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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?
Call Now - Direct Line - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs.
EMAIL - sprokop@7parkavenuefinancial.com
GROWTH / ACQUISITION / RESTRUCTURING FINANCE SOLUTIONS
Our team of finance professionals helps your company fund debt, cash flow, and asset monetization strategies via traditional financing as well as innovative alternative financing products that allow your firm to thrive, survive, and grow. We work with your small business and larger corporations regarding business financing and business loans that make sense for your needs.
Canadian banking facilities continue to be a challenge for small businesses and medium-sized ( SME ) firms in Canada. While we pride ourselves in our relations with Canadian banks, we've recognized that many clients require a specialized form of alternative finance in areas and credit profiles generally not within the historical field of interest of traditional financing in Canada as it relates to the small business finance challenge around loan amount requirements.
We originate accounts receivable financing via asset-based lenders, commercial finance firms, and Canadian chartered banks. These solutions typify our efforts to ensure our clients have the best financing program in place for cash flow funding. Advances on your receivables are made against your approved facility based on a percentage of your outstanding a/r.
The size and type of your receivables facility will depend on the type of financing firm. Interest rates vary on receivable financing based on the risk parameters around your company and its receivable quality. In asset-based lending using factoring as an example, the a/r cost of financing is dependent on the number of days outstanding, as a ' fee' is charged, as opposed to an interest rate.
Covenants around receivable finance vary based on whether financing is from a bank or ABL lender - in general, non-bank lenders have fewer covenants.
Clients at 7 Park Avenue Financial recognize that as investments in receivables grow as revenue grows, receivable finance is critical to speeding up the cash flow cycle.
Typically we achieve approximately 90% advances on an a/r facility in non-bank solutions, while our clients seeking small business bank financing can expect an advance rate in the area of 70%.
For non-bank solutions, cash flow financing via ' factoring ' is more expensive but has great value from the monetization of working capital; however, a higher cost than conventional bank finance allows a company to fund continued sales growth if the balance sheet and income statement cannot support bank financing. If your firm can support a small 1-2% decrease in the gross margin or pass that on to pricing to clients, your firm will be fully financed and able to avoid a working capital crisis.
At 7 Park Avenue Financial, we are the first to recognize the terminology in non-bank financing can be confusing to small businesses with limited outside external finance expertise. Terms such as confidential receivable financing, notification, recourse, discount rates, holdbacks etc., are not always explained properly in the industry for clients considering this financing program. We will take the time to ensure you understand how things work, their cost, and the benefits.
If required, we will assist you in obtaining credit insurance to protect higher-risk or foreign receivables.
INVENTORY FINANCE
In most cases, but not all, our goal is to combine an inventory financing program with client receivable solutions. Funding rates for inventory are based on a variety of factors, including liquidation value as well as an assessment of what stage your inventory is in ( raw materials, work in process, finished goods ). Inventory financing costs will typically be similar to receivable financing facilities - on larger transactions, audits are sometimes required.
EQUIPMENT LEASING
Canadian companies who need to require assets to run and grow their business find that lease financing will allow them to acquire those assets to expand and grow revenues. The combination of the value of assets you are purchasing and your overall business credit profile of almost any credit quality will qualify you as a lessee of assets.
Equipment leasing allows your supplier/vendor to be paid directly by the leasing company to exchange fixed monthly payments for the lease term. Almost any industry asset can be financed, and many firms finance their technology needs through the lease finance process. At 7 Park Avenue Financial, we will take the time to understand the equipment you are financing and ensure the lease term of the asset matches your intended useful life. Equally as important in lease financing is the need to understand what you as a lessee intend to do at the end of the lease term and address some of the tax and accounting issues in the lease decision.
Business owners have the ability to choose either a ' capital lease ' ( a lease to own ) versus an ' operating lease ( a lease to use )
SALE-LEASEBACK
In many cases, a sale-leaseback allows you to draw additional working capital into your business as you refinance equipment you own already. In essence, you are shifting around the capital in your company, and it's a widely used strategy for both fixed assets and company-owned real estate. It is a form of off-balance-sheet financing that is significantly less costly than other capital forms, such as additional equity or mezzanine-type solutions.
SUPPLY CHAIN / PURCHASE ORDER FINANCING
If your firm has specific goods that have been pre-sold to a client/clients, purchase order financing facilities will pay your supplier directly. Our typical clients in the P O area are exporters, wholesalers, manufacturers, and distribution companies. Firms with reliable sources of supply and legitimate purchase orders from good clients are perfect candidates for this type of financing. After typical due diligence around purchase order validity and your order's appropriate monitoring, the transaction is finalized. P O Finance is a solid way for our clients to take on larger orders and contracts that might not have otherwise been financed through traditional business loans.
BRIDGE LOANS
Let us help you bridge finance solutions that allow you to fill a gap in a future event. Bridge loans are typically for a 1-year term and potentially renewable at your firm's agreed-upon option and the lender. In most cases, bridge loans are secured by some or all company assets, depending on your firm's unique situation and needs. Although interest rates vary depending on your firm's circumstances, rates are typically higher. As your firm's situation improves, you have more negotiating power to return to normalized borrowing situations.
CHARTERED BANK FACILITIES
WHAT BANK HAS THE BEST BUSINESS LOAN SOLUTIONS?
At 7 Park Avenue Financial, we constantly source debt financing, term loans, and revolving credit lines for clients via Canadian chartered banks. We work with clients to ensure they have the necessary cash flow and collateral required by our regulated banking system for commercial lending. Clients who meet established guidelines will achieve the best interest rates and flexible terms.
WHAT IS THE AVERAGE INTEREST RATE FOR A SMALL BUSINESS LOAN IN CANADA
Our clients at 7 Park Avenue Financial are looking for interest rate alternatives. For different types of business financing we originate rates that might be either fixed or variable. Our job is to ensure that we accurately demonstrate the most positive credit profile consistent with any lender requirements. Solutions such as our work in equipment financing allow our clients to enjoy predictable payment streams over the asset financing agreement's life - whether that be a business loan or a financing lease. Current low-rate environments favour borrowers! The vast majority of industry experts state that small businesses are huge users of lease finance.
Bank finance solutions are typically based on the Canadian prime rate - so growing and healthy businesses can command an excellent interest rate - especially if assets are secured, and a guarantee of the owner is in place. Typically security arrangements on bank financing involve a 'GSA' - a general security agreement.
For larger bank transactions, credit quality will always play a large role in determining the interest rate. Banks are solid providers of credit facilities for companies that are focused on product or market expansion. Many of our clients look to refinance existing facilities, perhaps with another bank, depending on when and how the original line of credit facility or term debt was financed.
Our goal is to reduce the time and potential expense of loan documents and the facility's securitization or loan. In many cases, we work with other lenders who might be unsecured or unsecured. Leverage and debt to equity ratios play a large role in bank business loan interest rates, and bank interest margins will always be higher on unsecured loans.
ASSET-BASED LENDING
'ABL' is the acronym for Asset Based Lending. Asset-based lenders provide several significant ' alternative financing ' solutions in Canada. It's a combination of debt financing and the 'monetization of your business's sales and assets. Our clients at 7 Park Avenue Financial don't need to be confused by the different financing types based on terms they might not have been familiar with within their search for Canadian business funding.
Some ' ABL ' solutions might come from banks, but they are typically from nonbank lending firms, which differ from traditional bank finance solutions related to small business credit availability.
Asset-based lending is all about 'leverage' - leverage in a positive way based on the sales levels and asset collateral in your business. As a business owner, you should view this financing method as your lender's ability to liquidate the assets and sales without concern for how your business is doing.
When we work with companies, we focus on the type of industry you are in, what type of financing you require, and what stage your business is in, vis a vis its life cycle.
Larger firms that are a bit more established like ABL because it is cheaper than equity can almost always be paid out early without exit penalties. The facilities in ABL tend to grow automatically as a company grows.
The irony that asset-based lending works for healthy growing companies, as well as firms with significant financial challenges, is not lost on the 7 Park Avenue Financial team. Many companies don't have the consistent financial performance that traditional financing demands, so the flexibility of asset-based financing has a lot of appeal to our clients. Most firms can access asset-based lending solutions with simple applications that include financials, aged receivables and payables, we well as info on owners and the company. It's as simple as that.
ROYALTY FINANCING
Royalty finance solutions provide funding against the future sales of a company so that percentage of future sales reduces the amount of the royalty advance. This financing works best when firms have a predictable revenue flow and profit margins that can sustain and pay for the financing.
Technology companies are a great example of royalty finance candidates and 'SAAS' (software as a service ) firms that have recurring revenues. Benefits are similar to other alternative financing solutions and include flexibility around growth financing that does not dilute equity which is important to owners searching for small business financing solutions.
TAX CREDIT MONETIZATION - SR&ED LOANS AND DIGITAL MEDIA TAX CREDIT LOANS
7 Park Avenue Financial is your tax credit financing expert. We've successfully financed Canadian tax credits under Canada's ' SR&ED' program for over 15 years. Clients who use the program to take advantage of the tax incentives involved in research and development can monetize their tax credits significantly in advance of receiving federal and provincial refunds under the program.
Billions of dollars are advanced under the program annually, and financing your credits allows your firm to pursue research and accelerate the cash flow from the refund. Working with your SR&ED tax credit consultant allows us to typically cash flow claims within a couple of weeks. Given that many SR&ED claims provide up to an amount of 35% of your r&d expenditures, the popularity of tax credit financing continues to grow.
CASH FLOW LOANS
Cash flow-based loans are available to clients who have solid cash flows. The loan amount is based on the calculation of cash flows, and typically other security arrangements may be required. Your borrowing capacity will be a multiple of your current cash flow, with adjustments made to ensure a proper normalization of your cash flow generating ability.
Interest rates vary on cash flow loans and are typically higher than secured lending, depending on your business's overall financial leverage. Your ability to cover debt costs and demonstrate revenue growth is key to a successful cash flow loan transaction.
This method of funding typically has a longer term attached to it; 5 years is a common payback. Financing in the unsecured cash flow area is often dependent on the general strength of the Canadian economy. The 7 Park Avenue Financial team commonly uses this financing method as a part of an acquisition or recapitalization.
When financing is unsecured in this area of corporate funding, a solid balance sheet and a track record of cash flow generation are key.
SUBORDINATED DEBT / CASH FLOW FINANCING / MEZZANINE FINANCE
Subordinated debt is also known as ' Mezzanine Financing ' These cash flow term loans are a form of debt financing, but typically it ranks behind other senior lendings you have in place. 7 Park Avenue Financial clients view this as a source of working capital that is more permanent in nature. While it's usually used for working capital, as we noted, funds could also be used for the purchase of assets or, in fact, could be a part of the financing puzzle that solves acquisition or management buyout and even a recapitalizing of your business.
' Sub debt/Mezz finance' is usually associated with companies doing well and generating very positive cash flows.
GOVERNMENT BUSINESS LOANS CANADA - THE CANADIAN SMALL BUSINESS FINANCING PROGRAM
WHAT IS THE CANADA SMALL BUSINESS FINANCING PROGRAM
The Canada, Small Business Financing Program is one of Canada's best and most popular small business finance solutions. At 7 Park Avenue Financial, we have consistently proven that we are experts in facilitating the program's benefits for our clients via one of the best solutions for small businesses in the realm of Canadian Small Business Financing. One significant feature of this financing program is its ability to fund leasehold improvements which are a challenge for many firms, large and small. We should point out a small registration fee when your loan is approved, but this amount is also financeable!
Canadian chartered banks favour the Canada small business financing program because of the government loan guarantee attached to the program. This type of 'backup ' guarantee is key to understanding how the Government BIL program works. ' BIL ' is the acronym for Business Improvement Loan, which is the program's formal name under the auspices of Industry Canada. Not every small business recognizes the government's role properly in the program as a sponsor, not a facilitator.
The government loan program's goal is to provide additional capital and small business financing to small business owners who otherwise might not be able to access small business financing with typical collateral and loan approval issues required in Canadian lending. Your new or existing small business's ability to access small business financing via a bank loan with competitive interest rates is the appeal of the Small Business Loan ( 'SBL'). Leasehold improvements financing is a key offering within the program, as this ' asset category' typically is difficult to finance even conventionally.
We are specialists and experienced in alternative commercial finance solutions in small business financing in the economy's SME sector. Our focus is on lending solutions and financing structured around debt and cash flow financing that works for your business needs with specific industry expertise. We believe strongly you will like working with us and our attitude towards your business is ' JOB 1 " AT 7 Park Avenue Financial.
Government loans in Canada are accessible via our work for a new and small business financing under the Canada Small Business Financing program under the Small Business Financing Act, allowing you to access financing for leasehold improvements and equipment. Whether your search is for a business loan amount that cannot be accessed elsewhere or the ability to monetize and cash flow sales and business assets, the 7 Park Avenue Financial team has a solution for your needs.
The Canadian government small business loan program is one of the best business finance solutions for new and existing businesses. Under the Canadian small business financing program, 3 asset classes can be financed. Those asset classes are :
Equipment
Leasehold Improvements
Real Estate
This small business financing program provides companies with flexibility and interest rates unmatched under normal SME borrowing conditions. Leasehold improvements are for business premises that are under lease. Business grants from the government are not a part of the government small business loan offering.
The program is excellent for business expansion and business growth facilities to accelerate your revenues. Interest rates are very competitive given the loan's nature, and many start-ups utilize the ' CSBFP' loan to start a business, including franchise purchases.
A question we often get at 7 Park Avenue Financial is: How much financing is available? The loan amount has been increased to 1,000,000.00 recently, and both a business credit union or a Canadian chartered bank can facilitate the loan.
Business owners and financial managers don't necessarily have the management time and resources to explore different and unique financing options in traditional financing and the relatively new world of alternative finance business credit. If you are searching for small business finance options or just question how certain aspects of small business financing might work for your firm, we want to hear from you.
If your company is focused on growing revenues and profits and you need access to funding, we want to tailor our service to your needs. In today's world, traditional banks might solve all your financial challenges, but business capital from traditional sources is challenging and time-consuming to obtain for small businesses in Canada.
The Canada Small Business Loan program is sponsored and administered by Industry Canada - a branch of Canada's government. The program provides financing assistance in the form of a term loan program to Canadian Small Businesses. ' Small ' is currently defined under the program as companies with actual or projected revenues less than $ 10,000,000.00.
The financing is delivered primarily through Canadian chartered banks and authorized Credit Unions. The Business Development Bank OF Canada ( BDC ) is a Canadian government crown corporation that also offers numerous business finance solutions that augment Chartered bank financing.
These government-guaranteed loans are for start-up and small business financing for emerging companies in the Canadian economy. The government is a guarantor of the loan, which the financial institutions actually make.
Industry Canada sets out obvious guidelines that are Industry Canada sets out obvious guidelines to the program allowing lenders to minimize risk. As noted, the actual loans are provided by the banks and credit unions. They have substantial guarantees from Canada's federal government on the portion of the loan that is ' guaranteed.' The government of Canada cannot force any bank or other institution to make the loans.
At 7 Park Avenue Financial, we take a positive and proactive approach to the Canada Small Business Government Loan program to our loan submission on our client's behalf. We understand the program's criteria and requirements. We have a long multi-year track record of success in the program - ensuring that our client proposals and submissions are eligible and creditworthy.
Our role in Canadian government loans is to make your firm eligible and successful. As a result, we focus on repayment ability and ensure our applications on your behalf reflect your management ability and experience.
With some clarifications, the maximum availability under the program is One Million dollars. Government loans are considered ' long term loans,' and typical terms are usually 3- 5-year terms, with some additional flexibility for real estate.
Many clients are under the mistaken impression that Government Small Business Loans in Canada can be working capital or cash flow loans. That is not the case, and only equipment, leasehold improvements, and real estate can be financed under the program.
Interest rates are mandated by the program and are very competitive, given the nature of the program. Our clients have the flexibility to focus on either variable-rate loans or fixed-term interest rates.
There are no prepayment penalties under the program, unlike many other business finance loans.
Business owners should also be aware of business financing services through the Business Development Bank, a government Crown corporation.
FINANCING ACQUISITIONS WITH THE HELP OF 7 PARK AVENUE FINANCIAL
The Canadian business landscape is always offering up business acquisition and management buyout opportunities for your business. Our clients recognize the benefits of acquiring a business versus organic growth. Those benefits are sometimes undeniable, sometimes less so, and include the ability to grow sales significantly, expand into a new client or geographic market, capitalize on the competition vis a vis market share, etc.
When you have found a 'target company' we want to talk to you! Our focus is then to outline a plan or strategy and start a basic financing process that will allow you to meet your goals. While it is rare that acquisitions be financed via all-cash, the reality is that a financing component to most deals will be needed. We will identify a deal structure that works for our client and our underwriters, and, of course, the seller. We will ensure you have a buy-in from financing sources that meets your goal - and timelines!
Closing an acquisition can get complicated very quickly - that includes borrowing from a debt perspective, understanding present and future cash flow and working closely with current and potential lenders within the deal. 7 Park Avenue Financial will be with you all the way on that journey.
RESEARCH AND DEVELOPMENT OF NEW PRODUCTS AND SERVICES
We focus on ensuring they are taking advantage of the Government of Canada SR&ED Program, which allows them to commit capital and even at the risk of uncertainty knowing they will capture a large amount of that capital via the ' SRED ' PROGRAM. Sr&ed credits are financeable, and a SR&ED loan is a beautiful financing solution to accelerate the government refund and turn that refund into real cash back into your company.
ACQUIRING NEW BUSINESS PREMISES - COMMERCIAL MORTGAGES
Many of our clients see value in owning their premises rather than financing them.
We are focused on proper short-term bridge loans or long-term mortgage financing that will take the distraction away from financing commitments required for their building/ plant, etc.
WORKING CAPITAL FINANCE SOLUTIONS
The area of working capital financing is a key focus at 7 Park Avenue Financial. Your firm's ability to manage working capital accounts ( Inventory, Receivables, Payables ) as well as financing your investments in a/r and inventory is key to long-term business success and survival.
In the receivable financing area, accounts that are significantly past due cannot be financed - asset turnover is key in our analysis of AR financing capabilities.
It is a commonly held belief in business finance that a growing company more than ten or fifteen percent per annum cannot continue to self-fund their operations. The cash flow operating cycle is key to funding your long-term revenue growth.
BUSINESS PLANS VIA 7 PARK AVENUE FINANCIAL
Numerous clients require a business plan for their lenders of financing plans. Our clients' plans are cost-effective, prepared promptly, and meet and exceed lender/bank requirements. Business plans include management overviews/bios, product and service overviews, industry analysis, and detailed financial projects.
ACCESS CANADIAN CHARTERED BANK SOLUTIONS VIA 7 PARK AVENUE FINANCIAL
Which bank has the best loans? That's a common question we get all the time. Canadian banks provide the fullest access to capital in Canada. Bank financing requires collateral and potential secondary sources of repayment. We deliver on bank finance solutions by proving our clients have the cash flow to repay debt. Because of the regulated nature of bank lending in Canada, we focus on ensuring our clients demonstrate the value of assets, and the ability to generate cash flow and are willing to provide guarantees if required.
Because business growth is a consumer of cash, not a cash generator, many of our clients look to 7 Park Avenue Financial for business financing and alternative finance sources. As well, financial covenants and balance sheet ratio requirements might work now but not in the future. Many clients consider the personal and spousal guarantees a major issue in business bank borrowing, which cannot be overlooked. Canada Small Business Financing SBL loans are facilitated through Canadian banks.
Interest rates and cost of financing will vary on any business financing based on key factors such as collateral, type of financing, amount of financing, company credit profile, etc.
Click here for the business finance track record of 7 Park Avenue Financial
