YOUR COMPANY IS LOOKING FOR CASH FLOW FINANCING!
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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?
CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs
EMAIL - sprokop@7parkavenuefinancial.com
How to finance a company in Canada - It is no secret that the ability to start a business, fund it for operations, and, as importantly, grow the company is a key challenge facing business owners, financial managers and start-up entrepreneurs.
THERE ARE 3 WAYS TO FINANCE A BUSINESS
There are basically only 3 ways to finance your company -
Equity
Debt
Cash Flow Financing Assets/Sales
ACCESSING ONE OR MORE BUSINESS FINANCE SOLUTIONS
Let's take a look at some key basics surrounding how these solutions can be accessed, and in some cases 'cobbled together' to identify the right source of business capital for your firm. Our comments will not focus on the 'equity' component of your business; private and public equity is a subject for another day.
In business the old adage 'timing is everything' is critical. Naturally financing your business in a healthy economy when your company is firing on all cylinders is much easier than a faltering economy or with your company experiencing financing challenges. The right amount of debt and cash flow is often the lifeblood of any firm. Companies large and small go out of business due to their inability to get the proper mix of financing in place.
CAN A COMPANY GROW TOO QUICKLY
Banks and commercial finance companies are of course your 'financial partner' when it comes to generating financial support for your firm. As companies growth they need additional cash flow financing to support sales, a/r and inventory levels, etc. It should not, but it might! come as a surprise to many that companies can fail when they grow too quickly.
As we noted the main providers of business financing in Canada are our chartered banks and commercial finance firms. Some of these commercial finance firms offer traditional financing - many of them are 'bank alternatives', providing capital to firms that cannot access bank credit.
Debt And Cash Flow Financing Options in Canada
Banks are often the first 'go-to' when it comes to businesses looking to access financing solutions in Canada. When companies have the right amount of owner equity, corporate and personal assets and collateral the rates, terms flexibility, and amount of capital is virtually unlimited.
Unfortunately the banking system in Canada does not support the many thousands of firms who have basic or specialized needs and can't qualify under bank criteria. These companies just don't have the 'secondary repayment sources' and outside the business collateral often required by the SME COMMERCIAL FINANCING sector in Canada.
So what then are the options to finance a company? The options are asset based lenders and other 'alternative finance' firms that provide:
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
Government Of Canada Small Business Loan Program - Guaranteed federal business loan
And it is safe to say that these firms do not require the same qualifications required by banks. It's a bit of an over-simplification but the two main requirements for alternative financing are:
Sales
Business Assets
Equipment financing, aka leasing your key assets is also a very effective method of financing your firm. It also relieves the larger cash outlays your business needs when it acquires assets.
Start-up and small businesses have access to the Government SBL loan program - This is a government-guaranteed loan which has great rates, terms and structures when it comes to acquiring assets and even financing leaseholds and real estate. Many franchises in Canada, as well as business acquisitions in the SME sector, are financed by the Industry Canada government loan program. As stated the majority of the loan is guaranteed to the bank by the Federal government. A partner you might not have known you had!
Cash flow financing or 'Asset Monetization' can be accomplished by utilizing receivable financing, inventory finance, and even selling your tax credits such as those under the SR&ED program. The SR&ED program provides billions of dollars in non-refundable credits and these credits are easily financed.
IMPORTANCE OF ASSET MANAGEMENT AND ASSET TURNOVER
One of the best methods of cash flow financing comes you know only too well - yourself and your firm. By managing your assets such as inventory and A/R you can generate internal cash flow through your business operations.
Speak to a trusted, credible and experienced Canadian business financing advisor who has a track record of business finance success on those debt and cash flow financing options when it comes to how to finance a company in Canada.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop 7 Park Avenue Financial/Copyright/2020
