YOUR COMPANY IS LOOKING FOR BUSINESS FINANCE SOLUTIONS!
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?
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
"Exploring diverse sources of business financing can revolutionize your company's growth trajectory and sustainability."
"Struggling to fuel your business growth? Discover innovative financing solutions today!"
7 Park Avenue Financial originates business financing solutions for Canadian Businesses – We offer SOURCES OF BUSINESS FINANCING solutions that solve the issue of cash flow and working capital – Save time and focus on business profits and business opportunities
INTRODUCTION
Business finance challenges and problems often have owners/managers feeling like they are in the ' lonesome corner ' as the need for financing solutions and capital sources seems never-ending and seemingly unattainable. So let's look at our Canadian version of the current ' state of the union ' in funding your business. Let's dig in.
We're going to assume a couple of things - first of all, that as an owner/mgr your goal is to ensure the right amount of liquidity in your business. Additionally, as the cost is always a consideration in business financing it is a case of ensuring you have the most capital funding at the lowest cost for a business venture - which is of course driven by your overall credit quality.
The right mix of what you have in the company already (i.e. owner equity) versus the maximum amount you can borrow is what is going to give you what the pros call maximum ' return on capital' when it comes to sources of funding for businesses and the ability to meet debt repayment.
ARE BANK LOANS THE BEST SOURCE OF BUSINESS FINANCE
There is no question that Canadian bank loans/bank finance are probably the ultimate source of business capital, whether your firm is small/medium, or large.
Besides the obvious unlimited source of capital, they offer numerous solutions that are varied and can be tailored to your company's needs. The challenge is ensuring that your company is eligible to borrow under Canadian banking guidelines from such a financial institution, which is very focused on clean balance sheets, historical and present cash flow and profits, and potential personal guarantees and outside collateral. Those issues are the SME conundrum!
THE CHEAPEST SOURCE OF FINANCE AND LOWEST COST?
Not all business owners will recognize that the lowest cost financing you can obtain is the retained earnings and profit and cash flow that your firm generates on its own - allowing you to grow sales, increase equity, and used internal cash flow to fund operations and growth.
Again, the SME conundrum arises !! At 7 Park Avenue Financial we will often be explaining to clients that if it comes down to raising additional equity capital all finance experts agree that debt and cash flow financing will almost always be cheaper than the dilution of owner equity as a means to finance a business.
A WORD ON DEBT FINANCE SOLUTIONS
The concept of leverage is very important for non-financially oriented business folks to understand. Knowing that they can leverage capital and manage the right level of debt and equity will lead toa long-term lower cost of funds. The pros call that ' WAAC ' - your weighted average cost of capital in business finance. It's not always about the interest rate!
We mentioned the business owner as potentially feeling as if they are sitting in that ' lonesome corner' - in fact, the way to remove that feeling is simply to be more proactive in understanding what capital sources are out there relative to how you wish to use those funds. ' Use of funds' is important as you need to distinguish between ' assets' you need to run and grow the business versus those short-term cash needs such as business credit lines.
We can't overemphasize the issue of funds ' matching'. Big mistakes occur when you use the wrong strategies -
Example: taking cash on hand or accessing credit lines to acquire a long term fixed asset. (Those types of assets should be acquired via business finance strategies such as equipment financing or term loans. It's a case of simply focusing on what those assets will cost and what type of cash flow and profits they will generate over the longer term.
WHAT STAGE IS YOUR COMPANY IN?
We're always referencing the fact that the owner/mgr has to sit back and get a sense of what stage their company is in. Those stages are actually very defined. They are:
Start up / New business
Growing/emerging
Mid market
Mature and or large publicly traded
Firms that have proven management track records with substantial traction in revenue although they are in early-stage might pursue venture capital but this type of financing journey is limited to the smallest percentage of early-stage small businesses, and not for the faint of heart when trying to secure financing or raise funds from financial institutions.
Types Of Business Financing
SOURCES OF FINANCE FOR BUSINESS EXPANSION AND GROWTH
A/R Financing
Inventory Loans
Access to Canadian bank credit
Non-bank asset based lines of credit
SR&ED Tax credit financing - monetizing tax credits
Equipment / fixed asset financing
Cash flow loans
Royalty finance solutions
Government Of Canada Small Business Loan Program - Guaranteed federal business loan
KEY TAKEAWAYS
Equity Financing: This method involves raising capital through the sale of shares in the company. Investors purchase stakes, expecting the business to grow and yield returns. This option is appealing because it does not require immediate repayment and investors often provide additional support and networking opportunities and help to minimize personal investment.
Debt Financing: Companies borrow money that they must repay with interest, typically through loans. This is commonly used because it allows businesses to retain full ownership, although it does create an obligation to make regular payments regardless of earnings.
CONCLUSION
That’s our ' state of the union' on sources of capital in Canada. If you want to exit our ' lonesome corner' analogy and access the financing and capital sources your firm needs, today and tomorrow.
Call 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can assist you with your needs as well as prepare a solid business plan and financial package that best represents your firm's current situation.
FAQ: FREQUENTLY ASKED QUESTIONS PEOPLE ALSO ASK MORE INFORMATION
What are the main benefits of equity financing for startups?
Equity financing offers startups substantial capital without the pressure of repayments, allowing founders to focus on growth while potentially gaining valuable mentorship from investors. Start up businesses often attempt to secure additional equity financing.
How does debt financing differ from other sources of business financing?
Debt financing involves borrowing money that must be repaid with interest, typically providing quicker access to funds without diluting ownership, unlike equity financing.
Can government grants significantly impact my business operations?
Yes, government grants can provide essential funding without the need for repayment, often supporting specific industries or initiatives, thereby easing financial burdens.
What should businesses consider when exploring angel investing?
Businesses should assess the strategic alignment of potential angel investors who offer capital, expertise, and sometimes key industry connections, in exchange for equity.
How do crowdfunding platforms work for business financing?
Crowdfunding platforms enable businesses to raise small amounts of money from many people, typically through the internet, often in exchange for product pre-orders or equity.
What role does credit score play in securing business financing?
A good credit score can significantly enhance a business's ability to secure favourable financing terms from lenders such as bank loan financing and debt capital , reflecting financial reliability to meet interest payments.
Is bootstrapping a viable long-term financing strategy?
Bootstrapping can be a sustainable strategy if the business generates sufficient revenue to fund its growth, minimizing debt and outside influence on company decisions. Most firms don't qualify for funding from venture capitalists / venture capital firms. These firms also demand an ownership stake.
What exactly is confidential factoring and how does it differ from traditional factoring?
Confidential factoring involves selling receivables to a factor without customers knowing, whereas in traditional factoring, customers are aware that their invoices have been factored.
How does confidential factoring improve a company's cash flow?
By selling invoices to a factor, companies receive most of the invoice value upfront, thus improving cash flow and enabling more predictable financial planning to secure funding for day to day operations.
What are the risks associated with confidential factoring?
Risks include dependency on the factor's service quality for invoice collection and potential impacts on customer relationships if the factor's collection practices are perceived negatively.
What are the benefits and advantages of Factoring
Invoice Management: The factor manages and collects the invoices, reducing the administrative burden on the company.
Immediate Cash Flow: Businesses gain immediate access to a significant percentage of the invoice value, enhancing liquidity.
Credit Analysis: Factors perform credit checks on customers, offering businesses valuable insights into their customer base's creditworthiness.
