YOUR COMPANY IS LOOKING FOR COMMERCIAL FINANCE ALTERNATIVES!
BRIDGING LOAN AND BRIDGING FINANCE SOLUTIONS FOR CANADIAN BUSINESS
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Financing & Cash flow are the most significant 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
EMAIL - sprokop@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Commercial financing for private companies in Canada, or rather, the lack of it, has been a challenge for companies in the SME sector (small to medium enterprise) for some time. Bridge loans, often short term in nature, can be a saviour to a company in times of financing need. All business assets, including real estate, can be utilized for bridge funding scenarios. Let's dig in.
Remarkably even the owners of Canada's largest stock exchange, the TMX Group, recently announced capital raising activity for companies whose long-term goal is to ' go public. '
LACK OF BANK FINANCING WILL LEAD TO BRIDGE LOANS WHEN BUSINESS CAPITAL IS REQUIRED
In the meantime, the business owner grapples with lack of bank financing and finds himself or herself considering bridging finance solutions - those bridge loan and alternative finance solutions that are non-bank in nature.
Top experts, including those TMX gurus, tell us that ' bank loans and venture capital are tougher to come by. ' Naturally private financing of a larger nature comes with ' control ' issues, or loss thereof, as the stats tell us that when private equity and VCs are done with your firm, they often own a majority interest in the business, in fact, over 86% of the time!
MANAGING DEBT VERSUS EQUITY IN YOUR BUSINESS
Financing in the SME sector typically involves amounts of 250k and goes up to the 10-15M dollar range. The challenge for the owner is almost always the same - debt or equity?
BANKS FOCUS ON CASH FLOW, RATIOS, AND COVENANTS
The core of bank financing in Canada revolves around our chartered banks' ability to ensure loaned funds are always secure. If a business does not have cash flow repayment power or significant unencumbered assets, getting all the financing you need will be difficult. While the entrepreneur dreams of hyper-growth, the bank dreads it - there go the ratios!
CONSIDER THE GOVERNMENT GUARANTEED LOAN PROGRAM IN CANADA
The Canada Small Business Loan program is often a reliable alternative for start-up or fledgling companies. It's all about the government guaranteeing loans that typically max out at 350k - recent changes to the program have made this program worth watching. The interest rate and terms and conditions, and limited guarantee are very popular attributes of the program.
The challenge with taking on debt in commercial financing is simply repayment ability - don't also forget that repayment of bridge and asset loans comes at the cost of not plough that money back into the business. Many businesses in Canada become so focused on their debt that the hurdles to growth and success are higher.
EQUITY CAPITAL
Equity capital in Canada can come from several sources; in addition to the new kid on the block ' Crowdfunding,’ the owner can also solicit capital from Angel investors, VCs, and strategic partners.
While equity investors rely on sales projections and future valuation and operating margins, the asset lender focuses on past and present financial statements. Here the focus is debt load, quality of accounting and cash flows.
WHAT ARE BRIDGE LOAN SOLUTIONS IN CANADA
Bridging finance solutions in Canada include:
A/R Financing
Inventory Loans
Access to Canadian bank credit
Non-bank asset-based lines of credit
SR&ED Tax credit financing
Equipment / fixed asset financing
Cash flow loans
Royalty finance solutions
Purchase Order Financing
Short Term Working Capital Loans/ Merchant Advance
Securitization
THE COST OF BRIDGE FINANCE
Interest rates on these solutions will vary greatly based upon collateral and overall credit quality. Commercial real estate owned by the company will often have appraisals attached to the bridge loan requirement. Interest rate on term financing will often be lower but again subject to collateral and credit.
CONCLUSION
Bridge financing delivers working capital and cash flow when you need it most. If you're looking to ' triumph' via bridge loans and asset monetization, seek out and get in touch and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your commercial finance needs.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
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