YOUR COMPANY IS LOOKING FOR BUSINESS FINANCE 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?
CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8
Direct Line = 416 319 5769
Email = sprokop@7parkavenuefinancial.com
"The key is not the will to win... everybody has that. It is the will to prepare to win that is important." - Bobby Knight
7 Park Avenue Financial originates business financing solutions for Canadian Businesses – We offer Sources of Business Capital and working capital solutions – Save time, and focus on profits and business opportunities
7 Park Avenue Financial: “Canadian Business Financing with the intelligent use of experience”
Understanding Business Financing Loan Source Availability in Canada
The Traditional vs Alternative Financing Divide
Business financing in Canada, executed improperly, can go wrong!
So, regarding financing sources and loan needs, having a solid ‘lay of the land’ is critical to ensuring your company is heading in the right direction for survival and growth. Let’s dig in.
In Canada, there is somewhat of a line down the middle regarding the types of capital available—it comes down to ‘traditional’ or ‘alternative.’
Those seeking alternative solutions demand more flexibility to the alternative of Canadian banks and credit unions, often attracted by flexible repayment terms. Those banks, of course, have low rates and unlimited capital for your business but more demanding qualifying criteria - all for the right reasons.
The Business Funding Crisis: Finding Your Way Through the Maze
Canadian businesses struggle to secure adequate financing through traditional channels.
Rejection rates exceed 40%, leaving companies unable to fund growth or operations. Let the 7 Park Avenue Financial team help you access diverse business finance loan sources while opening new funding pathways.
3 UNCOMMON TAKES ON FINANCING YOUR BUSINESS
- SR&ED financing remains underutilized despite offering immediate cash flow benefits
- Sale-leaseback arrangements provide hidden value in existing assets
- PO Financing / Contract financing offers untapped potential for companies
The Current Business Landscape Challenge
The irony of the business landscape is that those firms needing financing the most are, in fact, the majority of the economy these days!
Local economic development incubators play a crucial role in supporting these businesses, fostering innovation, job creation, and regional revitalization, thereby contributing to the broader economic landscape.
Government-Backed Financing Options
While business owners and financial managers associate government with our category of ‘traditional’ finance, they often overlook two solid funding sources in this area: government-guaranteed business loans from participating financial institutions and Canada’s ‘SR&ED program.’
Government grants are also available for Canadian businesses to support their innovation efforts. Recent limit changes in the Government SBL program make the program very desirable for start-ups and earlier-stage companies via a participating financial institution.
Additionally**, SR&ED credits allow firms to recoup up to 40% of their R&D activity, and these credits are financeable!** These grants can further lead to additional financing opportunities if the businesses meet certain criteria.
Understanding Financing Realities
The Angel Investor/VC Challenge
When discussing things ‘going wrong’, it’s important to note that any early-stage companies work the venture capital/Angel investor angle. The reality is that only the smallest % of firms qualify for this type of financing, most of which are in the tech/pharma area.
Traditional Business Loan Limitations
Some stats indicate that over 40% of all firms applying for the financing they need from 'traditional' sources are declined.
Then, given the need for capital to' run/grow' the business, alternative options exist.
Alternative Financing Solutions
The key alternatives include:
A/R Financing
Inventory Finance
Working Capital Term Loans
Tax Credit Monetization Financing
Government Guaranteed Business Loans - funding equipment, working capital, leasehold improvements, intangible assets - a valuable new business funding option - small registration fee required on approval and funding
PO/Contract financing
Sales royalty financing
Asset-based business credit lines - revolving facilities that allow you to borrow against receivables, inventory and equipment
Equipment Leasing/ Sale Leasebacks
Understanding various aspects of a business loan is crucial, including researching lenders, calculating costs, and preparing for the application process.
Improving Cash Flow
Effective cash flow management is vital for small businesses aiming to maintain financial stability and support growth.
One practical approach is to optimize accounts receivable and payable processes. Implementing a digital invoicing system can streamline payments, reduce delays, and improve overall efficiency. Also, fostering strong relationships with suppliers can improve payment terms, further enhancing cash flow.
Efficient inventory management is another crucial strategy. Overstocking can tie up valuable resources, while understocking can result in missed sales opportunities.
Adopting a just-in-time inventory system can help balance inventory levels, minimize waste, and ensure that capital is used effectively.
Exploring alternative financing options, such as invoice factoring or lines of credit, can also provide quick access to funds. These financing options can help businesses meet financial obligations, invest in growth opportunities, and maintain a healthy cash flow.
Business Valuation and Credit Score
Understanding the importance of business valuation and personal credit score is essential for securing favourable financing terms.
A thorough business valuation helps determine your business's worth, which lenders use to assess lending risk and set interest rates. A higher business valuation can lead to better loan terms and lower interest rates, making it easier to secure the necessary funds.
Equally important is maintaining a good personal credit score.
For small business owners, a strong personal credit score can significantly impact the business’s creditworthiness.
To achieve and maintain a good credit score, ensure timely payments, keep credit utilization low, and regularly monitor credit reports for any errors. A good personal credit score can open doors to better loan terms and lower interest rates, facilitating more straightforward access to business financing.
Avoiding Scams and Pitfalls
When seeking business financing, being vigilant and avoiding potential scams and pitfalls is crucial. Be cautious of lenders charging upfront fees or promising unusually low interest rates, as these can be red flags.
Conduct thorough research on potential lenders and check reviews and ratings from reputable sources to ensure their credibility.
Additionally, be wary of lenders that require personal guarantees or collateral. While these may be necessary for some loans, they can put personal assets at risk.
Carefully review all loan terms and conditions before signing any agreements, and consider seeking advice from a financial advisor to ensure you fully understand the implications.
By taking these precautions, you can protect your business and secure financing that supports your growth and success.
Making the Right Financing Choice
To make the right financing decision, it’s important to distinguish between debt financing and cash flow finance.
Establishing a monthly amortization schedule is crucial for accurately calculating the cost of a business loan.
Owners/managers must consider equipment financing or term loans when acquiring assets. Funds for this category should typically not come from operating cash flow.
Key Takeaways
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Understanding credit requirements drives approval success
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Proper documentation preparation accelerates funding
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Knowledge of available financing types enables optimal choice
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Strong cash flow management improves lending terms
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Asset valuation expertise maximizes borrowing capacity
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Preparation is key for a successful loan application, including having specific documents and a solid business plan ready for the loan review process
Conclusion - Don't Let Business Funding Stop Your Growth
If you're focused on doing things right and proactively closing on your finance needs, call 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can help you address our key question 'What Could Possibly Go Wrong!'
FAQ
What types of business financing loan sources are available in Canada?
Traditional bank loans, government programs, alternative lenders, equipment financing, AR financing, inventory loans
How do I qualify for business financing?
Credit score requirements, time in business, revenue thresholds, and collateral needs vary by lender type.
What makes alternative financing easier to obtain?
How does equipment financing benefit my business?
What are key lending criteria used by lenders for evaluation?
Most lenders evaluate:
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Annual revenue
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Time in business
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Credit score
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Available collateral
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Industry type
What documents are required for application?
Standard requirements include:
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Financial statements
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Tax returns
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Bank statements
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Business plan
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Collateral documentation
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Faster processing
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Higher approval rates
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Flexible terms
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Creative solutions
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Industry expertise
More information:
BDC
