Factors To Consider In Floor Plan Financing In Canada

 

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YOUR COMPANY IS LOOKING FOR CANADIAN FLOOR PLAN  FINANCING! 

FLOOR PLAN FINANCING COMPANIES / INVENTORY FINANCING SOLUTIONS FOR DEALERSHIP FLOOR PLANS

You've arrived at the right address! Welcome to 7 Park Avenue Financial 

        Financing & Cash flow are the biggest issues facing businesses today 

                              ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?

CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs

Email:  sprokop@7parkavenuefinancial.com

 

  

UNDERSTANDING THE BASICS OF FLOOR PLAN FINANCING IN CANADA  

 

  

"It takes money to make money." - Titus Maccius Plautus, ancient Roman playwright  

 

Floor plan financing in Canada is clearly a niche financing industry.

 

Floor plan finance solutions in  Canada allow dealerships in various industries to purchase and finance inventory - The inventory finance lender provides a line of credit solutions that allow a business to purchase inventory for resale. Borrowers under a floor plan facility pay financing costs until inventory is sole  - many different industries utilize this type of financing to generate sales revenues without having to make significant capital outlays or investments. An auto dealership is a good example of floor plan finance utilization.

 

The landscape for floor plan financing has changed dramatically over the years, with this type of financing becoming a very specialized field when it comes to the need to purchase inventory for resale. Cash flow needs around inventory and product are key to understanding the solution of a floor plan financing provider for a dealer's inventory when you need to obtain financing.

 

  

WHAT IS INVENTORY FLOOR PLAN FINANCING?  

 

The floor plan finance solutions allow short-term financing of inventories for distributors and retailers  - Floor planning allows the manufacturer or distribution segment of an industry to satisfy client needs and demands.

 

CUSTOM FLOOR PLANNING OPTIONS

 

Many types of assets can be on a lot or floor for several months - floor plan finance companies take security on assets for clients who require floor planning and who are financially stable. Typically floor plan loans are accompanied by periodic inventory checks/ collateral audits via a floor plan auditor and via verification of serial numbers/ VIN numbers as well as the requirement for proper insurance to be in place.

 

Flooring plans allow for the commercial lender to register security on assets while dealers and distributors hold possession of inventory for resale - As assets are sold loans are paid down - with the process being known as ' cash interest-based inventory management.

 

KEY BENEFITS OF FLOOR PLANNING OPTIONS

 

A dealer floor plan funding solution allows distributors and retailers to increase purchasing power in their businesses. At the same time, they have the ability to grow sales by the ability to have more products on hand, as well as making strategic purchases around product price when opportunities become available

 

  

WHAT IS A FLOOR PLAN USED FOR?  

 

A  solid asset finance solution allows for payment to the seller/manufacturer with the requirement of a dealer to pay vendors as the product is old - That cash flow solution over a longer period of time will allow sellers to turn assets and generate profits within their business cycle.

  

 

 

BUSINESS FINANCIAL SOLUTIONS

   

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As with many other types of business financing, a solid asset finance solution such as a floor plan facility allows the business to deploy capital in other areas of growth and expansion.

 

This type of focus on inventory management and asset management turnover is important to Canadian business owners and financial managers.

 

Your business has the need for inventory and floor plan financing that gives you the amount of credit limit you require to grow and prosper.

 

Interest rates charged on floor plan financing are important – equally as important is your ability to maintain enough gross margins to absorb floor planning charges and still generate a profit.

 

Floor plan financing in Canada is available for any wholesaler or retailer who is aligned with reputable manufacturers. Historically floor plan financing was for select industries but now it has broadened to a variety of consumer and commercial products.  In the 1980s and 1990s, floor planning of computers for OEMs and Value-added Resellers was an important component of the computer industry.

 

Floor plan financing is all about inventory management. You need inventory as your products are sold to your customer base.

 

In many cases, it also makes serious sense to ensure you have a financing program in place with the customer base also that is a logical extension of the floor plan financing that you yourself carry.

 

Floor plan financing is somewhat of a ‘risk-based financing, in that your floor plan lender always carries the risk that your firm might sell products ‘out of trust‘ – which is the finance terminology for the collateralization of your inventory by your floor plan financing firm.

 

 FLOOR PLAN FINANCING REQUIREMENTS 

 

A significant amount of emphasis on any floor planning arrangement is the focus that is put on your firm's overall creditworthiness and ability to conduct business in an honest and ethical manner. Clearly, your business model also necessitates that you have strong inventory and control systems in place which allow you to report regularly on the inventory that is financed, i.e. how to account for floor plan inventory.

 

In Canada, the Person Property Security Act and the concept of ‘security interest ‘is the lending documentation by which your inventory is financed and collateralized.

  

STREAMLINING INVENTORY MANAGEMENT WITH FLOOR PLAN FINANCING IN CANADA  

 

 

While physical inspections and regular and ad hoc audits are key elements of floor plan financing clearly the use of technology and the internet has significantly enhanced your ability to interact with your floor plan lender.  At the root of all floors, planning is the ability of the manufacturer, yourself, and the floor plan financier to communicate effectively. The overall creditworthiness of your company drives the final decision on what amount of maximum floor planning credit line can be provided.

 

We often speak to our clients regarding floor planning facilities on the need for your business to understand your inventory turns – in a perfect world, you want to have a strong inventory turnover which will drive a lower cost of carrying floor plan financing. In many cases the receivables you generate out of a sale of inventory can help to bolster your overall floor plan financing arrangement.

 

The ‘worst-case scenario‘ in any floor planning arrangement is your firm's inability to pay the floor plan financing at which point measures are taken to repossess the product. No one wants that of course. That’s the most negative aspect of floor plan financing – the positive aspect is that it provides tremendous financing power for sales growth.

 

  

  

KEY TAKEAWAYS FOR FLOOR PLAN FINANCING CANADA   

 

Floor plan finance options are widely used in dealership/distribution type financing for many different asset categories

Companies will often need a combination of retail and wholesale finance options for growth objectives

Independent dealers cannot always rely on a manufacturer to provide financing

Floor plan funding is often part of a  line of credit solution

Floor plan finance firms assist in areas of credit risk

 

CONCLUSION - FLOOR PLAN FINANCING CANADA

 

Floor plan financing is a key element of business finance for any wholesaler or retailer of manufactured products by well-known household and industrial names. Speak to  7 Park Avenue Financial, a credible, trusted and experienced financing advisor in this area to determine how to floor plan financing in Canada works and how specialty finance companies fill the need to improve your revenues and profits.

 

Talk to the 7 Park Avenue Financial team about the costs of financing and the overall values in a floor planning facility that meets the flexibility and pricing you require to run and grow your business.

 

 

  

FAQ: FREQUENTLY ASKED QUESTIONS / PEOPLE ALSO ASK / MORE INFORMATION 

 

What is a floor plan in financing?

 

Floor planning solutions are inventory financing solutions for many different asset collateral categories - Distributors and retailers use these short-term loan programs from floor plan lenders and lines of credit from different financial institutions to purchase products for repayment until sold. Floor plan audits by the lender are a common business practice in the industry - for example, auditing auto dealerships.

 

Wholesale financing solutions in inventory finance/dealership financing will often involve a  revolving line of credit allowing the borrower to repay inventory purchases and allowing for more control of their business - as well as helping to generate sales and better profit margins in the business.

Asset categories that use floor plans from commercial lenders include car dealerships/vehicle stock, trucks, recreational vehicles, appliances/retail goods,  and construction and industrial equipment. The automotive industry is a large user of floor plan finance solutions based on the unique needs of the industry to carry product.

This ' pay as sold'  floor plan dealer financing allows borrowers to buy inventory without the use of excessive upfront capital and the financial will typically bring a level of financial stability to the business while ensuring long-term growth and maximizing short-term product opportunities while controlling expenses and cash flow given the ability to extend repayment to the manufacturer.

 

What is floor plan financing interest in flooring financing?

 

Floor plan interest costs for dealer floorplan financing is the finance interest paid on debt used to fund acquisition of assets in an inventory finance solution.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Struggling With Cash Flow Issues ? Working Capital Financing Solutions Can Help Unlocking The Secrets To Business Cash Flow Problems !

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YOUR COMPANY IS LOOKING FOR WORKING CAPITAL SOLUTIONS!

CASH FLOW MANAGEMENT STRATEGIES AND SOLUTIONS TO IMPROVE CASH FLOW

You've arrived at the right address! Welcome to 7 Park Avenue Financial

Financing & Cash flow are the biggest issues facing businesses today

ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT  BUSINESS FINANCING OPTIONS?

CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs

EMAIL - sprokop@7parkavenuefinancial.com

 

 

WORKING CAPITAL SOLUTIONS THE COMPETITION DOESN'T WANT YOU TO KNOW ABOUT

 

 

 

Solutions to working capital problems for Canadian entrepreneurs work best when they come from the real world .. we can call it  ' main street financing '.

 

Yes, you're right - this isn't the time for ' crowdfunding ' !... what a concept that is  .. having a million people send you $1. We wish we had thought that one up.

 

THE MOST COMMON CASH FLOW PROBLEMS IN SMALL BUSINESS

What then do the Canadian business owner and financial manager do regarding cash flow problems and working capital solutions when cash flow shortfalls are tightest? Even well-operated companies require cash flow solutions for their profit and growth objectives; clients of 7 Park Avenue Financial tell us they just want to know how to get there.

 

We will discuss the common causes of cash flow shortages and what is at the root of these poor cash flow problems - Obvious issues are typically slow-paying customers or the seasonality that might occur in any business or industry - Many businesses also encounter unexpected expenses.

 

IS YOUR BUSINESS EXPERIENCING  ANY OF  THESE  COMMON  CASH FLOW PROBLEMS AND CHALLENGES?

 

Inability to pay bills and  meet vendor/supplier obligations

Unable to meet obligations around long-term debt financing

Missed opportunities for growth

Excessive reliance on the owner's personal funds to avoid a cash flow crunch

Inability to meet  payroll obligations

Reduced vendor and employee satisfaction and morale

High growth leads to lower cash flows as profits do not equal cash in a business - Expaning and a focus on growing quickly will always lead to a loss of cash flow as additional staff and investments will require external business financing

 

  

BOUNCING  BACK TO POSITIVE CASH FLOW  

Cash flow is of course 'fuel' that will drive the combinations of growth and more profits, and allow you to run day-to-day operations with greater ease. Your working capital is tied up in the current asset accounts on the balance sheet - that includes cash on hand,  accounts receivable and inventories for those businesses selling products versus services.

 

It's all bout cash going out versus cash coming in! Liquidity problems will lead to the ineffective running of the business and cash flow is always seen by business lenders as a key financial indicator of business financial health - Fast-growing and profitable businesses can easily have cash troubles.

 

 

 

2 WAYS TO ACHIEVE THE OPTIMAL BALANCE IN YOUR CASH FLOW

 

Cash flow problems and growth goals are usually tied together in some manner - problems for small businesses can be solved by a business owner by focusing on two key areas :

SALES .. AND ASSET TURNOVER!

  

Asset turnover is sometimes a bit of a surprise  to business people that aren't necessarily grounded in finance, but the issue of turning over your assets, in fact, opens up a wide variety of potential solutions, most notably:

MONETIZING AND CASH-FLOWING YOUR BUSINESS  ASSETS

 

  

By financing your assets and at the same time focusing on better turnover your overall profit/growth situation improves, almost immediately.  It’s all about ensuring your cash reserves :


Turning Inventories

Collecting Receivables Faster

Financing Long Term Assets Profitably

  
  
  

SOLUTIONS TO WORKING CAPITAL & CASH FLOW NEEDS - TRADITIONAL AND ALTERNATIVE FINANCING OPTIONS 

 


Working Capital Facilities

Short Term 12 Month Working Capital Loans Paid From Future Sales

Receivable Financing / Factoring / Confidential Receivable Finance

Asset Based Lending / Non Bank Asset Based Business Lines Of Credit

Chartered Bank Solutions

Leasing / Sale Leaseback

Tax Credit Monetization

P O Financing / Supply Chain Financing

All these key solutions can be structured from both traditional and alternative finance firms. Even better, certain solutions, structured properly can be cobbled together to increase your firm's total access to credit.  It's all about monetizing the balance sheet, and your sales!


So how does the business owner/financial manager actually figure out how much to borrow, and then whether for it's short-term financing needs? And don't forget the overriding question which is knowing how to balance the eternal questions of more debt or adding equity as examples of cash flow problems that must be addressed. 

Remember that many of the cash flow solutions here monetize assets and sales and don't require ANY dilution of equity! That's a good thing from the business owner's point of view.


For companies that have inventory, it all starts at some sort of production cycle...  but even service industries in technology or other areas have their own flavour of a working capital cycle.


A very simple rule to address working capital problems is that whenever your receivables and inventory grow you are going to have to address more working capital solutions... it's as simple as that.

  

  

28% of small business owners say they lose sleep over cash flow problems; 48% say they pay others before paying themselves; and 28% had experienced cash flow problems such as postponing hiring - SOURCE: STAPLES

 

  

  

CONCLUSION - CASH FLOW MANAGEMENT STRATEGIES FOR WORKING CAPITAL

 

There are many different types of working capital solutions for your business - as in all aspects of business financing, there are advantages and disadvantages to each solution - Making the right decision around the best solution for your company is job #1 for small business owners.

 

Cash shortages have numerous negative effects on a business and 'cash-strapped' businesses have problems that must be addressed.

 

The ability of a business to achieve positive cash flow and positive net working capital becomes the lifeblood of the company. Liquidity shortages are common in the majority of small businesses in Canada - Planning around effective cash flow management empowers your business to grow and succeed.

 

   

A Small business cash flow problem can devastate a business.

 

Speak to 7 Park Avenue Financial,  a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success. Discover how you can address cash flow challenges... the right way. That is of course if your crowdfunding strategy doesn't work... and you can pretty well count on that one! Talk to our team about your business survival plan via healthy cash flow!

 

  

FAQ: FREQUENTLY ASKED QUESTIONS /  PEOPLE ALSO ASK  / MORE INFORMATION  

 

What are cash flow problems, and how do they affect businesses?

Cash flow problems arise when inflows of cash into the business exceed current obligations - That's when a business is challenged to pay accounts payable and meet payroll obligations - Naturally growing the business in that situation is very difficult. Common causes of funding shortages include:

Low profitability - price rises won't always discourage clients and may also lead to perceived value for products and services

Overinvesting

Rapid expansion without financing in place - Uncontrolled business growth leads to cash shortfalls for businesses over-forecasting growth and expenses, it is important to distinguish between profitability and cash flow.

High fixed costs

Unexpected expenses

The owner draws from the business

Poor inventory and a/r management

Seasonal fluctuations in sales

 

  

What is working capital, and how can it help businesses solve cash flow problems?

 

Working capital is the funds that a company has available to fund day-to-day operations - Key balance sheet accounts such as inventory and accounts receivable are key components of working capital. Companies should review trade credit payment terms and focus on enforcing sound credit and collection policies.

If a business improves its working capital it can cover day-to-day operations and consider growth opportunities - Numerous small business financing solutions can be addressed to fix cash flow challenges - they include short-term working capital loans known as merchant cash advances, as well as other solutions such as invoice financing/factoring - Business lines of credit are the optimal solution. Cash flow statements in business financial statements outline the sources and uses of cash in a business. 

 

How do different working capital solutions work, and what are their advantages and disadvantages?

 

 Different working capital solutions work in different manners - for example, businesses utilizing factoring financing have the ability to sell invoices to third-party commercial financing companies, enabling the business to achieve immediate cash as sales revenues are generated. Inventory financing to fix cash flow problems can be combined with numerous asset-backed lending solutions with inventory being used as collateral for a borrowing base in combination with accounts receivable.

What can businesses do to prevent cash flow problems in the first place?

Businesses can prevent cash flow problems around poor cash flow management via financial planning in a variety of ways, including the preparation of proper cash flow forecasts and projections around cash flow management and funding needs for a healthy cash reserve based on sales and timing of receipts from customers.

Creating a short-term business survival plan should be a priority - focusing on issues such as profit and expense reduction. In certain situations, a scaling-back plan should be initiated.

In some cases, payment terms can be negotiated with key vendors and clients. Expense reduction around variable costs can also be addressed to ensure enough cash on hand. The goal is to be proactive from a prevention point of view.

Businesses also have the ability to refinance existing debt, allowing the business to achieve lower payments and lower financing costs. High-interest loans should be avoided if possible - Supplier financing can also improve the cash cycle.

    

How do you manage cash flow and working capital?    

 

Tips to improve working capital management and manage cash balances &  cash outflows include:

 

Reduce inventory and a/r investment via more effective asset turnover around days sales outstanding for outstanding receivables / slow payments , as well as  inventory turns in the business's cash flow cycle

 

Manage accounts payable - late payments to suppliers improves good  cash flow but should not be done at risk of supplier relations

 

Investigage short term financing for current assets  and business growth via a cash flow budget - Financing via confidential  invoice discounting allows a business to bill and collects its own invoices while maintaining healthy cash reserves as sales are generated

 

Increase profit margins with a focus on  gross margins and a more profitable business

 

Create proper cash flow projections with the help of proper accounting software  to help determine how much cash the business needs

 

 

 

Working Capital & Business Lines of Credit and Loans To Optimize Cash Flow

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YOUR COMPANY IS LOOKING FOR CANADIAN  BUSINESS FINANCING SOLUTIONS!

 

HOW TO MASTER BUSINESS CASH FLOW VIA WORKING CAPITAL AND LINE OF CREDIT SOLUTIONS

 

You've arrived at the right address! Welcome to 7 Park Avenue Financial

Financing & Cash flow are the  biggest issues facing businesses today

ARE YOU UNAWARE OR   DISSATISFIED WITH YOUR CURRENT  BUSINESS  FINANCING OPTIONS?

CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs

EMAIL - sprokop@7parkavenuefinancial.com

 

 

WORKING CAPITAL LINE OF CREDIT SOLUTIONS 

 

 

" If you can't manage your cash you can't manage your business " - Grant Cardone 

 

Business lines of credit & the right loans for your business deliver on working capital, cash flow, and growth for your company; they can come at a painstaking price it seems sometimes.

 

We're exploring the strategies that allow you to have business financing success in this area. Let's dig in.

 

 

WHAT IS WORKING CAPITAL? 

 

Working capital is all about the amount of cash a business can generate to fund day to day expenses and operations of the business. Business lines of credit allow a company to borrow up to predetermined limits and repay as cash flows come into the business. Working capital lines of credit loans and other monetization strategies give a company the flexibility to cover short-term obligations as sales revenues and expenses fluctuate.

 
  
FUELING  BUSINESS GROWTH-  WORKING CAPITAL AND A LINE OF CREDITS BOOST THE GROWTH OF YOUR BUSINESS   

 

 

When business owners and financial managers have successfully negotiated working capital facilities or term loans it should not be the end of the story. By that, we mean that the business owner and financial managers must continually focus on what the bank or other financial institution requires, and more importantly, how lenders view the customer from a control point of view. So how does the lender exert control over your business?

 

 

USING THE BALANCE SHEET TO FUEL BUSINESS GROWTH 

 

Knowing the balance sheet must be a top focus for the business owner - once a firm is over-leveraged, i.e. borrowing too heavily, the bank or commercial lender generally starts positioning around their overall security or your ability to de-leverage.

 

Balance sheet accounts in the working capital equation include inventories, accounts receivable, and pre-paid accounts - Short term liabilities include payables, emergency repair costs,  and fixed costs around items such as rent, utilities, etc, Some businesses must balance deferred revenue and accrued expenses in their day-to-day cash management of everyday business expenses.

 

UNDERSTANDING YOUR CASH FLOW  'TRIGGERS '

 

Borrowers must be comfortable and knowledgeable about the use of 'triggers '. Triggers are the implied actions the bank or institution will take when things aren't working out. This can include everything from general poor financial performance to very specific pre-agreed-upon financial ratios. And the business owner must remember that he or she agreed to and concurred with these ratios.

 

  

BANK FINANCING FOR BUSINESS NEEDS  

 

Banks want to see cash flow ' flowing ' - flowing to repay their debt - so there may be triggers put in place by the bank to ensure that minimum cash flow standards are kept, and also that owners and shareholders do not withdraw excess funds.

 

Over time business owners will probably find, in our experience, that the bank and business credit union restrictions either tighten up or loosen, depending of course on the overall comfort level the bank has with the firm. Clearly, firms that seem temporarily challenged in profits and balance sheet quality will receive much more scrutiny when it comes to approval for working capital lines.

 

Business owners can do some very solid and valuable preparatory work in the negotiation of bank triggers. If they have a solid long term history of earnings this should be a very strong negotiating point with the institution.

 

 WORKING CAPITAL IN BANKING 

 

Simply by self-introspection of the firm can the owner or financial manager focus on what is going to go wrong regarding sales, pricing, forex, etc? The owner needs to be able to talk about these issues and show how he could address them. Also, remember that traditional lending sources such as banks are not the only way to finance a business these days.

 

 WORKING CAPITAL FINANCING OPTIONS 

 

Other solutions in the alternative sector for SME/small business owners  include: Choosing the right type of financing for your business needs

 

A/R Financing/ Factoring

Inventory Loans

 Purchase Order Financing

Non bank asset based lines of  revolving credit

Tax Credit Financing

Sale leasebacks

 

Using 'what if 'scenarios help immensely and will position yourself as knowledgeable about your business.

 

Discussions with your bank need not be absolute and immediate on any time of loan negotiation - you can get a great informal sense of what the bank is thinking and work from that point forward. Try and read between the lines as to what is hot, and what a Vis is not with the bank Vis their perception of your firm, industry, etc.

 

In summary, business owners need to show maximum flexibility in working capital and loan negotiations. Negotiations should be from strength, accentuating the positive.

 

Example - strong forecast sales and profits can potentially offset a weaker balance sheet. That's when those alternative financial solutions should well be investigated. Trade-offs with the bank are also encouraged - and fewer triggers and covenants are better than more! Understanding the pros and cons of using a line of credit facility is key to effective business cash management.

 

 

 

' Never take your eyes off the cash flow because its the lifeblood of business ' - Richard Branson

 

 

 

 

 CONCLUSION  - SECURE YOUR BUSINESS FUTURE VIA FLEXIBLE  WORKING CAPITAL SOLUTIONS 

 

And yes, there is more than one bank in the world for small businesses, although business owners should be cautioned that shopping around is not always optimal, and can in fact backfire, particularly for a small business. Business owners beware! Speak to 7 Park Avenue Financial,  a trusted, credible, and experienced Canadian business financing advisor who can help avoid those painstaking finance errors.

 

  

FAQ FREQUENTLY ASKED QUESTIONS PEOPLE ALSO ASK MORE INFORMATION 

What is working capital, and why is it important for businesses?

 

Working capital is the funds availability that a company has that allows it to cover day-to-day operations Maintaining effective cash flows in the business allows the company to operate effectively and manage current liabilities such as accounts payable - A positive working capital position allows a business to capitalize on short-term opportunities.

 

What is a line of credit, and how does it differ from other types of financing?

Business lines of credit are a type of loan financing that allows a company to draw down on funds - Unlike term loans these facilities allow a business to pay interest only on funds that are used and drawn down on the facility - In optimal situations, business credit lines fluctuate according to sales and cash inflows from collections.

 

  

How can businesses determine their working capital needs, and what factors influence the need for cash flow?

 

  

Businesses determine working capital needs by utilizing financial measurement techniques such as the current ratio formula which subtracts current liabilities from current assets on the balance sheet to provide a net working capital amount as an example.  Other factors include the size of the business and the asset turnover in key balance sheet accounts such as accounts receivable and accounts payable. Some businesses and industries have a seasonal business aspect to sales revenues which also impacts cash needs.

 

What are the benefits and drawbacks of using a line of credit for working capital?

 

Companies that utilize a line of credit for working capital need to benefit from the flexibility to access funds as needed when there is a cash flow shortage  - Drawbacks for business owners to consider include interest rates and costs of financing and the danger of overborrowing or over-reliance on the facility.

 

 What are some alternatives to a line of credit for working capital, and how do they compare?  

 

Alternative financing solutions to a line of credit for a company's working capital needs that are short term financing based include financing solutions such as business credit cards and invoice financing, aka ' factoring ', as well as merchant cash advances which are short-term working capital loans repaid on an installment basis based on a credit limit calculated around monthly revenue and owner personal credit score and credit history. This type of small business loan / working capital loan is easily accessible but more costly.

Many firms use invoice financing as an alternative to a traditional bank business line of credit when traditional financing is not available to the business. This also eliminates overreliance on lines of credit. This method of financing allows funds to be deposited into the business bank account as sales are generated.

 

 What are some best practices for managing working capital and using a line of credit effectively?  

 

Businesses can utilize best practices around working capital management that include maintaining regular cash flow forecasts and monitoring asset turnover utilizing calculations for days sales outstanding and inventory turnover. Cash flow facilities should not be used to fund long-term assets - these assets should be funded via the use of equipment loans and lease financing which allow a business to match cash flow to useful asset life.

 

Click here for the business finance track record of 7 Park Avenue Financial

ABL Lending Versus Bank Financing - What is Right For Your Business Exploring Alternative Financing Solutions - A Deeper Dive Into ABL Versus Bank Lending

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YOU ARE LOOKING FOR ASSET BASED FINANCING / ABL LENDING  BANKING SOLUTIONS

BEYOND BANKS - THE ABL / ASSET BASED LOANS  LENDING SOLUTION FOR CASH FLOW / WORKING CAPITAL

You've arrived at the right address!  Welcome to 7 Park Avenue Financial 

        Financing & Cash flow are the biggest issues facing businesses today

               Unaware / Dissatisfied with your financing options?

Call Now! - Direct Line - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs

Email - sprokop@7parkavenuefinancial.com

 

 

UNDERSTANDING THE ASSET BASED LENDING SOLUTION – WHAT IS IT  / HOW DOES IT WORK? 

 
Are you enjoying life as a commercial borrower in Canada -?

We can't even imagine some of the answers to that question, although we have certainly heard a lot of the stories!  Let's examine why a new breath of fresh air – Asset based lending, aka  ‘ABL lending ‘ has become a favourite and very unique banking and asset financing strategy in Canada.

 
WHAT IS ABL LENDING? 

 

ABL lending is also commonly known as asset-based lending / asset-based financing -  This form of funding a business via an asset based loan utilizes the technique of collateralized loans by financing business  physical assets such as accounts receivable, inventory, and fixed assets - as well as in some cases commercial real estate if held by the business. ABL, although commonly used as an alternative to bank financing, is focused on the assets of the business, versus the typical bank credit profile - Banks focus on strong business credit scores, as well as in many cases requiring personal guarantees and external collateral -  ABL, on the other hand, focuses solely on business assets.

 

COMPARING ASSET-BASED LENDING VERSUS BANK CASH FLOW LENDING  – PROS AND CONS

 

One of our favourite expressions these days is that the old ways don’t work anymore.

 

As it relates to today’s subject of business financing we're talking of course about commercial banking facilities in Canada, and focusing primarily on firms that have challenges raising working capital and cash flow facilities that work - thereby qualifying for an unsecured loan.

It often comes down to a comparison of the two types of financing, traditional Canadian commercial banking, and our favourite new kid on the block, ABL lending and banking. We use the term new but quite honestly it’s simply a Canadian business financing facility that hasn’t been heard of by many Canadian business owners and financial managers for a variety of reasons.  Maybe some people prefer to hide a good thing and keep it secret.

 

COMPARING INTEREST RATES AND FINANCING COSTS IN BANK FINANCE VS ABL LENDING SOLUTIONS

 

 

 

THE ADVANTAGES OF ASSET BASED LENDING – FLEXIBLE, FAST, AND FINANCING BASED ON YOUR SALES AND ASSETS!

So what's better, a 'regular' commercial banking facility via a Canadian chartered bank, or ABL lending and financing via a true asset based line of credit?  Regular commercial facilities are extremely focused on criteria for mutual success - we say mutual because we hope everyone agrees that your firm and the lender both have to win. (By the way, we are on our client's side in that battle).

 

Borrowers, however, must understand that financing costs in asset-based lending solutions are commonly higher and companies must be able to report properly on the company's assets via financial statement updates, as well as provide information on sales, receivables, payables, etc.

In certain cases, other assets such as  intellectual property or ' brand ' might qualify for additional financing within the credit facility.

 

THE ROLE OF CREDITWORTHINESS IN A BANK FINANCING SOLUTION

 

score history and ratios, personal guarantees, liens and covenants

Got what it takes for a Canadian commercial banking facility?  You know the drill - you need reasonable leverage, no significant events that are negative in nature, covenants that are a combo of income statement and balance sheet based - for example, fixed charge coverage, etc.!

 

Canadian banking loan approvals place a heavy emphasis on business credit score history and rations, personal guarantees, and liens and borrowing covenants related to the credit facility. Businesses should also expect to have best practices for inventory management.

Traditional lending is of course alive and well in Canada – banks provide commercial loans/business loans for an unlimited amount for financing that meets bank creditworthiness criteria.

Lines of credit and unsecured loans come at competitive interest rates from banking financial institutions. Companies must ensure they met business credit score criteria and must be in a position to provide personal guarantees as well as adhere to loan covenants and financial ratios as set out by bank underwriters

 

ABL LENDING ELIGIBILITY

But hey, what about ABL banking and asset financing - what's required there?  Are you ready? Just assets!

That’s the appeal of asset-based banking and financing - it focuses almost solely on current assets, key categories being, of course, receivables and inventory.  Where our commercial banking friends focus in a dramatically different manner in analyzing and funding your business, the ABL focus is simply on asset monitoring and ensuring you can borrow on a daily basis at the highest of advance rates based on real-world values of your assets. Oh, and by the way, 'strange events' are fully allowed - so you have a challenge, an acquisition, a special loan situation, a year of bad luck... You will still be forgiven by ABL lending and banking.

CONCLUSION – THE RIGHT FINANCING OPTION FOR YOUR BUSINESS

 

ABL loan solutions provide a business with access to working capital and enhanced cash flow that otherwise might not be available from traditional bank lending.  ABL facilities are flexible and often custom-tailored to a particular business or industry - that flexibility in the type of repayment provides access to capital that otherwise might not be available.

Want to ensure you have maximum availability on borrowing against your assets on a daily basis - speak to a trusted, credible and experienced Canadian business financing advisor about an asset based line of credit that makes perfect sense for your company. 

 

Speak to the  7 Park Avenue Financial team about our expertise in working capital loans and accounts receivable financing solutions that combine inventory financing and equipment financing in a secured lending non-bank lending solution. Debt financing via alternative financing solutions can be the growth capital you are looking for to grow your business.

 
 
 
 FAQ FREQUENTLY ASKED QUESTIONS / PEOPLE ALSO ASK / MORE INFORMATION

 

What is asset-based lending?

 

Asset-based lending /ABL is a type of financing that uses the assets of a business as loan collateral. Typical balance sheet assets that are financed include accounts receivables, inventories, and fixed assets. Widely used as an alternative to traditional financing institutions such as banks many companies in the SME sector utilize ABL credit lines and term loans as a senior lender solution to the company's funding needs.

 

How  does ABL lending differ from traditional bank financing?  Why choose asset based lending?

The difference in ABL lending, when compared to traditional bank finance solutions, is that banks focus on financial fundamentals around strong balance sheets, cash flow, and profit generation. Cash flow financing is a cornerstone of bank unsecured lending. The emphasis in bank financing solutions is also on the personal guarantee of the owners and the potential need to provide external collateral.

 

Secured lending can assist businesses in obtaining financing when traditional finance cannot be accessed. Additionally, ABL loans are often used in business turnaround and the restructuring efforts of a company.

Asset based lenders focus on the sales revenue and business assets, deemphasizing limited personal credit history, low personal credit scores, etc.

 

 How can a company determine whether ABL lending is right for them?

 

Companies considering ABL lending should consider their cash flow needs in day-to-day funding of operations, and the ability to provide asset coverage around key business-specific assets.  Multiple forms of collateral can make up an ABL financing line of credit or term loan- and the ' covenant light structure ' of ABL is a key benefit of this method of financing.

Businesses that cannot achieve some or all of the bank financing they need to run and grow their business are solid candidates for asset-backed lending solutions. Business owners should also be prepared to understand the interest rates and cost of financing in accessing ABL capital. A broad range of industries and businesses in the Canadian economy utilizes asset backed loans.

Companies using ABL products such as financing  for receivables can receive up to 90% of the face value of the receivables - allowing the company to pursue  growth opportunities  via more financing and liquidity around the borrowing base investment in A/R - The positive impact of accounts receivable financing on cash flow and working capital should not be underestimated when considering the investment companies make in carrying trade receivables.

 

 

 

 

Click here for the business finance track record of 7 Park Avenue Financial

SR&ED Tax Credit Loan Financing Working Capital Via SRED Finance

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YOUR COMPANY IS LOOKING FOR A CANADIAN SR&ED FINANCING 

LET US HELP YOU FINANCE SR&ED CLAIMS TODAY! FUNDING YOUR R&D SCIENTIFIC RESEARCH

You've arrived at the right address! Welcome to 7 Park Avenue Financial

        Financing & Cash flow are the biggest issues facing businesses today

                              ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?

CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs

EMAIL - sprokop@7parkavenuefinancial.com

 

 

FINANCE YOUR CANADIAN GOVERNMENT SR&ED CREDIT REFUND  

 

  

What is the SR&ED Credit and Why Should Your Company Take Advantage of the Program?   

 

SR&ED financing is simply the method by which you can, at your own firm's own option, monetize or ‘cash flow' your SR&ED tax credit and generate needed working capital and cash flow for ongoing operations or of course further investment in your R&D capital processes and development. All Canadian controlled private corporations  in every industry are eligible under the program.

 

 

WHAT IS SR&ED? 

 

The 'SRED' program is one of the best, yet somewhat underutilized ways of recovering research and development expenditures. When both the federal and provincial tax credits under the program are combined they can return up to 50% of your R&D spend via the Canada Revenue Agency administration of the sr&ed program.

 

ELIMINATE THE WAITING - CASH FLOW YOUR SR&ED REFUNDABLE TAX CREDIT

 

We have all seen the oil change commercial where the mechanic states ‘you can pay me now or pay me later'. Well, financing your SR ED Claim has a similar ring to it – of course, you have the option of waiting for the government at the federal and provincial levels to mail your firm your cheque – which could take anywhere from 1-12 months – Or you can arrange to finance that claim now and utilize those funds for any business purpose.

 

  

FINANCE YOUR SR&ED CLAIM BEFORE YOU  FILE - YES YOU CAN!  

 

Are we eligible to finance our SR ED tax credits? Clients often ask. We can only reply that if you have a claim, and have filed it, you are in fact eligible.  In fact, under certain circumstances, it can be arranged to receive funds even prior to filing for the investment tax credit.

 

 

ELIGIBLE SR&ED EXPENDITURES 

 

That's what we at 7 Park Avenue call a financial incentive!  Spending items covered in your refund includes items such as salaries, work done by subcontractors on your project via guidelines around scientific of technological uncertainty,  and items  and materials purchased relevant to your specific project. Your claim is filed with your T1 tax return in conjunction with your accountant and SR&ED Consultant.

 

 

THE BENEFITS OF THE SR&ED PROGRAM 

 

Clearly, the purely financial benefits of the SRED grant program in Canada are numerous – you receive significant amounts back from expenditures made on research, including wages and salaries associated with that research, as well as major portions of material and equipment expenses.

   

THE ROLE OF INDUSTRY SR&ED CONSULTANTS   

 

Industry sred consultants with technical knowledge in your business and industry are invaluable in maximizing your claim and preparing the claim via write-up and filing. Bottom line - maximizing sr ed funding for a more effective cash management process around your r&d. The software development industry is a huge user of the sr&ed program to capitalize on the tax incentive provided by  the program.

 

All of those above-noted expenses are ‘cash out' to your firm – the funds have been spent. So why not consider financing your claim and receiving those funds back in an extremely timely manner?

 

SR&ED FINANCING - WHAT YOU NEED TO KNOW!

 

We can almost hear some of your questions now as you review our information, as they are typical of what many clients ask:

 

• How exactly do I monetize the SRED claim?
• What exactly is an SRED loan – is there additional debt involved?
• How long does it take and what does it cost?

 

Let’s cover some of those very basic questions so you can feel comfortable about the SRED financing process. The SRED financing or the monetization or cash flowing of your SRED claim is simply a business financing that uses the actual SRED claim as collateral.

 

You receive approximately 75% of the full federal and provincial total as a short-term cash loan that is collateralized by the SRED itself. Of course, the additional 25% is still yours, it is simply held back as a buffer for any adjustments that are made to your claim.

 

 SR&ED LOANS DO NOT HAVE MONTHLY PAYMENT OBLIGATIONS 

 

No payments are made on your SRED loan, and the final cheque to your firm (you have already received 70%) is the holdback amount less the financing costs. So you have pure cash flow and additional working capital, no long-term debt associated with a loan per se, and no payments are made. That is truly creative business financing of which most Canadian business owners are not even aware.

 

 FUNDING IN 2 WEEKS! 

 

The typical process to create SR&ED financing is approximately 2-3 weeks, you should quite frankly view it as any other business application – the usual business info and backup on your firm, plus of course the details of the SRED financing.

 

From the government's perspective, the amount of time it takes to validate your claim on the sr ed refund or inquire about any specific details might be from 2-6 months depending on the size of your claim. Your actual SRED credit is the main collateral for the loan; Canadian firms are tired of waiting for their refund, so they explore the refundable tax credit financing option for sr ed tax incentives.

 

This short-term working capital loan is a key source of cash for many younger and growing companies, with many still in 'start-up' mode. They can't wait for long periods of time to conduct research and recover expenditures related to future sales prospects - SRED finance loans for Canadian companies allow the firm to grow faster as you focus on r&d around scientific or technological advancement / technical challenges in your company/industry.

 

 CONCLUSION  - SR&ED TAX CREDIT FINANCING / SR&ED LOANS

 

In summary, have your claim prepared by a qualified SRED consultant - recent submission rules and styles have changed.

 

If you have unlimited cash flow and working capital resources by all means wait for your cheque – if you want to cash flow or discount your claim speak to 7 Park Avenue Financial,  a credible experienced and trusted business financing advisor in the area of SRED Financing.

 

  

FAQ: FREQUENTLY ASKED QUESTIONS PEOPLE ALSO ASK MORE INFORMATION  

 

What is the sr&ed expenditure limit?

Canada's sr&ed program offers specified rates on qualified expenditures - with a non-refundable tax credit that is applied to a reduction in taxes payable.

 

 

Click here for the business finance track record of 7 Park Avenue Financial

BUSINESS FINANCING OPTIONS

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YOUR COMPANY IS LOOKING FOR  BUSINESS FINANCING SOLUTIONS!

SMALL BUSINESS LOANS AND BUSINESS FINANCING 

You've arrived at the right address! Welcome to 7 Park Avenue Financial

Financing & Cash flow are the  biggest issues facing business today

ARE YOU UNAWARE OR   DISSATISFIED WITH YOUR CURRENT  BUSINESS  FINANCING OPTIONS?

CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs

EMAIL - sprokop@7parkavenuefinancial.com

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

 

  

THE IMPORTANCE OF BUSINESS FINANCING SOLUTIONS FOR CANADIAN BUSINESSES 

 

Funding businesses in Canada often comes down to recognizing what type of business financing loans make sense for your firm. In fact, not properly ascertaining what type of finance or business loan is needed makes sense, or that your company is qualified for is what it's really all about - It's all about ways to finance your business. Let’s dig in.

 

   

UNDERSTANDING YOUR BUSINESS FINANCE NEEDS  

 


"You can't build a reputation on what you are going to do." - Henry Ford


Let's dig in!

WHAT TYPES OF BUSINESS FINANCING ARE AVAILABLE IN CANADA - THE PROS AND CONS OF DIFFERENT BUSINESS FINANCING OPTIONS IN CANADA

It’s no secret that it's a challenge for small and medium-sized businesses in Canada to access capital in Canada. Canadian banks of course maintain that they do finance the SME sector in Canada but the traditional financial institutions' lending model has a lending process and rules and regulations that make bank financing a challenge for many businesses – The bank credit model for business lending focuses on established businesses with healthy balance sheets and firms who exhibit profitability and cash flow and can establish business credit.

IS ALTERNATIVE FINANCING THE SOLUTION – WHAT IS ALTERNATIVE FINANCING IN CANADA

Alternative financing solutions allow businesses to acquire capital outside of traditional banking and other regulated financial institutions. There are alternatives to traditional bank loans for Canadian entrepreneurs. In some cases even online finance is available. Businesses choose non-bank lenders and commercial finance companies for a variety of reasons :

Alternative lenders have different credit approval requirements when compared to banks

Qualification criteria are more accessible and timelines are much shorter compared to the amount of time banks and other financial institutions take to approve business credit

 
UNDERSTANDING CASH FLOW AND WORKING CAPITAL

 

Part of the confusion around picking the right type of business loans revolves around understanding the sometimes subtle ( and sometimes not so subtle !) differences between ' working capital, ''   cash flow,' 'profits' and ' asset turnover. You may want to ensure you understand those differences.

 
PROFITS DON'T EQUAL CASH - HERE'S A FAMOUS EXAMPLE

We all should be familiar with the idea that profit isn’t cash, and many a great company has stumbled and fallen around missing that difference. They're a classic example of that in the U.S. used in textbook studies - it revolved around the dept store W.T. Grant.

It was a public company, seemed to be doing well (keyword = ' seemed ‘) and went under to the surprise of all, including shareholders!  The reason - things on paper looked great; assets were huge. The problem - assets weren't turning, and there was no real cash. After the company went under, the accounting industry invented the ' cash flow ' statement, which is not a part of every financial statement.

 
GROWTH REQUIRES FURTHER INVESTMENT IN CURRENT ASSETS

 

The reasons that cash and profit don’t equate often come down to the asset turnover we have talked about. As your firm builds up inventory and sells products on credit terms, a huge gap develops between paper profits and cash in the bank.

 
WHAT ARE METHODS TO FINANCE WORKING CAPITAL

 

 

Companies finance working capital, which then becomes cash via short-term credit facilities. In Canada.

 

TYPES OF BUSINESS LOANS IN CANADA - UNLOCKING THE SECRETS TO SUCCESSFUL BUSINESS FINANCING

 

 

Bank Loans / Bank credit lines - Traditional bank loans and lines of credit

 

Commercial A/R financing facilities / Invoice Financing

 

Inventory financing arrangements

 

PO Financing

 

Tax Credit Financing

 

Non-Bank ABL Asset-based credit lines

 

Short Term Working Capital Loans / Business Credit Cards / Merchant Cash Advances

 

The ability to turn receivables and inventory into cash is the ultimate measure of a business's success.

 

GOVERNMENT-BACKED LOANS - GOVERNMENT PROGRAMS TO SUPPORT BUSINESS FINANCING IN CANADA

 

Some Canadian businesses look to the Canada Small Business Financing Program as a small business loan to fund equipment, leasehold improvements, and in some cases, even real estate. Helping small businesses get loans is what this government program is all about. The interest rate on the program is competitive. Startup financing options for small businesses are always a challenge for business loan applicants!

 

The ' SBL ' Program is one of the best low interest small business loans for startups in Canada via a financial institution, including franchise purchases.

In 2022 the Government of Canada made substantial changes to the program, as the program options and requirements had not changed for many years! All of these changes are very favourable for the Canadian SME sector.

Changes to the program include entirely new classes of financing that are offered, increased lending amounts, and a reduction in administrative burden to the financial institutions that support the program.

The new maximum loan amount for the SBL Loan has been increased to 1.1 Million $ - Along with financing equipment and other assets as well as leasehold improvements the program can now also offer financing for intangible asses and working capital – including a line of credit facility.

The previous focus of the program revolved entirely around equipment/leaseholds/commercial real estate.

Intangible assets include capitalized r&d and even franchise fees. Many entrepreneurs used the program for franchise financing.

Many aspects of the program now include extended amortization periods, thereby lowering monthly payments.

Interest rates under the program are based on a 3% over bank prime, which is a competitive rate for small business borrowing.

Many business owners and entrepreneurs can also access government crown corporation financing via bdc for access to small business financing options.

Businesses that have been in business for 2 years and who have business profits can access a variety of solutions for working capital and the purchase of assets and real estate. Financing can be used to acquire commercial real estate or buy a business or working capital via a term loan structure.

ELIGIBILITY CRITERIA FOR GOVERNMENT BUSINESS LOANS

It is probably the best bank loan an early-stage firm can achieve from traditional financial institutions such as banks or business-oriented credit unions. A business plan highlighting your products or services, financial needs, etc., is always recommended for many types of financing - 7 Park Avenue Financial business plans meet and exceed banks' and commercial lenders' requirements.

 

For most small business solutions, focus on repayment terms that suit your cash inflows and remember that a good credit score and personal credit history is most times ( but not all times ) a requirement for business owners.

 

 
KEY ASSET FINANCING STRATEGIES & ALTERNATIVE FINANCING OPTIONS

The business owner/ financial manager should also be watching cash availability and assets needed to run and grow the business. Here asset financing strategies are key - they include:

 

Equipment Financing Options for Canadian small businesses/equipment leasing

 

Bridge Loans

 

Sale-Leaseback strategies

 

 
MATCHING LONG-TERM FINANCING NEEDS WITH ... LONG-TERM FINANCING!

The key point owners/managers need to recognize in acquiring capital assets is that these assets will typically be used over several years, so it doesn’t make sense to deplete cash and credit lines today for benefits that will be received over time. It's all about matching small business loans or lease solutions to your specific needs via the right debt financing.

SOURCES OF STARTUP FINANCING - BYPASSING THE BANK!

Startup financing sources in Canada are another challenge facing the entrepreneur. Owners should also be aware that they must be able to demonstrate some source of their own equity capital in the business. 

 

Startup companies / new or smaller businesses can rarely access needed capital, in part due to the lending process and regulations around the lack of an established credit profile requiring financial statements and tax information and personal net worth and suitable credit score of owners.
 

 

Financing startups can come from sources such as the owner’s personal investment, friends and family, government grants and government loans, or assistance from local business incubators.

Many entrepreneurs view venture capital firms as a potential source of funds, but the reality is that only the smallest portion of Canadian businesses are candidates for VC capital. These businesses are typically technology-type companies and are firms that already have revenue traction and are in high growth mode.

 

And of course venture capitalists and Private Equity firms demand a large portion of your equity in exchange for their significant investments. Often angel investors might be a potential source of capital and expertise for your business around areas such as financial planning and equity financing  – again with the caveat that you are giving up partial ownership.

Many tech-type firms look to sources of funding such as CROWDFUNDING from a viewpoint of sourcing capital versus traditional loans.

Often local ‘ BUSINESS INCUBATORS ‘ are a welcome source of support for newer businesses, providing expertise and resources and shared services in the early stages of a business.

GRANT FINANCING

Grant financing / small business grants from federal and provincial government agencies is also available to assist many Canadian firms in help in raising capital, especially those involved in various levels of small business innovation research and development. Financing from grants will often help to cover certain levels of salaries and r&d.

 

Although business grants are not repayable they often come with challenging terms and often further matching funding is required. Talk to the 7 Park Avenue Financial team about grant financing strategies and Canadian government grants and loans for small businesses.

Many companies employ ‘ grant writers ‘ to source grant funding – as they are skilled and experienced at providing project descriptions and business plans, financial projections, and work plans, as well as completing government form requirements around the grant.

 

"It takes money to make money." - Titus Maccius Plautus

 CONCLUSION -  BUSINESS FINANCING AND LOANS IN CANADA

Remember to ensure that working capital and cash flow needs cover your ability to pay down debt and purchase or finance new assets needed in the business.

 

Tired of approaching family and friends and angel investors for raising money,  and, dare we say it, the venture capital journey ? ! Sources of finance for small business rarely includes VC's.

If you're focused on properly recognizing the right type of business financing loans and asset monetization strategies for small businesses in Canada, speak to 7 Park Avenue Financial,  a trusted, credible and experienced Canadian business financing advisor who can assist you in business funding that matches your needs and help you find final solutions to term loan or asset monetization finance solutions for your business's success.

Talk to the 7 Park Avenue Financial team for information and assistance on the financing options you need to grow your business to access loans from traditional lenders and alternative lenders.

FAQ: FREQUENTLY ASKED QUESTIONS / PEOPLE ALSO ASK / MORE INFORMATION

 

What are financing options for small business?

 

Common financing options for small business to borrow funds include:

 

Self financing

Business Credit Cards

Small Business Loans

Government Guaranteed loans

Equipment Leasing

Community Development Futures Programs

Invoice Factoring

 

 

 What are SBA Loans 

 

SBA loans are government guaranteed loans from the U.S. Small business administration - These loans are not available to Canadian borrowers, but the program is similar to the Canada small business financing program which  has federal government guarantees on loans made by banks to business borrowers who might not otherwise qualify for traditional financing.

 

 

What are business term loans / longer term loans?

 

Larger asset purchase around land and equipment are typically financed with business loans of a longer duration. Typical terms range from 3-7 years depending on asset category being financed.

 

 

 

 

 

Click here for the business finance track record of 7 Park Avenue Financial