YOUR COMPANY IS LOOKING FOR BUSINESS CREDIT FACILITIES!
BUSINESS LINES OF CREDIT / LINE OF CREDIT SOLUTIONS 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
Suite 301
Oakville, Ontario
L6J 7J8
Business line of credit alternatives make funding a business a lot easier when it comes to the ups and downs of owners and financial managers managing their cash flow and working capital. As we have hinted, traditional and alternative funding exists - it’s not a ‘one size fits all’ type of financing. Let's dig in.
ALL COMPANIES WILL EVENTUALLY HAVE A CASH FLOW GAP / CASH FLOW CRUNCH
Whether a firm is a start-up or established and growing there are always going to be gaps between cash outflows and inflows. Although it might be a surprise to some even the largest corporations in Canada do not always exhibit constantly good cash flow.
WHAT IS A LINE OF CREDIT?
Credit lines are short term funding solutions for day to day operating activities, versus a term loan for permanent working capital or asset financing needs. Business owners should make sure they match funds properly, short term business credit lines should not be used for equipment financing/capital asset acquisitions.
WHY DO CASH FLOWS FLUCTUATE IN A BUSINESS
Why does cash flow fluctuate then? For the majority of companies, it's because a company has to 'ride out' the time between purchasing products and delivering services to the ultimate collection of receivables from clients. Business credit lines address that gap.
When a business can obtain traditional bank loan solutions or non-traditional business loans and revolving credit facilities it’s safe to say 'danger' ensues!
WHAT STAGE IS YOUR BUSINESS IN?
We talk a lot with clients about what stage their business is in and what types of business credit facilities are available. The traditional ' go to ' financing is of course our Canadian chartered banks where lower interest rates and unlimited amount of capital abound!
HERE IS A LIST OF KEY ALTERNATIVE FUNDING SOLUTIONS - WHICH ONE WORKS FOR YOUR BUSINESS
More non-traditional financial offerings are becoming more popular all the time - they include:
Non-bank Asset-based lines of credit (they lend, all in one facility, against account receivable, inventory and equipment) Real estate equity can also be bundled into your credit line to allow for maximum borrowing
Invoice Financing /Confidential Receivable Financing facilities
PO/Supply chain financing
Royalty/Revenue financing (New)
Merchant Cash Advances / Business credit cards
Unsecured business line / short term working capital loans/peer to peer, online lenders - repayment terms typically structured to your cash flow repayment terms based on business bank account history
Interest rates for a credit line interest rate for small business are generally higher in alternative lending - business owners must consider the cost of capital versus access to capital not available otherwise through traditional lending - Business owners tend to focus on the interest rate versus the opportunity cost of not getting appropriate financing for their company - higher interest rates should not discourage appropriate financing as long as you can achieve positive returns on equity.
STARTUP FINANCING IS A CHALLENGE
If a firm is in start-up mode, or in early revenue stages it is fairly impossible to access a traditional bank borrowing facility whereby receivables and inventory are margined on an ongoing basis. Instead, the banks will focus on the owner’s personal assets, good credit history, etc. Those items help you get approved.
2 KEY PIECES OF INFORMATION REQUIRED FOR ACCESS A LINE OF CREDIT FOR BUSINESS
Your ability to access the type of business credit funding you need depends on some very basic pieces of data -
Current financial statements
A Sales/cash flow forecast - In numerous circumstances business plans are a key requirement to present your firm in the most positive manner - 7 Park Avenue Financial prepares business plans that meet and exceed bank, commercial lender, and alternative lender requirements. In many cases a business plan and accurate cash flow projections will make your business case stronger and more successful.
It is important to note that owners of small businesses should generally, but not all the time, be able to present a positive credit score and personal credit history. A credit check showing good personal credit and net worth will almost always help to achieve lower interest rates
PRESENT ACCURATE CASH FLOW AND DEBT REPAYMENT INFO
Your current and projected financials should do a good job of indicating where your company is going. Presenting cash flow, debt load capacity in a manner that shows you are managing assets and able to grow sales with access to cash flow solutions is key.
CONCLUSION - BUSINESS LINE OF CREDIT CANADA
When it comes to business lending do you know your best option? There is no question there is a lot of demand for asset financing in Canada for the small business owner in the SME sector - those small and medium-sized companies that drive the Canadian economy.
Knowing you have choices is key; consider seeking out and speaking to a trusted, credible and experienced Canadian business financing advisor who can makes things a lot simpler than you imagined.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
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