Stuck In Business Financing Purgatory ? Options For Asset Finance and Loan Funding In Canada

Canadian Business Finance Options

OVERVIEW – Information on business financing and asset finance in Canada . Solutions to overcome funding via a commercial loan and asset monetization


They probably don't admit it but we meet a lot of clients who are stuck in what we could call Business financing Purgatory...

its that state of ' limbo' where they aren't sure of their funding, loan, and asset finance options .

We're told that ' Purgatory ' is somewhat of a condition whereby one suffers and experiences temporary punishment - that then seems to be the stance many Canadian business owners take - just treading water remaining in that ' dark place '. Do they have to do that? Absolutely not!

Although not everyone agrees it’s a lack of capital, cash flow, working capital... whatever one likes to call it that seems to be top of mind for challenges in running and growing a business.

The problem is compounded by the fact that the business owner/manager in Canada constantly hears about Private Equity and Venture Capital groups who have, we're told, almost unlimited capital in the millions/billions. The reality is though that the majority of businesses in Canada will never access this capital - and at the other end of the spectrum the bank and commercial financing industry has either consolidated or become an industry of ' niche ' financiers. (Don’t get us wrong though, some of those niche players are the ones that are going to take you out of business Purgatory!).

So at the end of the day your ability to ' attract ' debt and asset monetization strategies are probably , more often than not , going to be the ones that make you more successful in business and asset finance.

At the top of the pile in achieving the right amount of financing is your ability to show that you’ve got some measureable results .However not every company today can demonstrate great balance sheets and solid income.

But the good news here is that if you are able to demonstrate a credible financial position and financial reporting that hints toward the ' big picture ' you're in a much better position to get the financing you need.

Business in Canada, rightfully or wrong tends to associate financing with our Canadian chartered banks. That's not a bad thing, but as we talk to clients its clear they don't see the other end of the spectrum too clearly, which is simply that a whole range of other financing strategies exist outside commercial banking.

These solutions provide you with:

Bridge loans
Asset based credit lines
Working capital term loans - secured and unsecured
Equipment Financing
Supply Chain /PO Finance
Govt SBL Loans
Tax Credit Monetization
Mezzanine Financing...

and on it goes!

Canadian business is often caught in a dual trap - they arent aware of those other solutions and, more unfortunately they don’t have the info ready to be assessed for any of those solutions. Even simple things like a business plan or cash flow projection are often missing.

So, our bottom line today? Explore your options for capital, understand what you need to qualify, consider asset monetization strategies as an option to taking on debt, and reach out and seek a trusted, credible and experienced Canadian business financing advisor who can assist you with financing decisions that remove you from business Purgatory . And there was light ..!

7 PARK AVENUE FINANCIAL
CANADIAN BUSINESS FINANCING EXPERTISE



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 10 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-financing-funding-loan-asset-finance.html




7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653
Email = sprokop@7parkavenuefinancial.com

Leasing Assets - Would You Be A Business Zombie Without Lease Companies And Asset Financing ?

Do Equipment Lease Options Work For You?


OVERVIEW – Information on asset financing in Canada . Lease companies are a solid choice for leasing equipment assets in Canada



There's probably no chance you're a walking ' business zombie '

when it comes to leasing assets in Canada from lease companies that provide asset financing. But truth be told we do meet many clients that seem a bit lost and need a sense of direction when it comes to a positive way of acquiring their assets.

So when your cash flow restrictions are putting some pressure on your decision to acquire business assets that’s exactly a time when you should consider leasing. Oh, and by the way, in case you haven’t heard, times have changed! You're dealing with an industry that has evolved substantially over the years, and with all the technology in place these days, both in your hands and the lessors it's a lot easier to make a solid financing decision if you're well armed with needs/benefits and the ability to choose a solid lease company partner.

Naturally if your firm had all the cash it needs it probably wouldn't have to consider leasing as a business finance option. But when cash flow, budgets, and other pressures come to bear its right about now that you should be considering this financial solution. It's all about building, growing and even starting your business. (Yes start ups are eligible also!)

Rather than being in our ' ZOMBIE MODE ' it's important to be proactive in getting your asset finance in order. Yes, it’s true that you can't get funded for any loan, let alone a lease, prior to acquiring the asset but you sure can do a lot of work to ensure a financing approval is in motion.

If you choose to do everything ' wrong ' in leasing assets then categorically don’t spend a lot of time understanding your options. However, for the record, that is not our recommendation!! You should be able to get a strong sense, with some early pre-work , around what you should be able to finance, what rate is involved, and even as importantly, which term and structures are available . This type of effort by the Canadian business owner and manager simply takes a lot of future paralysis or last minute decision out of the game.

As we said, equipment financing works for both start up and established businesses of all size in Canada. And experts tell us that 80% of all North American businesses utilize lease financing. And you almost can’t name an asset that can't be finance - healthcare equipment. Trucks, printing equipment, technology and telecom assets, shop floor equipment, etc. Even software!

Yes, you typically might need a down payment or a first payment/last payment security deposit, but at the end of the day approval in lease financing in Canada comes faster than any other business financing solution. Certainly quicker than a bank loan... we can assure you of that! That's probably because the experience of the industry allows your collateral to be leveraged as a significant part of the final credit decision.

In Canada assets from 5k to 50 Million dollars can be leased. Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your asset financing needs. It’s simply a case of letting your assets pay for themselves, and that’s a good thing!

7 PARK AVENUE FINANCIAL
CANADIAN LEASE FINANCING EXPERTISE


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/leasing-assets-lease-companies-financing-asset.html

7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653

AR Financing And Factoring . Don’t Be Hatin’ A New Way To Finance Receivables

Out of the fog and into the clarity with A/R Finance



OVERVIEW – Information on factoring and AR financing in Canada . What’s the proper way to look at a receivables finance strategy for Canadian business owners who want to augment or increase working capital and cash flow


A/R Financing / factoring in Canada are significantly misunderstood when it comes to pricing, how it works, etc. For that reason we've met clients that actually ' hated ' it! So our message... stops hatin’ it and try and be somewhat more flexible in getting educated about how this method of business financing works.

And most importantly, understand this business financing model, how it works, and how to assess the true cost. Most people would agree that successful entrepreneurs and business people are the ones that took the time to listen to new ideas about anything that will make their business more productive from a cash flow and profits perspective.

So some might be thinking now... '' .. Sounds complicated?’

The reality, not really. AR financing is simply a 3 way mechanism between your firm, your finance partner, and your client with a focus on obtaining cash from your receivables investment.

And the reason it works when other forms of finance might not be accessible? Simply because the essence of collateral on the transactions are the value and quality of your A/R. It is not, we repeat... NOT... a loan based on your firms particular financial standing.

Pricing, while often pitched as ' complicated ' by others is the crux of today’s message to clients and others. While the common belief is that factoring is expensive this is not necessarily true. Oh by the way though, dealing with the wrong partner might be your biggest mistake when it comes to selecting a factor partner, but there enough solid financing firms out there who can make your ' partnering ' decision easy when it comes to financing your business for cash flow.

One of the misunderstood essences of factoring in Canada is the concepts of ' asset turnover ' and ' return on investment '. That’s because 99% of the clients we initially meet seem to have reviewed and investigated everything EXCEPT these two concepts, which in fact are the essence of factoring. So they can be forgiving for having focused on all the wrong issues.

So, asset turnover and return on investment. How do they play a key role in the factoring decision? They do that by the Canadian business owner and financial manager recognizing that there is a trade off in that they can now use the cash flow generated by the factoring transaction to grow and sell more. That is then benchmarked against the cost of A/R financing, so if your firm has solid gross margins, is growing, and needs to invest in working capital accounts such as inventory, etc you have probably just found the perfect method of financing your company!

We always strive to paint a balanced view , so we would be remiss in saying that AR finance sometimes is also very suited to firms that have significant financial challenges and cant obtain financing elsewhere , but the optimal scenario is when your firm is growing, generating some profits, but just unable to access the capital you need.

The actual arithmetic around how factoring is pricing is again very simply - sometimes the industry itself does a poor job of laying out that pricing. The only elements of the pricing are the amount of your invoice, the discount rate you are being quoted, the amount of the advance against your a/r, expressed as a percentage, and finally .. The time it takes you to collect your invoice. The faster you focus on collection the lower your financing costs.

Bottom line today... be open and flexible in understanding how receivables finance works. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in setting up a facility that works for your company.

P.S. Don’t forget to also check out confidential invoice financing, allowing you to bill and collect your own receivables under your total control.

7 PARK AVENUE FINANCIAL
CANADIAN A/R FINANCING EXPERTISE




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/factoring-ar-financing-finance-receivables.html

7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653

Cash Flow Financing In Canada. Internal And External Debt And Hybrid Asset Finance

Facts, Concepts and Insights Into Canadian Cash Flow Financing


Information on cash flow financing in Canada . Implications of hybrid asset finance for debt and asset monetization



Cash flow financing in Canada comes in many forms. In some cases it’s a hybrid asset finance model. When it comes to banks specifically they are of course focusing on both assets that have saleable value as well as healthy cash flows. No mystery there!

But cash flow financing can come from many different sources. The three general categories of these sources include:

Short term (less than one year) debt - example - a bridge loan

Business lines of credit

Long term debt (term loans, leases, mortgages)

Canadian business owners and financial managers should not forget that banks aren't the only source of business capital in Canada. Commercial finance firms, leasing companies, niche lenders and even insurance companies provide a lot of the finance that powers Canadian business.

In fact these other ' non bank ' sources are in some ways much more achievable because of the banks insistence (for all the right reasons) on proper debt/equity ratios, interest coverage, and restrictions on taking on more debt.

So when pure cash flow financing isn't going to work but you have ' assets' a lot more financing is available. Some examples:

Receivable finance
Inventory finance
Asset based credit lines
Tax Credit Monetization
Purchase order /supply chain finance
Equipment financing
Government SBL loans

Some types of what we call ‘hybrid’ finance could exist also as options for Canadian business. They are hybrid because they often take the form of a combination of debt and equity. Subordinated financing or mezzanine finance often is in 2nd position to other secured lenders. As a result many firms also take some equity in your firm as an added ' kicker ' to their overall finance structure with your firm.

Although this financing is typically always in the mid teens from an interest rate point of view that should not seem expensive to the owner/manager when he cant obtain further capital and the only other options is giving up more equity . Giving up equity is always expensive, very expensive.

Want to know where many owners miss the boat?

It's internal cash flow! While not all new or growing businesses might have a lot of ' profits' yet to generate cash flows and asset turnover you can accelerate and increase cash flow via credit from suppliers and the most common sense action of all - collecting your receivables on time! Reducing inventory or even selling of an asset you don’t need... you guessed it... generates internal cash flow.

So, bottom line, there are some implications in equity, debt, asset monetization finance. There is in fact a large spectrum of financing available to your firm - but you need to carefully asses risk/reward and the 'premium' you might pay to get that financing.

Consider:

Cost
Collateral
Covenants
Equity dilution

When you are assessing finance alternatives for your company. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor to asset cash flow and hybrid asset finance alternatives.

7 PARK AVENUE FINANCIAL
CANADIAN BUSINESS FINANCING EXPERTISE

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/hybrid-asset-finance-cash-flow-financing.html





7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653

Some Obvious Truth Around Business Acquisition Financing . 2 ( Other ) Things You Never Should Forget When Funding A Acquisition / Merger

Avoiding Skeletons In the Closet In Business Finance

OVERVIEW – Information on business acquisition financing in Canada. Funding your merger and acquisition requires not overlooking … the obvious!


Business acquisition financing in Canada. When you are looking for funder for a merger or if you're acquiring a firm remember something we heard the other day - ' Genius is often just pointing out the obvious truth that no one else sees'.

So when we recently talked about some critical aspects you may should not overlook with this type of financing challenge we remembered ... ' Wait ... there's more!”

It's critical in such an exercise to ensure you understand that both yourself and the other firm have somewhat separate agenda's. No question on that one! Simply speaking, it’s important to step outside those agendas, look inside, and ensure you have the right evidence on assets, cash flow, and valuation.

Experts in the field say that trends now show that while there seems to be a lot of businesses available for purchasing and financing many deals simply fade into oblivion. A lot of reasons might exist for that fact- one of them might simply be poor objectives, inadequate financing knowledge. As an acquirer it’s important not to underestimate your capacity to value and finance a deal, as tough as it might seem to admit that.

Many purchasers and sellers have a huge challenge in assessing the issues of existing and future debt in your deal. The amount of debt that is in fact existing, or planned does not necessarily make or break a deal, most experts seem to say that it’s all about two things - hard assets, and cash flows. And by the ways that’s future cash flows that you can reasonably predict!

Remember also that unless you're purchasing a public entity, which certainly doesn't happen a lot in the SME sector the liquidity issue around all those assets and intangibles doesn't really exist. So your challenge is, yes, to understand the value of assets and cash flows, but don’t forget those items such as intangibles! Perceptions of clients and lenders for smaller firms are equally as important.

There are of course some real basic methods to value your acquisition or merger and assess the financing needs. Businesses in the SME sector will typically be valued at a multiple of current cash flows. The time period in which you will be able to retire and pay back debt is also important.

Oh, by the way, don’t forget those skeletons in the closet!

They might include existing financing and credit problems with banks and other lenders, bad publicity, upcoming industry issues, potential loss of major accounts, and overvalued assets.

You do have the financing tools available, to make the ' right ' acquisition. They include-

Government business loan - The ‘SBL’
Asset Based Lending
Bridge Loans
Cash Flow loans
Bank term loans

Hopefully we have pointed out some of those ' obvious ' truths that will make you acquisition and financing more successful. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your business acquisition financing and funding needs.

7 PARK AVENUE FINANCIAL
CANADIAN BUSINESS FINANCING EXPERTISE


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-acquisition-financing-funding-merger.html




7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653

Business Acquisition Financing. 3 Things You Never Should Forget In Funding Your Purchase

Going Behind The Scenes In Buying and Financing A Business


OVERVIEW – Information on business acquisition financing in Canada . Critical aspects of financing any purchase or merger



When it comes to business acquisition financing in Canada there's several myths and things you should never forget when arranging and funding your purchase. Let's try and cover off 3 basics, and we're going to strive to be fairly non technical in nature... which is a good thing, right?

First point is simple the value and valuation. While a lot of people may tell you it’s all about the ' future cash flows / earning ' of the business that might not necessarily always be the case. Part of the challenge here is that the formulas around this calculation probably work best with larger public companies where you probably have a better chance of predicting the future.

So our basic caution is that as a buyer you should incorporate other factors and info into your final value decision; and make sure there are at least some cash flows today. not just ten years from now!

Point number 2 is simply the concept around the assets of the business. These days they can be a combination of hard and soft assets and you can't necessarily treat them the same. So the take away here is that each asset should be analyzed and value in the context of what they do for the business.

When we talk to clients who feel they have ' overpaid' for businesses they purchased and are now running it often becomes very clear that they never looked at each asset ' under the hammer'. That's the term for the idea of liquidation and the value of the asset that it might bring when financed. A good example might be the balance sheet accounts of inventory and accounts receivable. Are they really ' liquid ' and ' moving' respectively, or are they in fact uncollectible and waiting to be written off... respectively!

In general it is safe to say that hard assets do enhance the value and financeability of the purchase. And when you have a combination of hard assets and pretty good cash flows you definitely have found the winning combination.

Our final point pertains to both buyers and sellers and its all about disclosure. One writer referred to it as sellers who keep their dark sunglasses on!

That of course refers to sellers keeping buyers in the dark and on the other side of the coin purchasers opting to stay in the dark without doing the right amount of due diligence. Can a deal be done in the dark? Absolutely ... will it be successful for both parties? Probably not!

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

In Canada you can finance a business purchase via:

SBL Govt loans
Asset based lending
Bank term loans
Bridge loans
Cash flow loans - secured/unsecured

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can help you with business acquisition financing.

7 PARK AVENUE FINANCIAL
CANADIAN BUSINESS ACQUISITION FINANCING EXPERTISE



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-acquisition-financing-funding-purchase.html



7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653
Email = sprokop@7parkavenuefinancial.com

Canadian Business Financing . Learn From These Commercial Credit Mistakes!

Tuition In Business Financing Experience Can Be Very Expensive . Learning from Business Failure !



OVERVIEW – Information on Canadian business financing options . How business can learn from commercial credit failures




It's not always Happy Talk! When it comes to Canadian business financing and commercial credit in Canada we can learn a lot about the mistakes we and others have made in the past, right. We're full of sayings today, but our other favorite is that there is a lot of tuition

to be paid in the school of business experience.

In many cases when it comes to business finance a mistake can be corrected - the worst case is of course business failure, bankruptcy,etc Those experiences make business owners and managers shall we say ... ' resilient '.

Securing financing improperly is one of the worst mistakes your business can make. And that doesn't necessarily mean rate, it means structure and purpose of the financing. And when you don't know how and when to raise capital or monetize assets that just compounds the problem.

From your lenders perspective it’s all about risk and the amount they are willing to take with your business. So you become a winner when you obtain the financing you want and your bank or commercial finance firm feels they have not taken excessive risk. That's a great point to remember.

To make their loans and financing ' less risky ‘banks and other finance firms make ask for personal assets as collateral. While in many cases that can't be avoided the business owner should take great caution to over collateralize their lender. That mistake becomes very costly in the even of a business failure.

Matching the right term to your financing is critical. Remember that a bank or finance company, Lease Company, etc always feels less certain about a longer term. Why? Simply of course because the long term future is uncertain for any business.

Many businesses are forced to give up some for of equity in their early years. That might be from an investor, a lender, a partner/strategic partner etc. When you do that you're of course giving up significant returns at a future point in time.

We probably couldn’t count the number of times we have felt that clients have simply aligned themselves with the wrong firms, people and financing. In a perfect world you want to deal with people who are knowledgeable about your company and industry.

We hear a lot about ' bootstrapping ' these days. Essentially it’s utilizing personal and ' friends and family ' savings as opposed to seeking outside funding. That’s good and bad we think. You do have less or no external debt, but again you've pledge personal assets that ultimately will affect your personal credit history. The best bootstrapping arrangement is one in which you feel very confident about future cash flows.

What is the key take away today ?Simply that Canadian business financing, either via debt or cash flow and commercial credit asset monetization must be taken on in the context of short term, long term, and daily operations financing . There are serious implications to taking ' other people’s money '. You can pay a lot of expensive tuition when you don't understand your needs and potential sources of commercial credit in Canada.

Seek out and speak to a trusted, credible Canadian business financing advisor who can assist you with your commercial credit needs, with the benefits of experience.


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/canadian-business-financing-commercial-credit.html

7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS FINANCING EXPERTISE


7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653
Email = sprokop@7parkavenuefinancial.com