How To Finance A Business In Canada

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Traditional and Alternative Debt Financing Solutions To Run - Grow - Or Start Your Company In Canada

How to finance a company in Canada - It is not secret that the ability to start a business, fund it for operations, and , as importantly , grow the company is a key challenge facing business owners, financial mgrs, and start up entrepreneurs.

There are basically only 3 ways to finance your company -

Equity


Debt


Cash Flow Financing Assets/Sales

Lets take a look at some key basics surrounding how these solutions can be accessed , and in some cases ' cobbled together' to identify the right source of business capital for your firm. Our comments will not focus on the ' equity ' component of your business ; private and public equity is a subject for another day .

In business the old adage ' timing is everything' is critical . Naturally financing your business in a healthy economy when your company is firing on all cylinders is much easier than a faltering economy or with your company experiencing financing challenges. The right amount of debt and cash flow is often the life blood of any firm . Companies large and small go out of business due to their inability to get the proper mix of financing in place.


Banks and commercial finance companies are of course your ' financial partner ' when it comes to generating financial support for your firm. As companies growth they need additional cash flow financing to support sales, a/r and inventory levels, etc. It should not, but it might ! come as a surprise to many that companies can fail when they grow too quickly.

As we noted the main providers of business financing in Canada are our chartered banks and commercial finance firms . Some of these commercial finance firms offer traditional financing - many of them are 'bank alternatives ' ,providing capital to firms who cannot access bank credit.

Debt And Cash Flow Financing Options in Canada

Banks are often the first ' go to ' when it comes to business looking to access financing solutions in Canada. When companies have the right amount of owner equity, corporate and personal assets and collateral the rates, terms flexibility, and amount of capital is virtually unlimited.

Unfortunately the banking system in Canada does not support the many thousands of firms who have basic or specialized needs and can't qualify under bank criteria. These companies just don't have the ' secondary repayment sources' and outside the business collateral often required by the SME COMMERCIAL FINANCING sector in Canada.

So what then are the options to finance a company . The options are asset based lenders and other ' alternative finance ' firms that provide

Non bank lines of credit,

A/R financing,

Inventory financing,

Purchase order financing

Tax credit finance solutions.

Sale Leaseback financing

Short Term Working Capital Loans

And it is safe to say that these firms do not require the same qualifications required by banks . It's a bit of an over simplification but the two main requirements for alternative financing are

Sales


Business Assets


Equipment financing, aka leasing your key assets is also a very effective method of financing your firm. It also relieves the larger cash outlays your business needs when it acquires assets.


Start up and small businesses have access to the Government SBL loan program - This is a government guaranteed loan which has great rates, terms and structures when it comes to acquire assets and even financing leaseholds and real estate. Many franchises in Canada, as well as business acquisitions in the SME sector are financed by the Industry Canada govt loan program .As stated the majority of the loan is guaranteed to the bank by the Federal government. A partner you might not have known you had !


Cash flow financing, or ' Asset Monetization ' can be accomplished by utilizing receivable financing, inventory finance, and even selling your tax credits such as those under the SR&ED program . The SR&ED program provides billions of dollars in non refundable credits and these credits are easily financed.


One of the best methods of cash flow financing comes your a partner you know only too well - yourself and your firm. By managing your assets such as inventory and A/R you can generate internal cash flow through your business operations.


Speak to a trusted, credible and experienced Canadian business financing advisor who has a track record of business finance success on those debt and cash flow financing options when it comes to how to finance a company in Canada.



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

Business Financing Costs For Funding Solutions In Canada

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Looking for The Best Rates & Financing To Run and Grow Your Business ?

Business funding and the costs and ' rates ' around financing a company are always top of mind for business owners and their financial managers in Canada. It is safe to say that stability around financing options and solutions that are reliable play as much a key factor as the cost of that financing.

When it comes to financing a company it's a combination of current needs as well as the sometimes overlooked intermediate and long term needs of the firm. That becomes even more important if a firm has ambitious growth and expansion plans.

What Are The Finance Needs Of A Company ?

There are numerous ways to ensure your firm can access those shorter term needs to avoid the proverbial ' cash crunch '. And, as we noted cost always plays a key role.

Although it might not be immediately obvious to all business folks, suppliers are in fact a form of short term financing . There are benefits, risks, and costs associated with vendor/supplier finance.


Let's use the example of a supplier who offers your firm payment terms of 2/20 net 60. That of course means that you can pay them in 60 days, or takes a 2% discount if you pay in 20 days. If you use a sample $ 10,000.00 invoice the arithmetic around that transaction will tell you the opportunity cost of not taking that discount is almost 19%!

Opportunity cost is a solid way of looking at financing costs - It's very simply the cost associated with passing up an opportunity when making a financial decision.

The lowest costs of business financing in Canada is financing via our Canadian chartered banks . Interest rates for borrowers, consumers and businesses alike are the lowest they have every been . So what is the challenge ? Simply that bank facilities are often a challenge for a firm to get approved , so whether it's

Unsecured Cash flow loans


Business credit lines


Installment loans


Term loans

our Canadian banks offer up a plethora of financing options! For those companies that can't access some or all of the bank credit they need it is critical owners / financial mgr's understand that numerous alternative business finance solutions are available . Even firms that have had their loans called are eligible for alternative finance solutions that can save their business and put it back on the right financial footing. Special loan designation is not fun !

As stated a number of non bank commercial finance firms provide business funding solutions, albeit at a higher rate than the banks. With this group of lenders more emphasis is placed on business assets and sales versus the bank requirements of profits, clean balance sheets, and personal guarantees and outside collateral.
Alternative finance companies simply have a different way of looking at business credit, and of course they are not funded with customer deposits, as are our banks.


Receivable financing in Canada is more common place everyday. Many misconceptions exist around financing costs associated with ' factoring ‘. It's also important to remember that A/R finance allows you avoid long term debt and giving up equity - those are important considerations. If you understand the miscellaneous charges, the advance rate, and the discount rate on Receivable Finance in Canada you may well embrace the benefits, which are:


Immediate cash flow

Bulge financing

Growth potential

Strengthened balance sheet

Our recommended form of receivable financing for clients of 7 Park Avenue Financial is Confidential Receivable Financing, allowing firms to bill and collect their own receivables as well as achieving all the benefits of non bank a/r finance. This solution is also commonly bundled into a non bank business line of credit which combines the borrowing power of your a/r, inventory, and even equipment you own.

Short term working capital loans are also very popular in recent years - Typical terms are 1-2 years maximum, and many firms can qualify for a loan amount based on 10-20 per cent of your annual sales .


Leasing/equipment financing in Canada offers competitive rates for all asset classes commensurate with your asset class and overall credit quality. The industry has a solution for every asset, and rates from 4-24% cover the spectrum of asset financing in Canada. While you will probably pay more for leasing than a bank term loan the appeal is staggered cash outlays, obsolescence protection and fewer financial covenants /restrictions.


So our bottom line today? Simply that each category of financing required comes with a different measure of cost, risk, liquidity and in many cases, restrictions. Speak to a trusted, credible and experienced Canadian business financing advisor who has a track record of business finance success , who can assist you with the cost of finance for your business.


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

Business Credit Solutions For Bank & Alternative Financing Needs

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Alternative Financing Needs Outside of Canadian Bank Business Credit

Business credit access via banking and alternative finance solutions often have business owners and their financial managers searching for the optimal finance solutions for their ongoing funding and growth needs . These solutions come in the form of business credit lines, term loans ( longer in nature - typically 2-5 years ), and short term working capital loans . 7 Park Avenue Financial clients tell us it is often somewhat of a nightmare, or at minimum, a negative experience , when it comes to searching for the right amount of capital.

How then can the business owner be successful in achieving the right financial solution for their company , while at the same time eliminating that 'negative ' vibe that comes from initial failures in securing capital.

Because the majority of business people consider ' the bank ' as the premier lender in Canada one piece of guidance we can provide is to choose the right banker, not the bank per se. An experienced commercial banker can provide you with the financial and business guidance to solve almost any financial challenge.

To gain confidence of a commercial bank , or even a business financing advisor the business owner / financial mgr must be able to properly present their current financial condition in the form of cash flow , business projections, and a clear overview of your business assets and financial potential . By the way a good business plan can pretty well do all that .

Good information such as noted above will give your lender or advisor a solid idea of incoming and outgoing cash - and will often suggest how your firm can best ' bridge the gap '.

Many business owners find the whole issue of personal guarantees a major problem in their financial decisions around business credit. Of course the majority of banks almost mandate personal guarantees, while at the same time mandating outside collateral . While alternative non bank business lenders will often request guarantees it is safe to say less emphasis is placed on that owner ' promise to pay'.

Also it is important to know that guarantees can be negotiated in many situations- they can be limited or in rarer instances waived - although in general these are exceptions, not the norm. The bottom line on guarantees is that your personal assets and credit history are a large part of traditional bank lending . In certain times in the economic cycle banks pull in the reins on business credit - you therefore need to know where the banks and your particular industry are in the credit cycle.

While the need to cultivate a positive relationship with a lender is important it's key to note that other 3rd party professionals such as lawyers, accountants, and credible business financing advisors can also steer you to the right lender or financial solution. Those introductions can be worth their weight in gold when it comes to establishing a relationship with a bank or commercial lender.


Key Criteria For Achieving Business Lending

Business people often ask us what lenders are looking for when it comes to accessing loans or business credit lines . We can summarize that pretty concisely - depth and experience of management, a good business model, and the right amount of debt and equity in their business. In the new economy companies can be either
asset intensive or service based - it's all about successfully marketing your service of product.


A final note on bank loans in Canada? Unlike the U.S. which has hundreds, even thousands of different banks and even more independent non bank finance firms Canada's banking system is smaller. Clients who are bankable often focus on ' rates ' - in our opinion the rates will vary no more than some basis points from bank to bank.


Your focus should be on the banker, and the structure, terms, and guarantees surrounding your bank loans or credit lines. That saving of a couple basis points will be non existent in your mind when you get locked into a structure or guarantee or ratio and covenant scenario that you can't get out of.

Non Bank Alternative Financial Solutions

Traditional finance solutions provide almost unlimited capital to a business that is profitable , has good cash flow, and is growing . Many firms don't necessarily meet all those criteria , so it's important to know that a number of key alternative financing solutions are available to run, grow, or even save your business.

These asset based lenders and provide :

Non Bank Business Credit Lines

Sale leaseback Solutions

Tax Credit Financing ( SR&ED )

Short Term Working Capital

Purchase Order Financing


Can you avoid business credit nightmares in Canadian banking? We sure think so... consider talking to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success on achieving some of the best business banking and alternative finance solutions in Canada.






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

Looking For A Solution To Business Cash Flow Problems ? Solved !

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Business Cash Flow & Working Capital Solutions

Business cash flow problems are encountered at numerous stages of growth in a company's existence . The good news that numerous solutions, both ' traditional ' and ' alternative' are available to fix the problem and set your company back on the right course.

One solution to the working capital conundrum is of course to stop growing ! That's a tough one for any business owner,financial mgr, or entrepreneur to accept . If they did that though they would not need to maintain a higher level of inventory, investment in accounts receivable, or to purchase new equipment/software , etc. It then makes sense that financing solutions around those asset categories we must mentioned might just be the answer you're looking for, right?


In some cases firms might find themselves in a crisis or turnaround situation - it is very difficult to grow and expand your company when you're in the throes of daily financial type issues that deter owners and mgmt from moving forward with growth plans. Quite often these situations are accompanied by pressure from secured lenders , banks, suppliers, etc. Those situations are never comfortable.

Many firms that are growing to quickly will often find that costs and other finance issues are being masked or hidden due to the apparent success of sales. But higher sales can't hide financial flaws forever.

Obviously those sales also create the need for more working capital and the required investments in those current assets on the balance sheet - a/r , inventory, etc. As we said stopping the growth frees up cash flow and some of those creditor issues. Efficiencies around collecting your a/r faster, managing better inventory turns , etc always create more cash flow . So it shouldn't always be about volume - that old adage ' We'll make it up on volume ' somehow seems to never work!

In some cases raising prices to increase cash flow might be considered , but that's rarely the focus of many business owners.


We think you can see the point, in that the optimal solution is to ensure your cash flow / working capital availability must be measured and managed around sales growth


Many businesses in Canada, (perhaps not tech type business) would be very happy with a ten percent year over year sales growth. Let's say you were focused on growing at 25% this year, a huge increase by any measure. However, profits and cash flow and working capital don't move lock step with those sales.

What then are the actual financing solutions to those changes in your current assets in the sales growth strategy. Traditional solutions such as bank financing for business lines of credit will work - Firms that cannot access any or all the bank credit they need should consider alternative financing solutions such as asset based business credit lines. These 2 types of business credit facilities allow you to better finance and manage extending credit to your clients.

No one solution is applicable to every company in every industry - so the ability to access financing assistance from an experienced 3rd party is key .

Solutions For Cash Flow Problems In Canada:

ASSET BASED LENDING

RECEIVABLE FINANCING/FACTORING

WORKING CAPITAL TERM LOANS

SHORT TERM WORKING CAPITAL LINES

PURCHASE ORDER FINANCING

INVENTORY FINANCE

TAX CREDIT FUNDING ( SR&ED LOANS )



Speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success who can assist you in the need for proper business working capital and cash flow solutions that match your company needs.


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

Business Acquisition Financing

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How Do You Finance A Business Purchase ? Like This !

Business acquisition financing in Canada comes with several myths and when it comes to arranging finance for buying a business there are some key basics every business owner / entrepreneur needs to know . It's easy to get bogged down in the legal and accounting jargon sometimes so here at 7 Park Avenue Financial we strive to give you the layman's version - in plain English!

Business value and how companies are valued are key in a successful business purchase and financing. The pro's talk about ' future cash flows' and ' earning potential ' but the formulas and calculations around these can sometimes be a little overwhelming . For a starter this area of buying a business is key and should always require some third party input from a business pro. While future earnings are key there are a number of other areas that require your focus - including ' what are the cash flows today '!

Assets are a key part of any business purchase . More and more businesses today have ' soft assets ' which often makes valuation even harder . These typically aren't treated the same as hard assets , which can be more precisely appraised and valued. The bottom line is that you have to look at each asset, soft or hard, in the context of what they do for the business.

We can't count the number of times new business financing clients have told us they feel they ' over paid ' for the company they now own and run. It's clear to us they never looked at each asset under the telescope , or even more precisely , ' under the hammer '. That ' hammer' refers to the idea of liquidation of auction value of what an asset might bring under auction. Inventories and accounts receivable are also key aspects that require significant due diligence . You need to know those ' liquid assets ' ( A/R + Inventory ) are moving cash through the business. This can often easily be measure by applying basic '
' days sales outstanding' and ' inventory turnover' ratios to your analysis.

Hard assets often naturally enhance the value and financeabilty of the business. A winning combination is good assets and good cash flows from those assets.


Proper disclosure from the seller is a final point to focus in on - Beware of sellers with dark sunglasses! That of course refers to sellers who choose to keep buyers in the dark, and a purchaser who does not prepared to do proper due diligence . Can a deal be done in the dark? Absolutely ! Will it be a successful deal for both parties? Probably not.


There's an old saying that the best deal /negotiation is when both parties feel they didn’t get all they wanted, and there’s probably a lot of truth in that.

How To Finance A Business Purchase In Canada

SBL Govt loans

Asset based lending

Bank term loans

Bridge loans

Cash flow loans - secured/unsecured


Seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success who can help you with business acquisition 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


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

Is Asset Based Lending Your Best Route To Business Financing Solutions ?

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ABL Is Your Back To Basics Business Finance & Cash Flow Conundrum Solver !

Business financing requirements for Canadian business often require very timely solutions .

Alternative finance solutions for your business are more and more becoming the new norm for funding companies in Canada. They get our clients to the ' goal line ' in a more timely manner when it comes to some of the timelines imposed on firms applying for traditional bank credit . Asset based lending , commonly called ' ABL ' solutions provide a solid funding alternative for your cash flow and working capital needs.

Clients of 7 Park Avenue Financial will often ask what is the key requirement for asset based credit lines, as well as the other funding solutions within the ABL world. That key requirement ? Assets ! Those assets can come in the form of receivables, inventory, equipment and fixed assets, company real estate, and in a round about way orders and contracts - those latter two being valuable but not on the balance sheet of course.

Those assets are collateralized or ' cash flowed ' in asset based borrowing facilities. A revolving credit facility, similar to a business bank line of credit is the common solution for many of our clients.

Cost always becomes a factor when it comes to ABL financing - it is more expensive than traditional bank rates, but the harsh reality is that many companies can't meet the key criteria required by banks such as solid consistent profits, clean balance sheets, and outside collateral and personal guarantees that available to secure bank financing.

It's safe to say though that most forms of business financing, however costly, are cheaper than giving up owner equity in your firm, especially for a firm that is growing and has promise of great value and success.

Although we stated that ABL typically costs more than bank finance solutions larger higher quality deals can actually compete with those bank rates, while at the same time providing much more liquidity !

So how does the asset based lender value and monetize those assets? Receivables are typically financed at 90% of the a/r base ; inventory margins vary depending on the nature and marketability of inventory and can range anywhere from 30-70% ; and finally equipment and real estate are typically appraised at their market or liquidation values. The bottom line? More borrowing power!

So what are some of the key benefits of asset based lending solutions? They include, as we mentioned, quicker approval . That is because the main focus of he ABL lender isn't all those financial covenants and ratios imposed by banks. For ABL it's all about .. you guessed it .. Assets!


Another point is flexibility. We see this lot. And it all comes down to the fact that there is a good chance that your business is different from many other businesses and in a different type of industry. We quite often see that a tremendous amount of flexibility can be applied, via ABL asset based lending, to your particular circumstances. Some of those circumstances might be seasonality of your revenues and cash flows, etc.

Asset finance has matured significantly in Canada. In historical terms we could say it's relatively new , but it has exploded onto the business landscape due to choices, costs, etc. Many Canadian banks have explored and are exploring these type of solutions . We keep reading in the Globe & Mail or Financial Post about the abundance of capital in the markets, and ABL lending is one of those reasons .
That's a good thing for Canadian business borrowers.

Asset finance solutions are typically revolving facilities and rarely add debt to the balance sheet . That's a good thing !

Speak to a trusted, credible and experienced Canadian business financing advisor who has a track record of success on a financing alternatives achievable for your firm, no matter what your particular circumstances are.



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

Make Business Financing Work For Your Cash Flow Needs : Here's How !

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Looking For A Financing Option For Your Company?

Business financing challenges? We hear about that a lot from clients at 7 Park Avenue Financial . It just so happens we've got some ' therapy ' for those cash flow and working capital problems that often beset a growing or newer firm. ' Therapy ' is defined as being a ' curative power ' so let's examine some of the most often utilized ( and sometimes quite unknown ) business finance solutions available to business owners in Canada today.

One of those time tested entrepreneurial sayings is ' you need money to make money !'; we're rewriting that and offering up ' you need working capital and cash flow solutions to make more money '!

Growth in sales will sometimes hide some problems for quite awhile but at some point business owners/entrepreneurs recognize that fundamental business challenges will often become increasingly severe without proper business funding underpinning the company.

Profits can fund growth for awhile but ultimately some business finance basics need to be addressed. One of those? Simply the fact that your lenders and suppliers want to be paid before you often get paid from clients.

Solutions To Business Cash Flow

What then are the right solutions for your business finance needs. The majority of clients tell us they ' went to the bank ' where quite often the bank as asked for owners to put more owner equity into the company . That works if it's possible , but that is usually a big ' if ' for most business owners.

The reality is those great sales we have been talking about have created a cash flow gap - some of our clients might call it a big chasm or canyon!

Every business needs a different amount of working capital based on their industry
and how their business if financed and run . This is where the ' cash conversion cycle ' comes into play , and it's different for every business and industry.

How does the business owner/financial mgr calculate that cash conversion cycle. It's more simple than you think - take you days sales outstanding ( DSO ), add up your inventory on hand days and then subtract payables.

That final number you arrive at tells you the length of time a dollar takes to ' travel ' through your company . In some cases it might seem like a slow meander!!

Take for example a pharmaceutical type firm that has to invest and spend tons of money before getting govt approval and bringing products to market . The other side of the spectrum? It could be a large retailer who sells on cash/credit cards and gets great payment terms from key suppliers. Their cash conversion cycle is a lot less than our pharma firm example.

So what is our bottom line then ? Simply that business can control the cash conversion cycle .

You can accelerate the cash conversion cycle by accessing bank or non bank business lines of credit. Many firms look to receivable financing , inventory financing, and even purchase order financing to speed up the working capital flows in their business. The shorter the cash conversion cycle the better!


Speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success to assist you with your business cash flow problems and working capital solutions to accelerate your cycle of cash.





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