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Small Business Financing Solutions For Business Needs
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Financing & Cash flow are the biggest issues facing business today
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7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
A commercial business loan in Canada. The ability to successfully achieve the financing the Canadian small business owner or manager needs clearly eliminates a lot of the worrying around your business success.
In the case of Canada, we're in a lot better shape these days than we were a few years ago when it comes to commercial loans for business, pandemics notwithstanding! Even start-ups seem to be able to get financed again! How to get a business loan is a very asked question from new clients here at 7 Park Avenue Financial!
BANK BUSINESS LOANS VERSUS ALTERNATIVE LENDERS
In Canada, those loans are going to come from Canadian commercial banks or non-regulated commercial and alternative lenders. When we say unregulated basically we are saying ' they are not banks!”...simple as that.
TYPICAL USES OF COMMERCIAL TERM LOANS - CORPORATE LOANS
Its commercial business loans that solve both survival and growth needs. Those small business loans cover equipment, real estate, working capital, and even acquisitions. What's important is to start the whole process even a bit before you need the financing - searching for financing in crisis mode is highly NOT recommended. That pretty well goes for line of credit facilities, which in many cases are what the business owner/manager still associates with a ' loan '. Long term loans should be matched with long term assets and business goals, as opposed to day to day funding.
COMMERCIAL LOANS VERSUS MONETIZING ASSETS FOR CASH FLOW - THERE'S A DIFFERENCE
That does though bring us to the point that it's important to understand that there is a huge difference in either term loans as opposed to monetizing current assets for cash flow - it the ' business line of credit'. It's therefore important to think of your business loans in terms of strategically acquiring financing. Running small businesses on a business credit card is not optimal! A commercial loan rate of interest/business loan interest rates will be dependent on your overall business credit profile.
THE GOVERNMENT OF CANADA SMALL BUSINESS FINANCING PROGRAM - A ' GUARANTEED' FEDERAL GOVERNMENT LOAN
So what can in fact term business loans be used for in Canada? A variety of assets can be financed- up to and including the corporate jet. (Well we can dream can't we?!) . But typical assets financed under loans include computers, telecom assets, software, machinery, equipment, and even leasehold improvements. A great tip we can offer clients is that leaseholds up to 350,000.00 can in fact be financed at great rates, terms and structures under the Govt. SBL Business loan. Check out this loan program if you have revenues under 10 Million dollars per annum, which is the revenue cap of companies allowed to apply under the program. Both the interest rate and repayment flexibility of the program are very attractive to business owners. The government allows banks to be the financial institution to process the loans, which is often misunderstood by borrowers.
These loans are not lines of credit or working capital loans which again is often a misunderstood point, as many borrowers compare the program to the U.S. ' SBA ' program, which is somewhat more robust. In Canada, in some cases, a business credit union may also offer gov't SBL loans.
In business credit, the personal credit score of the owner/ owners is important for any small business loan. To apply for a loan and secure a loan ensure you understand the requirements of the specific type of financing you are looking for. At 7 Park Avenue Financial we will often prepare business plans and cash flow projections for clients if they are needed. When you need a bank business loan a business your plan should be very clear on repayment ability, not just marketing plan focus!
At the outset of a business loan have a strong sense of the term of the loan - rates re important but it is not always about the interest rate! That is going to play into the lender's cash flow analysis, and at the same time, you want to be able to match the term of the loan with the useful economic life of the asset. That same tip goes for lease financing those assets also by the way. Small businesses are always looking to stay competitive and acquire new assets.
Bridge loans are offered by alternative and other lenders as a way of acquiring assets you normally might not be able to finance through a bank. In some cases, you might even be exploring a sale-leaseback to generate cash flow out of assets already owned. When it makes sense, key word ' makes sense ‘! that's a great way to generate cash flow. Remember also that you will need to have a strong sense of market and liquidation value when it comes to financing pre-owned or used assets. That’s a critical part of the lender equation.
One final tip we always talk to clients about is the concept of ' matching'. Simply speaking it means ensuring that you financing long-term assets with long-term financing vehicles such as a business loan. To put it more simply, don't finance that corporate jet out of the line of credit
In Canada business loans come from banks, leasing companies and asset-based lenders. If you are looking to grow your business seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your commercial business loan needs.
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