Business Finance Solutions: Funding Approaches for Canadian Companies | 7 Park Avenue Financial

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BUSINESS LOANS AND BUSINESS FINANCING     - UPDATED 05/03/25

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?

CONTACT US

7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

BUSINESS LOANS AND BUSINESS FINANCING

Most business owners and financial managers know that the right type of business finance solutions critical to long-term success.

Issues around the cost of financing, timeframes for approval and repayment terms are critical.

Companies have the choice of financing alternatives from traditional and alternative lenders in Canada for every stage of their business growth, from startups to mature businesses.

Let's examine business funding options and key strategies around how to finance your business in Canada.

Financial Lifelines for Growing Businesses

Many Canadian businesses struggle with inadequate financing options, creating operational bottlenecks.

This financial stress intensifies when market opportunities require quick capital deployment, leaving business owners feeling trapped and unable to expand.

Let the 7 Park Avenue Financial team show you how Business Finance Solutions provide customized funding strategies that align with your growth objectives / expanding operations, transforming financial constraints into strategic advantages.

Business Loan expertise?

Most business owners and financial managers know the story - the bank has the money, you need it. Term loans and business needs in general can be a tough negotiation for any business owner.

Part of that is simply because the final conditions imposed upon the bank m given their fiduciary responsibility can be somewhat restrictive when it comes to small business finance.

Term loans are one business financing solution that allows you to purchase assets, finance an acquisition, or the numerous benefits around restructuring your overall capital structure.

They are long term in nature, unlike the plethora of short term working capital solutions offered in the marketplace. Every industry has the ability to finance and grow its business through a term loan structure.

As simple as it may seem, the business owner has to think like the banker, which allows one to reverse the negotiation stance to some degree. Also, it's all about 'strategy' when it comes to business loans.

When it comes to SME COMMERCIAL FINANCE, needs opportunities can be planned or arrive suddenly - at the opposite end of the spectrum,m serious business challenges can also arise -

It's at both of these times that small businesses, more so than those large public corporations, need access to capital.

The ability to secure short term loans and other forms of business financing is key to addressing issues such as inventory replenishment,  offsetting your investment in receivables, taking on large new orders or contracts, the necessity for new assets or equipment upgrades,  or simply a short term bridge loan to get back to more traditional financing.

CANADIAN BANKS AND OTHER  COMMERCIAL LENDERS 

One of the reasons that business capital is a challenge for Canadian firms is that traditional financing solutions, which historically have been the ' go-to '  for Canadian companies involve a longer lending process and requirements that many businesses can not meet.

The traditional bank lending profile in Canada is based on companies that have a historically healthy financial profile around profits, clean balance sheets, and the ability to demonstrate cash flow.

We would point out also at the outset that there are a number of banks and an equally larger number of independent finance firms that offer term loans.

The business owner should ensure he is aware of the market players, and who offers what. The goal tends to always be the same though - get the largest loan at the best rate, as well as the fastest credit approval. Not easy to achieve!

Business people as we have said, should have a solid strategy in the entire process, and believe me it's a process.

Borrowers can benefit by doing research into the banks' current market and objectives in commercial finance. There will be issues and objections raised by the bank on the owner's submission -

They should be dealt with in a manner that keeps business loan submissions positive. Thousands of books are written on the art of negotiation, and no business owner can expect to reasonably get the full amount with all the terms that he or she asked for.

Term loans are generally for long-term assets. They are paid by future cash flows and earnings.

That brings to bear two key sources of information that should be properly prepared - what has the business done financially, and what has it the potential to achieve - i.e. a forecast.

Successfully qualifying for bank loan guarantees the best/lower interest rate and repayment terms that are hopefully tailored to your cash outflows.

Banks focus on cash flow, so they will want to carefully look at what the risk is to those future cash flows.

Business people should be prepared to talk thoroughly about their own particular industry, many industries are currently out of favour - for example, cannabis; many are sought and in favour: 'Green' industries - (solar, et al).

The owner should anticipate what risks the bank or other lender will perceive in their industry -

They should be prepared to talk about those risks. Owners should also remember that although they need this term loan now for this asset, the bank will also want to look into what else they might need in the future, which might have the ability to restrict the cash flow somewhat.

Unfortunately more often than not the lender looks to historical cash flow to reflect future cash flow - therefore is a company has lots of changes in sales and profits over the years the why's and wherefores around these need to be discussed and presented.

UNDERSTANDING BANK RATIOS / COVENANTS  

While the focus is definitely on cash flow the balance sheet will definitely come under scrutiny. Weaknesses in the balance sheet need to be tabulated and discussed.

Banks love 'ratios'.  At 7 Park Avenue Financial, we call them 'number relationships'.

It is highly recommended that the business owner review and understand some of those 'ratios 'which will come under scrutiny. Typically those are liquidity, operating, and fixed asset coverage ratios.

UNDERSTANDING HOW CREDIT DECISIONS ARE MADE  - STAYING INSIDE THE CREDIT BOX!    

In summary, all banks and other finance firms have very similar and basic analysis models around a line of credit and term loan.s

They involve industry and financial statement analysis, focusing as much on the past and future as the present.

It behooves business owners and financial managers to understand some of those metrics used by bankers, which should, in the long run, limit loan restrictions and get the business owner the capital he or she needs.

It is critical that your firm has access to capital as your ability to cover expenses and finance, and grow the business is key to long term success. So whether it is a bank or a commercial loan provider access to business funding should be at the top of the list for every business owner / financial manager.

 WHY ALTERNATIVE FINANCING?   

Alternative financing allows a business to access capital outside of traditional banking in Canada. 

Why would a business seek alternative financing and bypass traditional banking?  The answer is simple!  

Financial credit requirements have a lower bar based on the type of loan and provider - In many cases, little or no emphasis is placed on credit scores and net worth and external collateral of the business owner.  Qualifying is therefore easier and the timeline for alternative loan approvals is much shorter.

BUSINESS FINANCING  SOLUTIONS - SOURCES OF FINANCE FOR BUSINESS   

By the way, although our conversational focus has been term loans, business folks must understand numerous other cash flow, debt and working capital options around ways to finance your business. Working capital  options include:

A/R Financing  -

Invoice financing and factoring solutions allow a business to get an advance payment on invoices as the business generates sales - This allows a business to consistently have a predictable source of cash and working capital to cover short-term obligations - Accounts receivable financing closes the critical gap in the timeline that a business incurs from providing products or services and then getting paid on outstanding invoices.  This method of business finance allows for growth opportunities to be capitalized on.

Inventory Loans

Equipment Leasing -  purchase  equipment and technology

Asset-based bridge loans

Non-bank asset-based lines of credit

Unsecured cash flow loans

SR&ED Tax credit loan finance  - financing small projects / large projects in r&d

Government Small Business Loans -

The Canada Small Business Financing Program underwent very positive changes in 2022. While the program traditionally financed only equipment and leasehold improvements and commercial real estate, new classes of loan solutions are part of the program, including business lines of credit.

Talk to the  7 Park Avenue Financial team about qualifications for the program, and we have also prepared detailed business plans, which are requirements of the program and help ensure a focus on what a business needs to exceed. When it comes to start-up business loans in Canada, the CSBF program is an excellent choice! Companies that can meet bdc small business loan requirements can also access a wide variety of loans and assistance to find financing.

Royalty Finance

Short-Term Working Capital Loans / Merchant Cash Advances -

Short-term working capital loan solutions are also known as merchant cash advance loans in certain situations.

These loans come with higher interest rates but are readily accessible and comparable to business credit card rates.

Loans and payment terms are structured under a lump sum loan solution and paid back in regular installments based on approval formulas around annual sales and the credit score of the small business owner.  Thousands of businesses that don't qualify for a small business loan utilize this form of financing for small business financing solutions.

PO Financing

Grant Financing   -

Many  Canadian businesses focus on scientific research around their products and services.

Many of these initiatives qualify for grants from the government and companies that meet federal and provincial grant requirements in Canada, as they commercialize their products, are eligible for grant funds. In many cases, grants can be financed.

Case Study: Benefits of Business Financing Solutions

A Montreal-based manufacturing company faced a critical challenge when a major contract opportunity required 60% production capacity increase within 90 days.

Traditional bank financing offered only partial funding with a 10-week approval timeline – far too slow for the opportunity.

By implementing a strategic combination of equipment financing, inventory funding, and accounts receivable factoring, the company secured $1.2M in growth capital within 3 weeks. This tailored Business Finance Solution enabled them to:

• Increase production capacity by 75%
• Secure the major contract plus two additional clients
• Improve cash conversion cycle by 14 days
• Boost annual revenue by 38% within the first year
• Maintain ownership equity without dilution

KEY TAKEAWAYS - BUSINESS LOANS CANADA   

• Every financing strategy begins with accurate cash flow forecasting that aligns with your business cycle and growth projections.

• Understanding the true cost of capital requires analyzing beyond interest rates to include fees, covenants, reporting requirements, and operational restrictions.

• Matching financing term length with the lifespan of the assets being acquired prevents dangerous misalignment of debt obligations with value creation.

• Strategic debt structuring creates financing flexibility that allows quick pivots when market conditions change unexpectedly.

• Maintaining relationships with multiple financing sources provides both competitive leverage and contingency options during economic disruptions.

• Accounts receivable management directly impacts financing needs, as improved collection efficiency can substantially reduce borrowing requirements.

• Properly structured seasonal lines of credit eliminate the costly practice of maintaining unnecessary cash reserves during slow periods.

• Separating growth financing from operational financing creates clearer metrics for measuring return on investment for expansion initiatives.

• Regular financial statement analysis forms the foundation for identifying financing needs before they become urgent business problems.

• Leveraging supplier financing through negotiated payment terms often provides interest-free working capital that improves overall cash position.

At 7 Park Avenue Financial, we're proud to point out to clients that there is in fact a wide range of both long-term and short-term funding solutions to meet their needs.

Business credit is available to finance new business investments going forward. Business credit revolves around cash flow and working capital needs, as well as leases and loans that can fit the needs of any company.

Ensure your business has a financing strategy around issues such as how much business capital is needed and what traditional and alternative lending options make sense for the company.  

In many cases, a business plan will help identify the funding sources most suited to your business.

Companies in higher growth industries are suitable for expansion and growth financing solutions, and where applicable government loans and programs such as SR&ED, Grants, and SBL loans should be utilized.

Talk to the 7 Park Avenue Financial team about financing these programs and qualifications for loan applications.

Call  7 Park Avenue Financial, an expert in business professional services in financing,  a trusted, credible and experienced Canadian business financing advisor who can assist you with your term loan or cash flow needs and implement a finance solution for your stage of business growth based on specific funding requirements.

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