Business Finance Options: The Complete Guide for Canadian Business | 7 Park Avenue Financial

Tweet

YOUR COMPANY IS LOOKING FOR  BUSINESS FINANCING!

 

BUSINESS FUNDING & BEST FINANCING OPTIONS FOR A BUSINESS

 

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

CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs

EMAIL - sprokop@7parkavenuefinancial.com

 

 

  

LOOKING FOR THE BEST BUSINESS LOANS  AND  FINANCING OPTIONS  

 

  

 

WHAT IS ALTERNATIVE FINANCE?  

 

 

Business owners often misunderstand alternative finance. It has several connotations, but it is financing not fulfilled by traditional chartered business credit solutions.

 

Typically, traditional bank financing cannot fulfill the financing request due to the stricter small business lending policies of the regulated banks and other lending institutions in Canada for securing financing.

 

 

Business finance options in Canada. These days, we constantly hear the term ' out-of-the-box thinking', denoting some creativity in small business finance solutions.

 

When it comes to alternative financing, a number of non-traditional solutions are available, such as business loans for running and growing a business.

 

All companies will need access to business capital via a business finance solution to fund their businesses. That financing can be used for short-term capital needs or long-term business capital for asset and technology acquisitions.

 

Borrowing from the wrong source or accessing the wrong type of financing brings risk to the business.

 

 

Breaking Through Financial Barriers: The Canadian Business Finance Solution

 

 

Canadian business owners often face rejection when seeking traditional financing, leaving growth plans stalled and opportunities missed. This funding gap creates stress, limits potential, and can threaten business survival during crucial expansion phases.

 

Let the  7 Park Avenue Financial team show you how diverse business finance options beyond conventional banking exist, providing tailored solutions that align with your business model and growth trajectory.

 

Two Uncommon Takes on Business Finance Options

 

1. Alternative financing isn't just a backup plan—it should be part of your primary funding strategy even when bank relationships are strong.
2. Some business finance options can actually improve operational efficiency beyond providing capital through enhanced reporting requirements and financial discipline.

 

 

  

 

ALTERNATIVE BUSINESS FINANCE IS GAINING TRACTION!   

 

 

 However, a number of these business finance strategies are gaining increasing traction every day. So yes, they are ‘out of the box ' to a certain degree, but we can guarantee there are no 'dark secrets '. Let's dig in.

  

 

 

 

SEPARATING THE OWNER'S PERSONAL FINANCES FROM BUSINESS FINANCES     

 

 

Let's examine some methods of financing your business that might be ' alternative  ' compared to solutions from various lending companies.

 

Every successful business requires some level of owner equity. Many companies are starting to use personal assets monetized into small business lending solutions.

 

We've repeatedly repeated that it’s essential to separate your business and personal life when it comes to finances and begin working with a real small business lender.

 

 

  

BALANCING EQUITY AND DEBT RELATIONSHIPS IN YOUR COMPANY

   

 

So, while small business owners might consider selling or liquidating assets as an ' alternative finance  ' strategy, the reality is that if your resources become exhausted, they are at risk if the business fails. Your all-important personal credit history might unravel.

 

So yes, committing equity to a business is essential, combined with the right amount of debt. Ensure, though, that the assets you're tapping are in the right amount, which will help attract the correct amount of debt financing you need.

 

 

 YOU'VE HEARD IT BEFORE - ' WHEN THE BANK SAYS NO '! 

 

Many small businesses that banks can't fund are eligible for bank loan financing! What do we mean by that? Whether you consider it a traditional or alternative bank, government-guaranteed loans are a great way to finance fixed assets, leaseholds, technology requirements, etc.

 

Bottom line: Investigate the SBL program. The Canada Small Business Financing program was developed as a Canadian version of the U.S. Small Business Administration's (SBA) loan program. The loan application process for the program is similar to any other business loan request submission.

 

We frequently encounter many businesses that are financed by credit cards. This is a double-edged sword when it comes to small business financing options.

 

Business credit is accessible, but caution must be taken to use the right type of cards and ensure that your credit history will not be tarnished by overuse of credit.

 

  

 

  

 THE MOST POPULAR ALTERNATIVE FINANCING STRATEGY TODAY? HERE IT IS!   

 

Many business owners and managers don’t realize they can bulk up on cash simply by selling accounts receivable.

 

This process immediately monetizes A/R into cash, and although more expensive is much cheaper than giving up control and equity ownership.

 

Receivable financing, done right, is a solid alternative strategy used by thousands of corporations, large and small, every day.

 

Our recommended solution here at 7 PARK AVENUE FINANCIAL  in this area is Confidential Receivable Financing, providing you with, in the short term,  unlimited credit against your sales and allowing you to bill and collect from your clients without any third-party interference.

 

It is probably the quickest way for any firm to address cash flow problems related to small business loan requests.

 

Have you heard of Royalty Finance? We rarely see clients use this method of financing, but it’s certainly worth considering compared to obtaining bank loans.

 

It allows you to borrow against future sales, creates a win/win strategy for your investor/lender, and allows you to avoid debt and grow your company.

 

Never forget that your suppliers/key vendors are excellent sources of capital. Just negotiating better payment terms creates business cash flow. In some instances, you might consider a more strategic relationship that will benefit you in the future.

 

 

  

  

CANADIAN SOURCES OF FINANCE - WHICH ONE / ONES WORK BEST FOR YOUR BUSINESS?    

 

Understanding the repayment terms in any small business funding and how the solutions work daily is essential.

 

A/R Financing / Invoice factoring

 

Government Loans Under The Canada Small Business Financing Program

 

Federal government-guaranteed loans are available via Industry Canada's Small Business Loan Program. In 2022, major changes were implemented to the program, adding new classes of loan financing, including the ability to finance working capital, lines of credit, intangible assets, franchise fees, etc. Participating institutions, such as banks and credit unions, provide the loans under government guidance and guarantee. The loan maximum was increased to 1.1 million dollars.

 

Regarding how to finance a startup business, government loans are a great option.

Inventory Loans

Access to Canadian bank credit/term loans/lines of credit - Traditional bank loans

Non-bank asset-based lines of credit

SR&ED Tax credit financing - financing for small business innovation research - Many viable small businesses in Canada utilize the SR&ED program for product and market research innovation

Equipment Leasing / fixed asset financing

Cash flow loans - merchant cash advances from online lenders

Royalty finance solutions

 

Purchase Order Financing

 

Short Term Working Capital Loans/ Merchant  Cash Advances (Good personal credit score required!)

 

Securitization

 

  

 

CASE  STUDY: The Benefits of Business Finance Options  

 

 

CHALLENGE: A growing Canadian precision parts manufacturer with $3.2 million in annual revenue faced a significant challenge when a major opportunity arose to supply components to a Tier 1 automotive manufacturer. The contract required a $450,000 equipment purchase and hiring additional skilled staff, but their bank denied their loan application due to already utilized credit facilities.

 

SOLUTION: Working with a financing specialist, the company implemented a multi-faceted approach:

 

• Equipment financing secured against the new CNC machine itself ($450,000)
• An invoice factoring program for their largest customer accounts to improve cash flow
• Small operating line of credit from an alternative lender

  
 

KEY TAKEAWAYS - BUSINESS FINANCING      

 

 

There are numerous alternative and traditional finance solutions for Canadian business owners and entrepreneurs.

Debt financing and equity financing are the two main components of a business finance structure.

Equity finance demands relinquishing percentage ownership of a business

Balance sheet financing/asset monetization strategy and cash flow loans supplement  equity /debt finance

 

  

  

CONCLUSION - SOURCES OF FINANCE / BEST FINANCING OPTIONS   

 

Proper preparation for access to business capital is key.  Business plans and solid cash flow projections count with commercial lenders.

 

At 7 Park Avenue Financial, we prepare a client business plan, if required, that meets and exceeds the expectations of all banks and other lenders. Which traditional or alternative funding options will provide your company with the capital it needs?

 

Call 7 Park Avenue Financial,  a trusted, credible and experienced Canadian business financing advisor who can assist you with your capital needs.

 

 

FAQ: FREQUENTLY ASKED QUESTIONS /  PEOPLE ALSO ASK  /   MORE INFORMATION

 

What are the Disadvantages of Debt Financing   

 

When a company assumes debt financing on the balance sheet, it assumes that capital inflows of cash flows will meet repayment terms and obligations from the bank or business lender. Cash flows can be cyclical and may deteriorate in poor economic times. Many smaller and new businesses are often unable to qualify for competitive rates on debt finance solutions and require the personal guarantee of the business owner.

 

 

How do I determine which business finance option best suits my company's current needs?

 

Assess your business's funding purpose, timeline for repayment, current financial health, available collateral, and growth projections. Match these factors with different financing solutions' requirements, costs, and flexibility. Consulting with a financial advisor specializing in business financing can provide customized guidance.

When should I consider invoice factoring versus a traditional business line of credit? Consider invoice factoring when you need immediate cash flow improvement, have creditworthy customers with slow payment cycles, or don't qualify for traditional credit lines. A business line of credit works better for ongoing operational expenses / business expenses and when you need flexibility in drawing funds over time without tying financing to specific invoices.

 

Why might equipment leasing be preferable to purchasing equipment outright?

Equipment leasing preserves working capital, offers tax advantages, provides easier upgrades to newer technology, includes maintenance packages, and doesn't typically require down payments. This option helps businesses maintain financial flexibility while still accessing necessary operational assets.

 

How do merchant cash advances differ from traditional business loans regarding repayment structure?

 

Merchant cash advances are short-term working capital loans. They use percentage-based repayments from sales rather than fixed monthly payments. This creates flexibility during slower business periods, doesn't require collateral, and typically has faster approval processes, though overall costs are generally higher than traditional financing.

 

What advantages do specialized business finance options offer compared to traditional bank loans?

Specialized business finance options often provide industry-specific terms, faster approval processes, and more flexible qualification requirements than traditional bank loans. These alternatives can address unique business needs like seasonal cash flow, project-based funding, or equipment-specific financing with structures designed for particular business models rather than one-size-fits-all solutions.

 

Does accessing multiple business finance options improve my company's financial flexibility?

Accessing multiple business finance options creates a robust financial toolkit that improves adaptability to changing market conditions. This diversity allows businesses to match specific funding needs with appropriate financing solutions, optimizing interest costs, repayment terms, and approval timelines while reducing dependency on any single funding source.

 

What documentation will I need to apply for business financing?

Standard documentation for business financing applications includes business and personal tax returns (typically 2-3 years), financial statements (balance sheet, income statement, cash flow), business bank account statements (last 3-6 months), business plan for startups, accounts receivable/payable aging reports, and proof of business ownership. Additional industry-specific requirements may apply, and alternative lenders often require less documentation than traditional banks.