YOUR COMPANY IS LOOKING FOR BUSINESS FINANCING OPTIONS!
TRADITIONAL FUNDING OPTIONS / ALTERNATIVE BUSINESS FUNDING
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
FINANCING OPTIONS FOR BUSINESS / TYPES OF BUSINESS FINANCING YOU CAN ACCESS TODAY!
Business Financing methods. New and existing businesses are always looking for capital. Although a solid majority of business owners, managers and entrepreneurs know where to look, many can’t make that claim when it comes to business lending.
Additionally, there are a number of alternative options, sometimes little known ways to finance a business for working capital that is not as ‘main street ‘as the obvious choices – our Canadian chartered banks, etc. ( Statista.com reports strong growth in numerous market segments and positive annual growth rates in the alternative lending industry. )
Whether your company is one of the established businesses that is growing, or maybe one that is challenged there is always a solution - that means ' alternative lenders ' to the rescue for many small businesses. Here's your guide to alternative lending for small business. Let's dig in on financing companies for small business!
ARE YOU LOOKING FOR DEBT/EQUITY OR CASH FLOW FINANCING?
We suppose if the entrepreneur/owner knew exactly what to do all they would need is the Yellow Pages and a phone; however, that is not the case.
Looking for financing methods requires that you immediately ‘slot’ your needs into one of two buckets – equity, or debt. Naturally, the SME sector in Canada is not funded from an equity perspective via our banks. Simply – they don’t do that! That's why it's important to be aware of alternative ways to finance your business.
CAN THE GOVERNMENT SMALL BUSINESS FINANCING PROGRAM WORK FOR YOUR FIRM?
The other natural tendency is to take the government up on their offer of assistance. Like you, we’ve seen the commercials! When it comes to real-world access to government funding we work with our clients in two areas – The federal government SBL loan, and SR&ED tax credit financing. Either of these two is a tremendous way to help finance your business, particularly in the early stages.
The Canada Small Business Financing program is the Canadian equivalent of U.S. ' sba loans '. A lower interest rate on government loans translates into thousands of firms each year taking advantage of the program. Good credit history is required, and the 7 Park Avenue Financial team can help you with the application process, including the required business plan.
As a financing option for small businesses, this is probably the most popular government funding program outside of the 2020 government programs under the Covid pandemic. A bank or credit union is the financial institution that offers the 'Government CSBFL loan'.
The program is not a limited time offer, and has been in place for decades and utilized by thousands of companies. These are lump sum term loans, not to be mistaken with credit lines or working capital facilities. ' SBL LOANS' are one of the top startup financing options for small businesses.
At 7 Park Avenue Financial , we focus on the more common methods of financing a business – from both a traditional bank loan or line of credit perspective as well as alternative lending solutions from alternative lenders for small business.
BEST ALTERNATIVE BUSINESS LOANS & FINANCING OPTIONS FOR YOUR SMB / ALTERNATIVE BUSINESS LOAN LENDERS
A/R Financing / Invoice Factoring /Confidential Invoice Financing - the ability to fund outstanding invoices is key to Canadian business financing success.
Inventory Loans
Access to Canadian bank credit /line of credit/term loans - cash advances under short term working capital loans are installment term loans on a 1-2 year term and have become increasingly popular- long term financing solutions from banks offer unlimited capital at best interest rates for firms that qualify.
Non bank asset based lines of credit
SR&ED Tax credit financing
Equipment / fixed asset financing
Cash flow loans
Royalty finance solutions
Purchase Order Financing - combined with invoice financing this solutions allows companies to take on larger orders and contracts when a traditional bank loan is not accessible for growth finance solutions
Short Term Working Capital Loans/ Merchant Cash Advances/Business credit cards - merchant cash advances historically were loans against future credit card sales for retailers but have evolved into a large small business financing industry.
The industry uses sophisticated algorithms to determine how much money you can borrow and pay back on the loan amount. These loans come with higher interest rates - but it comes down to access to capital as they allow businesses to get almost instant credit and are paid back tailored to your cash inflows.
Securitization
WHAT ARE THE BIGGEST CHALLENGES IN FINANCING A BUSINESS FOR SMALL BUSINESS OWNERS?
When examining debt financing options challenges that business people need to address include:
The need for hard assets which can be collateralized or monetized
The need to give up assets as security for debt type financings
Ensuring that your business assets have real value – i.e. Realizable receivables, sales growth, quality inventory turnover, etc - Short term loans and revolving lines of credit depend on good asset turnover in the current assets on your balance sheet. Interest rates on all types of business loans will always come back to the overall credit quality and perceptions of the management of your business.
When you are looking for equity financing, which is not our specialty at 7 Park Avenue Financial the mindset of the investor (not a lender) changes. They want technology or businesses with a proven competitive edge, strong growth potential, sensible exit strategies.
HOW WILL YOU DOCUMENT THE FINANCIALS OF YOUR BUSINESS
This is a great question. Documenting your financials via a realistic business plan and cash flow forecast is key. At 7 Park Avenue Financial we prepare business plans for our clients that meet and exceed the requirements of all banks and commercial lenders.
Just being able to answer simple questions such as ‘ how long will it take you to collect ‘, ‘ are your costs in line with others ‘ ‘ how will you market your product or service ‘ are key to winning over a lender or investor. You have to be able to estimate reasonable sales and show a cash flow that shows ‘how your company works!'
A good credit score/personal credit history for the owners of a business is almost always essential for both traditional and alternative funding , whether you are accessing bank loans or non-bank funding and will go a long way towards a lower interest rate.
CONCLUSION - TRADITIONAL AND ALTERNATIVE BUSINESS FINANCING
Business credit for small businesses will always be a challenge. Note that widely read business publications such as Forbes reports positively on the growth of alternative lenders.
What type of financing does your business need? Small businesses will always require external capital. Speak to 7 Park Avenue Financial - a trusted, credible and experienced Canadian business financing advisor who can assist you with methods to finance your company and make sure you've got a great way, both alternative and traditional, to fund your business needs via a wide range of options. We'll make sure you are aware of alternative small business financing options you need to know about!
FAQ: FREQUENTLY ASKED QUESTIONS
What is alternative lending?
In Canada, alternative lender refers to business borrowing from financing companies that are independent of Canadian banks and regulated financial industries. Through online and other platforms financing solutions are provided for small and medium companies in Canada, referred to as ' SME's" Bank financing is typically not considered when using the term ' alternative finance'.
What skills do you need to run and finance a business?
Operating and financial management skills are key to how you will be perceived and dealt with by lenders and investors. Your management and financial skills must be clearly evident to lenders, either through your financial track record in business or in-person meetings to present your firm. If your company is perceived as ‘incomplete’ when it comes to key personnel you will never get the full financing you need at rates, terms and structures you want.
What should you avoid when financing a business?
At 7 Park Avenue Financial we’re always cautioning our clients to separate their personal finances from their business finances. It's important though to note that all traditional lenders and some alternative lenders place an emphasis on good credit scores / personal credit history. Tapping significantly into registered savings plans is by far not the best funding option if you can access other options. And by the way, debt is cheaper than equity – look into that comment when it comes to alternative financing options for small businesses.
What are some newer forms of equity financing vs business loan options?
Some other methods of equity financing in the early stages include friends and family, angel investors, venture capital, peer to peer ( 'p2p lending platforms') reverse takeovers of public companies with cash and no business currently inside them, and the newest kid on the block, ‘Crowdsourcing/ equity crowdfunding platforms ‘. (It’s our understanding you simply ask 1 Million people for 1$!)
In Canada, there are a number of Community Futures programs that fund regional development via loans. It’s our experience these loans have never provided the business owner with all that they need, an alternative financing is also required.
Many business people aren’t aware of Royalty financing, it’s an innovative way to promise future payment via future sales. You just need the confidence you can make those sales goals from your lender.
Click here for the business finance track record of 7 Park Avenue Financial
