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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
Business loans in Canada, unfortunately, don't come in a one size fits all package. So which financing sources make sense for your company, whether it’s a Chartered bank solution or those offered by mainstream or specialized niche finance companies? Let's dig in.
Along with ' variety, a business loan also comes with different terms, conditions and structures. We're not trying to complicate the situation. Still, the business owner/mgr quickly sees that the challenge in this form of Canadian business financing revolves around knowing what your needs are and matching those needs to your firm's situation.
What distinguishes ' loans ' from other financing forms (equity or current asset monetization) is fixed terms and typically, but not always, fixed interest rates. Current low rates, of course, make the financing cost scenario very attractive.
Business owners are also encouraged to understand the difference between ' secured' and ' unsecured ' loans. Safe to say, an ' unsecured' loan is difficult to obtain unless fairly strict financial criteria are met.
When it comes to SME COMMERCIAL FINANCE needs, one of the best examples of an ' unsecured' loan is the Government Guaranteed Small Business Loan. It provides financing up to 1,000,000.00 for two asset categories that meet most start-up and growing businesses' needs. Those asset categories are ' equipment ' and ' leasehold improvements.
Confusion reigns supreme when business owners often construe a ' line of credit' as a loan, when in fact, you're just cash flowing your current assets - accounts receivable and inventory. These loans fluctuate, and while there is a rate attached to the borrowing, costs fluctuate as you draw down or pay down the revolving facility.
Non-bank business credit lines are available via what’s known as an Asset-Based Line Of Credit. Known as ' ABL's, they actually combined your fixed assets with your receivables and inventory, all into one fluctuating facility.
Various subsets of asset-based financing are also not really ' loans.'They include Accounts receivable financing/factoring and inventory finance facilities.
Two traditional forms of loans are mortgages and equipment loans. These are typically larger facilities to secure buildings and land or shop floor assets or technology. A lease is not a loan, but it also has a fixed term and rate. Most clients we meet are happy to get approved for a lease or a loan and often don't understand some of the accounting distinctions between the two!
The providers of ' loans in Canada are banks, commercial finance companies, insurance companies, and, as we noted, the government.
Owners and managers can quickly see that any number of combinations of business loans from the right financing sources can meet their operating and growth needs. In most cases, it's a simple fact of knowing what amount of financing you need, being able to demonstrate your firm's financial condition, and ensuring you understand which finance companies or banks can fit your needs. Not feeling like you can go it alone? Speak to 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can assist you with your financing needs.
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