YOUR COMPANY IS LOOKING FOR BUSINESS FINANCE!
SME BUSINESS FINANCING & BUSINESS LOAN SOLUTIONS IN CANADA
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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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EMAIL - sprokop@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8
"The art is not in making money, but in keeping it." - Proverb
Unlock the hidden potential of your business with innovative funding solutions tailored for Canadian entrepreneurs.
7 Park Avenue Financial originates business financing solutions for Canadian Businesses – We offer Business Funding 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”
Unfortunately for many owners/ financial managers (especially those in the COMMERCIAL SME sector), business finance funding in Canada is, to paraphrase our friend Shakespeare... MUCH ADO ABOUT SOMETHING!
These are the challenges companies face that require, among other things, business refinancing and asset monetization. Let's dig in.
Exploring Options for Business Funding
DOES BUSINESS REFINANCING REQUIRE SOME PATIENCE?
If there is any good news, the options available in business loans require some patience and expertise.
By that time, typically, the business had started to grow in revenue. They have passed the ' friends and family' phase, including popular options today such as ' crowdfunding.'
3 KEY AREAS - SALES /ASSETS... & CASH FLOW!
Business financing is all about sales, assets, and cash flow. Without all of those in some measure, options such as additional equity capital or grant funding must be explored.
HOW CAN CANADIAN BUSINESS FUND R&D WITH BUSINESS GRANTS
In Canada, firms involved in R&D in some manner have the unique benefit of utilizing the SR&ED refundable tax credit program and accessing various business grants; they can now do so under that fed./prov. Program to recover most of their R&D spend on eligible expenses and contractor costs via refundable tax credits.
Business grants are available to support R&D activities, providing additional financial assistance for hiring, research and development, or expansion projects.
Even better news is that the SRED program is 100% financeable, allowing firms to monetize / cash flow those credits and eliminating the waiting period for the refund.
Thousands of firms utilize the concept of getting paid back for research and development every year. The government refunds billions of dollars in this area—are you getting your share?
What must the owner/manager do to access the proper funding at the right time? The answer is the business equivalent of returning to school: You need to educate yourself on the different financing methods available, how they work, and what they can or cannot do for your firm.
Naturally, the interest rate and cost of financing will always be at the forefront of the borrower's mind and the overall ability to repay the loan. Business credit will always be challenging, and the working capital challenge will increase as your firm grows.
In many situations, your firm may be required to have a business plan in place with proper cash flow projections. 7 Park Avenue Financial plans to meet and exceed the requirements of Canadian banks and other commercial lenders.
BASIC BUSINESS FUNDING OPTIONS FOR SMALL BUSINESSES IN CANADA
A quick recap of the primary funding options is as follows:
A/R Financing
Inventory Finance
Working Capital Term Loans
Tax Credit Monetization Financing1)
Government Guaranteed Business Loans
PO/Contract financing- domestic and international markets
Sales royalty financing
Asset-based business credit lines - revolving facilities that allow you to borrow against receivables, inventory and equipment
Equipment Leasing/ Sale Leasebacks
Merchant Cash Advance / Short-term working capital loans - higher interest rates by easily accessible ‘fast capital.’
For a small business loan in Canada, there is often an emphasis on the owner/owners’ credit score and personal credit history. As one expert said, ‘In small business, the company’s credit score is the same as the owner's credit score!’
Many small businesses turn to angel investors and venture capitalists.
They are disappointed that only the smallest percentage of Canada’s businesses can qualify for such funding, typically equity funding that dilutes ownership. Venture capital and small business lending typically don’t go together for the short-term financing you require, usually a bank loan or alternative lending finance.
THE GOVERNMENT GUARANTEED SMALL BUSINESS LOAN
Don’t forget to consider a government loan via the Canada Small Business Financing Program, which various financial institutions sponsor. These ' SBL term loans from the government ' come with a monthly payment structured over a 2-5-year term for eligible businesses.
It’s a lump sum term loan that, as we have noted, comes with the requirement of the business owner ‘ good credit ‘. The payback flexibility and the ability to access funding for new equipment and leasehold improvements over the long term appeal to thousands of businesses every year who access the program.
These loans also support economic development initiatives to enhance community capacity and prosperity. Additionally, they fund economic development activities such as community capacity-building initiatives and funding for new and existing employees.
You need to know this is not a line of credit or accounts receivable/working capital funding—it’s a term loan to fund assets and leaseholds. Business owners who want to access the program should talk to our 7 Park Avenue Financial team. You may wish to satisfy some business needs with the government loan program, often called the ‘ SBL Loan.’
Business support programs and business grants and services to assist entrepreneurs include financial assistance, mentorship, business startup and expansion resources, and training workshops to enhance business operations and economic development.
When discussing criteria for receiving business grants, it is essential to note that grant providers prefer to support businesses with a demonstrated track record. This indicates that established businesses are viewed as lower-risk candidates for funding.
Government funding programs can also support small businesses by hosting webinars and events to assist business owners with the funding application process, further underlining the support available for small enterprises.
WHAT ARE THE REQUIREMENTS TO QUALIFY FOR BUSINESS FINANCING AND ELIGIBLE COSTS
After you understand each of those offerings' basics, it's essential to ensure you can supply the information needed to qualify for one or a number of them. That might include a business plan, cash flow forecast, and asset schedules for receivables, inventory, and fixed assets.
ESTABLISH CONTROL OVER YOUR FINANCES
Regarding being prepared, it's a very safe bet that if you can demonstrate control and knowledge of your business finances, you'll be in a much better place regarding financing funding approval.
KEY TAKEAWAYS
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Understanding credit scores and their impact on loan approval
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Identifying suitable funding sources based on business stage and industry
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Crafting compelling business plans to attract investors
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Navigating the application process for government grants and understanding the importance of grant funding as a non-repayable financial support available to businesses. A solid business plan is crucial for a successful grant application, and knowing the factors that influence eligibility and allocation can significantly enhance your chances.
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Leveraging personal assets to secure better loan terms
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Recognizing the importance of cash flow management in funding decisions
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Exploring alternative lending options beyond traditional banks
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Utilizing financial projections to determine appropriate funding amounts
CONCLUSION
If you want to address the problem of refinancing or funding your business and want some help in the time it takes to source the right solution, call 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can shorten that timeline!
FAQ
How can business funding accelerate my company's growth?
Business funding provides the necessary capital to invest in new equipment, expand operations, hire talented staff, and seize market opportunities, ultimately accelerating your company's growth trajectory.
What are the advantages of exploring alternative funding options?
Alternative funding options often offer more flexible terms, faster approval processes, and specialized solutions tailored to your industry or business model, providing greater financial flexibility and support.
How can securing adequate funding improve my competitive edge?
With sufficient funding, you can invest in cutting-edge technology, enhance your product offerings, and implement effective marketing strategies, giving you a significant advantage over competitors who may be struggling with limited resources.
In what ways can business funding help me manage cash flow challenges?
Business funding can provide a financial buffer during slow periods, help bridge gaps between accounts receivable and payable, and ensure you have the necessary working capital to maintain smooth operations and seize growth opportunities.
How does obtaining business funding impact my long-term business strategy?
Securing appropriate funding allows you to focus on long-term strategic goals rather than short-term financial constraints, enabling you to make informed decisions that support sustainable growth and profitability.
What role does credit history play in securing business funding?
Credit history significantly influences funding approval and terms. A strong credit score can lead to better interest rates and more favorable loan conditions, while a poor credit history may limit options or require additional collateral.
How do seasonal business cycles affect funding opportunities?
Seasonal businesses may face unique challenges in securing traditional funding. Lenders often prefer consistent revenue streams, so seasonal enterprises may need to explore specialized financing options or adjust their funding strategies to align with their cash flow patterns.
What are the potential risks associated with taking on business debt?
While business debt can fuel growth, it also carries risks such as reduced flexibility, increased financial stress, and potential loss of assets if unable to repay. It's crucial to carefully assess the terms and your ability to manage debt before committing.
How can I determine the right amount of funding to seek for my business?
Determining the appropriate funding amount involves analyzing your business plan, financial projections, and growth strategy. Consider immediate needs, potential risks, and long-term goals to avoid under-borrowing or taking on excessive debt.
What impact does the current economic climate have on business funding availability?
Economic conditions can significantly affect funding availability and terms. During economic downturns, lenders may become more cautious, potentially leading to stricter requirements or reduced funding options in regional economic growth . Conversely, periods of economic growth may result in more accessible and favourable funding opportunities.
What factors do lenders consider when evaluating a business funding application?
Lenders typically evaluate credit history, business financials, cash flow, collateral, industry outlook, and business plan to determine loan approval and terms. They assess the overall risk and potential return on investment.
How does equity financing differ from debt financing in business funding?
Equity financing involves selling ownership stakes in your company to investors, while debt financing requires borrowing money that must be repaid with interest. Equity doesn't require repayment but dilutes ownership, whereas debt maintains full ownership but adds financial obligations.
What are some common mistakes entrepreneurs make when seeking business funding?
Common mistakes include underestimating funding needs, neglecting to thoroughly research all available options, presenting incomplete or inaccurate financial information, failing to have a clear business plan, and not understanding the terms and conditions of financing agreements.
