YOUR COMPANY IS LOOKING FOR NEW CHOICES IN BUSINESS FINANCE!
ALTERNATIVE LENDING SOLUTIONS & BUSINESS LOANS
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
EMAIL - sprokop@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8
Loan alternatives in Canada come in a variety of forms in Canada. 'Alternative business financing ' is a term we've often thought a bit unusual on occasion, if only for the fact that commonly used business finance alternatives are in many cases tens of years old and in some cases thousands! For your firm to successfully access the capital it needs, it’s a question of an ‘art’ and a ' science. ' Let's dig in.
WHERE IS THE ABUNDANCE OF CAPITAL EVERYONE IS TALKING ABOUT?
Business lending in Canada took a major step back in the recession of 2008, and the 2020 Covid Pandemic hasn't helped much either! Business owners and financial managers are told today that we're back to an abundance of capital - however, it never seems to be for them!
WHAT ARE YOUR BUSINESS FINANCE GROWTH ALTERNATIVES
It's tough enough to grow your business in a good economy, let alone one that doesn't provide the right loan alternatives. What then is traditional financing, and what's the alternative? Ask our clients. The simple answer is that it’s financing solutions outside of Canadian chartered banks. The solutions provide the same thing - they provide cash flow, capital, and loans, but rates, terms, structures, and day-to-day mechanics are often different. Facilities such as lines of credit provide small businesses with the business capital required to prosper - whether it's short term loans or permanent working capital.
WHAT TO DO WHEN THE BANK SAYS NO!
Statistics vary from country to country, of course, but top experts say that in many cases, almost 25% of businesses that apply for bank credit are declined. Typical requests from the bank for many small businesses come in two categories - term loans and revolving credit facilities. Alternative lenders have the solutions small business needs to fund daily operations and grow revenues. When it comes to traditional banks, all businesses cannot meet loan application requirements given the strong focus on clean balance sheets, historical cash flow, availability of outside collateral and personal guarantees, etc. As business lenders, banks place a high reliance on credit scores, net worth, etc.
ASSET BASED LENDING SOLUTIONS IN CANADA
‘ASSET BASED FINANCE ' is the general category for putting together all the different asset and cash flow financing solutions. Think of it as 'when equity crowdfunding ' no longer is an option! The application process when you need a loan is less onerous than you think. Many asset monetization techniques are alternatives to loans and debt on the balance sheet. These solutions via the alternative lending industry include:
A/R Financing (Factoring) (Our recommendation for clients here is CONFIDENTIAL RECEIVABLE FINANCE
Inventory Financing
Tax Credit Finance
Asset-based ABL lines of credit
Purchase Order Financing
SaleLeasebacks /Bridge Loans - The business owner should always consider equipment loans for asset acquisition.
Working Capital Term Loans / Mezzanine unsecured cash flow loans
Merchant Cash Advances / Business Credit Card /Short Term Working Capital Loan (Retailers often use the merchant cash advance funds for future credit sales ) Shorter repayment terms are the hallmark of these types of funding.
Crowdfunding/ Royalty finance techniques
When it comes to financing for entrepreneurs for firms with under 10 million dollars in annual revenue, the Government of Canada Small Business Financing Loan program is a viable alternative for certain financing forms. Given that the government guarantees the business loans, we can almost call it a form of alternative finance.
WHAT IS THE MOST POPULAR ALTERNATIVE BUSINESS FINANCE SOLUTION IN CANADA
Our first example, A/R non-bank financing, has only been around a thousand years or so... right around the time the Dead Sea was only getting sick! That's our tongue-in-cheek comment on why ' Alternative ' is, in fact, more common than most people think. This single alternative form of cash flow finance strongly appeals to thousands of business owners/financial managers because it immediately ' cash flows ‘your sales and allows businesses to immediately fund outstanding invoices with funds deposited into your bank account the same day. That's a funding option that makes sense!
The trick is to pick the right facility at rates, terms and day-to-day mechanics that makes sense. Invoice factoring when properly accessed is an alternative to traditional bank loans/line of credit when invoice financing is required. It is often the best alternative for short term business funding to traditional bank loans. Factoring credit lines are virtually unlimited based on your growing sales - so there is no real capped loan amount.
Less reliance is placed on time in business and the personal credit score and a poor credit history of business owners in almost all alternative lending solutions - bottom line = less emphasis on so-called ' bad credit.' At the same time, higher interest rates can be expected funding options for a short term loan. Alternative loans or other business credit solutions are always available. The alternative lender funding solution should not always be assessed on criteria of interest rate only.
While there is no doubt that banks still provide in Canada the huge majority of ' Traditional ' financing, the newer forms of capital access are in many cases complementary to the bank - but essentially are often the real alternative when bank capital can't be accessed. Small business owners should expect that interest rates and financing costs will always be higher in alternative finance solutions.
Still, it becomes a question of access to capital versus the cost of capital - whether it's a term loan or asset monetization of accounts receivable, inventories, etc. Financing for startups, often difficult, can also be achieved with alternative finance options.
LET 7 PARK AVENUE FINANCIAL HELP YOU WORK OUTSIDE THE BANK LOANS FINANCING STRUCTURE
More and more accountants, lawyers and business peers are recommending loan alternatives outside the bank structure. This pool of capital is large and diverse. In our experience, many key financial problems are, in fact, solved by non-traditional finance - and some of the most successful companies in Canada and the world were, in fact, started by owners and managers who went looking outside the traditional landscape. The type of financing you require might need a business plan that outlines management, company history, cash flow projections, etc. 7 Park Avenue Financial business plans meet and exceed bank and commercial lender requirements.
CONCLUSION
There are numerous types of small business financing in Canada regarding financing small businesses in the SME sector. If you want to know how Canadian business financing has evolved via the alternative lender in the new world of alternative financing, seek out and speak to 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can help you explore both the art and science of loan alternatives. When traditional loans don't work, every business should consider alternate business funding solutions that almost always can be accessed in less time.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
7 Park Avenue Financial/Copyright/2021/Rights Reserved
