YOUR COMPANY IS LOOKING FOR BUSINESS FINANCE!
BUSINESS LOANS IN CANADA / FINANCING SOLUTIONS
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
Oakville, Ontario
L6J 7J8
In Canada, business financing and loan alternatives are either at one time (or constantly!) sought by owners/financial managers. If loan options are no understood, chaos can reign supreme. Let's dig in.
CASH FLOW & WORKING CAPITAL AND DEBT OPTIONS FOR YOUR BUSINESS
Unless you're solely in the retail business, cash flow, working capital, and debt alternatives should be on the table. We're constantly amazed at the amount of time new clients have spent chasing down financing in areas they will never qualify for - these might include VC equity, Private Equity, etc.
WHO WAS THE FIRST VENTURE CAPITALIST? YOU'LL BE SURPRISED
Not knowing how to obtain loan financing, and more importantly, knowing what finance sources you qualify for are key points to consider. There's a great analogy that Queen Isabella was the first VC, having financed Chris Columbus - and probably without a business plan! Key requirements are that some equity is in place and with future cash flow potential with products and services.
AVOIDING EQUITY DILUTION
On the other hand, private equity groups are looking for no early development firms and typically favour niches in certain industries they are familiar with. Whether it’s a VC or a Private Equity Group, prepare for DILUTION OF OWNERSHIP!
FINANCING THE STARTUP
Early-stage businesses, including startups, should take advantage, or at least investigate the Government Small business loan option. Getting someone to cover off and guarantee your loan is always difficult, so if the Canadian govt is willing to do that... check it out.
4 KEY BUSINESS FUNDING ALTERNATIVES
Business owners can be forgiven for not breaking down their financing needs into different loan types - that might be:
Lines of Credit - bank revolving credit facilities / non-bank asset-based lines of credit (typically these finance receivables and inventory) - A line of credit is necessary for all businesses that are not self-financing and sell on business credit terms
Term loans - secured / unsecured cash flow loans - rates and fees depend on the loan amount, overall credit quality and whether a traditional or alternative funding solution is available - Repayment terms are heavily focused on cash flows in the business.
Equipment Leasing - Assets can be acquired for any loan solution - equipment loans are key to acquiring new assets or technology for your business - Monthly payments on leases are usually at a fixed rate, and numerous key benefits accrue to lease financing solutions - including cash flow conservation, ability to purchase more expensive assets, ability to deduct interest expense, etc.
Asset Monetization - tax credit financing, sale-leasebacks, etc
Merchant Cash Advance / short-term working capital loans - merchant cash advances are more expensive but readily accessible and structured to meet your working capital and repayment needs - Thousands of small businesses utilize this form of short-term financing via alternative lenders. This type of peer-to-peer lending comes with higher interest rates, but the loan application and quick approvals allow many firms to grow their business when there is the proverbial cash crunch. The retail store owner in these financing options is based on cash and credit card sales based on your ability to provide your bank statements reflecting cash inflows and daily sales. The loan term is based on monthly revenue - a typical formula for loan amount eligibility is 10-20% of annual sales revenues. Alternative lenders provide quicker access to capital than typically a credit union or a loan from a bank.
Naturally, a business loan from a business bank will always have lower rates for established businesses.
New businesses should consider the Government of Canada Small Business Financing Program, one of the best financing options to grow your products or services. Getting approved for a relatively new business is always a challenge. These ' SBL LOANS' are a solid financing option for a business term loan that is typically 2-5 years - The government loan allows you to acquire new equipment, used equipment, as well as fund leasehold improvements.
LET 7 PARK AVENUE FINANCIAL ENSURE YOU FIT INTO THE RIGHT ' CREDIT BOX '
In every case, the owner/manager needs to understand if they fit into the ' credit box ' that defines any particular loan or asset monetization. Those ' fit factors’ include: length of amortization/ amount borrowed/collateral/personal guarantee requirements/ down payments. That ' credit box ' we have mentioned is what drives interest rates in Canadian business financing. Business owners in the SME sector are always focused on an interest rate commensurate with their overall credit quality. Small business financing is also heavily reliant on the credit score and personal credit history of owners. Business credit and personal finances are highly intertwined in the SME/SMB sector.
Business owners in our observation seem to have a desire to blanket the market with their loan/financing requests. This often backfires for the simple reason they don't understand the particular ' niche ' that commercial finance company or bank, or alternative lender specializes in.
UNDERSTANDING W KEY ASPECTS OF ' ALL-SEASON ' FINANCING
So can we summarize key aspects to ' all seasons' financing? Key areas to focus on are:
1. Understanding lender specialization
2.Ensuring proper documentation is immediately available - i.e. business plans, cash flow forecasts, and owner information. 7 Park Avenue Financial business plans meet and exceed Canadian bank and commercial lender requirements. A business plan will almost always assist in financing approval and speed up the application process to get a small business loan. Whether you are applying to banks, credit unions or online lenders, a proper loan submission package is essential.
Businesses in Canada should ensure they have proper and up-to-date financial statements- a key element in lender due diligence.
CONCLUSION
The bottom line? Small business loans and access to capital are constant challenges - Being prepared and knowing finance alternatives is, in fact, the ' best preventive medicine ' for your financing needs. Consider seeking out and speaking to 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can help you avoid ' tire kicking' in Canadian finance and make sure proper funding is accessible.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
7 Park Avenue Financial/Copyright/2021/Rights Reserved
