YOUR COMPANY IS LOOKING FOR BUSINESS BORROWING!
THE BUSINESS INTEREST RATE ON LOANS CONUNDRUM - SOLVED!
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?
CONTACT US
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
Oakville, Ontario
L6J 7J8
7 Park Avenue Financial originates business financing solutions for Canadian Businesses – We offer Bank loan alternatives and working capital solutions – Save time, and focus on profits and business opportunities
7 Park Avenue Financial: “Canadian Business Financing with the intelligent use of experience”
Exploring Bank Loan Interest Rate Alternatives
Borrowing interest rates and the financing rate for a bank business loan or other commercial financing are often disconcerting issues for Canadian owners and financial managers.
When talking to clients, we often explain (defend?) the costs associated with different types of borrowing. So, the (not so) frightening truth ... Let's dig in.
Breaking Free from Traditional Bank Rate Constraints
Securing business financing through traditional bank loans has become increasingly challenging, with stringent qualification requirements and rising interest rates.
These constraints force many viable businesses to delay expansion plans or miss crucial opportunities, potentially stunting growth and market competitiveness.
Let the 7 Park Avenue Financial team demonstrate how Exploring bank loan interest rate alternatives offers flexible financing solutions tailored to your business's unique needs and cash flow patterns.
DID YOU KNOW?
- 67% of Canadian SMEs seek alternative financing options
- The alternative lending market grew 48% in 2024
- The average approval rate is 76% vs 45% for traditional banks
2 TYPES OF BORROWING
We can quickly divide our subject into consumer loans/retail borrowing and business funding. We’re talking solely about business funding here.
We can further divide that into a bank or credit union business loan or financing that Canada’s commercial finance companies provide. By the way, many of those business financing firms, non-bank in nature, are subsidiaries of U.S. firms in many cases.
THE CURRENT LOWER INTEREST RATE ENVIRONMENT TREND
Almost always, business bank rates are at an all-time low.
Should this be a surprise to the Canadian business owner/financial manager? Not really, as it's simply the spread between what the bank is paying us on our deposits and their profit requirement on the markup of those rates.
TERMINOLOGY CAN BE CONFUSING IN BUSINESS CREDIT
Confusion reigns supreme quite often because there are many bank products and services that all have their own lingo—base rate, ancillary costs (our favourite!!), etc.
THE BANK RATE / BANK PRIME RATE
Behind the entire bank, pricing is the policy of the Bank of Canada as it pertains to the banks' borrowing and lending with the government and themselves. Fortunately, that’s a subject for another day.
IS YOUR BUSINESS BORROWING SHORT-TERM OR LONG-TERM
When it comes to business financing and small business loans, transactions from banks or commercial finance firms can be short-term or long-term in nature.
In a perfect world, the banks themselves would want to pay us, consumers, low short-term rates and lend these funds out on a long-term basis at higher rates—it's just common sense.
WHAT IMPORTANCE IS OVERALL CREDIT QUALITY AND CREDIT HISTORY IN BUSINESS BORROWING
How does your firm have input into what rates you will be charged for revolving facilities, asset monetization, or term loans? It’s simply all about credit quality.
A secured loan, which requires collateral, can often result in more favourable borrowing terms due to reduced risk for lenders. So, creditworthiness, as it pertains to profitability, having a historical borrowing record, solid financials, or being in business for a long time, counts.
THE COST OF FINANCING OUTSIDE TRADITIONAL BANKING
Thousands of firms borrow outside of the banking system for business needs.
A line of credit is a flexible financing option that allows businesses to access funds as needed, paying interest only on the amount borrowed.
Here, solutions for working capital and asset monetization abound - they include:
A/R Financing
Inventory Loans
Access to Canadian bank credit- fixed or variable rate solutions for loan payments
Non-bank asset-based lines of credit
SR&ED Tax credit financing
Equipment / fixed asset financing
Merchant Cash Advance - Short term working capital loans typically from an online lender with a minimum monthly payment
Cash flow loans
Royalty finance solutions
Purchase Order Financing
Short Term Working Capital Loans/ Merchant Advance/ Business Credit Card - Good personal credit history and credit score is required.
Securitization
ALTERNATIVE LENDING RATES
In non-bank financing, rates are typically higher because the finance firm takes on more risk, and transactions are more structured for loan funds.
Payday loans are a high-interest, short-term borrowing option often used by individuals with poor credit who need immediate financial assistance.
That might include deposits, outside collateral, warrant plays, etc. Borrowing rates, terms, conditions, and banking for business will always require some due diligence and additional expertise on behalf of the Canadian business borrower.
CASE STUDY:
A rapidly expanding SaaS company based in Toronto's tech corridor, had developed an innovative customer service automation platform. Despite showing strong monthly recurring revenue of $500,000 and maintaining a 92% customer retention rate, traditional banks denied their loan applications due to their limited operating history of 18 months and significant reinvestment in R&D.
The Challenge:
- Needed $750,000 for market expansion and product development
- Traditional banks required 3+ years of operation
- Banks wanted personal guarantees from founders
- Fixed monthly payments would strain cash flow during growth phase
- Time sensitivity - market opportunity window closing
- Valuable IP assets not considered by traditional lenders
Alternative Financing Solution: TechGrowth partnered with a revenue-based financing provider who offered:
- $750,000 in growth capital
- No personal guarantees required
- No fixed monthly payments
- Payments scaled at 6% of monthly revenue
- No equity dilution
- 72-hour approval and funding process
Implementation: The company utilized the funding strategically:
- 40% for sales team expansion
- 35% for product development
- 15% for marketing initiatives
- 10% for operational infrastructure
Measurable Outcomes: Financial Impact:
- Revenue grew from $500K to $700K monthly within 6 months
- Reduced financing costs by $45,000 compared to quoted bank rates
- Maintained healthy cash flow with flexible payment structure
- Achieved 40% growth without equity dilution
Operational Benefits:
- Hired 4 additional sales representatives
- Launched 2 new product features
- Expanded into US market
- Increased customer base by 45%
- Reduced customer acquisition cost by 28%
KEY TAKEAWAYS
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Revenue-based financing adapts payments to your business cycle
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Alternative lenders focus on cash flow over credit scores unliked personal loan lenders
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Collateral requirements differ significantly from traditional banks
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Approval processes emphasize recent business performance
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Technology-driven underwriting enables faster decisions
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Personal loan alternatives provide flexible borrowing options for those who may not qualify for traditional personal loans or wish to enhance their credit score
CONCLUSION
Don't let interest rates on business loans be confusing and impede your business growth via financing options available.
Your business, in fact, does have an input into rates. First of all, Canadian business financing is competitive, and your ability to demonstrate growth, prospects, good management, and assets will increase the odds of better borrowing rates in your favour.
Small business financing is always a challenge for small businesses and any firm in the SME / SMB sector.
Are you focused on the truth in bank business loans and borrowing rates in Canada, including options for commercial loans?
Call 7 Park Avenue Financial, a trusted, credible, and experienced Canadian business financing advisor who can help you find the lowest cost/maximum benefit at competitive interest rates.
FAQ
What factors determine qualification for alternative financing?
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Business revenue history /bank account history with a financial institution
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Time in business
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Industry type
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Current debt obligations under any loan balance
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Credit profile assessment for loan options
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Cash flow patterns
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An unsecured loan does not require collateral, which can result in higher interest rates and lower borrowing limits due to the increased risk for lenders.
How quickly can alternative financing be secured?
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Most alternative lenders process applications within 24-48 hours
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Digital application platforms enable rapid document submission
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Pre-approvals often available same day
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Funding typically complete within 5-7 business days
What makes alternative lending different from traditional bank loans?
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More flexible qualification criteria
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Faster approval processes
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Variable payment structures
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Focus on business performance
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Less emphasis on personal credit
How do alternative lenders evaluate applications?
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Review of recent bank statements
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Analysis of cash flow patterns
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Assessment of industry risk
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Evaluation of business model
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Consideration of growth potential
