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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
"Stop letting bank rejections limit your business potential – discover funding options you didn't know existed."
7 Park Avenue Financial originates business financing solutions for Canadian Businesses – We offer Alternative small business financing for small business 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”
Alternative Financing for Small Business: Business Loan Finance Solutions
Introduction: Understanding the Importance of Business Finance Access for Small Businesses
Business finance access should always concern small business owners and financial managers in Canada.
Alternate financing loans and other solutions arise out of the necessity to fix your company’s wrongs. We’re covering some of those ‘do’s and don’ts’ when your financing access ‘dries up.’ Let’s dig in.
Struggling to secure traditional business loans? You're not alone.
Canadian banks reject 45% of small business loan applications, leaving entrepreneurs stuck between growth opportunities and financial gridlock.
Let the 7 Park Avenue Financial team show you how Alternative financing for small businesses opens new doors, providing flexible funding solutions that adapt to your business needs, from invoice factoring to merchant cash advances, equipment financing, and non-bank line of credit solutions.
Did You Know?
- 45% of small businesses seek alternative financing options
- Alternative lending market growing 25% annually
- 67% faster approval than traditional loans
- 82% of businesses consider alternative financing
- $504.5B alternative finance market size globally
Recognizing Warning Signs of Financial Distress
Sales Revenue: A Double-Edged Sword
For starters, it's critical to recognize the warning signs that your company's financial health is deteriorating.
Although business people always fear that their sales revenues will go south, they rarely associate a huge sales increase with financial distress. Sometimes, even the simple issue of 'seasonality' can negatively affect your firm's cash flow or working capital needs.
The Impact of Unpaid Accounts Receivable
When those sales translate into a change in profits or, worse, a considerable investment in unpaid accounts receivable, it’s safe to say you could be on the verge of financial distress.
Merchant cash advances and Short-Term working capital loans can sometimes also be viable solutions for financial distress caused by unpaid accounts receivable.
Alternate financing, such as A/R Finance solutions like factoring, asset-based credit lines, or PO Finance, can fix that problem and is often the sole solution to the dramatic increase in your sales.
Addressing Cash Flow Problems
Working Capital Needs: A Silent Alarm
Putting the sales revenue issue aside, any unattended increase in working capital needs will always highlight cash flow problems—whether you're making money on paper or not. Pricing, margins, and inventory issues always need attention.
Customer Concentration Risks
Those two solutions can also address an often common problem of the traditional lender's concern (aka 'the bank'), which is that your company is too dependent on any one customer.
Alternative Lending Options
What are alternative lending options, and how do they work?
Alternative lending options are financial solutions that provide businesses with access to capital outside of traditional bank loans.
These options are designed to be more flexible and accessible than traditional lending. They often have faster application processes and more lenient credit requirements.
Alternative lending options can be used for various purposes, including working capital, equipment financing, and expansion.
Unlike traditional bank loans, which often require extensive documentation and a lengthy approval process, alternative lending options streamline the process, allowing business owners to secure the funds they need more quickly and efficiently.
Types of alternative loans, including lines of credit, short-term loans, and installment loans
There are several types of alternative loans available to businesses, each tailored to meet specific financial needs:
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Lines of credit: A line of credit is a revolving loan that allows businesses to borrow and repay funds as needed. This type of loan is often used for working capital or to cover unexpected expenses. It provides flexibility, as businesses only pay interest on the amount they draw, making it a cost-effective solution for managing cash flow.
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Short-term loans: Short-term loans are designed to provide businesses with quick access to capital for a short period, typically less than a year. These loans are often used for emergency funding or to cover seasonal fluctuations in cash flow. They are ideal for businesses that need immediate funds to address urgent financial needs without committing to long-term debt.
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Installment loans: Installment loans provide businesses with a lump sum of capital repaid over a set period, typically several months or years. These loans are often used for equipment financing or expansion. The fixed repayment schedule helps a business plan its finances more effectively, ensuring it can manage its cash flow while investing in growth opportunities.
Investing in Growth Despite Financial Challenges: Exploring Alternative Lending Options
Equipment and Technology Investments
In some cases, your company might be unable to invest in new equipment/technology or even R&D for those firms that consider themselves leaders in their industry. Proper equipment leasing and financing strategies and SR&ED Credit financing can often assist in these two areas.
Tackling CRA Arrears
Resolving Tax-Related Financial Distress
Occasionally, we meet clients where the ugly head of 'CRA ARREARS' has arisen. That failure to pay taxes or divert those intended funds to other areas of your business is a key sign of financial distress, and many forms of alternative finance can 'fix' the CRA delinquency issue.
Overcoming Bank Challenges with Traditional Bank Loans
Special Loans and Non-Performing Loan Categories
Many firms that are too far down the path in financial challenges find themselves offside with their bank; in many situations, they are placed in the 'special loans—non-performing loan' category. This is the time to consider alternative finance loans as your 'takeout.'
Strategies for Restructuring and Refinancing
Rescheduling Liabilities and Monetizing Assets
It's important to reschedule liabilities and restructure your business finances during financial challenges while also taking a hard look at your operations.
Sale-Leaseback for Fixed Assets
In some cases, refinancing owned fixed assets such as equipment or real estate can be accomplished via an effective sale-leaseback lease or loan. While potentially a cost, an appraisal greatly benefits both your company and any proposed lessor/lender.
The Bottom Line: Strengthening Your Financial Health
At these times, examining your balance sheet and monetizing assets or refinance effectively is critically important. A business line of credit can be an important tool for strengthening financial health due to its flexibility and revolving nature. A cash flow/business plan time investment is also a solid requirement.
Case Study:
An Mfr/distributor faced a critical expansion opportunity but couldn't wait for traditional bank approval. Using alternative financing, they secured $250,000 in 48 hours through equipment financing and invoice factoring. This quick capital access enabled them to increase production capacity and secure a major contract, resulting in major revenue growth within six months.
Key Takeaways
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Understanding credit requirements differs significantly from traditional lending, focusing on revenue over credit scores.
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Revenue-based financing provides flexible repayment based on actual business performance.
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Digital application processes streamline approval timeframes dramatically
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Alternative lenders evaluate business health differently than banks
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Collateral requirements vary widely among alternative financing options
Conclusion
Looking to fix your firm's finances healthier and ensure access to financing at all times?
Call 7 Park Avenue Financial, a trusted, credible, and experienced Canadian business financing advisor who can assist you with your business finance access to alternative funding options when it's most important.
FAQ
How does alternative financing improve business cash flow?
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Provides immediate working capital
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Offers flexible repayment terms
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Matches funding to revenue cycles
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Reduces strain on existing credit lines
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Enables faster inventory turnover
What makes alternative financing faster than traditional loans?
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Digital application processes
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Streamlined documentation requirements
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Automated underwriting systems
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Direct lender relationships
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Quick funding deployment
Why choose alternative financing over traditional bank loans?
How can alternative financing support business growth?
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Enables quick response to opportunities
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Supports inventory expansion
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Facilitates equipment acquisition
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Funds marketing initiatives
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Enables hiring and training
What advantages does alternative financing offer?
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No long-term debt obligations
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Customizable funding solutions
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Scalable funding options
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Preservation of equity
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Strategic financial flexibility
What risks should I consider with alternative financing?
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Higher costs compared to traditional loans
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Shorter repayment terms
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Potential impact on cash flow
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Variable fee structures
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Required personal guarantees
How do I choose the right alternative financing option?
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Assess business needs
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Compare costs and terms
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Review qualification requirements
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Evaluate lender reputation
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Consider long-term impact
What documentation is typically required?
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Bank statements
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Financial records
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Business licenses
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Tax returns
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Sales History
What industries commonly use alternative financing?
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Retail
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Manufacturing
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Service businesses
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Construction
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Technology companies
How does the application process work?
What role does credit score play in alternative financing?
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Focus on revenue over credit
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Multiple evaluation factors
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Flexible approval criteria
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Business performance emphasis
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Holistic assessment approach
How do repayment terms differ from traditional loans?
What security requirements exist for alternative financing small business loans?
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Asset-based options
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Personal guarantees
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Accounts receivable
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Equipment collateral
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Inventory backing
What is crowdfunding, and how does it work?
Crowdfunding is a type of alternative funding that allows businesses to raise capital from many people, typically through an online platform. This method is often used for product launches, marketing campaigns, or other specific projects with as much of the founder's own money as required. Businesses create a compelling pitch and rewards structure to attract investors, who contribute small amounts of money in exchange for rewards or equity. Crowdfunding platforms typically charge a fee for their services, and the success of a campaign largely depends on the business’s ability to engage and persuade potential backers. Crowdfunding, business incubators, angel investors, venture capital and peer to peer lending solutions are generally only for the smallest portion of SMEs in Canada.
