Are You Properly Positioned For Working Capital & Canadian Business Loan Financing – Here’s How

A Different Way To Look at Business Financing Needs


Information on working capital and business loan financing in Canada . How do business owners best position their company based on their needs and who they are dealing with?


Positioning... we checked, and it's simply about ' being in the right place'. When we first talk to many clients who are looking for working capital and business loan financing we sometimes find that they are unable to properly communicate their historical , current and of course future financial position.
Your firm will always need outside financing if you are going to grow, and the reality is that achieving financing success is a lot different than running your business – to put it simply... raising money isn’t quite like making money! We’ve always felt that the financing process should not be as stressful as it seems; so whether you’re dealing with a bank, commercial credit union, or an independent finance firm you need to be able to present your data in a compelling manner.

The most important tool you have in that communication challenge is your financial statements. They bring light into what we could call ' conversation darkness'. Business owners of small and medium sized businesses in Canada simply need to be able to convey what their financials tell about their company.

If we had to focus on one key area re: positioning of your firm it’s simply the challenge of showing your firms ability to repay debt. The majority of debt financing in Canada is of course secured. If your firm over performs, increases sales, and generates significant profits your lender , whether that is a bank or a commercial finance firm does not benefit any more than if you didn’t have that solid financial performance we mentioned. So again, any lender is always focusing on repayment.

Typically your positioning on a commercial financing is well served if you are able to demonstrate what lenders call a primary source of repayment - 99% of that time that is going to be operating cash flow. Other assets or strengths of your firm are always going to be a secondary source of repayment - i.e. additional collateral, your personal guarantee, etc.

Whether it’s in Canada or elsewhere a business loan financing its going to always come down to certain ' ratios’. We have always though that’s such a mechanical term and description, and have tended to use the work ' relationships'. Your ability to position certain ' relationships' in your financial statements are fundamental to business loan financing approval.

So what ' relationships' are those underwriters (underwriters = people you will never meet) looking for. Some of those are your gross margins, your net profits, which are usually benchmarked against companies in your own industry.

Working capital and debt financing makes much more sense to the lender when you have a positive net flow of funds. Simply speaking that’s your cash flow, which most lenders calculate by adding your net income and deprecation. The number that we consistently see ' traditional ' lenders applying to cash flow is a 1.25:1 ratio... or relationship.

Want to better position your working capital needs? Then be prepared to address or talk to your operating cycle. Knowing how long it takes to collect your receivables, turn your inventory, etc is what working capital analysis is all about. Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in the proper positioning of your firm... for financing success!



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/working_capital_business_loan_financing.html

Sources of Equipment Financing Loans In Canada – What Commercial Business Lenders Meet your need

Get Practical On Sources of Equipment Leasing For Canadian Business

Information on sources of equipment financing loans and leases in Canada . Commercial business finance options that make sense!


After Canadian business owners have made the decision to acquire assets for their business they are often faced with the choice of identifying the best 'source' of that financing.

Businesses lease or arrange commercial business loans for assets they need for ongoing operations. So who do you turn to for a financial option that makes sense - one that allows you to match cash outflows against the expected benefits of the asset you are acquiring?

In a perfect world, (and trust us we know its not!) you want to find a financing partner that has a good sense of what your business and your overall financial condition is about. Your ultimate goal should be to give your business a financing rate, term, structure and benefits that you deserve.

In one aspect of equipment financing loans in Canada we must regretfully report that ' size counts'! What do we mean by that ?Simply that the overall financing size of your commercial loan or lease dictates who your best financing partner will be . We advise clients that in Canada there are in effect 4 tiers of equpment financing size. They are as follows - large ticket, mid ticket, small ticket, and micro. When you know who the best players are in one of those four niches we believe you’re... to quote Charlie Sheen ' winning'!


Ever tried to put something in a box that doesn’t fit? It’s quite an unproductive task. That’s why we cringe when we see clients trying to put their box in a lease niche that doesn’t fit. The reality is that many Canadian businesses get the run around only because they have stumbled into the wrong niche. So whats our point, simply that the asset dollar size, type of asset and your overall credit and financial strength very quickly determine who you should be dealing with.

Credit quality is what business equipment financing loans are all about in commercial financing in Canada. Optimally you will get the best rate when you have a decent balance sheet, good cash flows, and a credible business history.

Unfortunately that doesn’t include thousands of business owners who have unpredictable cash flows, some historical operating issues, or who perhaps find themselves in an industry that is ' out of favor '. Does that mean you can’t be successful in commercial business leasing? Absolutely not , but it does mean that you are now in the category the industry terms as a ' story credit', and its up to you now to tell a good story . If you do that you will get a lease approval, but your transaction will be structured in some manner that affects the rate, term of the lease, or perhaps outside collateral, guarantees, etc.

So who exactly do you turn to for financing you need in equipment? The parties that are offering you financing today are captive vendors, banks (who really are into leasing these days) and independent specialized lease firms of all sizes, types, and ownership. (Many U.S. firms are key players in the Canadian business equipment financing arena.

Want to fast track lease financing approval, and ensure that you find yourself in the right niche and ticket size that we have outlined? Speak to a trusted, credible and experienced Canadian business financing advisor who will help you manage the process and identify your rights, obligations and key benefits. Get your 'best deal' with professional assistance, saving you time... and money.




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/equipment_financing_loans_business_commercial.html

What’s The Best Financing & Funding In Canada For Your Business - Tips On A Corporate Bank Loan

Does a corporate bank loan for the financing and funding of your Canadian business seem a monumental or impossible task these days? It shouldn't if you have the right information.

When Canadian business owners and financial managers think of financing or funding for their business its natural they gravitate to Canadian chartered banks. If there was one reason it’s a pretty simple one, it’s basically the best commercial loan or line of credit financing in Canada.

Business loan financing in Canada comes in two categories when you're dealing with a Canadian chartered bank - intermediate or long term ' term loans ‘, and of course operating lines of credit .

Typical terms for intermediate loans are in the 3-5 year range, paid in installments. Longer term loans might be available for financing and funding of long term assets such as business or plant assets .It is absolutely essential that you can demonstrate historical and future profits and cash flow to be in a position to be approved for bank term loans of a long term nature .

Many Canadian business owners and their financial staff find the approval process within a bank as somewhat ‘rigorous’. And that’s an understatement for many of our clients! Because of the strong banking system in Canada the supply of business financing and funding is virtually unlimited. Unlike in the U.S. the supply of business credit, we feel in our opinion, is not highly differentiated. The U.S. banking system and their various types of banks (money center, regional, specialized, S&L... etc) is a whole different kettle of fish.

If you can pass what some might call the litmus test for approval within the Canadian chartered banking system then the rates and structures are categorically worth it. Misc fees and standby type arrangements might make you’re financing a bit more expensive, but nonetheless it’s still pretty well the best deal in town.

In Canada the chartered banks have started to compete with the independent lease financing industry. While a bank lease rate might be a bit higher than a term loan scenario it is still very aggressive pricing which many independent finance firms just cant match ( Probably because they borrow those funds from the bank themselves!)

It's always somewhat amazing to us that the bank criteria for making decision on Canadian business financing have pretty well stayed the same for 100 years. That criterion is as follows, and should be no mystery to a Canadian business owner. The management experience and personal credit history of the owners is always a key element in financing approval. Also banks think in terms of capacity - which is a fancier term for simply ensuring that they feel you have the ability to repay. Significant analysis on your cash flow coverage, leverage, etc is done at this point.

Additional outside collateral is sometimes also requested, which can come in many forms, i.e. Other assets within the business, spousal or third party personal or corporate guarantees, etc

Is there one final tip we can offer up on knowing how to succeed when looking for a corporate bank loan? It's personality. Personality? Simply speaking we have always felt it’s the banker, not the bank, so spending a lot of time in searching for high quality commercial bankers that actually want your business is worth it. That banker will have a very clear idea and plan to get you approved, and will work with you to be successful.

If you don’t have the time to conduct banker interviews (?!)... who does ?... then seek and speak to a trusted credible and experienced Canadian business financing advisor who can help you forge a relationship with the right banker .



About the Author:
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/corporate_bank_loan_financing_funding.html

Commercial Bank Financing In Canada – Solutions and Maybe An Alternative Via Business Banking Competitors!

Canadian Bank Business Financing .. & Alternatives !

Information on commercial bank financing in Canada . What are the key issues in getting approved for the business financing your firm needs . There is in many cases a bank alternative via non bank financing from competitors to the Canadian banking industry .


When most Canadian business owners and financial managers think of commercial finance in Canada commercial bank financing comes up logically as the ' go to ' solution. That seems logical because probably for many decades in Canada it was the only solution. In recent times financing alternatives via bank competitors have proliferated. Let’s examine some key aspects of Canadian chartered bank commercial financing, and perhaps some alternatives... who knew!

Borrowing from a chartered bank in Canada comes under two categories for most small to medium sized corporations ... term loans and revolving lines of credit. Banks are very focused on your cash flow for the simple reason that it, plus additional collateral that is pledged, becomes the source of repayment.

It is well known that the Canadian chartered banks have pretty well the highest reputation in the world for being well run, profitable, and soundly capitalized. That becomes a double edged sword when you are a borrower looking for commercial bank financing , for the emphasis on your overall credit risk, assets, cash flow coverage , and personal guarantees of shareholders is somewhat intense !

When your lines or credit or term loans can’t be repaid in the eyes of the bank then you're deemed ' none performing ‘... (Even though you're working as hard as ever!) .

Over times business owners realize that a lot of the financing they need might not be accomplished by a Canadian chartered bank because of the significant emphasis that is placed on the rear view mirror. What do we mean by that?! Simply that your past financial performance is often a huge part of the overall bank approval decision for your new financing. So even if you have great prospects, new contracts, new owners, new equity, etc, etc, etc the reality is that last years financial losses, or negative cash flows or some other incident in fact will probably preclude you from being approved, at least in the amount that you might desire.

But of course being approved by a commercial bank in Canada for the financing you need pretty well means you are achieving the best finance rates and terms in the country. The banks low returns on commercial borrowers (because of those low rates) are compensated by the low risk they take.

When clients talk to us about focusing on a traditional Canadian commercial bank financing it is our advice that they totally disregard rate (because as we said, there isn’t any better) and instead focus on the ratios and covenants and personal guarantee that make up your financing approval.

And what about those alternatives and competitors to Canadian chartered banks .Over the last 10 -20 years a number of very solid alternative finance offerings are available to you the Canadian business borrower. They include asset based lending via non bank credit lines, confidential receivable financing, equipment financing for new and sale leaseback scenarios. Even more alternatives are available, including purchase order financing, bridge loans, and private equity.

In many cases a lot of the banks actually have started new divisions to compete with these new competitors - however typically in our opinion their same credit standards are in place; that is to say it’s not a bad thing, just the same challenge of getting approved within a bank offering.

Want to discuss commercial bank financing, or an alternative via competitors to the chartered banking industry in Canada? Speak to a trusted, credible and experienced Canadian business financial advisor who can work with you to achieve proper financing for your firm.




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/commercial_bank_financing_alternative_competitors.html

Create A Customer Financing Program For 10 Cents! Looking for Canadian dealer / vendor funding For Your Clients? Here’s How!

Interested in a Customer Strategy To Increase Sales, Profits, and Cash Flow – Try This!

Information on the benefits of a customer financing program for Canadian companies who wish to implement a vendor funding program for their client base . Dealer /cust. Finance pays off !



Buddy, got a dime? Did you ever think you could increase sales, profits, and the almighty cash flow for a ten cent investment?

More about that 10 cent investment requirement later ; but we're talking about utilizing a customer financing program, often called a dealer or vendor program, for assisting your clients in financing their purchases - of your products and services .

When Canadian business owners and financial managers think of acquiring assets from their vendors / suppliers almost 80% of all businesses consider lease financing as a financial mechanism to acquire that asset. But wait a minute... lets turn that situation around; aren’t in fact yoru own clients thinking about financing options when they are looking to acquire YOUR products and services. You've proven they do, if only because you do it also.

So is the price of any product or service one of the critical aspects of any firm considering a purchase of any type? You bet it is. In fact in surveys we have seen for years ' price' actually becomes an ' obstacle to innovation ' - a term we've grown quite fond of.

So are you in a position to remove that obstacle to innovation that your clients are experiencing. You are in fact, if you choose to develop a customer financing program. This type of program allows your customers to match reasonable cash outflows with the benefits they receive from your product.

There are a couple of different ways you can do this, so let’s cover them off. Our favorite is the ten cent investment scenario we discussed earlier, but in fairness to all parties let’s ensure you understand all your options.

You have the choice of actually forming your own finance firm or division - for many major manufacturers this in fact is almost a must. Think of what GMAC did for GM... Namely allowed their clients to finance millions of cars over the years... how by offering them financing or subsidized financing.

The reality for small and medium sized firms in Canada is that they are probably better served by aligning themselves with an independent third party who has day to day expertise in offering customer financing and funding to customers such as yours. They have the expertise and business model in place

As we said earlier the benefits of a dealer / vendor program (you in effect are the dealer/vendor) are significant. Very significant. They include increased sales, a total solution perception by your customers (i.e. product/service/financing) and lower inventory levels due to the fact that sales turn around faster, bottom line... what they call a faster sales cycle.

So how is it possible to do all these great things on a ten cent investment? Well we've estimated 10 cents as the cost of a phone call, and if you seek out and call a trusted, credible and experienced Canadian business financing advisor with significant lease experience you will be in a position to implement a full customer financing program at no cost.

That advisor will work with you to identify a financing partner(s) that you are comfortable with, thereby ensuring you can use vendor funding for any size of deal of credit quality in your customer base. Many programs can be ' tweaked ' to ensure you have numerous other small benefits that add up to a significant amount of what lessors call ' control' in your customer base. That might include upgrade programs, end of term programs, or Zero per cent financing subsidized by yourselves to increase sales for a short period.


So is that ten cent investment (isn’t calling even cheaper than that these days?!) worth it. We'll let you decide. But your competitors are doing it, so if more sales, increased profits, and a faster sales cycle appeal to you consider making that call for a customer financing 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/customer_financing_dealer_funding_vendor.html

Deciding On How To Finance A Franchise? Canadian Franchising Business Loan Info On Financing and Lending That Makes Sense!

Make the Right Decisions in Canadian Franchise Financing

Information on how to finance a franchise in Canada . Getting a franchising business loan that makes sense for the entrepreneur . Financing & Lending tips for the new Canadian franchisee.


Not only do you want to have a solid plan when you want to finance a franchise in Canada - it sure helps when that plan makes sense for the business financing loan / loans that you need!

We think that most Canadian entrepreneurs who are either first time franchisees or perhaps are adding another location to their business would agree that its not as important as to where the franchise lending and business funding comes from, but that you get the full funding at terms that make sense for you personally .

Let's examine some of those key decision points and requirements that you need to fulfill a proper franchise financing solution in Canada.

We think that a lot of franchisees are sometimes overly focused on ' the interest rate ' when they are seeking a franchise loan. That’s human nature we guess, but the reality is that the loan is simply commensurate with your overall credit quality and in line with the types of financing that are out their in the Canadian business financing market - unfortunately that market for new franchisees is somewhat more limited that in the U.S.

In Canada franchises are financed really in only 3 or 4 different manners -- actually 5 we could say if you considered financing the whole franchise yourself through personal savings.

While that might seem a good idea we think in many cases it is not for a variety of reasons - i.e. collapsing personal investments and savings and assets when you don’t have to cant be an overall great strategy. We spoke awhile back to a franchisee who had pledged and used all his personal assets to acquire a franchise - business was slow, and he was unable to secure additional outside financing to re- boot the business because all his personal assets were pledged/gone. Bottom line, not recommended!

So the question then becomes as to how you decide to finance a franchise once you have made that acquisition decision. We'd like to share a couple key points. First of all, whether it’s a franchise or any business whatsoever, it’s financed by two guys, debt, and equity; i.e. what you borrow and what you put in yourself. Spend some time determining the optimal mix and you will best be able to gravitate to the right financing strategy.

In Canada these days we see franchisees putting in anywhere from 10 -50% as their personal investment into the business. Whats the perfect number? The reality is there isn’t one, because each business requires a different amount of financing and has a different mix of assets and financing needs. The key assets and financing needs in franchising are all your initial soft costs, such as the franchise fee, and then comes your costs to open the door, often called the ' turnkey ‘. That turnkey component consists of equipment, leaseholds and opening working capital.

We spoke of 4 methods of franchise financing in Canada .Those are as follows : Specialized commercial finance firms that have dedicated franchise finance divisions , Equipment financing, Working Capital term loans as a supplement to your overall financing, and finally the BIL/CSBF loan . The latter is the government SBL loan that is used by hundreds, probably thousands of franchisees to acquire their franchise. It only has one or two limitations, one of which is that it caps out at 350k, but that certainly covers a lot of franchises in Canada in different industry segments - examples restaurants, service businesses, etc.

So, today’s bottom line? Simply that spending some quality time early on in the process in understand which of the 4 options makes sense for you is a valuable investment. That time, coupled with your business plan and financial projections will help you ensure that you have the right mix of financing solution, as well as a properly chosen business loan strategy for your franchise.

Speak to a trusted, credible and experienced Canadian business financing advisor on how to best decide which financing mechanism works for you.




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/finance_franchise_lending_financing_business_loan.html

Smarter & Faster Canadian Business Financing - Why Asset Based Lending Credit Facilities Work!

Simplify Business Credit With An ABL asset based line of credit !


Information on asset based lending as a business financing ‘simplifier’ for your operating credit needs in Canada .


We recently did an internet search for the term ' business financing ' in Canada. Last month in Canada 18,100 searches were performed for that term. WOW! We're quite sure that asset based lending could satisfy a lot of those Canadian business owners and financial mangers looking for business credit facilities that comes ' smarter and faster '. How? Let’s take a look.

Asset based lending is business to business lending , providing cash flow and revolving credit facilities for firms of all size in Canada . In truth the facilities work for firms requiring a monthly business credit line in excess of 250k, and ranging upward to tens of millions of dollars. We're quite sure that covers many of those 18,100 queries made on the internet.

Asset based lending uses your receivables and inventory by the way to provide you with a lending facility against those two assets. Because of the manner in which these types of credit lines are calculated you can be sure that 99.99% per of the time you are going to have access to more cash flow. And that's what business financing is about, right?

ABL ( asset based lending) business financing is business credit that can be used to grow your business, acquire another business, or simply speaking, fix a lot of the financial challenges that you are experiencing, almost immediately .

A key benefit often overlooked in the approval process is the fact that your firm is now in a position to negotiate better terms and prices for your products and services that you need. Why / because you have ' business buying power ' Vis a Vis your new found access to more business credit.

So when we look at those 18,100 firms that searched for business financing last month in Canada why didn’t these companies simply call you know who... Canada's chartered banks?

The quick answer to that is that they probably have tried to arrange additional or new financing with their chartered bank or credit union, but have exhausted all attempts at approval simply because they can’t meet more rigorous bank qualifications. And , unfortunately, in some cases they have even been asked to leave the bank or find themselves in the ' special loans' portfolio of the bank - we hasten to always commiserate with them that we know that’s not a ' special ' feeling you want to have in business.

In many cases the banks or other private equity type firms will suggest or request that the business owners put up additional personal equity into the business to justify new financing. Asset based lending does not require you to consider that option , simply because you already have the one thing that ABL financing needs to work smart and fast .. Assets!

So how does the ABL lender do it differently then. The short answer is that they place a lot of emphasis on understanding your business, getting regular bi weekly or monthly reports from yourselves on the basics , such as a/r, a/p, inventories, etc. This business financing expertise allows asset based lending to work in pretty well every industry in Canada - its real world working capital finance

If you want your company to be on the growth trail again , without taking on extra debt ( ABL business credit financing is cash flowing your assets, not adding debt to your balance sheet ) speak to a trusted, credible and experienced Canadian business financing advisor - let ' smarter and faster' work for your credit needs.. 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/asset_based_lending_business_financing_loans.html