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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?
CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8
Direct Line = 416 319 5769
Email Address = sprokop@7parkavenuefinancial.com
Alternative business lending revolutionizes access to capital for businesses overlooked by traditional banks.
Unlock your business's potential with innovative financing solutions that go beyond conventional banking!
7 Park Avenue Financial originates business financing solutions for Canadian Businesses – We offer ALTERNATIVE BUSINESS LENDING solutions that solve the issue of cash flow and working capital – Save time and focus on profits and business opportunities
INTRODUCTION - ALTERNATIVE BUSINESS LENDING IN CANADA
Alternative business lending can be found via asset-based financing solutions for Canadian businesses. This type of capital for business offers many reasons for owners/financial managers to consider an alternative for financing such as business lines of credit in Canada. We're discussing some of those reasons. Let's dig in.
alternative business financing can be a viable solution for companies unable to secure traditional bank loans. These facilities are lifelines to (SMEs) by offering diverse financing options that are accessible, flexible, and tailored to meet unique business needs.
The Business Credit Line Alternative
The ability to borrow the maximum you can under an asset-based financing credit facility is a key part of the attractiveness of ' ABL ‘loans, particularly the revolving line of credit option. Those selected assets include almost always: Receivables, Inventory and Fixed Assets. Alternative lenders tend to be experts in looking at all your business assets to maximize borrowing power.
Alternative lending also can differ from traditional bank finance - Note also that potentially you can include real estate and, in some cases, even your intellectual property if either of those applies to your company. Those latter two are more rare additions to your borrowing, but they are there. Interest rates are almost always higher in asset-based credit line revolving facilities. Still, they offer a financial alternative to small and medium-sized businesses that cannot borrow some or all of the capital they need to fund operations and grow the business via ongoing working capital needs.
The best way we describe asset-based credit line loans is simply that they bundle your assets into borrowing power, with less emphasis on the overall credit quality that our banks focus on as it pertains to balance sheet quality, cash flow, and profit/loss history. Compared to other financing types, most commonly the bank revolver, this solution almost always delivers significantly more borrowing power.
What Are ABL Line Of Credit Requirements?
ABL loans are offered by commercial lenders who, in some cases, even have significant expertise in your industry as it's been their niche. But at the end of the day, every asset-based lender focuses on the overall asset evaluation and the ability of you to report those assets regularly. That is often easily accomplished by reports that include aged receivables, aged payables, inventory lists, etc. We suggest to clients that if you can't supply those basics, you probably have other problems!!
Asset-based credit lines also distinguish themselves via ' flexibility ' - It's all about providing a finance solution focused on any complexity in your business and industry.
Types Of Alternative Lending In Canada
Another key difference here is that whole bank credit facilities from our Chartered banks tend to offer fixed upper limits and are reviewed almost always annually versus alternative financing options which are viewed as more flexible.
ABL credit lines can easily fluctuate with your sales levels, with increases in borrowing power most often easily accomplished as seasonality and sales bulges occur in your business. Many firms gravitate to asset-based lending lines for the sole reason that it allows them to take on larger business, new contracts, etc.
Thousands of firms are checking into the asset-based financing alternative - it's about flexibility, specialization, and increased liquidity.
KEY TAKEAWAYS
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Peer-to-Peer Lending: Some alternative lenders operate online - This method connects borrowers directly with investors online, bypassing traditional financial institutions.
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Merchant Cash Advances: Businesses receive cash upfront as installment term loans in structure, in exchange for a portion of their future sales, making this suitable for those with high sales volume but less credit.
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Crowdfunding: An innovative way to raise capital by soliciting small contributions from many people, typically via the Internet.
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Asset-Based Lending: Loans secured by a company's assets, offering a way to obtain financing based on the value of those assets.
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Invoice Factoring Financing: This allows businesses to advance cash based on amounts due from customers, improving cash flow immediately.
CONCLUSION - Alternative Lending 0ptions - Canada
Alternative finance requires special insights into your business needs -
Call 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor with a track record of business financial success who can assist you with your borrowing needs via alternative business lenders.
FAQ
What is alternative financing in business lending?
It refers to financing solutions offered outside of traditional banking systems and traditional lenders, including peer-to-peer loans and merchant cash advances, providing quicker, often more accessible capital.
How does peer-to-peer lending work?
In peer-to-peer lending, businesses obtain loans directly from individual investors through online platforms, bypassing traditional financial institutions. Rates are almost always higher than traditional lending institutions for a business loan
What are the advantages of merchant cash advances?
Unlike lines of credit, The merchant cash advance provides small business owners with fast access to capital, with repayments made through a percentage of daily sales, which adjusts based on the company's revenue flow.
Why might a business opt for crowdfunding?
Crowdfunding allows businesses to raise capital from a wide audience, often in exchange for product perks or equity, fostering community support and validating business concepts.
Can microloans be beneficial for startups? Yes, microloans offer small, manageable amounts of funding to startups and small businesses, often with less stringent qualification criteria than traditional loans.
What is the typical interest rate for alternative business loans?
Interest rates in alternative lending vary widely depending on the loan type and risk, generally higher than in traditional banks due to the increased risk assumed by lenders.
Are there specific industries more likely to utilize alternative business lending?
Yes, industries such as retail, hospitality, and e-commerce often turn to alternative lending due to seasonal fluctuations, rapid growth, or difficulty obtaining traditional bank loans.
How does invoice financing differ from traditional bank loans?
Invoice financing allows businesses to borrow against outstanding invoices, providing immediate cash flow, whereas traditional bank loans require collateral or a strong credit history.
What role does credit score play in alternative business lending?
While credit score is considered, alternative lenders often focus more on factors like revenue, cash flow, and business performance when assessing loan eligibility.
Can businesses with bad credit still qualify for alternative lending?
Yes, some alternative lenders specialize in working with businesses with less-than-perfect credit, offering solutions tailored to their specific financial situations.
