Canadian Business Financing - 7 Park Avenue Financial

WELCOME !

Thanks for dropping in for some hopefully great business info and on occasion some hopefully not too sarcastic comments on the state of Business Financing in Canada and what we are doing about it !

In 2004 I founded 7 PARK AVENUE FINANCIAL. At that time I had spent all my working life, at that time - Over 30 years in Commercial credit and lending and Canadian business financing. I believe the commercial lending landscape has drastically changed in Canada. I believe a void exists for business owners and finance managers for companies, large and small who want service, creativity, and alternatives.

Every day we strive to consistently deliver business financing that you feel meets the needs of your business. If you believe as we do that financing solutions and alternatives exist for your firm we want to talk to you. Our purpose is simple: we want to deliver the best business finance solutions for your company.

Tuesday, November 5, 2019

Isn't It Time You Understood Operating Lines Of Credit Alternatives ?

Is There A Better Way to Access All The Working Capital You Need ? We've Got One !

Operating lines of credit, or Asset based lines of credit , via ' non-bank' lenders, are fast becoming one of the most flexible and popular methods for small, medium, and large customers to finance their operations

. Asset based lending is getting increasing popular with Canadian firms. Terms are more accommodating, and are usually ' non covenant' based . Unpredictable cash flows and seasonality are often other reasons why an asset based line of credit has substantial appeal to business owners and CFO's. These operating loans are totally focused on the assets of the business , most predominately receivables and inventory .

The total focus of the facility is the ' Current asset ' portion of your balance sheet, ie receivables, inventory. In certain cases equipment, real estate, and intangibles can be financed . Credit line facilities are set up based on your borrowing requirements relative to your receivable and inventory assets . Generally receivables under 90 days are financed, as those > 90 days infer uncollectability . Although some focus is placed on over all viability and secondary sources of repayment overall the focus is on the business assets . Rates vary based on size of facility, overall asset quality, and the lender pricing model.

This type of financing provides the firm with significantly more liquidity as the Canadian chartered banks usually lend only 50-75% on current asset categories such as receivables and inventory .

More and more Canadian businesses in the small and medium sized enterprise space are finding it difficult to achieve the operating lines of credit they need from our traditional lenders such as the Canadian chartered banks. These firms are turning to asset based lenders . In our experience many companies are not even aware that such a financing option exists .

Asset based lending places less emphasis on proven track records and financial strength , instead focusing on key business assets such as accounts receivable, inventory, and in some cases equipment and real estate .

True asset based lending should not be confused with ' factoring '. In a factoring environment the company in effect sells their receivables to another firm at a discount . Asset based lending allows the company to bill and collect its own receivables . The loan is paid down and reduced , in a fluctuating manner , as the company collects its invoices .

This type of financing can in effect become a strong lifeline in the current liquidity and credit crisis . Banks traditionally margin receivables in a more conservative manner , and further significant reliance is placed on the customers over all financial health with respect to the current balance sheet and income statements .

The one negative aspect of this type of lending is that it comes with a higher cost . The lender usually has a higher cost of capital and is looking for a significantly higher return than a traditional chartered bank .

In most cases more reporting by the company is often required . That is to say they are more often submitting updated reports related to current receivable and inventory levels . Overall a more rigorous due diligence is in place .

The current asset based lending market in Canada is still quite small , but the industry is clearly growing .

In summary, small and mediums sized businesses should check out asset based lending as an alternative to traditional bank financing . Due to the complexity and relative lack of knowledge around this industry the firm should work with a trusted business financing advisor . Asset based lending can provide unlimited liquidity to firms who are growing - because it focuses on the assets, not the balance sheet and income statement !

Business owners and managers should seek qualified assistance in locating an asset based lender that suits their industry and overall financing requirements re loan size, etc . A study done by the CIBC several years ago indicated that business owners who sought out trusted financing advisors had revenues 76% above those who did not seek a business financing specialist or trusted advisor . Traditionally these types of loans or operating facilities are for firms with under 50 employees .

Asset based lending in Canada is a classic case of a source of capital at the right time, given the current turmoil in the financial and credit markets . Many special situations can be addressed by a constructive asset based line of credit - these include buyouts, cross border projects, and debt restructuring . Many firms that are even in bankruptcy or receivership can avail themselves of a true asset based lending agreement .

Although it is often a more expensive type of financing the case can be made that the asset based financing is much cheaper than the firm issuing additional equity and diluting ownership . Key benefits are improved cash flow, stronger reporting capabilities and the maximization of receivables and inventory financing .

7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com

Click Here For 7 PARK AVENUE FINANCIAL website !

7 Park Avenue Financial provides value added financing consultation for small and medium sized businesses in the area of cash flow , working capital , and debt financing .

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .

' 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

Sunday, November 3, 2019

The Most Important Purchase Order Financing Success Factors

A Little Known Way to Finance Sales - P.O. Finance !

Purchase order financing is a relatively new addition to the Canadian business landscape . When utilized successfully it allows companies to take advantage of major opportunities that might otherwise not be possible .

Typically purchase order financing is most relevant to companies that are unable to obtain capital either in the amount required or at favorable rates . The financing is especially suited for firms such as importers, distributors, and manufacturers.

Other forms of financing highlight a clients historical financial results . Purchase order financing looks to the future, without the collateral need that the former results require.

How does the financing work ? In essence the purchase order financier purchases the materials required by the client for their order or contract . Many transactions are time sensitive for the client , and the type and amount of financing required do not lend themselves to traditional lending time frames re due diligence required , etc . In essence the client is using the lenders capital to finance future growth .

Purchase Order Financing Terms

A simple breakdown of the transaction flow on a purchase order/contract financing is as follows :

* Company obtains a large contract or purchase order
* Payment is made by lender to the supplier directly
* Suppliers ships goods/product
* End user customer acknowledges receipt
* Company's receivable lender ( usually a bank or factor firm ) pays purchase order finance firm

It is important to note that purchase order financing usually focuses specifically on the order or contract . The client requires an additional credit facility in place in order to retire the receivable and payback the purchase order financier .

Our experience is that a purchase order finance firm is looking for a longer term relationship, this is not a one shot deal business .

In the current banking and lending environment, with more increased focus on risk, it has been very difficult for firms to get traditional bank type financing for large new orders and contracts . Most firms quickly realize that banks prefer more stable predictable growth, and large new contracts or orders are challenging to financing when they significantly increase a banks exposure . Needless to say that foreign aspects of many purchase order transactions only exacerbate that issue - i.e. how does a supplier in China get paid, or even ' vetted '.

Our experience is that purchase order/contract financing only works when the client has solid gross margins that can handle the additional financing expense .

Customers looking to finance purchase orders and contracts need to focus on solid partnerships with firms that have capital, experience, and relative ease of doing business re paper flow, documentation, etc . The proper mix of those attributes will foster a solid business relationship that is mutually profitable for all within the unique purchase order financing realm .

Purchase Order Financing Lenders :

If you're looking for the right firm to finance your purchase orders and contracts seek out and speak to a trusted, credible and experienced Canadian Business Financing expert with a track record of success .

7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

' Canadian Business Financing With The Intelligent Use Of Experience '

Thursday, October 31, 2019

Modern Rules of Working Capital Loan Solutions

How To Ge A t Working Capital Loan - Alternative Business Funding

Does a working capital loan requirement loom on your company's horizon? Business funding is all about timing - the right financing solutions for your business needs which change over time . That additional cash flow from the loan covers up the gap when those proverbial ' cash flow crunches' arise.

Working capital loans are typically debt financing - removing the need for business owners and entrepreneurs to have equity dilution in their ownership.

Confusion sometimes arise out of the different types of working capital loans in the current Canadian business financing environment Traditional loans of these type are typically provided by the banks, and they are longer term in nature - typically 2- 5 years . They place a very strong emphasis on historical cash flow of your firm, as well as typically a need to see some solid cash flow forecasts.

In recent times, ( hence our ' modern rules ' ) a number of very viable alternatives have arisen in the Canadian market . These alternative financing solutions are more often than not easier to obtain and provide capital to fix the shorter term challenges that business face.

Although they are no pure ' working capital loans ' per se many companies will lean towards a/r financing and short term cash advances ( typically 12 mo duration ).

The short term cash loans are typically repaid via a fixed amount on a weekly or monthly basis. Surprisingly in some cases your bank is debited daily for a fixed amount in certain situations - examples might be retailers or restaurants - The industry has termed these ' Merchant Cash Advances '. Probably the most important requirement to achieve this type of loan is simply your bank statements which show the inflows and outflows of cash . It allows for a formula to be created, determining the loan amount . Here's a secret . It's typically 10-20 per cent of your annual sales .

Receivables financing solutions pertain predominantly to firms who sell on a B2B basis . They invoice their sales , and the cash flow for the business comes down to the timing of those payments by your firms clients. No surprise that over the years the days sales outstanding has in fact increased for many firms - placing the reliance on borrowing and working capital loans .

Larger firms can also explore non bank business lines of credit - called ' asset based lines of credit ' These facilities will margin your a/r and inventory and even place a borrowing value on equipment and real estate, if in fact you own the business premises.

If you are interested in a working capital loan that provides business funding for your short or long term needs seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a track record of success in alternative and traditional business finance.

7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

' Canadian Business Financing With The Intelligent Use Of Experience '

Tuesday, October 29, 2019

Looking For The Best Secured Business Loan ?

Asset Based Lending & Working Capital Loan Solutions Can Propel Your Company Forward

A secured business loan strategy will often reward Canadian business owners and financial mgrs. with an excellent rate - but one is best to remember other financing options . Rates , terms, repayment etc are critical but numerous other solutions can provide the business capital you need ;

At 7 Park Avenue Financial we're constantly preaching options !

Secured loans bring the word ' collateral ' to mind of course. So it's all about assets.

So what do lenders look at when are taking your firm's entire picture into focus, as well as of course the collateral . They look at your overall industry, the business financial credit history , and of course the general picture on cash flow .

While the current craze of ' online lenders ' seems extremely popular these lenders look mostly at the cash flow coming in and out of your business. They will often do this simply by reviewing bank statement history . These lenders are essentially unsecured - they have a promise to pay from the company and it's owners, but almost never any collateral.

Asset based lending solutions make it possible for SME COMMERCIAL FINANCE borrowers to look at new equipment, expansion, or simply the financing of inventory and receivables as the business grows . Most business folks are not aware that non bank asset based lines of credit will often come at a cost, but will in fact provide unlimited amounts of capital that is in lock steps with your sales and growth plans .

The plethora of working capital loans available ( short term, long term, retailer merchant advance, etc ) provide the amount of business finance optimism that business owners and their financial mgrs, are looking for .

In fact the Asset Based Finance solution can best be described as a one stop solution - given that it combines the ability to finance inventory, receivables, equipment, and , if applicable, real estate.

More firms than every look to these type of solutions even when they are challenged in financial performance and can't access traditional Canadian chartered bank financing. Companies look to these ' ABL ' ( asset based lending ) solutions as an alternative from having owners raise additional equity . Often times the business might have enough debt already and asset financing solutions monetize assets.

So how does the facility work - it is a non bank solution with an independent firm, and provides you with 90% receivable financing, and inventory borrowing that’s based on the actual value of your inventory, not some predetermined cap or limit that many banks impose. (That’s because banks generally don’t have the ability to understand your inventory values - ABL lenders do!).

Speak to a credible, experienced and trusted Canadian business financing expert with a track record of financing success. Secured small business loans and other finance options are just around the corner !

7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

' Canadian Business Financing With The Intelligent Use Of Experience '

Sunday, October 27, 2019

A Business Cash Flow Loan Overview

Whether it's Mezzanine Financing Or Alternative Finance Solutions You're Ready For Business Capital Solutions

A business cash flow loan ? Whether your company is expanding to increase sales of simply running into the proverbial cash flow crunch business owners might like to know that financing solutions are just around the corner. The trick ? Knowing what types of loans suit your firms exact needs .

Additional capital infusions , whether they come from owners themselves or commercial lenders allow a company to finance specific needs - which are many times industry specific . For example mfg. companies typically require significant working capital for inventory and receivables .
The challenge is of course to understand that additional debt must be both managed wisely .. and paid back! In certain cases your firm might be looking at buying a competitor or a firm that adds business synergies. At the opposite end of the spectrum some owners might be looking to take out the equity they have built up over the years.

Let's also not forget companies who are experiencing some level of financial stress, but true mezzanine loans require strong cash flow as the collateral - those cash flows are not always present in firms experiencing any form of distress of business challenge.

True mezzanine loans are typically complimentary to the debt you already have in place, although if can also be used to displace current lines of credit or owner equity .

Cash flow loans for larger firms are a ' hybrid ' type of financing, in the pecking order of security they are below secured creditors, but above owner equity holders. From the owners perspective collateralized cash flow loans are cheaper than equity raises.

So whats the problem then with cash flow financing ? It's simply that it is much costlier than secured bank debt and in some cases the lender might want some ownership in your firm.

The real mezzanine financing we are speaking of typically is used by larger firms.

What About Cash Flow Financing For Small and Medium Sized Companies?

Companies looking for SME COMMERCIAL FINANCE solutions have the same challenges as large firms - They too want to fund growth properly , buy competitors or finance a management buyout perhaps.

Non bank alternative financing lenders provide business cash flow financing in a variety of ways . Those solutions include

CASH FLOW FINANCING SOLUTIONS

Non bank business credit lines

Inventory Finance

A/R finance

Equipment financing / Sale Leaseback loans

Tax Credit Financing

Short Term Working Capital Loans

Long term ( 2-5 YR ) working capital term loans

Seek out and speak to a trusted, credible and experienced Canadian Business Financing advisor with a proven track record of success , giving you the ability to weigh the benefits and risks of cash flow finance.

7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

' Canadian Business Financing With The Intelligent Use Of Experience '

Friday, October 25, 2019

Do You Know Your Business Alternative Financing Options ? Non-Bank Lenders Have Them

Best Alternative Financing Options Reviewed

Alternative financing options are increasing popular for a very simple reason. That reason ? Traditional bank and business credit union lenders are unable , for various reasons to assist firms that have short term or emergency cash flow needs . You guessed it . The inevitable ' cash crunch !

Naturally it goes with out saying that banks also like to see business collateral , outside collateral, and , remarkably, they are not big fans of firms in hyper growth . Firms growing too quickly require higher investments in current asset financing in categories such as receivables and inventories.

Alternative finance providers focus on assets and sales - it's that simply so those short term business finance needs can often be fixed quickly via bridge loans that are transitional in nature .

It should be no surprise to business owners and financial mgrs that alternative finance providers are the first to realize that it is probably every company's goal to be back on side with more traditional finance solutions, and non bank lenders know that . Bottom line - alternative business financing providers recognize the transitional nature of their products and services when it comes to Canadian business financing.

Secret to Creating Business Capital

So how should business owners assess the consideration to look towards a non bank lender ? First of all, and we're the first to recognize its more than a bit of a cliche, but ' cash is king ' and if your firm is having cash flow or debt challenges the focus must always be on cash,

Sometimes the benefits are pretty simple - business survival ! And yes that might come at a higher cost, given than non bank lender financing costs more - but it's a question of your access to cash, vs. the cost of that financing . The good news is that properly structured short term financing alternatives can often provide a path back to more traditional financing, aka ' the bank .

At 7 Park Avenue Financial we're never surprised that high growth and success comes with financing challenges. Your firm needs to carry more inventory, hire staff, and invest in the cost of financing receivables .

Many firms are at the opposite end of the spectrum - they re operating thru a difficult period which might involve restructuring, slow down in sales, loss of a major client etc. At this point traditional lenders such as the banks are looking to reduce your access to business credit - Alternative small business financing providers are focused on providing you the necessary capital, recognizing the period of uncertainty you are in .

Solutions to rebuild your business finances include :

A/R Financing

Purchase Order Financing

Inventory Finance

Non bank full business credit lines

Short term working capital loans

Tax Credit FInancing

Sale leaseback Finance

Seek out and speak to a trusted and experienced Canadian business financing provider with a track record of business financing success - allowing your firm to get the finance understanding manage any transition .

7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

' Canadian Business Financing With The Intelligent Use Of Experience '

Wednesday, October 23, 2019

Important Sale Leaseback Financing Success Factors

Sale Leaseback Financing Lessons That Will Pay Off

Sale leaseback financing provides many advantages to Canadian business owners . While at the same time selling equipment or other assets ( for example real estate ) to a third party you are effectively agreeing to use and repurchase the asset .

The goal ? Simply unlocking and cash flowing the equity you have in the asset . Naturally every company has a different situation for evaluating the reasons to perform a sale leas back financing .

Cash flowing the asset through this financing process allows your company in effect to extract equity - and almost always that equity and potential cash flow infusion is significant, which is one of the reasons your firm is considering the financing .

Generally speaking a typical loan to value amount under the financing process can unlock up to 100 % of the assets value. Naturally in traditional finance scenarios the typical loan to value would be 75%.

Balance sheet implications also come about under the leasing back of assets, and the good news is that in the majority of situations those implications are positive. Your accountant will explain to you that issues such as depreciation can positively impact your financing statements in the sale leaseback process.

While ' off balance sheet financing ' is no longer in vogue for a couple of reasons the selling and refinancing of assets is a positive mechanism to cash flow success. Typically those all important ratios and covenants that revolve around debt to equity positively impact company financial statements. Anytime you remove debt from the balance sheet tends to be a good thing we are told !

Business these days seems to move at lightening speed and even the largest firms in Canada will consider the leasing back of assets as a move to improve liquidity . Any finance mechanism that improves financial statements and generates cash at the same time is a welcome Canadian business financing solution .

Let's back track to understand clearly how the transaction works . The process is quite simple - your firm owns the asset, you sell it to the lessor and lease it back. You have just converted a fixed asset to cash!

Crucial Tactics for Sale Leaseback Financing

Typically it protects both the lender and you the borrower to ensure you have a proper appraisal of the asset in question - again that's typically equipment or real estate. It is critical to mention that that there can be no liens and encumbrances on the asset .

While many firms employ lease back finance as a cash flow strategy it can also be used as a strategic option . Canadian banks sold many of their prestigious bank towers as they realized the benefits of using that capital to grow the bank.

It is safe to say that many firms unfortunately find themselves in a cash crunch and as such that is also a key reason to entertain this method of asset refinancing.

Typical asset categories in the equipment area involve construction , mfg, and rolling stock assets Companies in cash crunches use the cash to mend their working capital and debt situations . Many firms find themselves in seasonal cash crunches which must be addressed. Remember one of the golden rules of finance, which is to use assets that appreciate, while financing those that do not!

Keep the leaseback finance strategy in mind as an additional tool kit in your business finance arsenal .

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

7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

' Canadian Business Financing With The Intelligent Use Of Experience '

WELCOME !

Tuesday, November 5, 2019

Isn't It Time You Understood Operating Lines Of Credit Alternatives ?

Is There A Better Way to Access All The Working Capital You Need ? We've Got One !

Sunday, November 3, 2019

The Most Important Purchase Order Financing Success Factors