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, January 14, 2020

Is a Sale Leaseback of My Business Assets a Good Thing?

Sale Leaseback Financing

At various points in the economic cycle a business owner or financial manager considers a sale leaseback financing. Is that type of transaction advantageous, and what are the risks and benefits?

Many firms do not fully know about or understand the advantages of this type transaction. This is a classic alternative financing strategy that works best when it is a good deal for the lessee and the lessor. It does not work well when the lessor presumes it is a 'cash grab' by the lessee.

This type of financing should be contemplated if your firm has the following characteristics:

- Experiencing working capital challenges
- Declining profits
- Excess unencumbered assets
- High amount of debt

If a company has a high amount of debt a sale leaseback transaction can still be a very positive financing event. By structuring the the transasction as an operating lease the debt becomes 'off balance sheet '. This gives the appearance of the company being not so highly leveraged and quite often it can save the company from being in default of its loan covenants.

In many cases the sale leaseback can bring a significant amount of capital back into the firm.

So when does a firm consider such a transaction - every industry is different but if the firm is bottom line, over leverage, i.e. Debt too high, there can be advantages to an off balance sheet sale leaseback transaction.

If a company has historically had pride of ownership, and has significant assets, and is suddenly going through a high growth stage it also becomes a good candidate for a sale leaseback. Cash flows are restructured and the company gains significant new working capital.

The best candidates, overall, for this type of financing strategy are high growth companies who would prefer to invest additional cash in receivables and inventory. Naturally no lessor wants to consider such a financing if the company is in some sort of death spiral.

In some cases when assets have in fact appreciated (not depreciated in value) the company may actually be able to report a gain in earnings, as the sale leaseback transaction in excess of book value allows the company to book the sale leaseback gain into the profit account!

Many government institutions, such as municipalities, hospitals, etc may find this type of financing strategy as optimal in solving temporary budget cuts and working capital challenges.

In summary, a properly structured sale leaseback can provide new cash, enhance earnings, and in effect be a creative way to temporarily re finance the firm or institution.

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

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

Article Source: https://EzineArticles.com/expert/Stan_Prokop/432698

Article Source: http://EzineArticles.com/3723483

Saturday, January 11, 2020

How To Finance A Franchise In Canada

Can You Finance A Franchise ? Yes You Can !

Canadian entrepreneurs continue to explore franchise acquisitions in Canada as a way to maximize on the business opportunities provided by the franchise industry. Entrepreneurs evaluate franchising because it provides them with an ability to generate sales and profits from established business models – they can build equity in businesses and enjoy the benefits (perceived or otherwise!) of self employment and the entrepreneurial dream

As you start to formulate your ideas around purchasing a franchise the concept of how o you will finance your new business should be very close to the top of your list. Many clients we talk view the actual financing of the franchise as the largest obstacle to achieving self employment success.

The reality is that anyone with a reasonable business and work background, coupled with a stable financial situation (good credit bureau history, etc) should be able to successfully finance their venture.

Is there a secret to franchise financing in Canada! Yes, there is, and don’t by surprised by the answer , which is simply that you must have a thorough and solid proposal in hand, and the right people need to see that proposal. Unfortunately that isn’t as easy as it seems when you searching for franchise loans,

Sohow are franchises in Canada actually financed? During the last couple years, due to the world wide economic slowdown/recession franchise financing became a smaller fish bowl so to speak. The methods in which franchises were financing in some cases actually disappeared, and in most cases simply had the ground rules changed relative to whats required and how its works and how long it takes.

In Canada franchises are financed by, in most cases a government sponsored and subsidized loan that comes under a program known as the CSBF loan program. Additional a very select number of firms offer specialized franchise financing loans, and in our experiences we have complimented these two programs with basic lease financing of assets plus in most cases a working capital cash flow loan or an introductory line of credit to facilitate daily operations and long term growth.

So is there a key to success in franchise finance ? I Absolutely, and it starts with a solid executive summary and business plan that has some reasonable financial projections and assumptions attached to it. That is one critical key to understanding franchise loan requirements . The basic elements of that document are the business description, an overview of the basic business model and industry, financial projections, and a focus on the strengths of your business and its expectations of profits. Those profits will of course be cash flow to repay your franchise loan and debt.

We recommend to all clients considering and entrepreneurial career as a franchisee in Canada to discuss your franchise financing options with a credible and experienced advisor in franchise financing, sometimes known as a franchise loan broker .Keep your financing objectives at the very top of your list early on in your process, plan well, and present your proposal once, and properly. You will soon be en route to a successful new business with sales and profit growth!

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, January 10, 2020

Canadian Business Financing - Tips on Securing Financing For Your Business

Business Financing Solutions In Canada

Business financing is a challenge anytime, from the entrepreneur's dream of a small start up to major corporate needs.

The current economic downturn makes the above noted challenge even more daunting. Whether a firm is established and doing well, or experiencing financial distress or working capital or growth needs - the challenge remains the same.

What is the 'challenge'? Simply speaking it is identifying the proper financing solution , determining whether the solutions is a short term fix or a long term solution , and then, most importantly executing with experience the proper financing solution.

The business owner must be able to properly position the current shortcoming as both an opportunity and risk appropriate.

Proper financing begins with the owners and his advisors ability to identify the current financing challenge. The owner and advisors must provide a compelling reason for the lender to assist in an appropriate financial solution.

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

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

Leases and Term Loans

Working Capital Loans

Asset Based Lines of Credit

Bank credit lines

Non bank credit lines

Receivables purchasing

Inventory Lines of Credit

Purchase Order Financing

Commercial mortgages

Tax Credit financing

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

7 Park Acvenue 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, January 8, 2020

How To Access A Business Line Of Credit

Alternatives to Traditional Bank Revolving Credit Lines - Enter ABL Alternative Finance Solutions

Business Line Of Credit . Will that be small, medium or large? We're not talking about a coffee cup size... we're referring to the fact that no matter what your size of business your access to a business line of credit is the lifeblood of your company . That's why an ABL revolver (ABL = asset based line of credit) is potentially the solution to turbo charge your working capital and cash flow. Let's examine how.

Clients seem to always wrestle with the fact that they don't really understand the differences between this type of business financing and banking as opposed to a ‘regular’ operating facility with the bank. The differences could not be more dramatic. While a bank facility (by the way, we are all for them also, when they work! ) focuses significantly on your balance sheet ratios and over all profitability , etc the ABL revolver solution hones in on one issue only - your assets and their overall quality and size . It is on that quality and size that the ABL business line of credit is structured.

Borrowing power is what business lines of credit are of course about. When you utilize the
ABL approach you in effect leverage all the power of the assets, which certainly isn’t like what we like to call ' traditional bank borrowing '.

So, why would a business such as yours want to unlock that borrowing power? The reality is there are some very recurring needs for firms which choose this type of business financing. First of all they either can’t get or can’t get enough working capital borrowing power against their inventory, receivables and equipment. Secondly, all sorts of other problems, challenges, and yes opportunities can e overcome with an asset based line of credit.

Many examples exist of firms who have doubled and in some cases tripled their business financing access via this type of finance. The answer is simple - it’s based on asset size, not ratios and covenants and external collateral.

Those include firms which have large seasonality issues, companies who which to merge with or acquire a competitor on an asset financing basis, and, most commonly, firms that view themselves in turnaround or restructuring mode when it comes to where they are at in their life cycle - i.e. coming out of a challenging economic time or negative business event (operating losses, etc).

Did we just say ' operating losses ‘? Yes, the reality is that even firms who are experience operating losses and could otherwise not achieve maximum operating cash flow are excellent candidates for ABL financing. We should mention that the type of facility you get, the pricing on that facility, and how the facility works vary within ABL revolver financing depending on your overall transaction size and asset coverage .

We must never forget also that these type of facilities never bring debt to your balance sheet, you view them similarly as an operating line, in that you are just monetizing your assets for working capital and cash flow - the only difference is you've got tremendous flexibility around borrowing power - because you are borrowing against a base of receivables, inventory, unencumbered equipment, and in some cases real estate also.

In summary ABL revolver financing gives you a full service business financing, its cost effective, addresses almost every financing problem you have had related to cash flow, and is available in facilities from 250k to many millions of dollars .

It somewhat of a secret to many that some of Canada's largest corporations choose this type of financing over a traditional bank facility. Speak to a trusted, credible, and experienced Canadian business financing advisor on why ' ABL ' give you that ' turbo charge' boost in cash flow we've talked about.

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 '

Saturday, January 4, 2020

Guide to Equipment Financing To Finance Business Assets

Tips to Help You Find the Best Equipment Financing Company

How to Finance Business Assets

Equipment financing and leasing is offered by a number of equipment lease companies in Canada. The only problem is knowing which company to work with, and moreover, how to ensure you receive the best rates, terms and structures available to your firm - based on your overall credit quality and the assets being financing .

Let’s get right to the point - let’s assume you have been approved for a lease financing, or that you have received what appears to be a competitive lease offer.

The information we share with clients focuses around how the lease company makes money - if you know that then clearly it becomes much easier to determine if you have a competitive structure - one that involves both rate, term of the lease, and conditions.

First of all, ensure you know what type of lease you are getting into - there are only two basic types in Canada, operating leases and capital leases. And we will keep it even simpler than that - if you wish to keep the equipment at end of the term of your desired lease get a capital lease, if you intend to use and return the asset negotiate an operating lease.

As we said, you can save or even make money if you know how a lease company makes money - and for the record we are totally in favor of any lease company in Canada making a reasonable profit relative to risk and reward, as well as a reasonable return on their own cost of funds. (Leasing companies borrow money just as your firm does!)

So what areas of concern and diligence should you have around a lease financing? We can summarize all of the main methods a lease company makes money on your transaction in three categories : interest rate charged on the lease , any tax benefits that might come from the financing, and finally, the re-leasing or sale of any equipment that comes off lease or is returned .

Those are pretty key basics, but there are probably 20 other methods in which your lease is ultimately recorded as a profitable deal. Let’s look at some of those areas in which you can have a direct negotiation or input on.

If your supplier is getting paid in advance your lessor will want to confirm they are ok with that – what you need to do at this point is ensure that the agreed upon financing in this interim period is clear and acceptable to yourself . Additionally many lease companies offer, or have alliances with firms that provide asset insurance. We totally agree that insurance is a requirement, after all the lease company has to ensure the collateral they are financing is there of course. But you should ensure that the insurance is fairly priced.

Quite frankly we recommend to clients that they contact their own insurance broker and provide the lease firm with a certificate of insurance with the lease company named as loss payee. That’s a cost effect method of addressing this issue, with you as the lessee still being in control.

Documentation and filing fees have continued to be standard in the Canadian equipment financing and leasing industry. Typical charges for this tend, in our experience to be in the 250-300$ range. Anything more excessive than this should be questioned. These charges cover the preparation and registration of lease documents under the governments Personal Property and Security Act regulations.

In general we are not if favor of clients paying commitment fees to get a lease transaction done – however we temper that by saying that if your transaction is very large and requires a significant amount of due diligence, credit investigation and analysis, then these fees we feel are sometimes justified . Ensure they seem reasonable Vis a Vis the size of your transaction.

In summary, the profits made by your lessor should be legitimate – profits vary based on your firms overall credit quality, the size of the transaction, and the amount of time needed to consummate the transaction by both parties. The difference may not always be in the interest rate you are receiving, and we tell clients they actually get to pick their own interest rate – simply because your firms overall credit quality has determine your general price structure as the leasing industry in Canada is very competitive.

Confused about how you can control your lease transaction and the profit made by your lessor? Speak to a trusted, credible and experienced leasing advisor with a track record of business finance success who can guide you through key aspects of a successful lease negotiation.

7 Park Acvenue 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, January 2, 2020

How To Finance A Franchise ! Great Question !

Can You Finance A Franchise ? Yes You Can !

Canadian franchise financing - When Canadian business owners and entrepreneurs ask us what their financing options are for a Canadian franchise we indicate to them that the options certainly aren’t unlimited, but a number of standard and also creative options do exist.

Naturally all of these options are supplemented by your own savings or investment, what the finance world typically calls ‘owners equity ‘. In the current somewhat difficult challenging environment we have observed that there is upward pressure on the amount of owner equity you need to put into the business yourself.

How to Get A Business Loan For A Franchise with Franchise Financing Lenders

Most franchises in Canada are typically financed via loans, or debt – Canadian franchising does not really lend itself to a venture capital type environment. So where do those loans or debt come from – typically it is from traditional sources such as banks, and our firm has found success in effect cobbling together a couple of different financing sources to ‘ get the job done ‘.

When entrepreneurs come to us for franchise financing them is either looking for one of three scenarios – they are:

Looking to renovate their franchise location
They are wishing to purchase a brand new franchise
They have entered into a purchase agreement to purchase an existing franchise

Each of the above scenarios is worth mentioning with respect to a couple key points and observations:

Renovating an existing franchise via leasehold improvements or new equipment is probably the easiest financing scenario – as we have a real business already on our hands that is hopefully doing well, making some money, and looking to grow / expand
New franchises are probably where most of the financing challenge is as the entrepreneur and his trusted business financing advisor have to sell the lender(s) on the nature of the franchise, the probability of success, the industry business model, etc
Existing franchises are fairly easy to finance as again we have a business with sales, assets, and profits already in place. Some owners we work with target franchises that are existing that might not be doing well, they negotiate a fairly reasonable price, and have the determination that they can ‘turn the franchise around. Sometimes that is not necessarily as easy as it sounds.

One of the most popular methods of financing franchises in Canada is the Govt of Canada guaranteed small business loan . A large majority of franchises are financed in this manner .

Highlights of the Program include :

Eligibility for any franchise with under 5 M or less from an actual or projected point of view.

Loans up to 1 Million $ are available, with a large portion of the loan guaranteed by the government . An appropriate business plan and other key documents supporting the is required to commence the loan process. 7 Park Avenue Financial prepares proper business plans for our clients in the franchise segment.

Loans are used to either purchase the building/land , new equipment, as well as leasehold financing improvements.business.

Repayment terms and rates are very attractive and similar to traditional financing that is available to non franchise businesses.

We can’t over emphasize the fact that the ‘financing’ aspect of the business purchase should be entered into very early on in your whole process. Typically you have selected a franchise, or are entertaining a couple different options. In the last couple years we have been made aware of specialized firms that match your own business traits and style with the type of franchise that would most suit you. Not everyone is cut out to sell donuts and pizza, and we find some owners simply look at the appeal of potential revenues and profits, and not into the issue of ‘does this franchise suit my overall business style, work ethic and skills.

‘Skills ‘– Let’s focus on that for a moment. In our experience owners stand a significantly more better chance of success when they have some industry experience – We are not saying you ‘can’t be successful with no industry experience, but certainly those chances improve, and we hasten to add that issue is one criteria of any lender – i.e. does this business owner have the skills to run this business on a daily basis and grow and profit.

In summary, finalize your franchise purchase and start early on in your process to determine a financing strategy that works and will compliment your skills and investment. Rely on the services of a trusted , credible and experienced Canadian business franchise advisor with a track record of business finance success who will work with you through the entire financing process.

7 Park Acvenue 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, December 31, 2019

Quick Tips to Help You Find the Best Equipment Financing Company

Important Things You Need to Know About Equipment Financing

Equipment Financing in Canada is a specialized type of financing. Lease financing on its own goes back hundreds of years and is a widely accepted financing tool. Major companies in Canada utilize lease financing, why shouldn’t your firm.

Lease financing covers all sorts of equipment – that includes production equipment, transportation equipment, machine tools, computers, etc.
Heavy equipment financingis a popular category in this segment, for both new and used assets . In general most Canadian banks do not offer lease financing, although two of the Chartered banks have dedicated lease operations but require a very high quality credit quality.

You should consider leasing because it’s a simple to arrange financing agreement between yourself, your vendor of the equipment, and the lessor. Leasing should not be considered complicated, however Canadian leasing practices and the parties that participate are much different than in the U.S. . . . It benefits Canadian business owners and financial managers to ensure they understand why leasing is so popular.

Equipment Leasing and Financing Options

Two basic types of leases are available for the Canadian business owner – they are capital and operating leases. Operating leases are often promoted by manufacturers or vendors and they often include maintenance and insurance. You should consult with an Equipment financing specialist to ensure an operating lease is right for your firm.

The essence of an operating lease is that your intent is to use the equipment, but not to own it. When you enter into an operating lease ensure that you have no intention of owning the equipment at the end of term. In this case your payments will be much lower than if your intention is ownership, and you will have the benefit of some balance sheet improvement, as this lease is not shown as debt on your balance sheet. The alternative lease is a capital, or financial lease, which denotes ownership.

We can’t over emphasize the need to work with a trusted, experienced and credible advisor in this specialized area of financing in Canada. An equipment financing specialist will help you maximize the benefits of lease finance when it comes to acquiring assets, new or used, for your business .Seek out a professional that will assist you in acquiring the equipment you need and answer any questions you have about the proper rate, term and structure that your firm deserves based on overall credit and asset quality.

Equipment can be new or used, and a good lease financing specialize will be pleased to assist you in maximizing the benefits of lease financing, which include:

Simple Ways to Benefit From Lease Financing

Better use of working capital
Saves cash - often eliminates down payments
Often cheaper than a term loan
Faster and convenient re application time/process
Wont restrict your current banking arrangements
Payment flexibility
Pays for equipment out of before-tax savings rather than after-tax profit
Financing Leverage - leaves normal bank lines undisturbed
No ownership dilution
Fixed rate financing in today’s low interest rate environment.

Specialists in any industry are a benefit. Consult a lease financing specialist for your asset acquisition needs. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success who can assist your with your capital needs.

WELCOME !

Tuesday, January 14, 2020

Is a Sale Leaseback of My Business Assets a Good Thing?

Sale Leaseback Financing