YOUR COMPANY IS LOOKING FOR SOURCES OF FINANCE!
SOURCES OF FINANCING
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 = 416 319 5769
Financing sources in Canada for Canadian business must seem sometimes as if it's a matter of truth or fiction for Canadian business owners and their financial managers. That certainly the feeling we get from clients talking to us at 7 Park Avenue Financial as they balance debt and equity options.
So if those sources of business finance exist ( THEY DO !) let's take a look at what is available for the commercial borrower, hopefully eliminating some of the ' turbulence' associated with the search for business funding. When all those ' angel investors ' and venture capital folks have abandoned you it's time for some real world financing.
SOURCES OF BUSINESS FINANCE
We will focus primarily on sources of capital that essentially are available immediately for borrowers when it comes to business financing in Canada - they include:
Trade Credit From Suppliers
Bank Solutions
Equipment Lessors
DIRECT WORKING CAPITAL FINANCING
Working Capital Providers - A/R Finance / Inventory Finance / Purchase Order Finance / Short and Intermediate-Term Working Capital Loans
GOVERNMENT BUSINESS ASSISTANCE
Government loans for businesses are also available ,primarily via the Canada Small Business Financing Program sponsored by Industry Canada through various financial institutions. Never forget to investigate Canadian government assistance, in pandemic or non pandemic times! At 7 Park Avenue Financial we focus on business funding but important to note that government business grants are also available under various programs from both federal and provincial regimes.
DON'T FORGET SUPPLIER RELATIONSHIPS
Businesses should never forget that supplier/vendor financing is one of the best and cheapest forms of capital and cash flow. Why? Quite frankly it is much easier to obtain, is rarely, if ever ' secured' or ' collateralized ‘and typically carries no interest penalty
You should not forget that delaying payment to suppliers is a ' cash flow positive ', but, and it's important but, you never want to have that strategy deteriorate the relationship you have with a key vendor. Furthermore, if your firm has the cash the cost of not taking a payment discount also must be measured. The bottom line is that small business financing can be external or internal!
So why is a prompt payment to a supplier/vendor such a key cash flow/profit variable? You can check with your accountant but let’s say you bought 10k of product from a supplier and were able to successfully negotiate a 2% NET 60 payment term. Calculating the discount foregone and the proceeds from the use of the money you might find that’s an 18% savings rate -so if you can borrow for less than that you clearly are ahead of the game. Bottom line - never underestimate the power of supplier financing from a payment and cash flow perspective as you market your goods and services.
DOES YOUR FIRM QUALIFY FOR BANK FINANCING?
While banks might be considered as a first choice ' go-to ' when it comes to financing sources under consideration for small businesses many firms looking for ' SME ' Commercial Finance solutions will often find they don't qualify for some of all of the funding they need to run and grow the company.
Business lines of credit from banks are low cost and flexible - but they require appropriate bank collateral and the understanding from yourself that there might be some restrictions on your financials re additional borrowing from others, etc.
QUALIFICATIONS FOR BANK FINANCING IN CANADA
If your company meets cash flow and ratio and covenant requirements from banks they are certainly the lowest cost and excellent source of intermediate capital for loans on equipment, fixed assets, and a revolving line of credit.
WHAT IS THE MOST POPULAR FORM OF ALTERNATIVE FINANCING THESE DAYS?
One of the most popular forms of finance, growing constantly in popularity, is A/R financing. Why? Simply because it provides significant capital without additional equity and allows you to avoid long term debt. Essentially you are monetizing your current assets, ie accounts receivables.
Yes a/r finance has a higher cost, and we spend a lot of time speaking to clients around the fact that the old stigma of A/R factoring disappears more and more every day. The old alternative is fast becoming the new traditional for businesses in Canada.
The benefit of A/R Finance also includes the fact that your sales in effect become an ATM machine, generating true cash as you sell products/services. This type of business finance also is an effective way to manage seasonal bulges in your business.
FINANCING INVENTORY
Inventory financing is typically done in combination with a bank line of credit but is even more effective when in conjunction with a non-bank asset-based line of credit. Good inventory financing strategies are available if your firm has quality products; good inventory turns and is not of a perishable type - i.e. food.
FINANCING NEW ASSETS
Equipment financing is a solid use of intermediate financing - although not a 'business loan' per se. It allows you to avoid large cash outlays, replenish assets and technology, is easier to obtain from a financing approval point of view, and allows you to simply pay for assets over their useful economic life. A huge portion of all businesses in North America leases both new and used equipment.
The bottom line in Canadian business financing options? You can eliminate the turbulence that comes with business finance challenges by understanding what sources are available for what maturity. Simple as that.
CONCLUSION
Seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success, assisting you with your needs for financing sources in Canada to run and grow your company.Small businesses in Canada need all the help they can get whether you are an established business, medium sized, or a start up / new business. Financing options via 7 Park Avenue Financial are always available if you're prepared to investigate.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
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