Alternative Lenders: Empowering Business Financing Solutions | 7 Park Avenue Financial

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Business Loans In Canada:  Financing Solutions Via Alternative Finance & Traditional Funding
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7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8

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 Alternative lenders have revolutionized the landscape of business financing, offering tailored solutions beyond traditional banking avenues.

Struggling to secure funding for your business? Alternative lenders might hold the key to unlocking your financial potential.

7 Park Avenue Financial originates business financing solutions for Canadian Businesses – We offer  ALTERNATIVE LENDING solutions that solve the issue of cash flow and working capital  – Save time and focus on profits and business opportunities





Alternative Lenders In Canada: Unlocking Financial Possibilities for Your Business

Business loans and finance for a business just may have gotten good again.  The pursuit of traditional loans and business credit and funding of cash flow solutions for the business owner seems like an eternal challenge, even in the best of times, let alone in industry or economic/pandemic crises.

The world of alternative finance and funding small businesses is exploding at an exponential rate. Interested in learning more about what it can do for you?

Let's look at the different types of financing and explore why they may be able to help your business or personal finances grow!




Since the  2008  financial crisis, there's been much change in finance options from lenders for corporate loans. Canadian business owners and financial managers have access to everything from peer-to-peer company loans &  online lenders providing varied alternative finance options & solutions and the traditional financing offered by Canadian chartered banks.


Those online business loans referenced above are popular and arose out of the merchant cash advance programs in the United States. Loans are based on a percentage of your annual sales, typically in the 15-20% range. The loans are certainly expensive but are viewed as easy to obtain by many small businesses, including retailers who sell on a cash or credit card basis.


  Depending on your firm's circumstances and your ability to truly understand the different choices available to firms searching for SME COMMERCIAL FINANCE options. Those small to medium-sized companies ( the definition of  ' small business ' certainly varies as to what is small - often defined as businesses with less than 500 employees ! )






How then do we create our road map for external financing techniques and solutions?  A simpler way to look at it is to categorize these different financing options under:


Debt / Loans


Asset-Based Financing / Lines Of Credit - An alternative to traditional bank loans


Alternative Hybrid type solutions


Many top experts maintain that the alternative finance and growth solutions currently available to your firm are on par with Canadian traditional banks when it comes to a full spectrum of funding compared with traditional means. The alternative lender is typically a private commercial finance company with a niche in various asset finance areas - including commercial property finance.




One significant trend that's ' sticking' in business lending  ‘is Asset Based Finance. The ability of firms to obtain funding via assets such as accounts receivable, inventory, and fixed assets with no major emphasis on balance sheet structure and profits and cash flow ( those three elements drive bank financing approval in no small measure )  is the key to success in ABL ( Asset Based Lending ).


Factoring, aka ' Receivable Finance/ invoice finance, 'is the other huge driver in trade finance in Canada. In some cases, it's the only way for firms to sell and finance clients via a third party in other geographies/countries when a bank loan is not available.



The rise of ' online finance '  and alternative finance lenders also can't be diminished. Whether it's accessing 'rewards-based crowdfunding' ( from a large number of investors in small amounts )  or sourcing working capital term loans, the technological pace continues at what seems a feverish pace. One only has to read a business daily such as the Globe & Mail or Financial Post to understand the challenge of small businesses accessing business capital.



Business owners/financial managers often find their company at a ' turning point ' in their history - that time when financing is needed or opportunities and risks can't be taken.  While putting or getting new equity in the business is often impossible, the reality is that the majority of businesses with SME commercial finance needs aren't, shall we say, ' suited' to this type of funding and capital raising. Business loan interest rates vary with non-traditional financing but offer more flexibility and ease of access to capital.




We're also the first to remind clients that they should not forget government solutions in business capital. Two of the best programs are the GovernmentSmall Business Loan Canada  (maximum total amount availability = $ 1,000,000.00) and the SR&ED program, allowing business owners to recapture R&D capital costs.


Sred credits can also be financed once they are filed.  If government loans are good options, a solid business plan should accompany your government-guaranteed loan application - 7 Park Avenue Financial prepares business plans that meet and exceed bank and commercial lender requirements. Government loans are excellent for funding startup business ventures and franchises. Various term loan structures may include interest only payments


Government loans are available from participating financial institutions - talk to the 7 Park Avenue Financial team about the government loan process, including details about attractive interest rates and flexible repayment terms. Government loan providers require a good owner credit score and personal credit history.


Those latter two finance alternatives are often very well suited to business start-up loans for small business owners. We should not forget that asset finance / asset-based lending, often called ' ABL ' by those Bay Street guys, can even be used as a loan to buy a business which is difficult when considering the requirements of traditional lenders. It's the ultimate loan with collateral solutions for business borrowers.




  • Peer-to-peer Lending: Individuals or investors directly provide loans to businesses or individuals through online platforms, bypassing traditional financial institutions.

  • Online Lending Platforms: Digital platforms connecting borrowers with various lenders, offering streamlined processes and diverse financing options.

  • Invoice Financing: Businesses use unpaid invoices as collateral to secure immediate cash flow, enabling them to cover expenses or invest in growth opportunities.

  • Merchant Cash Advances: Advance payment based on a business's future credit card sales, providing quick access to capital but often with higher fees.




The financial services industry is transforming into a paradigm where numerous lenders provide better financing terms for those who need capital and are replacing banks. These players in the new space are commonly referred to as ' alternative finance ' and act more efficiently than traditional institutions by connecting people with money and needs of their own through transparent transactions.


When securing funding for their companies, entrepreneurs and small business owners now have more options than ever. Banks can still be a great option for some businesses, but others may need outside help in the form of alternative finance lenders.


Alternative funding has become an important part of small business loans in business finance, especially since banks have tightened their rules on what kind of loans may be granted. While large companies rely on securing funds from banks or investors, SME /SMB companies can't access this capital and finance cost without self-funding their business. Therefore, they can rely on alternative finance companies.


If you're looking to get the right balance of liquidity and risk in debt finance and growth financing, coupled with the flexibility to grow your business speak to 7 Park Avenue Financial,  a trusted, credible and experienced Canadian business financing advisor with a track record of business financial success who can assist you with your funding needs and demonstrate alternative finance benefits in any application process around alternative lending (Canada).



What is alternative finance?


The 2008  economic recession and Covid have dramatically increased people utilizing alternative finance channels, processes, and instruments. The term "Alternative Finance" refers to financing solutions that have emerged outside of the more traditional banking or capital market systems peer-to-peer lending as an example.

Quick access and easier access to capital are the highlights of alternative funding solutions - as are higher interest rates based on overall credit quality in those same alternative financing options.


  One contrasting feature is how these new avenues are often facilitated through technology-enabled 'disintermediation,' which means getting rid of middlemen like regulated banks allowing lenders to benefit from interest payments via online platforms and p2p lending.

Alternative finance refers to financial channels, processes, and instruments outside of the traditional banking system. Alternative financing differs from more conventional funding via regulated banks or capital markets through technology-enabled 'disintermediation.

Alternative financing from non-bank lenders represents various types of funding sources available outside of mainstream institutions, notably banks.  Business capital has become increasingly digitized, allowing people, companies, investors etc., who are not bankable due to their lack of credit history or assets (alternatively called “unbanked”) to access business loans via alternative lenders.

New rules allow accredited investors to invest on equity crowdfunding platforms. 


Is venture capital suitable for small businesses?


Venture capital is still considered a form of alternative finance. It tends to be ideal for companies looking to scale and those working in the tech sector. To capture the interest of a Venture Capital firm, you need an aggressive management team with good track records that have created valuable products used by current customers.

Venture capitalists are sophisticated investors and notoriously picky when it comes to investing their money into businesses they believe have potential as a return on investment and future income,  so make sure your business meets these criteria before pitching them anything, as this will increase the chances significantly.



How does the business owner compare traditional financing solutions versus traditional loans?

Alternative financing is a great option for business owners looking to avoid traditional loans that can be tough on your budgets. Structured payment arrangements make it easier to save up enough money to have more flexibility with payments. When compared side by side, there's no denying how much simpler these transactions are than those of borrowing from banks or other lending institutions.


What is peer-to-peer lending?

Peer-to-peer lending is a new way of funding investment. Several online portals combine crowdfunding, loans and angel investing to provide funds for businesses. These investments are potentially valuable because business owners know that when they get funded by established companies like banks or venture capitalists.



How do alternative lenders differ from traditional banks?

Alternative lenders offer more flexible financing options tailored to individual business needs, often with faster approval processes and less stringent requirements.


What types of businesses can benefit from alternative lending?

Businesses of all sizes and industries can benefit from alternative lending, especially those with unique financing needs or limited access to traditional bank loans.


Are alternative loans more expensive than traditional bank loans?

While interest rates and fees may vary, alternative loans can sometimes be more expensive due to higher risk or faster access to funds. However, they often provide greater flexibility and accessibility.


How quickly can I get funding from alternative lenders?

Funding timelines vary depending on the lender and type of financing, but alternative lenders generally offer faster approval and funding processes compared to traditional banks, with some providing funding within days.


Can I use alternative lending for startups or new businesses?

Yes, alternative lending can be a viable option for startups or new businesses that may not meet the strict requirements of traditional banks. However, interest rates and terms may differ based on the business's creditworthiness and risk profile.


How do alternative lenders assess creditworthiness?

Alternative lenders employ various methods to assess creditworthiness, including analyzing business financial statements, cash flow projections, credit scores, and sometimes even alternative data sources like social media presence or online reviews. They may also consider factors such as industry trends, collateral, and the purpose of the loan.


Are there any regulatory differences between traditional banks and alternative lenders?

Yes, there are regulatory differences between traditional banks and alternative lenders. Traditional banks are typically subject to more stringent regulations, including federal and state banking laws, while alternative lenders may operate under different regulatory frameworks depending on the type of lending they engage in. However, alternative lenders still need to comply with relevant consumer protection laws and regulations.


What are the potential risks associated with alternative lending?

Some potential risks associated with alternative lending include higher interest rates and fees compared to traditional bank loans or business credit unions limited regulatory oversight leading to potential predatory lending practices, and the possibility of taking on debt that may be difficult to repay, especially for businesses with uncertain cash flow or profitability.


How do alternative lenders handle loan defaults?

Alternative lenders handle loan defaults differently depending on their policies and the type of loan. In some cases, they may work with borrowers to renegotiate terms or develop repayment plans. If a borrower defaults on a secured loan, the lender may seize collateral to recoup losses. Additionally, some alternative lenders may sell defaulted loans to collection agencies.


Can businesses use alternative lending for long-term financing needs?

While alternative lending is often associated with short-term financing options, such as working capital loans or merchant cash advances, some alternative lenders offer products suitable for long-term financing needs. These may include term loans with longer repayment periods or equipment financing options tailored to the lifespan of the asset being financed.


What are the key advantages of alternative lending for businesses?

The key advantages of alternative lending for businesses include greater accessibility to financing, especially for those with less-than-perfect credit or limited collateral, faster approval and funding processes compared to traditional banks, flexibility in loan terms and repayment structures, and the ability to tailor financing solutions to specific business needs. An alternative mortgage lender may also be involved in a commercial property via a bridge loan.


How do alternative lenders mitigate risk in their lending practices?

Alternative lenders and other non-bank private lenders employ various risk mitigation strategies, such as thorough credit assessments, a potential down payment with the optimal structure, diversifying their loan portfolios across different industries and borrower profiles, setting appropriate interest rates and loan terms based on risk assessments, and utilizing technology for data analysis and fraud detection. Some alternative lenders also require collateral or personal guarantees to secure loans.


What role does technology play in the operations of alternative lending platforms?

Technology plays a crucial role in the operations of alternative lending platforms by enabling streamlined loan application processes for funders such as alternative mortgage lenders in alternative mortgage financing, automated underwriting and credit scoring for a required minimum credit report score, real-time data analysis for risk assessment, efficient communication between borrowers and lenders, and secure online transactions.

Additionally, technology allows alternative lenders to reach a wider audience and offer innovative financing solutions tailored to specific business needs such as commercial private mortgages via a non-bank b lender mortgage - Alternative mortgage lending is on the rise in Canada


' Canadian Business Financing With The Intelligent Use Of Experience '

7 Park Avenue Financial/Copyright/2024






Stan Prokop is the founder of 7 Park Avenue Financial and a recognized expert on Canadian Business Financing. Since 2004 Stan has helped hundreds of small, medium and large organizations achieve the financing they need to survive and grow. He has decades of credit and lending experience working for firms such as Hewlett Packard / Cable & Wireless / Ashland Oil

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