YOUR COMPANY IS LOOKING FOR BUSINESS FUNDING!
SMALL BUSINESS LOANS / FINANCE SOLUTIONS
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Financing & Cash flow are the biggest issues facing business today
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
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EMAIL - sprokop@7parkavenuefinancial.com
Business funding in Canada. We have remarked on more than one occasion that the business capital landscape has dramatically changed over the last number of years for business owners seeking business capital. Let's dig in on some innovative business funding solutions we can help you with today and access to small business funding by the government.
Frankly (perhaps it's because we're getting older?!), we can barely remember the days when sources of business finance options seemed almost unlimited. Everyone was saying, ' there is too much capital and too little deals. ' Starting a business funding challenges are even more difficult than ever- thus the need for ' creative financing. '
WHAT ARE THE TYPES OF CANADA BUSINESS FUNDING
The types of funding options available for private companies vary based on whether they are debt or equity financing or cash flow financing solutions. Companies unable to access private equity and venture capital focus on debt financing and asset monetization of business assets.
In some cases, entrepreneurs will focus on a business start up grant or seek loans for buying a business in Canada. Note that ' grant writing how to ' requires familiarity with this type of funding.
CANADIAN GOVERNMENT FUNDING AND BANK SOLUTIONS
Yes, the government and banks seem to have a party line about trying to help, and while interest rates are at rock bottom lows, the amount of funding out there, either traditional or in the area of ' creative financing' seems somewhat limited to the Canadian business owner or financial manager.
Starting a business in Canada with the Government Of Canada Small Business Financing Program is a solid method to achieve funding success. It is the equivalent of the U.S. ' SBA loan ', which many business people are aware of.
This program is also excellent for financing a franchise in Canada and is used by thousands every year. Opening a restaurant in Canada, especially during Covid !.. is another major use of the Small business loan program.
The business owner's good credit and personal credit history is key to acquiring traditional financing and is important but less so in alternative finance. Interest rates are often focused on both the owner's personal credit and your business's overall business credit profile.
At 7 Park Avenue Financial maintaining proper financing statements and cash flow projections is a focus we have and emphasize with our clients. While some business owners choose to pursue business grants, we focus on loans and finance solutions for small businesses.
We think the banks and the government would say that the amount of funding solutions out there is still the same. The reality is that they are harder to get approved for, at least for the amount of capital you need.
So, where does the business owner/manager start? Let's explore some of the more creative ways to fund your business, whether you are a start-up or an established company.
Start-up businesses, of course, seem to have the biggest challenge. They are typically funding via a ' bootstrapping' method involving savings, home collateral, and friends and family loans. They all work, but they are just not that desirable!
Naturally, not being aware of the other more traditional or creative ways to fund your business hampers any chance you have for success, let alone growth. At the end of the day, you need the right amount of debt and the right amount of equity to make things work.
HAVE A PLAN - BUSINESS PLANS!
Many businesses start without a plan, and in business, that is, of course, the ' business plan. ‘ We always tell clients that even if they don't need a plan for financing purposes (you usually do, though!), you should have your own ' flight plan ' in place for your business, and that document does just that!
Writing a business plan is a challenge and is time-consuming. 7 Park Avenue Financial business plans meet and exceed banks and other commercial lenders' requirements.
Naturally, when we talk to clients about additional financing, they are often focused on ' the bank. ‘ The challenge here quite often is that while our Canadian banks are pretty good at funding businesses for growth, they aren't that great when it comes to financing early-stage companies.
That always comes back to the bank's vested interest in preserving capital. So when you can't properly demonstrate a track record, the right amount of sales and profitability, or external collateral, what in fact are some alternatives for business funding?
One method is the Government Small Business Loan, aka ' CSBFP, 'which we've always thought isn't really that small - i.e. 350k is the borrowing limit, and in some cases, 1 Million dollars is the loan cap. It's available all across Canada, and criteria for small business funding from the government are much more ' looser ' than traditional bank financing. Unlike traditional collateral loans, these loans also require only a limited personal guarantee and no external personal collateral.
CANADIAN BUSINESS FINANCING SOLUTIONS - TOP SOURCES OF CAPITAL FOR BUSINESS OWNERS
A/R Financing
Inventory Loans
Access to Canadian bank credit
Non-bank asset-based lines of credit
SR&ED Tax credit financing - sr&ed tax credits are a solid way to recoup research and development costs
Equipment / fixed asset financing - financing equipment and equipment loans for assets and technology required in the business
Cash flow loans
Royalty finance solutions
WHAT ARE OTHER CREATIVE FINANCING SOLUTIONS & SOURCES OF FUNDS FOR BUSINESS?
Equity Credit Lines - You lend your business the funds on a secured basis
Business Credit Cards
Loans from Angel investors
Reverse takeovers of a public shell
Royalty and Revenue Sharing
Vendor financing - Supplier financing is a tested and true source of credit and comes with no additional financing costs.
Venture Capitalists / Venture Capital Funding
Business Incubators
Note that business loan interest rates vary with the type and amount of financing you are accessing and whether it's a traditional or alternative lender.
FACTORING AND THE BENEFITS OF FINANCING SALES VIA ACCOUNTS RECEIVABLE FUNDING
If we had to pick the most traditional method of ' alternative financing ' in business loans today, we would have to say it's factoring or receivable financing. Thousands of businesses use it to stabilize and generate ' lumps' in your cash flow. It covers short term emergencies, and lowers receivables and increases cash. Whether you are a new business or established and growing a/r, financing works and finances your sales revenues.
CONCLUSION
Our bottom line is that small business funding and business funding for startups is always a challenge for entrepreneurs, and raising money for a business requires specific expertise. There are numerous traditional and alternative financing sources and business loans that the business owner may not even know about small business funding and different funding options.
If you are looking for help for small businesses and business funding in Canada, seek out and speak to 7 Park Avenue Financial, a trusted, experienced and credible Canadian business financing advisor who can assist you in business loans ( Canada ) and solve the Canada business funding conundrum!
Whether you are an established company or looking for business funding to grow your business or startup ideas, let our team help. Our goal - fast and simple business funding for your business needs.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
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