YOUR COMPANY IS LOOKING FOR BUSINESS FINANCING CHOICES!
HOW TO FINANCE YOUR BUSINESS IN CANADA!
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
How much are Business Financing Options worth to the Canadian business owner/ financial manager. Top experts agree it’s quite a bit, so let’s provide the owner/manager with some privileged ' backdoor entry' into some key information and finance sources for your business in Canada. Let's dig in.
DEBT AND EQUITY AND YOUR CAPITAL STRUCTURE
The issue of knowing where your capital is coming from (term debt or operating cash flow) is pretty well top of mind for most business owners, whether they are in start-up or growth mode. The need to address high growth potential is key. The reality is that depending upon the type of business and industry you are in there are different levels of capital need. It goes all the way from one extreme to the other, capital intensive businesses or high cash flow/working capital needs based on investments in receivables, inventory, technology, etc.
SME FINANCE CHALLENGES
There is no discussion on Canadian business financing in Canada that happens without talking about the pros and cons of chartered bank financing for commercial loans and operating lines of credit. While large credit-worthy corporate borrowers have really unlimited access to bank capital the challenge for business in the SME / STARTUP sectors is much greater. There the focus is on the personal credit history of the owners, collateral, length of time in business, etc.
ARE BANKS THE SOLUTION FOR FINANCING YOU NEED
Very few transactions in SME banking are done around inventory financing, equipment finance, and equipment lease needs. In fact, while some of the banks have their own independent leasing divisions the great rates and structure they require to necessitate you moving your entire banking relationship over to them, which often is undesired or impractical.
OWNER INFORMATION / BACKGROUND/EXPERIENCE
Business owners in a start-up or SME (Small to medium enterprise) sectors should always also be cognizant of their personal credit history status. Banks and other lenders often immediately disqualify a borrower who has an unsatisfactory personal credit history. TIP: Credit bureau scores of 650+ are typically desired.
DO YOU HAVE A BUSINESS PLAN OR CASH FLOW PROJECTION? THEY ARE IMPORTANT
One of the great mistakes business people make is to not have a plan for growth. Often that revolves around having a solid business plan and cash flow forecast, the latter being more important in some ways. Knowing when you will need more financing is a valuable commodity in business.
CHASING UNREALISTIC SOURCES OF FUNDING?
Because many business owners don’t understand their alternative financing options they spend a lot of time chasing ' equity financing or venture capital which of course dilutes ownership stake. If the business owner takes some time to understand how private equity groups, angel investors, and VC's work they will save themselves a ton of time and understand very quickly that only 1% of all transactions submitted in this sector get financed. In many cases, personal savings are not available to raise funds to fund further equity needs when a traditional bank loan isn't available.
. Do we even need to mention that giving up equity in the early stages of your business dilutes ownership and future returns on your work and investment?
Hopefully not.
SOURCES OF CANADIAN BUSINESS FINANCING / BUSINESS LOANS - WHAT TYPE OF FINANCING WORKS FOR YOUR COMPANY
What then are the alternative sources of capital for business short term and long term needs ?
They include:
A/R Financing
Inventory Loans
Access to Canadian bank credit/bank loan solutions
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
Short Term Working Capital Loans/ Merchant Advance/Credit cards ( Credit history of the owner is important )
Securitization
The interest rate on any type of financing will vary based on the amount of funding need, overall credit quality, and your ability to demonstrate pay back via sales, assets, and cash flow. For small business, debt financing needs should ensure they can be covered by cash flows.
CONCLUSION
So whether you are early-stage or established, going in the front door of a Canadian bank or the back door via alternate finance strategies for business needs seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your finance sources that make business financing options make sense.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
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