What Type Of Start Up Business Financing Loans Are Available For A Canadian Company ? Startup Loan Info

Solving the startup financing challenge in Canada


Information on start up business financing in Canada . Starting a company? What type of loan/loans are available , and what do you need to do to successfully complete a startup finance strategy that makes sense.




We're all for hard work and facing challenges, but boy do we respect anyone setting up a business today and looking for start up business financing . What type of company loan/ loans and finance facilities are available for the Canadian entrepreneur?

We can pretty safely say it’s always been tough to finance a start up but in more challenging economic times you can easily assume a hard job just got harder. So what types of financings are available to Canadian entrepreneurs, and as importantly, what do you need to do to get properly prepared to complete loan/loans?

Many of our clients cringe when we ask them for their business plan - its seems a daunting task for many, and certainly doesn’t have to be. Even a very strong executive summary will often do the trick - information about yourself, your background, your new business, and, most importantly, what we call the financial potential. That potential of course relates to being able to pay back your borrowings!

Want to overcome obstacle #1 then, that business plan. Simply speaking, get someone else to do it, an experienced, credible and trusted Canadian business financing advisor. That recommendation can come from a business peer or friend, a banker, or your lawyer and accountant. These people are on the front lines of start up business financing for your company and others.

So what are some of actual borrowings available for start up Canadian companies? They include the Government small business loan - commonly called the SBL. Another government crown bank provides working capital loans that are true cash loans that are in effect unsecured - they require only your promise to pay, and of course that of your new business .

Other methods of financing your start up include receivable financing, aka ' factoring ', which provides instant cash on every sale you make, albeit at a cost. But ask yourself this, whats more important to you at this time, ' the rate ‘or access to capital? In the majority of cases we think its access to capital. Many firms that are retail or consumer oriented have gravitated to merchant cash advance financing, in effect loans made against your future sales. (A little bit of every future sale is used to repay you loan).

Having realistic sales and cash flow projections often makes or breaks the new start up in Canada. The reality is that many clients we meet with bring us unrealistic sales projections, and, on top of that those projections don’t have realistic cash flow attached to them.

Case in point, the business entrepreneur shows revenue of 100k cash coming in of 100k in that same month. Guess what though, it’s not a perfect world, and the reality is that cash, if you are selling to a business, will come in stages in 30, 60, and we shudder! even 90 days. So get realistic on cash flow, and have your plan B ready!

Many physical assets you need can be financed via Canadian lease financing. But be careful to ensure you have the right type of lease in place, and that the rates are commensurate with your overall credit quality, and that the terms and structure of the lease... you guessed it... make sense! (Don’t lease computers for 7 years!)


Many clients we speak to don’t realize the 100% OPM doesn’t work .OPM is of course ' other peoples money ', and Canadian business owners need to address the fact that they require a reasonable personal investment into the business. Whats reasonable? That question comes up pretty quickly !There is no one single answer ; as an example the government SBL small business loan requires a 10% equity injection by the owner . In the cases of lease financing 10-20% down typically are reasonable requests from the lessor.



So whats our bottom line if start up financing in Canada. First, its boy do we respect your entrepreneurial spirit! But pay attention to those details we have discussed, and seek the services of a trusted Canadian business financing advisor who can make that road you have not traveled before a much more pleasant journey, and distance!



Stan Prokop - founder of 7 Park Avenue Financial -


http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing .Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/start_up_business_financing_company_loans_loan.html

Making The Biggest Leasing Mistake Ever? Not Offering Financing For Customers? Customer Financing Programs & Canadian Vendor Loans Work!

Customer Finance Programs = Sales / Cash Flow/ Happy Clients


Information on how Canadian firms can offer financing for customers via customer vendor loans and lease finance programs that will increase sales , cash flow , and provide value added service to your clients .



We're the first to admit we have all made mistakes (could we call them strategic mis-steps?!) in business. Here's one mistake not to make - lose business and sales revenue because you don’t offer financing for customers. Let’s look at how customer financing programs and vendor loans and leases work.

We've spoken recently of ' obstacles to innovation '. That a great term for trying to understand why some of your prospects or clients don’t acquire your product and services. In fact, there is one reason that consistently ranks high in surveys as to why Canadian business owners and financial managers don’t acquire new assets or technologies or upgraded services. That reason? You guessed it, price/cost/budgets.

So is there a way to eliminate one of the largest obstacles to innovation your client has. We've got the answer, and it’s ensuring you have the abilities to offer financing for customers via a formal (or informal) vendor loan or lease program.



The #1 reason for firms such as yours to offer customer finance programs is probably ' sales '! We're talking increased sales of course. The thought of getting involved in putting together such a program might seem a bit overwhelming to some of our clients. But the reality is that if you don’t choose to offer the financing yourself you do in fact have the ability to partner to offer this service to your client base.

So what is a vendor program? It's simply your firm utilizing lease and loan financing to increase sales of your products and services. And yes, services, software being and example can in fact be financed!

Many clients we talk to feel strongly that offering such a solution is simple a strong weapon in their overall sales tool kit.

So why do we feel strongly that offering customer financing is such a good thing. For a variety of reasons. Here are some of them. In business we all agree it’s about relationships, and offering a financing solution to your client base simple enhances that overall business relationship.

All sales people in business probably regard ' the budget ' as the proverbial enemy. Boy is it hard to make a sale of your great product and services when ' the budget ' of your client precludes him or her from signing that P.O. on the dotted line. But lease financing via a customer vendor program allows you to circumnavigate that budget in many instances.

While you might dwell on your own firm’s financial condition remember that the customer has their own situation to think of. Quite often clients don’t commit to your products and services because they ' haven’t got the financing lined up ‘. So unbeknownst to you your customer is out there trying to arrange financing for the acquisition of your product and service. Wouldn't it be easier to hand them that solution, ensuring your sales cycle just got a whole lot shorter?

Remember also that if customers are out there prospecting for financing solution they just might run into a competitor’s product or a financing offer that in fact makes your competitors product more attractive.


So whats our bottom line point today, simply that by offering financing for customers via client financing programs that work you can clearly differentiate yourself from the competition, and enhance your own reputation with your clients . That’s a classic win win unless we're missing something! Speak to a trusted, credible and experienced Canadian business financing advisor who can help you set up a simple program to achieve the benefits of what we have discussed. Whether on a program basis or on a single transaction you'll find customer programs tailored to financing your products work. And that’s a good thing.


Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/financing_customers_customer_programs_vendor_loans.html

Straight Talk On Confidential Factoring In Canada – Why Accounts Receivable Financing & Invoice Services Just Got Better!

Fact & Fiction on Receivable Financing In Canada


Information on Canadian confidential factoring and invoice services in Canada . Why C I D ( Confidential Invoice Discounting ) Just made factoring and accounts receivable finance a whole lot better!



We're the first to agree that when one of Canada's newest forms of business financing just got better that’s clearly a good thing! We're talking about the concept of confidential factoring, invoice services that finance your accounts receivable for working capital and cash flow.

Canadian business owners and financial managers demand flexibility when they look to alternate financing methods. If you choose the right facility, as in our case today, confidential accounts receivable financing you have just converted 90% of your receivable investment into immediate cash flow availability.

That benefit becomes even more dramatic when you consider this type of financing essentially gets larger as your sales increase; your financing ability travels locks step with your sales increases. Your revolving credit facility of confidential factoring becomes your new financing safety cushion.

While the majority of our clients use this type of financing for ongoing operations and growth remember also that you have the ability to use this finance mechanism for a number of other reasons - they might include acquiring a business , restructuring your company without the need for additional equity, etc.

Many clients utilize this type of accounts receivable invoice services in the context of also combining their inventory and purchase order financing needs .You've then created a triple combination of financing power for your firm , outside of traditional Canadian chartered bank financing .

So lets just backtrack a bit and ensure you understand the whole issue of confidentiality around C I D; Confidential invoice discounting. When you set up this type of facility you effectively retain total control over your A/R function - you are billing and collecting your own receivables.

Those familiar with traditional U.S. and U.K. type offerings available in Canada know full well that is not the case with the offering that is used by 99% of your competitors. Those firms in Canada that use receivable financing but without a confidential facility have in effected handed their billing , collection, and all important client contact info over to the factor company . Does that type of traditional factoring work? Absolutely. It’s just that confidential A/R financing puts you in control, not your finance company. You bill and collect your own receivables, without any notification at all to clients, suppliers, etc.

Canadian businesses are of course used to paying for added value. That’s just common sense. So then our clients can of course be forgiven for asking if confidential factoring services costs more. The answer is NO! Your advance rate and financing charges are the same with confidential factoring as they would be in the traditional for of notification model used by your competitors.

We would add however that to take advantage of confidential receivable financing a typical A/R portfolio should be at lease in the 250k range. There is no real upper limit on the size of any facility

Accounts receivable financing has filled on of the biggest voids in Canadian financing. It is often mis understood, in no thanks to some of the firms that offer it. If your company is growing, unable to attract more traditional financing then confidential then invoice services such as we have describe are for you . The optimal situation is when your cash flow is being drained because your sales are growing, requiring to maintain higher levels of A/R and inventories, etc.

If you wish to better understand the nuances and yes, the benefits of factoring invoice services in Canada, and which one works best for your firm speak to a trusted, credible and experienced Canadian business financing advisor today.



Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/confidential_factoring_invoice_services_receivable.html

How Canadian Cash Flow Finance & Mezzanine Lending & Financing Differs From Lenders Offering ABL Solutions

Does Your Firm Qualify for True Cash Flow Financing and Mezzanine Lending in Canada ?



Information on cash flow finance and mezzanine lending in Canada . How do ABL lenders differ from cash flow and ‘ mezz ‘ lenders in the Canadian business financing environment ?



We often speak to clients about ABL - true asset based lending , and they can definitely be forgiven for sometimes mistaking that form of financing with true cash flow finance and mezzanine lending in Canada offered by a small number of commercial lenders . Let's explore some of those key differences in true cash flow lending.

It clear to us that part of the confusion lies in the fact that a number of different types of lenders are inter mingled in offering mezzanine lending and financing services in Canada .They might be Canadian chartered banks, in a small handful of cases those some ABL lenders that are causing us confusion differentiation are also offering cash flow loans in addition to their asset financing service . And firms not commonly known to many medium sized businesses in Canada, such as hedge funds, private equity firms etc also make up our mix.

Cash flow finance loans in Canada are true loans, unlike ABL services which are simply the monetization of current and fixed assets. Cash flow financing in Canada is about all those things we threw out the door when we spoke of ABL financing - things such as your firms total value, profitability multiples, and cash flow coverage.

Mezzanine and cash flow lending amounts are related directly to Ebitda and multiples thereof. Depending on the size of the transaction , who is doing it, and your overall credit worthiness within your firm pricing is very competitive to traditional Canadian chartered senior bank debt financing, but can also run into the ' teens ' when it comes to unsecured cash flow loans .. Mezzanine lenders register their 2nd place position but are clearly unsecured, resulting in that difference in pricing when it comes to a senior secured cash flow loan.

In ABL financing we speak of your firm’s ability to first of all have assets, and secondly your ability, together with your ABL partner to monitor and report on those assets. That isn’t the focus in cash flow finance and mezzanine lending, so you clearly should expect those periodic and sometimes expensive audits.

While many ( but certainly not all ) clients entertaining asset based lending in many cases have significant challenges , cash flow loans are truly made to firms who have profits, cash flows, and strong financial fundamentals .

We would also point out that mezzanine lenders, because they are offering a hybrid type of financing often will ask for some sort of equity ownership, usually in the form of a warrant .. ie a right to purchase some equity in your company .

How does a firm know if it qualifies for true cash flow finance? Simply put, as we have said, your firm must be generating significant cash flows. Your borrowing ability will be related very, and we repeat, very directly to the amount of historical and projected cash flow you generate.

To successfully generate a cash flow finance or mezzanine loan you need to have a strong sense of the limited Canadian market in this area of business financing .Having a solid handle on your cash flow coverage and leverage ratios is key.

We've therefore demonstrated some of the key differences between Asset Based Lending and Cash Flow and Mezzanine Financing and lending in Canada. When considering this type of financing speak to a trusted, credible and experienced Canadian business financing advisor who can assist you to navigate this little know sector of business finance in Canada.



Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/cash_flow_finance_mezzanine_lending_lenders_.html

5 Things You Didn’t Know About The Government Small Business Loan In Canada - SBL Federal Loans Info

Use This Info For The Payoff in Canadian Small Business Financing

Information on common questions surround the government small business loan in Canada . How do these federal loans work and what must business owners need to know to maximize the program .



Can we ask you a simple question? Actually, if it’s ok with you, we'll ask 5 questions, and we trust and hope you will gain some valuable knowledge about the Canada government small business loan. Federal loans under the CSBF / BIL program could be your secret weapon in Canadian business financing.

Ok, so let’s get the questions out of the way first and onward to those answers! Here are our 5 key shares around the program based on questions we continually get from clients.

Why should we finance equipment with federal SBL loans? What are the basic requirements of the program? Can the government small business loan be used to refinance business debt? Can we use the federal loans program for cash flow and working capital? And finally can we purchase a business via the SBL loan?

Great questions, and now hopefully some surprising answers! Here we go.

Equipment and lease financing in Canada are solid alternatives for the financing of your asset acquisitions. Numerous lease finance options are available, so why does it make sense to use the SBL program for equipment financing. For a start the small business loan program in Canada finances 90% of your equipment financing needs, the other 10% comes in the form of your down payment, which the program refers to as your equity in the transaction. Numerous lease scenarios may require either larger down payments, first and last monthly payments in advance, and in some cases might have a higher level of credit due diligence requirements .Equipment can be financing on terms up to 7 years, and typically that type of term may not be available through lease financing scenarios.

So what about those basic requirements of the program? The government small business loan requires the aforementioned 10% owner equity in your financing. Business owners and your business should have a reasonable credit history; you also should be ready to prepare a simple cash flow forecast that allows you to demonstrate repayment of the loan. Typically no other collateral is required for federal small business loans in Canada. We determined over time that it makes great sense to be able to properly demonstrate that you have sufficient management experience in your business and industry, whether you are a start up or an established firm.

On to our third question - can you utilize the loan to refinance existing debt .The short and simple answer is that any debt you wish to refinance in terms of equipment, leaseholds, software, real estate, etc can be financing within a 6 month window. Example - if you bought a major piece of equipment 5 months ago it can be refinanced under the program, bringing additional cash flow and capital into your business.

Can the program be used for cash flow and working capital? Simple answer = No! Unlike the U.S. equivalent of the program the government small business loan is massively understood by many, thinking it’s a cash flow loan. The program only funds equipment, leaseholds, and real estate.

And on to our final question. Can you purchase a whole business via SBL federal loans in Canada .Categorically yes if the business purchase is within the government loan cap you absolutely can purchase a company, competitor, franchise, etc using this program? Some very basic steps apply, including an appraisal of the business you are buying for example.

Well there you have it, 5 answers to common questions we get from clients everyday on Canadian government small business loan. Want more info, or wish to explore other issues pertaining to your financing needs around this great program? Seek and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in maximizing benefits of the program.


Stan Prokop - founder of 7 Park Avenue Financial - http://www.7parkavenuefinancial.com
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/government_small_business_loan_canada_loans.html

Within 30 Days You Could Have The Business Loan For Your Franchise Finance Funding For Your Franchise Investment

Here’s How Franchise Financing Works In Canada

Information on franchise finance funding in Canada . How you can complete a business loan financing in 30 days or less using established criteria for financing success .



They say timing is everything in business. So, if that’s the case then how much time do you need for franchise financing funding for a business loan when you've made ' the leap '?

By the leap we are of course referring to one of the larger decisions in your life - buying a franchise and starting the new life of an entrepreneur. In some cases you may have already owned a business, or in the majority of times you are transitioning from company life to your company life!

Your chances of financing are positive if only for the reason that the industry as a whole is perceived as having established business models that don’t require the chance or large advertising expense that many other new start ups would .

So while a lot of the ' keys to success' are already in place the only one that isn’t in place is of course a business loan for your financing! Although that business model is there remember also that you have additional issues to address outside the norm of buying any other non franchise business - things such as franchise fees and royalties.

So how do you fund your franchise start up, or alternatively the purchase of an existing franchise that the current franchisee wants to sell? (Don’t forget to ask him why he or she is selling!)

In 99% of cases we see you can almost certainly expect no direct financing from your franchisor - they want new franchisees, not loans on their books.

So do banks in Canada finance franchises, because going to a Canadian chartered bank or credit union is where logically most of our clients first seem to go? Well the answer is threefold, yes, no, and maybe. From the maybe perspective we suppose if you have an ultra strong net worth, long time bank relationship that you might in fact receive some sort of direct financing from the bank. But the reality is that really doesn’t happen in Canada.

So are the banks out? Not really, because they are the administrators of the government BIL program which funds thousands of franchises in Canada. While the BIL program was not tailored specifically to franchising in Canada it certainly has become a poster boy for the franchise industry.

So, could you actually complete a financing in 30 days, as we have noted? Absolutely, positively, yes. In fact many financings we've completed have been done in less time based on a few key things being in place.

First of all, find a banker. Not hard you say... there are thousands. Well the reality in our experience is that only a small subset of bankers understand the program and have the ability to execute on a BIL franchise loan quickly, and effectively, and by effectively we mean approval.

Rates and terms of a franchise BIl are exceptional considering your business is in effect a start up. Additionally the amount of funds you have to permanently commit is in the 10% range, so what could be better than that. We recommend to all clients that they set up their own investment as a shareholder loan on their books, so therefore you and the bank BIl are the main creditors of the business.

To properly complete franchise finance funding in Canada you need to address your start up costs, as well as your working capital. Don’t forget also to give some thought to the long term growth of your business from a cash flow and working capital perspective. Additional financing for franchises in Canada often comes from specialized equipment financing or a term loan for cash.

A business loan for a franchise is completely in a timely fashion when you have a crisp business plan, cash flows that make sense, and a solid story around yourself and the franchise. Being prepared on such key issues as documenting your own background, identifying the amount of funds you will put into the business, and being able to highlight your business skills and personal credit history all need to be addressed.

So, 30 days or less? Absolutely possible. Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you to meet your franchising finance needs.




Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/franchise_finance_funding_business_loan.html

Heard Of The New Paradigm Shift In Business Lines Of Credit ? ABL Asset Based Finance Is Changing Canadian Business Financing

Why Asset Based Lines Of Credit Give You A Commanding Lead in Business Financing

Information on ABL business lines of credit in Canada . Why Asset Finance lending & Financing give you an ‘ all in one’ credit facility.


We're sometimes reminded of the old bank joke concerning the sign on the bank window that says ' We can loan you money to get completely out of debt ‘...! Anyway... sometimes achieving the business financing you need isn’t always about debt. We're talking in this instance about a new paradigm shift ' in business lines of credit - namely ABL asset finance financing.

A paradigm shift is defined as ' acceptance by a majority of a changed belief or attitude or way of doing things ‘. That’s why we couldn't think of a better way to describe why ABL asset based lines of credit might be the solution for you business financing needs.

Can we all agree that it has been more challenging for Canadian business owners and financial managers to access the commercial line of credit financing they need to grow or simply survive in their business? Often times an ABL facility can be the solution that becomes what we could call a ' double whammy ' - it clears up a lot of current challenges and then focuses on the financing to grow you company .

What could those current challenges be then? It might be converting some senior secured debt into party of your new revolving credit facility, of paying off any arrears that you have with either suppliers or the big guy... aka Canada Revenue Agency!

ABL asset financing is a non - bank asset based line of credit that becomes your new ' revolver' line of credit. Typical facilities secure receivables, inventory, and in some cases can include fixed assets and real estate as party of your facility. That’s a powerful combination as you can imagine.

So where does our paradigm shift come into play? Simply that whatever you may have thought about a Canadian commercial bank line of credit somewhat goes away in the context of ABL asset finance. Receivables tend to be margined at 90% (for A/R under 90 days) and healthy advances on inventory based on its real world values now - something that has been often difficult to achieve in the past for many Canadian firms.

And what about the credit criteria used to approve such facilities. Suffice to say that they are different! Companies that are growing quickly but only just recently profitable or perhaps who had a loss last year are still 100% eligible for ABL financing. In many instances even the issue of ' concentration ' can be dealt with...namely your reliance on one or just a few customers for a large portion of your firm’s revenues.

The paradigm shift for these newer business lines of credit in Canada is significant. Your assets, the size of the facility (facilities range from 250k to the tens of millions of dollars) or the industry you operate in can effectively be dealt with in Asset based line of credit.

Probably the most important benefit of this type of financing for Canadian firms is their ability to satisfy day to day working capital and cash flow needs while at the same time being able to satisfy order demand for their clients.

In many cases Canadian small and medium sized firms are financed almost totally by the owners , in effect self financing but limiting growth ABL non bank financing provides an all inclusive facility to address daily and long term needs, its as simple as that .

If your firm has good management, growing sales, and the ability to produce good products and services while at the same time maintaining good financial statements on costs, asset quality, etc you are clearly a candidate for the new paradigm shift in Canadian financing.

Speak to a trusted, credible and experienced Canadian business financing advisor on why it might be time for you to seriously consider the new paradigm shift in business financing - asset based lines of credit.



Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/business_lines_credit_abl_asset_finance_financing.html