YOUR COMPANY IS LOOKING FOR COMMERCIAL BANK FINANCING!
BUSINESS CREDIT YOU NEED TODAY
You've arrived at the right address! Welcome to 7 Park Avenue Financial
Financing & Cash flow are the biggest issues facing business today
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs
EMAIL - sprokop@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Bank business credit in Canada. Our clients are very much forgiven for sometimes feeling that obtaining business loans and commercial bank financing in Canada is more akin to working their way through a roller derby tournament-high levels of navigation required at all times.
UNDERSTANDING THE COMMERCIAL BANKER
The key to understanding your ability to access and receive commercial bank financing is understanding the habits of that rare beast - the Canadian commercial banker. We say rare because we're talking about the good ones! Let's dig in.
DON'T FORGET NON-BANK SOLUTIONS FOR COMMERCIAL FINANCING NEEDS
Although it should not, in our opinion, necessarily be the case the hard reality is that most Canadian business owners and financial managers feel our Canadian banks are the ' go-to ' when it comes to debt or operating capital finance. (They often forget, or worse, don't know, that those same solutions are offered in abundance by commercial finance companies, lease companies, and non-bank asset-based credit line lenders.)
The business owner/financial manager can be forgiven though, because when bank financing is accessible by your firm the financing is in great abundance, and every type of business financing needed can be on the table.
THE BUSINESS FINANCE OFFERINGS OF CANADIAN BANKS
Bank offerings for Canadian businesses today, depending on who you are dealing with, offer -
Term loans
Lease Finance
Securitization
Equity Capital
Revolving credit lines
Trade Financing
Letters of Credit
Well, you get the picture. The key aspect that needs to be realized is that banks are at their essence cash flow lenders, so a great deal of emphasis is placed on the analysis of your historical, current, and projected cash flow. Each bank might look at this a little differently (but not that different) and at the backstop of that analysis is your ability to offer secondary corporate and or personal) collateral and guarantees. For small businesses personal credit is a key part of any final credit decision - much less so on larger more established firms, but nevertheless still important.
BANKING FOR BUSINESS IS HIGHLY COMPETITIVE - THAT'S A GOOD THING
We have always been of the opinion that there is a general similarity to commercial bank lending and competition. The difference, again, in our opinion, is the quality of your commercial banker. He or she operates in a very regulated and bureaucratic environment - so finding the commercial banker that is genuinely interested in your business and its growth is key.
BANKS ARE HIGHLY REGULATED
Because, unlike in the U.S., banks are highly regulated they are somewhat predictable in their behaviour and offering. Therefore the amount of capital they can lend, the rates, and margins on loan to value lending are not that dissimilar.
GOVERNMENT LOANS AND BANKS
The Government of Canada offers the Canada Small Business Financing Program loan that can address the needs of start-ups, franchises, and most small businesses. For more details on the program click HERE.
SPECIAL LOANS - SPOILER ALERT - THEY ARE NOT THAT SPECIAL!
Many clients find themselves at some point in time being 'out of favour' with the bank. This might also mean they are segregated into a 'special loans' portfolio. At this point, it's often time to consider non-bank solutions, especially if your assets and growth potential are still there.
In general, start-up companies in Canada can not, we repeat, cannot access commercial bank financing. The absence of our aforementioned cash flow coverage, collateral, and predictability of financing performance isn’t there. Don't count on your bank to properly finance a start-up - but do consider non-bank commercial financing sources.
DO YOU NEED A BUSINESS PLAN?
Business plans are a key part of many finance applications. They show the bank or other commercial lenders you that thought out and planned the financing, identifying sources and uses of funds in your cash flow. At 7 Park Avenue Financial, we prepare business plans that meet and exceed the requirements of banks and commercial lenders.
UNDERSTANDING BANK RATIOS AND COVENANTS
Just knowing a couple of basic ratio qualifiers will help you often to understand your chances of success with a bank business loan. Cash flow coverage should be greater than 1:1, and debt to equity rarely can exceed 2 or 3 to 1, respectively.
CONCLUSION
While commercial bank business credit in Canada is the lowest cost for pretty well every type of finance you need your challenge understands the criteria and probability of success. And finding a great banker for your business needs is key - it's always back to the people component.
Almost everyone agrees small business loans are a challenge for Canadian businesses. Small businesses need financing at interest rates that allows them to run and grow their business and sell their products and services. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your bank, and non-bank commercial financing needs.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
7 Park Avenue Financial/Copyright/2020/Rights Reserved
