Business Financing Canada: Loans And Finance Sources For Growth Factor Needs

Are Your Business Financing Needs On Or Off the Grid!?

OVERVIEW – Information on business financing in Canada. What loans and finance sources ( traditional and alternative ) are available for SME ( small and medium enterprise ) businesses that need to address growth

Business Financing in Canada finds owners/financial mgrs (particularly in the SME area) either on... or off... ‘the grid'. That's our term for traditional (on) or alternative (off) loans and finance sources. With all the changes in business and finance in these post recession years the challenges around accessing capital sometimes seem greater than ever. Let's dig in.

Owners/finance mgrs have had to do a lot of learning in 'Off the grid' financing and an equal amt of ' unlearning' in ' on the grid ' traditional solutions, many of which are no longer available or somewhat inaccessible.

Business owners in small and medium business often make the mistake that their personal banking relationships will take them into commercial banking relationships with the same bank - they feel even more strongly about that when they have good personal credit and other personal borrowings from that bank

However Canadian chartered banks run their commercial borrowings from major commercial offices and head office quite distant from the local branch relationship. More to the point commercial borrowing involves data points that are highly focused on business cash flow and other measures of business health including debt to equity, interest coverage, and quality of assets and collateral.

Being unable to access traditional capital has opened the world of ' off the grid ' finance sources - our coined term for ALTERNATIVE LOANS & FINANCING. While most business owners associate non bank financing with higher costs they need to understand the benefits of these solutions, which tend to be:

Quicker approval turnaround

More flexibility

Access to greater amounts of capital

While it is true that in most cases alternate finance solutions do bring a higher cost of funds in many cases their short term nature is actually cheaper than borrowing long term or taking on debt that will be on the balance sheet for a long time.


The one type of bank financing that is a ' hybrid ' of our on grid/off grid financial strategy is the Government Guaranteed Business Loan. Here term debt at attractive rates and structures offers a great solution for equipment needs and leasehold improvements. The downside? It's term debt and is not a cash flow/working capital/business line of credit solution that some business folks mistake it for.

Understanding non bank finance alternatives is key knowing what to borrow and when. This is a great time to measure the amount of financing you need, what it will cost and how it will contribute to your return on investment/return on assets.

And what exactly are those non bank finance alternatives? They include:

A/F Financing (Traditional factoring or our recommended CONFIDENTIAL RECEIVABLE FINANCE)

Inventory Financing

Asset based business lines of credit

SR&ED Tax credit financing

Bridge loans (asset based) & Sale leasebacks

Sales/Royalty Financing

Purchase Order/Contract Financing

If you're looking to better understand financing sources ' on' or ' off' the grid
seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with business finance needs.


ABOUT THE AUTHOR:
Stan Prokop - 7 Park Avenue Financial :
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 90 Million $ of financing for Canadian corporations . Info /Contact :


7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS FINANCING EXPERTISE





Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop

Sale Leaseback Transactions : Journey To The Center Of Lease Back Financing

Going Where Some Have Gone Before : The Sale Leaseback

OVERVIEW – Information on lease back financing in Canada. Sale leaseback transactions, implemented properly , is a solid way to maximize assets and enhance cash flow

Sale leaseback transactions present a unique opportunity to monetize existing equipment and real estate assets while still enjoying the benefits to the business of those assets. Many owners/financial managers are either unfamiliar with the process, or simply don’t understand when this type of financing is most applicable to their business. Let us therefore journey to the center of lease back finance! Let's dig in.

What then is the key driver in this whole process? Simply speaking it allows your company to use assets that are existing in the business while utilizing those assets to hopefully generate profits.

What can these funds be used for when a leaseback is completed. Numerous scenarios include:

Repayment of any existing debt

Generation of cash flow and working capital for the business

Owner proceeds

Partnership payouts

Financing new assets required in the business


The documentation and legality surrounding this method of financing is very basic - Title transfers to your lender, typically a bank but most often a commercial financing company. Based on the agreed upon value of the transaction your company makes monthly payments for a pre-agreed term. It's important this term could be short , i.e. a year , wherein its called a ' bridge loan', or alternately the amortization might be 3, 5, 7, even 10 years depending on the asset financed.

When traditional financing via Canadian chartered banks is not available business owners/managers typically use this financing for some sort of turnaround/restructuring of their business. We note to clients that it's important they discuss with their accountants any positive (or negative) implications around tax and balance sheets.

The size of your financing will often dictate what lender is optimal for your transaction. Also factoring into that equation is the nature of the asset - which typically includes categories such as plant assets, real estate, office technology, construction equipment (very popular!) and other miscellaneous asset categories.

Many business owners/managers contemplating sale leaseback transaction financing don't fully comprehend either the requirement for an appraisal or valuation, the nature of that whole process, and how the outcome affects your financing.

Appraisals and valuations affect the value of the asset with respect to the financing request. Lenders will focus on market values and liquidation values

(lenders seem to focus on worst case scenarios surprisingly!).








It is very rare that you would be able to achieve 100% financing on any valuation during a lease back financing - it's often a healthy per cent age of the total value of the asset or assets in question.

If you're looking to venture where you haven’t been before when it comes to considering a leaseback of assets seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with your needs.



Stan Prokop - 7 Park Avenue Financial :

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 90 Million $ of financing for Canadian corporations . Info /Contact :



7 PARK AVENUE FINANCIAL = CANADIAN SALE LEASEBACK FINANCING EXPERTISE







Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:
7 Park Avenue Financial

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop

Simplifying The Business Credit Revolving Credit Line Funding Decision

Feel Like You’re Flying Blind On Business Credit Lines And Alternatives?

OVERVIEW – Information on business credit line funding in Canada. Revolving facilities such as asset based lending and traditional bank credit round out the solution you’re looking for . Which works for your business?

Business revolving credit line funding
has many Canadian business owners and financial managers feeling like they are ' flying blind '. At the heart of the matter are really only two basic funding decisions - A Canadian chartered bank credit line or an alternative Asset Based facility offered by a non bank commercial lender. Which one works, or won't work for your business? Let's dig in.

The actual financial strength of your company will often drive the decision for which type of business credit lines make sense for your firm. In certain case a bank or an asset based lender will have certain industry expertise that will be invaluable to your firm.

Businesses that are currently financially challenged in some manner or in some sort of temporary downturn will almost always be unable to attain ' conventional bank financing ‘. That then gravitates your business to an asset based lender.

One area that comes under some interesting discussion around bank vs. asset credit lines is the reporting requirements. Typically bank credit lines require monthly and annual reporting at a minimum - Asset based lenders certainly mirror this policy but reporting requirements actually might be on a weekly basis. Typically asset classes that are financed under revolving credit lines are:

Receivables

Inventory

Equipment

The proper way to look at this as maintained by most experts is that banks lending on business credit lines are ' cash flow ' focused - the downside here is that numerous covenants are put in place by the bank and must be maintained at all times . If they are not companies are put in SPECIAL LOAN portfolios and find themselves at significant risk. The other side of the coin is that asset lenders focus on assets only, not covenants or cash flow per se

Many firms we meet qualify for some bank financing - but not all the capital they need to run/grow business. As a result they have a low cost of borrowing but are constantly constrained by lack of liquidity. In many cases asset based credit lines can immediately double your borrowing power.

Double your borrowing power? Yes, simply because receivables are typically financed at 90% (versus bank 75%), inventories are margined to actual collateral value, and, unlike bank lines, equipment/fixed assets can be a part of any asset based credit line.

We always like to point out to clients that the most efficient turnovers you can attain in receivables and inventory turns will eliminate that much more the need to borrow. Its internal financing 101.

If you're looking to simplify your business credit needs , understand alternatives, and wish to avoid that uneasy feeling in business of flying blind seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success
who can assist you with your borrowing needs.


Stan Prokop - 7 Park Avenue Financial :
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 90 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN
http://www.7parkavenuefinancial.com/business-revolving-credit-line-funding.html





Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '









Stan Prokop

Account Receivable Credit Can Eliminate Your Bleak Cash Flow Future Via Factoring Receivables Funding

Account Receivable Credit Solutions : Do You Know Them All?

OVERVIEW – Information on account receivable credit solutions in Canada. How does bank financing and factoring receivables differ in benefits, cost, and methodology .One recommendation offered works best

Account receivable credit solutions simply enhance the ability of Canadian business to facilitate business credit sales to customers. Whether its bank financing or commercial factoring receivables solutions these offerings put you in a position to eliminate what must sometimes seem like a ' bleak future '

when it comes to accessing business funding. Let's dig in.





Novice entrepreneurs up to experienced savvy business finance folks are keenly aware of ' the gap '. It's simply the time in between shipment or delivery of your product or service to the time you get paid - with 60 days feeling very much like the norm these days. A further complication? Traditional bank financing for revolving facilities is worth a million, but unfortunately no accessible by all.

Enter various forms of ' factoring receivables ' one of which might just be perfect for your business. We say ' one of ' because there are numerous offerings in the marketplace, making it easily confusing for the owner/financial manager.

The paperwork around various forms of factoring essentially does one thing - it identifies that receivables are being ' sold' as they are financed, unlike the bank which simply takes the A/R as collateral. More often than not business factoring mirrors bank financing in your obligations - that is to say that you are still responsible for any bad debt.

The key benefit of a commercial non bank A/R financing solution often boils down to:

Speed

Amount of capital you can access


While bank credit lines typically have a ' cap ' a solid non bank facility will often have unlimited upside financing capability. Simply speaking - if you have sales and A/R you will have full funding.

Spoiler alert! Factoring receivables will always be more expensive than bank financing with a typical fee on each receivable being in the 1.5 - 2% range. Simply speaking, on a 10k sale to a client you will receive same day funding and can expect to pay 150-200$. Clients we have worked with have been able to significantly reduce that cost by taking similar discounts with their new found cash, or in some cases negotiating better pricing with their vendors. Clients also forget that it costs money to carry A/R.

Many clients we speak to have heard of, or wish to avoid the involvement of a Commercial factoring company in their business model and client relationship. Can that be achieved? It can, via the use of CONFIDENTIAL A/R RECEIVABLES factoring, allowing you to bill and collect all your accounts with no notice or involvement to your clients or suppliers.

If you're not sure you understand all the benefits and mechanics of good and bad A/R financing offerings seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you in turning that ' bleak' cash flow future into a positive financial growth opportunity for your business.



Stan Prokop - 7 Park Avenue Financial :
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 90 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN RECEIVABLES FINANCING SOLUTIONS





Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop

SRED Tax Credits : Let Calm Prevail By Financing Your SR ED Refund Claim

How To Survive The SR&ED Refund Waiting Game

OVERVIEW – Information on the benefits and advantages of financing SRED Tax Credits In Canada. A Bridge Loan for your SR ED Refund Claim monetizes your refundable tax credit and provides valuable cash flow .. today

SRED (SR&ED) tax credits have the ability to create a certain amount of anxiety in Canadian business owners who utilize the program, if only for the fact that from the time you start your annual claim (many businesses file year after year successfully) a major waiting game starts! The way to eliminate that wait and shorten the cycle? Finance your SR ED refund claim. Let's dig in.


For the thousands of firms that successfully claim their share of billions of dollars funded annually by the fed/prov got vis a vis the SR&ED program the cash flow derived from those ' refundable tax credits' place a huge role in the ongoing financing of their company. It's interesting to note that many firms that file claims are actually in start up mode or pre-revenue/early stage revenue.

These tax credits come in the form of a cash refund. The problem? Time! Many, many months, in some cases a year, can transpire before your R&D is completed. Along the way you've worked with your SR&ED consultant to prepare and document the claim, ensuring it will pass the proper tests for expenditures under the spirit of the program.

The whole issue of financing your claim revolves around the fact that you are able to monetize an intangible asset for cash flow/working capital needs today! As an example typical reviews of your claim after submission may take 3-4 months. Naturally any follow up on the claim for clarification of issues simply... you guessed it... adds more time/waiting!

Recent changes to the program force business owners/managers and their Sred consultants to fit a years work of research into a very tight technical narrative. For example you're only allowed 350 words to describe the technical nature overview of your annual claim, which can often be in the hundreds of thousands of dollars.

When you finance a SR&ED claim its a very basic process - reduced to a simple business application, a copy of your claim and who prepared it , and potentially some other financial info around your business . Here it's important to stress that the real collateral of your claim is simply the SR ED refund itself. One can see therefore the important of eligibility and the credibility attached to your SRED consultant. These folks work on contingency and are specialized in the industries they do claims in.

What does the structure of a SR&ED bridge loan look like? It clearly maximizes the total benefits of your refundable tax credit, in that the financing is structured as a bridge loan with no payments made during the duration of your wait for the refund. The most typical advance under the financing is 70% of the total value of the claim. The other 30%? You receive that as soon as your claim is approved by the govt, less financing costs.

If you're looking for some ' calm ' to prevail in your waiting game for SR&ED refundable tax credits consider financing your claim. Seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with funding your claim.

P.S.

Claims can be financed prior to filing, and consideration can also be given to funding the start of next years claim. Waiting be gone!




Stan Prokop - 7 Park Avenue Financial :
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 90 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN SR&ED LOAN FINANCING EXPERTISE




Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '

























Stan Prokop

Tried & Tested Working Capital Funding & Business Cash Flow Solutions

You’re In The Right Place For Cash Flow Information & Solutions

OVERVIEW – Information on working capital funding and business cash flow solutions for Canadian business

Business cash flow solutions are sought by thousands of Canadian businesses everyday. Which solutions are ' tried and tested' and will work for your firm? Let's dig in.

It's the finance function and structure of your business that will drive your need for working capital funding. Here we're talking about short term financing needs, not debt or equity capital. (Some businesses do take on working capital term loans if they can demonstrate solid cash flows) The type of industry you are in, as well as how you compete is also a key factor to consider.

Companies that aren't growing sufficiently or are operating at a loss have even more of a challenge of course - the question becomes clear - how does the owner/ manager transform this loser into a winner?

The management of your working capital revolves around 2 key issues:

Ensuring you have the right financing mix in place for inventory, receivables,

Ensuring your finance solutions come at a cost that makes sense relative to your overall credit quality

We find that many companies get caught up in the technical definition of working capital - defined simply as the relationship of current assets on your balance sheet to current liabilities. That definition is fine but doesn't take into account the movement of those assets and liabilities, especially when it comes to turnover of receivables and inventory. Bottom line?

Focus on mgmt and financing of your current assets, not the ratios!









For businesses that sell on credit the management of accounts receivable is where it's at. Financing of receivables can be achieved in a number of ways, foremost of which is simply collecting your A/R to your terms or even sooner. When external financing is needed your solutions include:

Bank revolving credit lines

Non bank A/R Financing (our recommended solutions is Confidential Receivable Finance)

Asset based lines of credit which consolidate your A/R and inventory assets into one borrowing facility. These are predominantly non bank solutions offered by commercial finance firms

It's important to note that while cash flow

comes out of the management of your current assets it also comes out of delaying payables to the extent that your firm can still maintain it's relationships with suppliers as well as staying solvent.

The type of financing you need for working capital and cash flow solutions also depends on the industry you are in, your cash conversion cycle, and the amount of gross margin your firm commands on product and services you offer.

If you're looking to maximize financing for your cash flow and working capital needs seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success
who can assist you with your needs.



Stan Prokop - 7 Park Avenue Financial :
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 90 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS CASH FLOW FINANCING EXPERTISE




Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop

Business Finance Search In Canada Via SME Commercial Lenders & Banks

Here’s The Myth Vs. Reality Of Financing Small & Medium Sized Businesses In Canada

OVERVIEW – Information of business finance options in Canada for the SME segment . Commercial lenders and banks offer a variety of solutions - which solutions does your company need and how do you qualify

Business finance in Canada, when it comes to the SME ( small to medium enterprise) market leaves business owners / managers wondering how much they need to know or are missing when it comes to commercial lenders and the bank lending landscape. Here's a good shot of myth vs. reality. Let's dig in.

Confusion reigns supreme when it comes to Canadian business facing the challenges of financing their businesses. The two step process of understanding their options and then clearing the hurdles needed for approval sometimes feels like a full time job.

In fact top experts tell us that a majority of businesses don't fully understand bank offerings, they also most certainly from our experience don't understand alternate options, and finally misunderstanding exists around qualification for business finance.

One myth that exists out there is that little or no help is available from the Govt, or when it is the word ' cumbersome' comes to mind. The reality? In fact two very solid govt programs deliver almost 10 Billions dollars of financing every year to the SME sector.

Those programs? They are the Government Guaranteed Small Loan Program, as well as the SR&ED program which refunds a substantial portion of any R&D your company spends. Conservative estimates are that over 11,000 businesses just like yours take advantage of these programs.

Top of mind for any business owner/manager when it comes to financing is the fact that the only solution is ' THE BANK '. They are clearly one source, providing inexpensive capital for a variety of term loan and working capital needs.

That brings us to the point of alternate financing sources. Frankly there have never been more alternative finance solutions for your business. These solutions either provide new capital, or monetize your current and future assets, providing cash flow and working capital solutions.

They include:

A/R Financing/ Factoring/ Confidential Receivable Financing

Inventory Finance

SR&ED Tax Credit Bridge Loans

Equipment Finance/ Sale Leasebacks

Non bank asset based lines of revolving credit in Canada

Franchise Loans

Purchase Order Financing

Sales/Royalty finance

Alternate finance solutions are often more expensive, but will provide all the capital you need.

It's also critical to understand whether you're looking for debt, which must be repaid, or whether you simply need to monetize assets and sales. It's all about repayment terms, collateral, and the amount of a personal guarantee that might be required.


In summary, it’s important to assess your needs and to understand where you qualify for financing. And as we've shown commercial lenders, coupled with Canadian banks offer a variety of options that will make sense for your business. Seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with your financing needs, and help you sift thru that myth vs. reality! You're now in a position to get educated about your options, understand your needs vs. debt and working capital, and get help in successfully applying. A classic case of knowledge vs. power.


Stan Prokop - 7 Park Avenue Financial :

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 90 Million $ of financing for Canadian corporations . Info /Contact :


7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS FINANCE EXPERTISE






Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '





















Stan Prokop