YOUR COMPANY IS LOOKING FOR BUSINESS LOAN FINANCING
INTEREST RATES THAT MAKE SENSE FOR YOUR COMPANY!
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
Phone = 905 829 2653
Fax = 905 829 2653
Email = sprokop@7parkavenuefinancial.com
Business loan interest rates in Canada are a constant discussion point with clients when we're discussing financing options for loans and asset monetization strategies. And it's safe to say there is a huge ' FUD ' factor when it comes to that discussion in small business finance and the ' interest rate'.
FUD is of course Fear, Uncertainty and Doubt, and the costs and different financing alternatives certainly create that FUD factor in the mind of the Canadian business owner and financial manager.
How do you get a business loan quickly becomes ' what does a business loan cost ', and what about those ' higher interest rates '. Let's dig in.
DIFFERENT TYPES OF FUNDING BRING DIFFERENT COSTS!
Different types of funding for your business brings the issue of costs and the sources of that capital. Owners of small businesses and their financial managers, sometimes forget to address the fact that there’s a difference in where that capital comes from and the rates that come with that financing instrument - whether it's fixed-rate loans /variable rate loans, lump sum payment obligations, or revolving lines of credit facilities for working capital needs.
BUSINESS LENDERS HAVE DEFINED RATES OF RETURN
The reality is that the sources of capital you choose in a small business loan already have defined their required rates of return, whether that be a Canadian commercial bank, a commercial finance company or an alternative lender of sorts for small business loans. Their business models dictate how that financing is to be priced and there's very little ' wiggle room' once you're inside the 'credit box.'
KEY FACTORS THAT DETERMINE INTEREST RATES AND FINANCING COSTS
What then are key factors that determine the sum of money borrowed and your interest rates and cost of financing? They include key areas such as:
Financial strength in your balance sheet and income statement
Where your company is on the maturity cycle - i.e. Start up, pre revenue, fast growing, mature, etc.
Industry issues and concerns - industries are always in or out of favor - the stock market is a great example of companies that are in their halcyon days or alternatively in a death spiral
Management credibility and reputation
Risk assessment by underwriters associated with your lender - this will shock you but some of them have a bias!
HERE IS THE MAGIC NUMBER ON INTEREST RATES IN CANADA
As a general rule we can say that depending on the type of financing you require or choose the rates in Canada are generally 3%. The challenge is that it's either 3% per annum or 3% per month, depending on the financing vehicle you choose. And in some cases that 3% per month makes a ton of sense and is justified...
It's also important to understand who the players are and who offers what, when it comes to debt financing, and of course equity financing, which is not the focus of today’s discussion.
WHO ARE THE CANADIAN BUSINESS LENDERS
Who then makes up the Canadian business landscape? Key players include:
Canadian chartered banks
Commercial Finance Companies
Insurance Companies
Equipment finance companies
Private Equity/VC types
KEY CANADIAN BUSINESS FINANCING SOLUTIONS
Their solutions are priced, as we said, to risk , and the overall business model of your lender.
7 Park Avenue Financial Products and Services Include solutions such as :
A/R Financing
Inventory Loans
Access to Canadian bank credit
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
Securitization
Your ability to manage repayment terms and handle loan interest will always be very specific to how you run and manage your company, whether it's term loans or asset-based cash flow monetization strategies. Your application process will also be defined around type and amount of financing and in some cases, business plans should be on the table and can positively affect loan approval. A business plan can also be used as a long term planning strategy when updated at times.
Some lenders may require different types of additional information - for example up to date ageings of assets, confirmation of a personal credit score/ credit history on the owner, the requirement for a personal guarantee, etc. Bottom line is that loan options from credit unions, a business bank or alternative lender come with different requirements. Providing quality and timely info to the commercial lender ensures getting approved in the shortest amount of time possible when applying for a business credit facility. Even online lenders have sophisticated algorithms around your company's ability to pay back funds.
CONCLUSION
When small business owners understand their own firm's risk profile, and what the benefits are of any type of business financing they can better eliminate the FUD factor when it comes to business credit loan interest rates and financing costs in Canada. Established businesses seem to always have a ' leg up ' when it comes to borrowing, but numerous start up options are also available, most notably the Government Of Canada Guaranteed Small Business Loan Program.
Seek out and speak to a trusted, credible and experienced CANADIAN BUSINESS FINANCING ADVISOR with a track record of assisting firms who require the right financing, with numerous options available, right now!
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
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