YOUR COMPANY IS LOOKING FOR BUSINESS FINANCE SOLUTIONS!
BUSINESS LOANS FOR CANADIAN COMPANIES / BUSINESS FINANCING CANADA
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
Business financing in Canada for loan and cash flow purposes requires a basic solid understanding of your financial statements. And you would be surprised at what those financials know about your company and your chances of approval around a business financing loan and the subject of how to get funding for your business! Let's dig in on some great tips to easily obtain financing.
WHAT IS THE ROLE OF FINANCIAL STATEMENTS IN GETTING A BUSINESS LOAN?
One top expert describes your financials as a ' customer factory, ‘literally a machine that helps you ' create and keep customers. Your ability to get the' factory ' funded is job #1. The profit and cash flows that come out of that job create long-term success in your business. Your financials are key when it comes to how to borrow money from the bank or an alternative lender.
If your company has challenges in both created profits and cash flow, your company's long-term value is jeopardized to a certain extent. How then does the business owner/ financial manager successfully manage different business aspects that affect cash flow? Understanding those ' cash flow drivers' we've talked about in the past is key.
THE IMPORTANCE OF GOOD PROFIT MARGINS
Company gross margins create stronger profit potential and, in some cases, affect the type of financing you can access. For example, thousands of firms utilized A/R Financing, aka ' Factoring' as a method to access business credit lines they require for commercial lending needs. Strong gross margins allow you to absorb the cost of receivables loan funding, which is typical, if not always, more expensive than Canadian chartered bank financing.
Firms that require an investment in inventory require different types of financing. These might include:
Bank revolving credit lines
Non-Bank Asset-based lines of credit
Inventory Loans
Your financials will tell you how much inventory is on the balance sheet, how fast it turns and will ultimately prove your gross margin/profit assumptions on the products you sell.
While many business owners/ clients we meet have an ' intuitive feeling about the financial health of their receivables and inventories, the fact is that some time spent calculating your receivable and inventory turnover will ultimately prove whether your assumptions are, in fact, correct... or wrong.
UNDERSTANDING BUSINESS KEY RATIOS ON YOUR FINANCIAL STATEMENTS
By the way, those ‘ratios" (we call the business relationships!) are the same ones used by bankers and other commercial lenders to determine business financing approval.
Business lines of credit are key to feeding your working capital and cash flow needs. Your balance sheet ultimately dictates what amount of cash you need on an ongoing basis to satisfy working capital needs.
The right type of business credit line will then affect your balance sheet payables, payroll needs, investments in the future, etc. Those firms that invest in R&D are encouraged to both files and finance their SR&ED claims, allowing you to bring that cash investment back onto the balance sheet.
THE CANADA SMALL BUSINESS FINANCING LOAN ' CSBFL' - HOW TO FUND YOUR NEW OPPORTUNITY
The Canada Small Business Financing Loan program, offered by the Government of Canada, also known as the ' SBL Program,' often confused with the ' sbl loan ' out of the United States. is one of the best financing solutions for a small business. This is a government-guaranteed loan administered by Industry Canada and facilitated through financial institutions such as Canadian business banks and credit unions.
Commercial borrowers also can consider a government BDC loan ( the ' small business loan bank ') or EDC loans as an additional source of business funding. Small business start up loans for new business funding perfectly fit government programs as many startup businesses have huge challenges in accessing financing. Business owners should always explore government business loans such as BDC financing, and you can utilize the expertise of the 7 Park Avenue Financial team in this area.
The maximum loan amount is 350k and goes to 1 Million dollars if used for real estate. Asset categories financing under the government loan is equipment, leasehold improvements, and the aforementioned real estate. A one-time 2% registration fee is applicable for any approved loan, and that amount can be bundled into the financing!
Any company with less than 10 Million dollars in sales revenue can apply for the loan, and non-incorporated businesses such as proprietorships also qualify and may apply. This is not a working capital loan or line of credit; it's a term loan.
The program's interest rate is desirable and is benchmarked against Canada's prime rate - as well flexible repayment terms and a limited personal guarantee are cornerstones of the program. A good business plan is required for approval - 7 Park Avenue Financial business plans meet and exceed bank and commercial lender requirements for this key part of your loan application.
For some key industry statistics for business loan financing in Canada click here.
FOCUS ON WHERE YOUR CASH NEEDS ARE
Understanding your financial statements allows you to determine cash needs, understand your profitability and asset turnover, and determine the amount of debt your firm can take on and manage when it comes to lending for business, especially when it comes down to traditional bank loans for businesses. In some cases utilizing a SALE LEASEBACK financing loans strategy will allow your financials to generate cash flow on existing owned assets.
CONCLUSION
A small business financing loan can always be a challenge for business owners and achieve a business loan interest rate that matches the overall credit quality of the business. If you're looking to maximize business financing through the proper use of financials and matching financing appropriately, speak to 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can assist you with your loan and finance needs and help you grow your business with proper financing.
FAQ:
HOW DO I QUALIFY FOR A BUSINESS LOAN
Criteria used to determine business financing approval for small businesses by a business lender will always depend on owners' personal credit and the company's overall credit profile around factors such as cash flow and profit and debt ratios. Other key factors include how long the company has been in business, what debt load it carries, and the loan's collateral. In some cases, the overall industry profile is a factor as some businesses are out of favour with banks.
WHAT TYPES OF LOANS CAN A BUSINESS USE TO FINANCE THEIR BUSINESS
Types of business loans in Canada include business lines of credit, factoring, the government-sponsored Canadian Small Business Financing Program, short-term working capital loans known as merchant advances/ merchant loans, business credit cards, inventory financing, equipment leasing and commercial mortgages for real estate financing. Type os loans are in two categories, traditional loans and alternative financing offerings.
Interest rates on Canada's business financing will vary depending on the type of financing and whether a traditional or alternative lender offers it. Other factors include the amount of financing and overall credit quality of either the company and owners.
WHAT CREDIT SCORE IS NEEDED FOR A BUSINESS LOAN
As a general rule of thumb, traditional lenders for small business finance in Canada require a personal score in the 650 range for financing a business in Canada when it comes to bank small business loans. This number varies base on whether the financing is for government loans, bank loans, equipment financing, and merchant cash type solutions. Alternative lenders often place less emphasis on the actual owner credit score.
Click here for the business finance track record of 7 Park Avenue Financial.
