Business Finance Options Alternative Financing | 7 Park Avenue Financial

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Business Finance Options -  Not The Dark Secrets You Thought They Were When It Comes To Traditional Or Alternative Financing        
Are Your Business Finance Options Out Of The Box .. Or In The Box ?



 

 

YOUR COMPANY IS LOOKING FOR  BUSINESS FINANCING!

 

BUSINESS FUNDING & BEST FINANCING OPTIONS FOR A BUSINESS

You've arrived at the right address! Welcome to 7 Park Avenue Financial

Financing & Cash flow are the  biggest issues facing businesses 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

 

LOOKING FOR THE BEST BUSINESS FINANCING OPTIONS

 

 

expert business advice     7 park avenue financial     alternative financing options   small business financing options

Business finance options in Canada.  We constantly hear the term ' out of the box thinking ' these days, denoting some level of creativity for small business finance solutions. When it comes to alternative financing a number of solutions are available that are non-traditional in nature when it comes to business loans for running and growing your business.

 

When it comes to funding your business all companies will need access to capital via a business finance solution - that financing comes in the form of short-term capital needs, as well as long-term business capital for asset and technology acquisitions. Borrowing from the wrong source or accessing the wrong type of financing brings risk to the business.

 

 

ALTERNATIVE BUSINESS FINANCE IS GAINING TRACTION! 

 

 However, a number of these business finance strategies get more and more traction every day. So yes, they are ‘out of the box ' to a certain degree, but we can guarantee you there are no 'dark secrets '. Let's dig in.

 

WHAT IS ALTERNATIVE FINANCE?

 

Alternative finance is often misunderstood by business owners. It has a number of connotations, but simply speaking it is financing that is not fulfilled by traditional chartered business credit solutions. Typically the financing request cannot be fulfilled by traditional bank financing due to stricter small business lending policies of the regulated banks in Canada.

 

 

 

SEPARATING THE OWNER PERSONAL FINANCES FROM BUSINESS FINANCES   

Let's take a look at some methods to finance your business that might be ' alternative  ' in nature when it comes to solutions from various lending companies. Every successful business requires some level of owner equity. Many businesses are started by the use of personal assets which are monetized into small business lending solutions. We've said time and time again that it’s important to separate your business and personal life when it comes to finances and begins working with a real small business lender

 

 

 

BALANCING EQUITY AND DEBT RELATIONSHIPS IN YOUR COMPANY

  

 

So while small business owners consider selling or liquidating assets might as an ' alternative finance  ' strategy the reality is that your personal resources become completed, they are at risk if there is a business failure and your all-important personal credit history might unravel. So yes, it's important to commit equity to a business, combined with the right amount of debt. Ensure though that the assets you're tapping are in the right amount and that will help attract the correct amount of debt financing you need.

 

YOU'VE HEARD IT BEFORE - ' WHEN THE BANK SAYS NO '!

 

Many small businesses that can't be funded by banks are in fact eligible for bank loan financing! What do we mean by that -simply whether you consider it a' traditional' or  ' alternative bank government-guaranteed loans are a great way to finance fixed assets, leaseholds, technology requirements, etc. Bottom line - investigate the SBL program. The Canada Small Business Financing program was developed as a Canadian version of the U.S. Small Business Administration ' SBA' loan program. The loan application process for the program is common to any other business loan  request submission

 

We constantly run into many businesses that are financed by credit cards. Here it's a double-edged sword when it comes to small business financing options. Business credit is accessible - caution must be taken to use the right type of cards and to further ensure your personal credit history will not be tarnished by overuse of credit.

 

 

THE ANGEL INVESTOR AND VENTURE CAPITAL ARE OFTEN NOT VIABLE OPTIONS FOR MOST BUSINESSES RAISING CAPITAL - HERE'S WHY!

 

Certain companies are great candidates for high net worth investors, many of whom are termed ' Angel' investors. They look for good opportunities with firms that have growth and profit potential. Many have experience in the industry you are in, which you benefit from via external expertise. The biggest challenge in Canada is finding Angel investors and understanding they will demand an ' equity ' or ownership role in your business.

 

Other new-age solutions such as p2p loans (peer-to-peer) and equity crowdfunding platforms and strategic partner financing often take up a lot of management time and research and yield low results.

 

Only the smallest amount of businesses in Canada qualify for venture capital financing  - the majority of these businesses are in the technology financing area and are distinguished by high growth potential - VCs also demand a significant equity portion of your business based on their capital investment  - The long term goal of most venture capitalists is to take the company public as an exit strategy.

 

Similar to VCs angel investors tend to be wealthy and or retired business people who take partial equity ownership in businesses in exchange for management guidance and introductions to key contacts - they almost always prefer early-stage businesses and will ask for a board seat on major decisions.

 

Some early-stage and startup firms may benefit from business accelerators, also known as 'incubators - Often with local involvement, they provide business and workforce development and often business space and numerous technical resources for firms that are pre-revenue.

 

 

Over the years we've worked with a number of clients who have utilized the capital pool or reverse takeover option for new financing. Our own experience is that this often does not work, but done properly your firm is certainly more visible to the public and you have the opportunity to attract additional capital.

 

THE MOST POPULAR ALTERNATIVE FINANCING STRATEGY TODAY? HERE IT IS!

 

Many business owners and managers don’t realize they can bulk up on cash simply by selling accounts receivable. This process immediately monetizes A/R into cash, and although more expensive is much cheaper than giving up control and equity ownership. Receivable financing, done right is a solid alternative strategy used by thousands of corporations, large and small, every day. Our recommended solution here at 7 PARK AVENUE FINANCIAL  in this area is Confidential Receivable Financing, providing you with, in the short term,  unlimited credit against your sales and allowing you to bill and collect from your own clients without any third-party interference. It is probably the quickest way for any firm to address cash flow problems when it comes to small business loan requests.

 

Heard of Royalty Finance? We rarely see clients use this method of financing, but it’s certainly up for consideration versus the ability to obtain bank loans. It simply allows you to borrow against future sales which creates a win/win strategy for your investor/lender and allows you to avoid debt and grow your company.

 

Never forget that your suppliers/key vendors are great sources of capital. Just negotiating better payment terms creates business cash flow. In certain cases, you might end up considering some sort of more strategic relationship which is of future benefit.

 

 

 

CANADIAN SOURCES OF FINANCE - WHICH ONE / ONES WORK BEST FOR YOUR BUSINESS?  

 

It's important to understand the repayment term in any small business funding and how the solutions work on a day-to-day basis.

 

A/R Financing / Invoice factoring

 

Government Loans Under The Canada Small Business Financing Program

 

Federal government-guaranteed loans are available via Industry Canada's Small business loan program - in 2022 major changes were implemented to the program that added new classes of loan financing including the ability to finance working capital, lines of credit, intangible assets, franchise fees, etc. Participating institutions such as banks and credit unions are the providers of the loans under the government guidance and guarantee - The loan maximum was increased to 1.1 million dollars. When it comes to how to finance a startup business government loans are a great option.


Inventory Loans


Access to Canadian bank credit / term loans / lines of credit - Traditional bank loans


Non bank asset based lines of credit


SR&ED Tax credit financing - financing for small business innovation research - Many viable small businesses in Canada utilize the sr&ed program for product and market research innovation


Equipment Leasing / fixed asset financing


Cash flow loans - merchant cash advances from online lenders


Royalty finance solutions

 

Purchase Order Financing

 

Short Term Working Capital Loans/ Merchant  Cash Advances (Good personal credit score required!)

 

Securitization

 

 

GRANTS 

 

There are numerous grants and subsidies available from the Canadian government - Business owners and entrepreneurs should check availability via government websites such as

https://www.canada.ca/en/services/business/grants.html

Grants are made at both federal and provincial levels - although the criteria can sometimes be demanding as well as the competition for a limited amount of funds.  Talk to the 7 Park Avenue Financial team about how grants can be financed via the matching requirement that is a component of many grants.

Many firms hire grant writers who prepare detailed descriptions of projects, as well as highlight benefits to the Canadian economy based on the experience of grant applicants in their industry - The focus is typically on innovation and significance. Fund matching is often required, which again highlights the benefit of grant financing solutions.

 

  •  KEY TAKEAWAYS - BUSINESS FINANCING 

 

Numerous alternative and traditional finance solutions are available for Canadian business owners and entrepreneurs,

Debt financing and equity finance are the two  main components of a  business finance structure

Equity finance demands relinquishing percentage ownership of a business

Balance sheet financing/asset monetization strategy and cash flow loans supplement  equity /debt finance

 

 
CONCLUSION - SOURCES OF FINANCE / BEST FINANCING OPTIONS

 

A good business finance strategy is based on a good knowledge of funding options, whether that is a start-up or a mature firm addressing growth - Lenders place importance on owner funds and business experience. All the various sources of traditional and alternative finance come with specific advantages and disadvantages.

 

Proper preparation for access to business capital is key.  Business plans and solid cash flow projections count with commercial lenders. At 7 Park Avenue Financial we prepare a client business plan, if required, that meets and exceeds the expectations of all banks and other lenders. Which traditional or alternative funding options will provide your company with the capital you need?

 

Speak to 7 Park Avenue Financial,  a trusted, credible and experienced Canadian business financing advisor who can assist you with your capital needs.

 

FAQ: FREQUENTLY ASKED QUESTIONS PEOPLE ALSO ASK MORE INFORMATION

 

 

What is the best finance option for business finance?

     
     
     
     
     

What are the Ways of Financing A Business

 
Different sources of business finance include personal investments around their own business,  friends and family funding, venture capital,  angel investors as well as government loans and grants and subsidies -
 
Most entrepreneurs fund their business via self-funding, utilizing personal savings or personal debt via mortgages or credit cards as well as considering the sale of personal assets.  Business loan applicants via traditional financial institutions must demonstrate business expertise and good personal credit.
 
 
 

 

What are the Disadvantages of Debt Financing  

 

When a company assumes debt financing on the balance sheet there is an assumption that capital inflows of cash flows will meet repayment terms and obligations from the bank or business lender. Cash flows can be cyclical and may deteriorate in poor economic times - Many smaller and new businesses are often unable to qualify for competitive rates on debt finance solutions and require the personal guarantee of the business owner.


 

 


 

' Canadian Business Financing With The Intelligent Use Of Experience '

 STAN PROKOP
7 Park Avenue Financial/Copyright/2024

 

 

 

 

 

Stan Prokop is the founder of 7 Park Avenue Financial and a recognized expert on Canadian Business Financing. Since 2004 Stan has helped hundreds of small, medium and large organizations achieve the financing they need to survive and grow. He has decades of credit and lending experience working for firms such as Hewlett Packard / Cable & Wireless / Ashland Oil