Working Capital Lenders: Essential Financial Support for Your Business | 7 Park Avenue Financial

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YOU ARE LOOKING FOR WORKING CAPITAL AND BUSINESS FINANCING OPTIONS! 

WORKING CAPITAL LOANS AND BUSINESS CREDIT SOLUTIONS

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?

CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs

Or Email us with any question on Canadian Business Financing

EMAIL - sprokop@7parkavenuefinancial.com

Working capital lenders provide essential financial support to businesses by offering flexible funding solutions to meet everyday operational needs.

Unlock your business's funds to thrive with working capital solutions tailored to your needs.

7 Park Avenue Financial originates business financing solutions for Canadian Businesses – We offer  WORKING CAPITAL FINANCING  solutions that solve the issue of cash flow and working capital  – Save time, and focus on profits and business opportunities

Canadian Business Financing with the intelligent use of experience

WORKING CAPITAL FINANCING IN CANADA      

Canadian business financing these days, in many cases, is 'beyond the banks.' That was the catchy title of an old Canadian Business Magazine article. It profiled 15 (yes, 15!) alternate methods of financing working capital from a cash flow and loan perspective. We've got some thoughts on that... so let's dig in.

Securing adequate working capital is key to maintaining smooth operations and achieving growth in your business. Canadian working capital lenders play a role by providing the necessary funds to cover day-to-day expenses, bridge cash flow gaps, and support your focus on growing a business - At 7 Park Avenue Financial, we offer tailored solutions that address the unique financial needs of companies.

So what is and isn't working these days in business financing? Thankfully, as has been pointed out, you could use many new solutions and methods to finance your growth and operations, from working capital loans to asset monetization funding strategies via the balance sheet.

It's all about working capital loan vs. line of credit solutions, both of which come in a variety of methods for obtaining small business loans/funds to cover internal cash flow business needs.

Working capital loans for small businesses could include receivables loans via factoring solutions and short-term working capital, aka ' merchant advances ' based primarily on your sales and cash inflows.

These business loans are typically 12 months long and are readily accessible and easy to apply for. While the interest rate is higher for this working capital loan as a method of financing, its fast and easy approval appeals to many business owners - it's an excellent example of applying today and getting approved tomorrow!

The Working Capital Definition  

What is working capital?

How can it help my business? We get those questions  a lot about working capital financing here at

7 Park Avenue Financial.

Managing the relationship between the value of current assets and current liabilities (the working capital formula/ratio! ) on the balance sheet leads to business finance success. That ratio is one of the most common ratios banks use in assessing commercial credit.

Working capital is essential for everyday business expenses like payroll, inventory, software subscriptions, and utilities. Ensuring you have enough working capital helps your business run smoothly and seize potential opportunities.

We have rarely met clients who have successfully arranged angel financing as a source of funds. This is simply equity and ownership dilution and is often solely focused on high-growth scenarios, which may or may not include your firm. The concept of another owner or board member within your company may not be palatable to many small business owners.

KEY USES OF A  BUSINESS CREDIT CARD  

Purchase inventory / raw material expenses

Investment in Growth projects / r&d capital to develop new products for a new market

Employee new hires for your operations / pay wages

Marketing/ Advertising / Digital Marketing expenses

Fund payables / Operational expenses

FINANCING TAILORED TO YOUR NEEDS

Alternative lending secured business loans are a solid method of funding your company. ABL - asset-based lending is one of the best ways to achieve unlimited working capital financing for your growth prospects. Investigate asset-based lines of credit; they are viable and work.

A merchant cash advance is another alternative financing option for businesses, particularly those that process many credit card transactions.

It allows companies to borrow money against a portion of their future sales and repay the loan with a percentage of their daily or weekly revenue. While merchant cash advances can offer fast funding, they often come with high fees and less strict borrowing requirements than other financing options.

They finance inventory, accounts receivable and equipment all under one revolving business credit line. We rarely see a client not receiving 100-300% more finance liquidity once these assets are combined and margined properly.

Bridge financing is another type of working capital management solution often used for firms experiencing ‘hyper growth’ or, in some cases, exhibiting financial distress. Talk about a broad spectrum!!

It’s short to intermediate-term to pay for temporary working capital bulge needs - allowing you to manage accounts payable and surprise expenses and the need to cover other short-term liabilities such as lease payments, purchase supplies, required inventory etc.

COMPLEMENT YOUR LINE OF CREDIT

Canada’s Crown Corporation Bank is another solution provider that, in most cases, is very complimentary to any existing financing you have - even senior credit facilities in the form of a bank business loan. It’s a solid way to access working capital term loans, equipment loans, or real estate finance at a competitive interest rate. A good credit score and reasonable personal net worth are required. You can often structure bridge financing to pay interest only for some time.

Some business owners we meet are often too focused on ‘big boy’ financing - also known as private equity and venture capital.

The reality? Only a small market sector can access this finance, and it’s very inappropriate from most Canadian businesses. There’s no free lunch for the business owner when it comes to funding your company - whether that’s a bank loan or an alternative lender-type solution. Complementing a line of credit with other financing options can be beneficial, especially since lines of credit offer an approved credit limit, allowing businesses to borrow as needed and only pay interest on the amount borrowed.

HAVE YOU CONSIDERED GOVERNMENT SMALL BUSINESS LOANS AND FINANCING PROGRAMS

We’re from the government, and we’re here to help! Heard that one?  Actually, in one instance, we heartily agree on the Canada Small Business Financing program - the acronyms for this program vary. They include BIL, CSBF, and ‘SBL.’  You need to know these are not small business loans for working capital, but instead are term loan financing (typical 2-5 year amortization )  for 4 key asset categories:

Equipment

Leaseholds

Real Estate

Working Captial /Line Of Credit

We strongly believe and always advise clients that this is by far the best program for business financing of assets and real estate in Canada, including for a new business or startup. Investigate this program and take advantage of it if you can. It does not get any better!

SBL loans are another government-backed loan that offers favourable terms for small business owners.

It’s most applicable for new and expanding businesses, including start-ups and franchises. Good personal credit scores are required for government loans. Let the 7 Park Avenue Financial team help you put together your business plan and assist you in applying for this popular loan via our recommended bank or credit union.

WHAT IS WORKING CAPITAL FINANCING? FINANCING EVERY DAY BUSINESS NEEDS

You, by now, have probably heard a fair bit about ‘Factoring’ these days. It’s essential in business to distinguish between working capital loan vs line of credit type solutions, especially considering the variability of interest rates on working capital loans, which can range from 3% to 99% depending on the lender, loan terms, and applicant qualifications. Virtually unheard of some years ago, it is fast becoming Canada's hottest financing method of working capital.

WHAT IS THE BEST FORM OF RECEIVABLE FINANCING? THE ABILITY TO FREE UP WORKING CAPITAL!

SMB Loans Financing / Funding Complexity in business financing methods comes in how it works, what it costs, and selecting the right partner firm that matches your overall needs. Our recommendation to our clients in this area: Confidential Receivable Financing 

It allows you to bill and collect your own receivables while you finance them simultaneously. Your sales become a cash flow machine.

Under this method of accounts receivable financing, you bill and collect your own receivables without notifying your clients, suppliers, etc. For funding short-term working capital, either entirely or selectively, it’s our most recommended A/R solution to take advantage of a receivables loan type solution.

You must provide at least 12 months of personal and business bank statements as part of the documentation for the receivable financing application.

We strongly believe that most firms in Canada currently don’t have a handle on their business financing options. We can, of course, forgive business owners and financial managers as they are caught up in the day-to-day running of their businesses and the financial challenges that come with that.

KEY TAKEAWAYS  

1. Business Financing Options: Various funding sources like loans, credit lines, and advances help meet operational needs.

2. Cash Flow Management: Ensures the availability of funds to handle daily expenses and unexpected costs.

3. Small Business Funding: Tailored financial solutions for small enterprises, crucial for growth and stability.

4. Short-Term Loans: Quick access to funds with flexible repayment terms suitable for immediate financial needs.

5. Revolving Credit: Provides a reusable credit line that businesses can draw from as needed.

CONCLUSION

Cash flow is at the heart of any small business. Every entrepreneur/business owner faces a funding challenge at one time or another. We have shown that working capital loans for small business and other financing types are available for your company.

When addressing working capital challenges, look for options that will help you speed up asset conversion - speak to 7 Park Avenue Financial, your trusted, credible and experienced business financing advisor for traditional and alternative small business loans for working capital needs and other financing services whether you are a new business or established and growing. We've got the alternatives for different situations based on your needs.

FAQ: FREQUENTLY ASKED QUESTIONS  

What is Working Capital?

Working capital is financing to fund a company's day-to-day operations. Loans and lines of credit are used for short-term cash needs to cover operating expenses, whereas long-term investments are made through debt financing and operating capital loan solutions.

What is included in working capital?

The difference between your current assets and liabilities is the net working capital component of your business - Current assets, such as cash on hand and accounts receivable, are measured against short-term liabilities, such as accounts payable and other debt obligations due within 12 months - Understanding balance sheet relationships helps you access the best working capital loans. Commercial real estate loans are typically funded via a commercial mortgage.

What are the 4 critical components of working capital?

• Trade Receivables.

• Inventory.

• Cash and Bank Balances.

• Trade Payables.

How do working capital lenders operate?

Working capital lenders provide businesses with funds to cover everyday expenses, bridging cash flow gaps and supporting growth. Visit: https://www.7parkavenuefinancial.com

What are the main benefits of working capital lending?

Working capital lending offers quick access to funds in the business bank account  and flexible repayment terms helps manage cash flow effectively, and is often more quickly accessible than a bank business line of credit. Visit: https://www.7parkavenuefinancial.com

Is working capital lending suitable for small businesses?

Yes, it provides small businesses with essential funding to manage operations and pursue growth opportunities without taking on significant debt. Owners should have good personal credit and a minimum credit score in the 650 range. Visit: https://www.7parkavenuefinancial.com

What costs are associated with working capital loans?

Costs vary but typically include interest rates, fees, and repayment terms based on the lender and the business's financial profile. Visit: https://www.7parkavenuefinancial.com

Can working capital loans help my business grow?

Yes, working capital loans support business expansion by providing the necessary funds to manage day-to-day business expenses and obligations and invest in growth initiatives. Visit: https://www.7parkavenuefinancial.com

What are the differences between working capital loans and term loans?

Working capital loans and business lines are typically short-term and used for daily operations, while term loans are long-term and used for significant investments. Visit: https://www.7parkavenuefinancial.com

How does invoice financing work in the context of working capital?

Invoice financing allows businesses to borrow against their outstanding invoices, providing immediate cash flow without waiting for customer payments. Visit: https://www.7parkavenuefinancial.com

What industries benefit most from working capital lending?

Industries with fluctuating cash flows, like retail, manufacturing, and services, benefit significantly from working capital lending and working capital line of credit . Visit: https://www.7parkavenuefinancial.com

How do lenders assess eligibility for working capital loans?

To determine eligibility, lenders typically evaluate the business's creditworthiness, financial statements, and cash flow history. Visit: https://www.7parkavenuefinancial.com

What is a merchant cash advance, and how does it relate to working capital?

A merchant cash advance is a short term business loan that  provides a lump sum in exchange for a percentage of future sales, offering an alternative working capital solution. Visit: https://www.7parkavenuefinancial.com

What is the process for obtaining a working capital loan?

The process involves applying to a lender, providing financial documents, and undergoing credit evaluation. Upon approval, funds are disbursed quickly. Visit: https://www.7parkavenuefinancial.com

How does working capital lending differ from traditional bank loans?

Working capital lending often has more flexible terms and quicker approval processes than conventional bank loans. Visit: https://www.7parkavenuefinancial.com

What are the potential risks associated with working capital loans?

Risks include high interest rates, short repayment terms, and the possibility of debt accumulation if not appropriately managed. Visit: https://www.7parkavenuefinancial.com