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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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7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
BUSINESS LOANS IN CANADA
Debt financing choices can help to both strengthen... or hinder your business. Is there some formula for debt and asset financing via the right financial institutions or non-bank lenders? Several tools, as well as a basic knowledge of your business finance needs, come into play. Let's dig in.
FINANCING IN BUSINESS - CANADA
When, in fact, does the business owner/financial manager use ' debt ' to run and grow the business? The answer? Ensure you understand the mechanics of a debt solution, knowing which bank or non-bank lenders offer the financing you need... and ensuring you've explored all options when looking to borrow money, up to and including government t loans and business credit cards. There is a digital transformation in Canadian business and online banking and lending solutions abound, including short-term working capital loans.
In most cases, as it relates to business financing, you require assets and/or assets/cash flow to support a debt transaction. The assets you need to support debt financing are varied - equipment, real estate, inventories and receivables. When it comes to a business loan rate of interest your firm's overall credit quality is important to focus on and present in a positive manner.In some cases that might include a business plan.
KEY ELEMENTS OF A LOAN OR LEASE
Most business owners associate a debt finance business loan with fixed payments and term. When it comes to acquiring specific assets, they can be secured via either a term loan or a capital lease - both are forms of debt finance. The essence of those transactions is evident:
An interest rate
A Monthly payment
Securitizing the collateral in question
FINANCING SOLUTIONS IN CANADA
Various forms of debt finance a firm's current assets, such as receivables, inventories, and purchase orders. These include:
3 rather ' tricky' issues will almost always arise and need to be considered when entering into various debt financing forms. Those issues are ' personal guarantees, 'covenants, and dealing with other secured creditors.
GOVERNMENT HELP FOR SMALL BUSINESS / SMALL BUSINESS LOANS THAT ARE AFFORDABLE
The Canada Small Business Financing Program is a solid finance solution for many firms, including start-ups. Excellent terms under government-guaranteed loans even allow for lump-sum payments without penalty - Many potential franchisees seeking franchise finance/franchise financing utilize the program. Restaurant loans are also a popular part of the government loan program .
Talk to the 7 Park Avenue Financial team about which financial institutions participate in this program and what supporting documents are required for accessing funds. No personal assets are taken or secured under the program as collateral but a good personal credit score is required for approval.
Leasehold improvements for leased property, as well as fixed assets and equipment and real estate financing, can be facilitated under the program for eligible businesses. Commercial mortgage rates for business purposes in Canada are of course at all-time lows.
Flexible repayment terms for small businesses and new businesses are keystones of the government loan program.
Farming businesses in Canada have their own version of the same program, as well as being able to access Farm Credit Canada for a farm loan in Canada . These are long term loans with typical loan amortizations of 2-5 years and longer and are good for start ups also
In the SME COMMERCIAL FINANCE sector, almost all transactions tend to be supported by some level of personal guarantees from owners. Those business owners who enjoy bank financing or other forms of senior secured lending must be prepared to deal with other creditors' priority positions when it comes to financing assets. Except for equipment lessors, debt lenders will typically impose ' ratios and covenants ‘around your overall financial performance.
ASSET-BASED LENDERS - THE CANADIAN NON-BANK ALTERNATIVE
The good news around achieving the right business loan via debt financing is that there have never been more choices and alternatives available. Of course, lenders include Canadian banks and commercial finance firms for a working capital loan solution, asset-based lenders, equipment lessors who provide financing for equipment, bridge loan lenders, and online ' niche ' providers.
CONCLUSION - SMALL BUSINESS LOAN SOLUTIONS IN CANADA
If you're looking for more information and are focused on running/growing your company with the right amount of debt financing for now and the future, seek out and speak to 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can assist you in ensuring you've got the right formula down for your borrowing needs.
FAQ: FREQUENTLY ASKED QUESTIONS
What is a business loan?
A business loan is when you borrow a fixed amount for your company's needs (as opposed to personal) from the lender. It can be used in many different ways, like purchasing inventory or fulfilling purchase orders - Business loans AND working capital financing are great ways to get the funds you need for your business.
How does a business loan work?
Business loans work a lot like personal loans. A company is borrowing money from a bank or commercial lender and must eventually be repaid with interest - there are many lenders out there for businesses financing. There should also be consideration given towards rate (interest) rates; loan term length; repayment structure plus any other important factors that would fit into this category before making an educated decision about where best suited in terms of applying