YOUR COMPANY IS LOOKING FOR BUSINESS FINANCE SOLUTIONS!
You've arrived at the right address! Welcome to 7 Park Avenue Financial
Financing & Cash flow are the biggest issues facing business today
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8
Direct Line = 416 319 5769
Email = sprokop@7parkavenuefinancial.com
"The best way to predict the future is to create it." - Peter Drucker
7 Park Avenue Financial originates business financing solutions for Canadian Businesses – We offer Cash flow, debt financing and working capital solutions – Save time, and focus on profits and business opportunities
7 Park Avenue Financial: “Canadian Business Financing with the intelligent use of experience”
Financing a Company: A Guide for Canadian Business Borrowers
Understanding the Art and Science of Business Finance
Many top experts would say financing a company in Canada is an art and a science.
Financial institutions, such as banks and credit unions, play a crucial role in business finance by providing loans and evaluating credit requests. So when it comes to business loans and cash sources, we’re making the case that it might make sense to go ‘ local and organic. ‘Let’s dig in.
THE BUSINESS FUNDING CHALLENGE
Canadian businesses struggle to secure adequate financing for growth and operations.
Limited access to capital stifles expansion, prevents inventory purchases, and blocks hiring opportunities.
Let the 7 Park Avenue Financial team show you Strategic financing approaches that combine traditional and alternative funding sources. These approaches provide sustainable solutions for business growth while maintaining healthy cash flow management.
DID YOU KNOW?
- 26% of Canadian businesses cite access to financing as a major challenge
- 68% of successful business loans require collateral
- The alternative lending market is growing at 15% annually
- 82% of businesses fail due to cash flow problems
- Average business loan approval rate: 27%
The Local and Organic Approach to Business Finance
Local and organic? Isn't that about vegetables? In our context, we maintain that it's all about looking inward at your financial statements (that's the local part) and ensuring cash sources are available to grow your company ' organically.'
Understanding Sustainable Growth Rate
The pros call this a ‘sustainable growth rate.’ It simply means that you can calculate how fast you can grow without raising external financing.
Preparing essential documents, such as a business plan and financial projections, before applying for a bank loan is crucial.
At some point, you will need ‘good’ business loans and asset monetization strategies to move forward when financing is required. (Naturally, you can grow by merger and acquisition, but that’s another story)
Understanding Business Financing Options
Business financing refers to securing funds to support a business's operations, growth, and expansion.
It involves exploring various financing options, such as debt financing, equity financing, and alternative funding methods, to meet the business's financial needs.
Business financing is essential for companies to access capital, manage cash flow, and achieve their long-term goals.
Securing the right type of financing can make a significant difference in how a business operates and grows.
Whether you’re looking to cover day-to-day business expenses, invest in new equipment, or expand into new markets, understanding your financing options is crucial.
By carefully evaluating the different types of financing available, you can choose the option that best suits your business objectives and financial situation.
What is Business Financing?
Types of Financing
Debt Financing
Debt financing involves borrowing money from a lender, such as a bank or financial institution, to finance business operations.
The borrower agrees to repay the loan, plus interest, over a specified period.
Debt financing can be secured or unsecured, and the interest rates and repayment terms vary depending on the lender and the borrower’s creditworthiness. Common types of debt financing include term loans, lines of credit, and secured loans.
Secured loans, for instance, require collateral, which can be an asset like real estate or equipment.
This type of loan often comes with lower interest rates due to the reduced risk for the lender.
On the other hand, unsecured loans do not require collateral but may have higher interest rates and stricter approval criteria. Understanding the terms and conditions of debt financing is essential to ensure that the monthly payments are manageable and that the loan supports your business’s financial health.
Equity Financing
Equity financing involves raising capital by issuing shares of stock to investors, who become part-owners of the business.
Equity financing allows businesses to raise capital without incurring debt, but it can result in a loss of control and ownership. Investors receive a proportionate share of the company’s profits and losses in exchange for their investment. Equity financing can be obtained through venture capital, angel investors, or initial public offerings (IPOs).
Venture capital and angel investors are particularly popular among startups and small businesses looking to scale quickly.
These investors provide capital and often bring valuable business advice and industry connections. However, it’s essential to consider the trade-offs, as equity financing means sharing future profits and potentially giving up some decision-making power.
Businesses can determine if equity financing aligns with their long-term goals and growth strategies by carefully weighing the benefits and drawbacks.
Key Elements of Debt and Equity Financing
Financing a company is about getting the cash you need to start or grow a business.
Equity investment can attract venture capital and provide valuable expertise and networks, mainly through angel investors.
Three cash sources are available - debt, equity, and sometimes misunderstood: monetizing and ‘ cash flowing’ your existing assets such as receivables, inventory, and fixed assets/equipt.
Leveraging Financial Statements
Many business owners / financial mgrs don't always fully appreciate how much their financials tell them about the company's financial needs and prospects.
They don't realize the ' power ' they have to affect cash through good credit extension, collecting receivables, controlling expenses, and turning inventories.
Cash Flow Management
It is key to understand, at least basically, how your cash flow operates, where you are spending, and how outside financing is being used/consumed.
For example, Simply slowing down your payables will increase cash flow, but that strategy has certain risks.
Asset Management and Monetization
So, how can the owner/manager affect a company's overall financial health? Knowing what your assets are really ‘ worth ‘ is also key.
The quality of receivables, inventory turns, and the true value of your fixed assets lead to many external financing strategies that can help you grow cash and profits ‘ organically’. Mezzanine financing allows lenders to convert a loan into an equity interest in the company if repayment defaults on it.
Key Asset Monetization Strategies
Asset monetization strategies, properly used, are key to suitable 'organic ' financing. Examples include:
Bank credit lines
Asset-based lines of credit
SR&ED Tax credit financing
Sale leasebacks
PO / Contract finance
The Cash Flow Impact
The strategies we've just named eliminate debt on your balance sheet, enhance cash flow, and, hopefully, profit. Real-world financing always comes back to... you guessed it... cash!
Key Takeaways
-
Understanding cash flow dynamics drives successful financing decisions
-
Strategic asset utilization unlocks hidden business value
-
Credit quality determines financing costs and accessibility
-
Relationship building with lenders creates long-term opportunities
-
Proper timing of funding requests maximizes approval chances
Conclusion
Knowing how to extract internal ('organic ') cash and then complement that with good external financing is how you'll measure whether your business is headed in the right direction.
Looking for the ‘ best ‘ types of business loans and cash sources?
Call 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can assist you in financing a company…properly.
FAQ
What documents do I need to apply for business financing? Essential documentation includes:
-
Last 2 years' financial statements
-
Current year-to-date financials
-
Business plan for startups
-
Tax returns
-
Bank statements for last 6 months
These documents are essential for both startups and existing businesses.
How does strategic financing improve business growth potential?
-
Accelerates market expansion opportunities
-
Enables quick response to market demands
-
Provides competitive advantages
-
Supports innovation and development
-
Strengthens market position
What advantages does proper financing bring to operations?
-
Optimizes cash flow management
-
Reduces operational constraints
-
Enhances supplier relationships
-
Improves inventory management
-
Supports equipment modernization
How can financing boost profitability?
-
Enables bulk purchase discounts
-
Reduces financing costs
-
Improves operational efficiency
-
Increases production capacity
-
Maximizes revenue opportunities
What role does financing play in business stability?
-
Provides emergency funds access
-
Strengthens vendor relationships
-
Enables strategic planning
-
Supports sustainable growth
-
Maintains competitive edge
How does financing affect business valuation?
What are common financing application mistakes?
How does credit scoring affect business financing?
-
Determines interest rates
-
Influences approval chances
-
Affects lending terms
-
Impacts required collateral
-
Determines available options
What alternative financing options exist?
There are various loan programs and government assistance available specifically for small businesses.
What determines financing approval success?
How do different financing types affect business structure?
-
Impacts debt-to-equity ratio
-
Affects ownership control
-
Influences growth potential
-
Determines financial flexibility
-
Changes reporting requirements
What makes a strong financing application?
