YOUR COMPANY IS LOOKING FOR BUSINESS 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
Oakville, Ontario
L6J 7J8
7 Park Avenue Financial originates business financing solutions for Canadian Businesses – We offer Alternative Financing and working capital solutions – Save time, and focus on profits and business opportunities
7 Park Avenue Financial: “Canadian Business Financing with the intelligent use of experience”
Alternative Financing for Small Business: Business Funding Canada
Understanding Asset-Based Lending (ABL)
Canadian small business owners are discovering that the future of business funding lies beyond traditional bank doors.
Asset-based lenders are playing an increasing role in business owners' and financial managers' search for alternative business finance solutions that solve their challenges around growth and operations. Let's dig in.
What is Asset-Based Lending?
Alternative business funding options have become increasingly popular among small business owners who cannot secure traditional bank loans. These options allow businesses to access the capital they need to grow and expand their operations.
One fundamental challenge of understanding the ‘ABL’ (asset-based lending) offering is—you guessed it—understanding what it is! As in numerous industries, different terms mean different things to other people.
In the context of what we're talking about, commercial finance companies offer loans and credit lines based on your company's core collateral. Typically, that’s receivables, inventory, and fixed assets. It's as simple as that.
Breaking Free From The Challenges of Traditional Lending
Securing traditional business loans has become increasingly challenging for Canadian small businesses, with banks rejecting up to 45% of applications. This funding gap threatens business growth, expansion plans, and daily operations.
Let the 7 Park Avenue Financial team show you how Alternative financing solutions provide accessible, flexible funding options.
Three Uncommon Takes on Alternative Finance :
- Alternative financing can strengthen relationships with traditional lenders
- The higher cost of alternative funding often results in faster ROI due to the speed of deployment
- Alternative funding can serve as a market research tool for business scalability
Did You Know?
- 61% of Canadian small businesses sought external financing in 2023
- The alternative lending market grew by 28% in Canada last year
- Average alternative financing approval rate: 67%
- 73% of funded businesses report revenue growth within 6 months
- 82% satisfaction rate with alternative financing solutions
The Core Benefit of ABL
Because an actual asset-based loan or credit line is based on borrowing against specific assets, the real benefit of ABL emerges quickly - more cash and significantly more flexibility than Canadian chartered bank offerings. We can't say it anymore simply - it's all about the assets!
Different Forms of Asset-Based Financing, Including Equipment Financing
Alternative lending options have gained traction in Canada due to their flexibility and accessibility compared to traditional financing methods.
Different forms of asset finance are available for your company's stage, up to and including distress. Certain industries often demand more financing needs, and your company may transition from typical start-up scenarios to high growth, maturity, distress, etc.
ABL works because it’s all about the assets and their actual value (not book value!).
Common Forms of Asset-Based Lending
Key Benefits of Alternative Lending Options
What, then, are some key benefits that would make the business owner consider an alternative business finance solution?
They include:
-
Working with an alternative lender can provide funding quickly and with fewer restrictions than traditional banks and credit unions.
-
This includes benefits such as online applications, faster funding timelines, and the flexibility to approve a broader range of businesses, including those with lower credit scores or in specialized industries.
-
Any debt or alternative finance form is cheaper than giving up equity ownership or using your own money.
-
Business owners/managers still have all the flexibility of running their own company without the fear of falling offside on ratios and covenants typically associated with senior debt financing.
-
The competitive nature of the asset finance industry allows owners/managers to gravitate to a firm that best meets their needs.
-
Actual asset-based credit lines grow along with the business.
ABL’s Appeal Versus Traditional Bank Loans
One of the most interesting aspects of asset-based lenders’ offerings is that these offerings appeal to firms of any credit quality.
Unlike traditional banks and other financial institutions, which may have stricter lending criteria, asset-based lending provides flexibility that can benefit both well-managed, growing, and profitable businesses and those with more unpredictable financial progress.
Equally, companies with much more unpredictable financial progress (variable profits and losses, cash flow bulge needs, too much term debt, etc.) are often the perfect match for the asset-based lender offering.
Key Takeaways
-
Understanding cash flow impact drives successful alternative financing decisions.
-
Credit requirements differ significantly among alternative funding sources
-
Revenue-based repayment structures align with business performance cycles
-
Speed of funding access determines the optimal financing choice
-
Cost comparison calculations reveal the true financing value
Choosing the Right Funding Option
Choosing the right funding option for your business can be a difficult decision. Many types of funding options are available, each with its advantages and disadvantages.
Consider Your Business Needs
When choosing a funding option, it’s essential to consider your business needs. What type of funding do you need? How much money do you need to borrow? What are your repayment terms? Answering these questions will help determine the best funding option for your business.
It’s also essential to consider the interest rates and fees associated with each funding option. Some funding options, such as merchant cash advances, may have higher interest rates and fees than others. It’s crucial to carefully review the terms and conditions of each funding option before making a decision.
In addition to considering the interest rates and fees, it’s also essential to consider the repayment terms. Some funding options, such as peer to peer loans , may have stricter repayment terms than others. It’s crucial to carefully review the repayment terms of each funding option before making a decision.
Ultimately, the right funding option for your business will depend on your specific needs and circumstances. It’s essential to carefully review each funding option and consider your business needs before deciding. By doing so, you can ensure that you choose the best funding option to support your business’s growth and success.
Conclusion
Alternative financing allows business owners to maintain ownership control while providing flexible and scalable funding solutions.
Is your business financing ‘broken,’ and if so , do you want to fix it?
Call 7 Park Avenue Financial, a trusted, credible, and experienced Canadian business financing advisor who can assist you with your business finance needs via alternative funding options.
FAQ
What makes alternative financing more accessible than traditional loans?
-
Flexible qualification criteria
-
Faster approval processes
-
Multiple financing options
-
Less emphasis on credit scores
-
Focus on business performance
How does alternative financing help with seasonal business fluctuations?
-
Customized repayment schedules
-
Revenue-based options
-
Flexible terms
-
Quick access to working capital
-
No fixed monthly payments
What advantages does alternative financing offer for equipment purchases?
Why choose alternative financing for expansion projects?
-
Faster funding deployment
-
No dilution of ownership
-
Multiple financing structures
-
Scalable solutions
-
Performance-based options
How does alternative financing improve cash flow management?
How do alternative lenders evaluate applications?
-
Focus on business performance
-
Review revenue history
-
Assess industry factors
-
Consider time in business
-
Evaluate cash flow patterns
What documentation is typically required?
-
Bank statements
-
Financial records
-
Business licenses
-
Tax returns
-
Revenue projections
What are typical approval timeframes?
How do repayment structures work?
What are the common use restrictions?
-
Business purposes only
-
Equipment purchases
-
Inventory acquisition
-
Working capital
-
Growth initiatives
What factors determine alternative financing costs?
-
Business revenue
-
Time in operation
-
Industry type
-
Credit profile
-
Funding amount
How do alternative loans differ from traditional bank loans?
What makes a business ideal for alternative financing?
-
Strong cash flow
-
Growth potential
-
Clear funding purpose
-
Established operations
-
Strategic planning
What is Crowdfunding
Crowdfunding is a type of alternative funding that involves raising money from many people, typically through an online platform. This type of funding is often used by startups and small businesses that cannot secure traditional financing. Crowdfunding platforms such as Kickstarter and Indiegogo allow companies to create campaigns and raise money from many people. This method of ' venture capital ' not only provides necessary funds but also helps validate the business idea and build a customer base.
What are Merchant Cash Advances
Merchant cash advances are alternative funding that involves borrowing money against future credit card sales. Small businesses often use this type of funding with a high volume of credit card sales. This method provides quick access to capital and is repaid through a percentage of daily credit card transactions, making it a flexible option for businesses with fluctuating sales.
