in inventory and A/R varies considerably in every business.

We have discussed the definition and importance of working capital. So what are the sources of those funds? In a perfect world your company should have that aforementioned overdraft or operating line of credit with the bank.

The is the cheapest and lowest cost method of financing short term cash and working capital needs in Canada. The challenge is of course being able to meet the banks criteria for lending, which include personal guarantees, additional collateral possible, and imposed loan covenants and ratios.

A growing and more popular solution is asset based lending, this has little focus on the bank qualities demanded by Chartered banks and is more focused on what we discussed above, your firms ability to margin and leverage current assets and turn them over more quickly, thereby increasing sales and profits, albeit at a higher financing costs.

Other solutions to the business financing need include:

A/R Financing

Inventory Loans

Equipment Leasing

Bridge Loans/Sale Leasebacks

SR&ED Tax Credit Financing

Ultimately each Canadian business owner must understand their working capital needs and determine which solution works best for them.

Plan for growth, and seek out and speak to a trusted, credible and experienced Canadian business financing advisor to understand what sources of capital are available and which work best for your company.



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

SRED Credit Financing In Canada : Moving Cash Flow Success From ‘ Slim Chance’ To Success Via Tax Credit Loans: SR ED Loan 101

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Need A Better R&D Capital Investment Strategy? Consider SR&ED Loans As A Faster Cash Recovery Alternative

OVERVIEW – Information on sred credit financing in Canada. A Sred Loan Accelerates Your R&D Capital Investment ! Here’s Why Tax Credit Loans Make Sense

SRED Credit financing in Canada continues to be a strategic way in which your firm can stay competitive and at the same time take advantage of the cash flow financing benefits that come with a SR&ED loan. We're examining why tax credit loans work! Let's dig in.

While pretty well everyone agrees the Canadian R&D capital refundable tax credit is one of Canada's best programs for maximizing research and development incentives it's unclear that the advantages of a SR&ED are fully understood.


Not only is the program applicable to almost every industry in Canada, but at the same time business owners and financial managers can compound the power of this program by financing your claim via a Sred loan. The key benefit of that loan? Cash for your SR ED claim now!

Let’s recap some of the key aspects of the program as they relate to your ability to monetize ‘your tax credit into real cash flow and working capital now. Also, let’s recap and focus on some current issues in your ability to access and maximize your SRED claim.

If you aren’t filing a Sred claim you certainly can’t finance one. The Canadian government, both federally and provincially reimburse billions of dollars annually to Canadian business in all industries. A few industries seem more tailors made than others for SRED claims, example: Software and information technology.

The SR&ED program certainly doesn't discriminate on any one industry .Your firm can be a commercial bakery, a sign company, a biotech firm, a software development company, or an industrial manufacturer. Bottom line? Every industry is eligible in some manner.

Your claim of course needs to be prepared by a knowledgeable third party. In Canada this essentially is an accountant who is proficient in SRED or a third party commonly called a 'SRED consultant’. Typically, but not always, the consultant you engage will be a specialist in your industry. That's a plus of course but the reality is that even if your firm is preparing your own claim (rare but possible) it can still be financed, although the claim will be subject to some form of due diligence no doubt.

Recently changes in the entire SR&ED process can both help and hinder your firm in maximizing your total sred credit. Naturally the larger the claims the more amount of cash that you can finance under a tax credit financing.

Canada Revenue Agency has clearly focused on streamlining the program - forms are found online at the government website, and in some cases have dramatically been simplified. For example, the new online from limits the overall technical description of our claim to only 1400 words.

In general almost 75% of claims are not fully audited, and are therefore approved and somewhat fast tracked for refund.

How do some of the new forms and rules affect your ability to finance your claim? When it comes to financing your sred claim it is critical to work with an experienced, credible, and trusted third party. Claims are generally financed at 70% of their overall value. Therefore your ability to have your claim fully document, prepared by a credible third party, and fast tracked into the ‘non audit ‘75% of all claim range is a solid sred financing strategy .

We referenced that claims are financed at 70%. That simply means that the larger your claim you can receive immediately, on financing approval .70 cents on the dollar for your claim. You of course still receive the rest of the claim, less financing costs, when your claim is approved and funded by Ottawa.

The SR&ED Loan application process? It couldn't be simpler. A basic application, which is of course supported by your actual technical claim. The sred loan is collateralized by your claim. Our own goal in a completed financing is typically a few weeks start to finish.

If you are filing sred claims in Canada you are among the 15% of businesses that are eligible for this refundable tax credit. Consider compounding the power of the program by financing your claim and accelerating cash flow. Why not compound the power of that government benefit. Cash via tax credit loans can be used for any corporate purpose - including accelerating next year’s research spend!

In summary, that ' slim chance ' of a prompt cash refund can be significantly enhanced via SR&ED financing done efficiently and promptly. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your refundable tax credit funding 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

The Dirty Little Secret Your Banker Won't Tell You About Asset Based Lending and Asset Finance

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Can you blame someone for not telling you about a good thing? Especially when that thing is better than their thing! No surprise then that asset based lending is the dirty little secret

in asset finance that that bankers in Canada don't want to let you know.

We hate to burst their bubble... but what the heck; we'll share that secret with you and touch on why it's such a powerful non bank financing strategy.

To understand why an asset based lending solution is so different we need to understand what we are comparing it against. The comparison is of course an operating line of credit with a Canadian chartered bank. They are great, low cost, and run smoothly on a daily basis. If... and we repeat if... you can get one and get it increased as you need it.

Your ability to access a business line of credit with the bank focuses in on everything you probably feel isn't necessary. You have assets; you have growth, so whats the problem. The chartered banks, in their wisdom allocate these lines of credit based on yes... the assets... but as importantly ratios, covenants, personal guarantees and outside collateral. By the way, we think they do a great job of that... mainly because they are lending you my money which is on deposit at their bank. So all power to safe lending practices, and that's why Canadian banks are some of the strongest in the world.

That's all great say our clients, except it does nothing for us when you want to access business credit. That's brings us to our secret - asset based lending in Canada and why this type of asset finance is a powerful working strategy. And could it be simpler. Not really. It focuses on the two things you have always had... assets and growth potential for sales and profits.

Asset based lending is the ability of your firm to borrow, daily, as you need it, against receivables, inventory, as well as equipment and real estate if they factor into the picture.

It supports you credit needs, and does not, we repeat, does not revolve around those other requirements the banks have, i.e. rations, covenants, emphasis on personal net worth, outside collateral, etc.

Want to know an even more surprising secret. Some of the Canadian banks actually have small boutique divisions of asset based lending. In our experience these divisions don't communicate properly with regular commercial bank divisions around what their offering is.

So who actually offers this type of asset based lending. In Canada it's a relatively small handful of firms, some of which are U.S. based, and who have a tremendous expertise on the things you already have, inventory, receivables, and purchase orders and contracts.

Asset finance can cost the same as the chartered bank offering, in,many cases it costs a bit or a lot more, depending on the size of your transaction.A business line of credit via an asset based line of credit generally starts at 250k and goes up to anywhere up to 50 Million or more!.

Accessing and navigating the maze of this boutique financing is difficult for the Canadian business owner and financial manager. Speak to a trusted, credible and experienced Canadian business financing advisor on why asset based lending is the secret you want to know more about. And why the heck didn't your banker tell you about it sooner!


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/5564617

Asset Loans & Accounts Receivable Financing : How To Achieve Cash Flow Perfection

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Removing Scarcity In Canadian Business Financing

OVERVIEW – Information on different types of asset loans and accounts receivable financing in Canada . Which type of business funding works best for your firm?

Asset loans and accounts receivable financing are often sought after innovative financing solutions you probably have been hearing about. They are ' subsets ' of asset based lending in Canada, and are helping thousands of firms achieve that ' cash flow positive ' feeling. Let's dig in.

Despite its new found popularity it's been safe to say that alternative financing is still just finding its feet in Canadian business - growing in traction and popularity every day. We're going to clarify some of the myths around this type of funding for your company as well as focusing on key benefits.


One of the main differences of an asset loan is that typically it is financed through a non bank arrangement. You should seek this type of loan if you are unable to generate sufficient working capital to finance your business in a traditional Chartered bank environment in Canada. While Canadian banks by far provide the lowest cost and often most flexible form of capital for your business it's unfortunately not available to all those who apply!

Asset loans that encompass ' operating facilities ‘are structured, around the various asset categories of your business - the two main asset categories are:

Accounts receivable

Inventory

As well fixed assets / equipment balance sheet assets can also qualify for asset based credit lines in conjunction with A/R and inventories.

Leveraging fixed assets/equipt/real estate your company owns simply enhances your overall borrowing power. It's the true underlying current value of your A/R, inventory and equipment that provides you with true borrowing power - much less reliance is placed on balance sheet ratios, loan covenants, outside collateral, etc., those latter three items being the key part of any bank type facility, and is clearly focused on your historical and present cash flow generation.

The irony is , of course that historical cash flow ratios do not work for many companies who are experiencing temporary challenges and who require ' bulges' in working capital to fund their growth and operations.

Asset loans, and asset based lines of credit focus on the collateral. Many clients we deal with have the collateral in A/R, inventory, purchase orders and new contracts, equipment, etc but can’t satisfy traditional cash flow lending requirements. They then are the true prime candidates for an asset loan, an asset based line of credit, or at its simplest and most basic form, a receivable financing that fully margins their accounts receivable with no set limit on future growth.

So now we understand what the facility is. How does it work on a day to day basis you might ask? The answer is simply that it’s a facility that goes up and down, frankly every day, with your borrowing needs. As your receivables and inventory fluctuate you draw down against their current value. This optimizes the amount of cash flow and working capital available for sales growth and profit generation.

The security mechanisms around these facilities are very similar to any type of bank financing. Additionally approval is often much faster as a simple first charge lien is placed on the assets being financed.

Advances rates on accounts receivable and inventory are established and as cash is advanced and then repaid by your customers the cash is turned over to pay down your revolving balance. It’s as simple as that. The true beauty of the facility is that as you grow your facility grows with you.

These working capital facilities, predominately A/R an inventory based are becoming more traditional in nature ever day. If you're a business owner or financial mgr looking to eliminate the term ' scarcity ' in your business financing and growth needs seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can get your firm back on the road to cash flow perfection .


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

Cash Flow & Working Capital Solutions In Canada : A Whole New Wave Of Corporate Financing Choices

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Mapping Out The New World Of Business Financing In Canada

Information on newer corporate financing alternatives in Canada. Does the new order of working capital and cash flow funding solutions suit your business?

Corporate financing in Canada often assumes that owners and financial mgrs of companies are somewhat ' bullish ' on sales and profit growth. But where do those working capital and cash flow funding solutions come from? Now that's a challenge. Let's dig in.

The reality is that small, medium, and even to some extent large corporations in Canada is demanding more access to working capital and cash flow financing - yet the typical ' go to ' place where these firms look to, Canadian banks are in fact somewhat cautious about small and medium sized financing of enterprises such as yours. And don’t get us going on startups!

What are then some of those needs as they relate to growing your company with the right financing? It might be a bulge request for a temporary increase in their borrowing facilities, or sometimes a more permanent facility in the form of a term loan that might be tied to equipment, cash flow needs, etc.

Various statistics are available which validate the difficulty that business owners have in obtaining working capital financing. Most of the needs seem to be short term based. In Canada unsecured working capital loans are available from the governments crown corporation bank, and, alternatively, through private independent financing firms. As the transaction tends to be a bit larger in size these loans tend to be called subordinated debt, or mezzanine type loans.

When a business is significantly smaller and can't support the requirements of a more traditional lenders Canadian business owners have actually turned to credit cards and personal equity loans to finance their business. This works, but comes at a higher cost, including the higher risk that comes with combining your business and personal finances.

Are there other solutions available to address working capital needs in Canada? One of the solutions you might consider is a working capital facility, also known as an asset based line of credit. ‘ABL ' facilities are available through specialty firms and advisors, generally bringing significantly increases in cash flow and working capital while at the same time not bringing on extra debt to your balance sheet.

Companies can unlock working capital in a number of ways, one of which is to simply maximize the efficiencies via current asset turnover.
Many clients we talk to don't fully realize that they can unlock working capital that is in effect hidden on their balance sheets -

Translation? Turn your receivables and inventory over at optimal levels. These additional cash flows through current asset mgmt can help you avoid taking on more debt and allow you to grow sales and profits at the same time.

Corporate financing strategies for firms in the SME sector include:

A/R Financing/factoring/invoice discounting / Confidential Receivable Finance

Inventory Loans

Tax Credit Loans

Sale Leasebacks

Equipment financing/bridge loans

Purchase Order Financing

In summary, working capital and corporate financing solutions are in demand by Canadian business. Unfortunately supply is not always fulfilling demand!

Traditional solutions via Canadian chartered banks may not be available to your firm, and in some cases your firm might simply not qualify for the standard metrics around this type of loan / financing.

Speak to a trusted, credible and experienced advisor who can suggest alternative solutions that deliver on cash flow and avoid additional debt. That's a great corporate financing and business plan strategy every owner/mgr should consider!


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 Financia

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