YOUR COMPANY IS LOOKING FOR GROWTH FINANCING CHOICES!
GROWTH FINANCING FOR OPERATIONS
You've arrived at the right address! Welcome to 7 Park Avenue Financial
Financing & Cash flow are the biggest issues facing businesses 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
GROWTH FINANCING SOLUTIONS
Growth financing in Canada usually revolves around 2 key issues: Business finance solutions that are available and managing those solutions relative to their cost and structure. Those issues should not be the cause of your firm's meltdown ‘. Let's dig in.
BUSINESS EXPANSION
While every business in Canada isn’t obsessed with growth we can make a reasonable assumption that business owners and their financial managers do in fact want to increase the size and value of their business., or even grow into new markets as the next stage of growth.
We supposed the balance of the owners and entrepreneurs in Canada is obsessed with managing even worse matters, sales decline, operating losses etc. So we're all for a focus on growth.
UNDERSTANDING GROWTH CAPITAL
When it comes to financing and specifically in terms of growth the status quo rarely works. We constantly meet with clients who find themselves challenged as they strive to increase revenues - the old ways of financing their firm aren't working. In some cases, remarkably, they have been self-financing and didn’t even need external capital solutions.
FINANCIAL RESOURCES
What are those capital/cash flow/ and working capital solutions needed for? Typically they are for the purchase of new assets (equipment lease financing) and current asset growth in receivables and inventory. (Bank credit lines, non-bank asset-based lines of credit).
Any new capital or working capital resources is going to come from 1, or a combination of 3 things - new owner equity, some sort of debt financing, or one of our recommended favourites - monetizing assets.
MONETIZING ASSETS FOR FAST-GROWING COMPANIES
Monetizing assets can come in the form of the bank and non-bank credit lines we have mentioned. Other current assets that can be monetized are SR&ED tax credits.
Two other options to consider are sale-leaseback strategies of assets you have purchased and owned, but are not subject to any liens or encumbrances; the final strategy is to explore a PO/Contract financing scenario.
UNDERSTANDING THE DIFFERENCES BETWEEN DEBT AND EQUITY IN GROWTH FINANCE
All of these 3 different capital sources should come with the usual pros and cons analysis. That’s simply because of the following:
Debt financing is a long-term permanent obligation that must be addressed with future cash flows
Equity financing and ownership dilution are expensive - as your company grows the need to address cash flow and additional ownership financing is challenging - New investors often may not be a good fit for your business.
GROWTH FINANCING BUSINESS FINANCE SOLUTIONS
Bank and commercial financing companies offer different rates terms and structures all of which must be assessed relative to cost and the obligations that come with them (ratios, loan covenants, external collateral, etc)
When it comes to both debt financing and bank and commercial finance company solutions the dreaded owner personal guarantee is always going to be an issue. Often it can be negotiated in some manner, but not always.
The general rule of thumb of course is that debt and asset monetization strategies are always going to be more expensive than equity, especially in the early years of your business when you're building value.
When we sit down with a client to assess business financing alternatives the key issues on the table are as follows:
Asset valuation and quality
Profit and Loss status
Sales prospects
Operating issues relative to asset turnover
CONCLUSION- BUSINESS GROWTH & GROWTH POTENTIAL
If you don’t want your firm to face the growth meltdown challenge seek out professional guidance in business finance, and speak to a trusted, credible and experienced Canadian business financing advisor who can assist in ensuring the ability to grow your business -
We'll come up with the right financial plan, along with the right financial solution. Let our team make your business needs in capital a more seamless process.
FAQ: FREQUENTLY ASKED QUESTIONS /PEOPLE ALSO ASK / MORE INFORMATION
What is growth financing?
Growth financing is business loan financing that provides the business capital to support the growth initiatives of a company with the goal of increasing sales revenues and profits. In certain cases acquisition financing is chosen as a method to capitalize on existing assets, resources and expertise of a target company vis strategic acquisitions.
Many start-ups and small businesses utilize government loans or mezzanine financing solutions
What are the two types of finance for growth?
The two basic components of growth financing are equity owner or investor funding, and debt via external funding
How do you finance growth business?
Common methods of financing a business include owner bootstrapping and loans and equity from friends and family or strategic investors such as suppliers or corporate angels -
Some ecommerce oriented businesses utilized crowdfunding and private equity/venture capital funding. More traditional funding is sourced via chartered banks and credit unions, as well as asset based lenders. Small businesses utilize the Canada Small Business Financing program, a federal government loan program offering attractive interest rates and flexible terms.
Long-term financing can be sourced in the public capital markets as well as non-bank financial firms.
What is the role of finance in business growth?
Effective financing solutions enhace the business value of a company when proper financial plans and adequate management of resources and assets are used to fund growth initiatives with a goal of growing profits while minimizing risks.
