YOUR COMPANY IS LOOKING FOR BUSINESS FINANCE SOLUTIONS!
From Commercial Loans to Government Funding: A Comprehensive Guide to Business Financing
You've arrived at the right address! Welcome to 7 Park Avenue Financial
Financing & Cash flow are the biggest issues facing businesses 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
Innovative Business Loans and Funding Solutions to Drive Your Company Forward
Business financing needs, aka ' business loans'! in Canada might be requiring you to ' test the water ‘. But the question that begs to be asked by small business owners is :
"What amount of capital do you require for your company and, equally important, what is the desired or best funding solution".
INTRODUCTION
Business owners know that cash flow and the right financing solutions are the lifeblood of a business - from startups to established businesses any company that wants to both expand or generate additional cash flows for funding day-to-day operations - Numerous financing options, both traditional and alternative in nature are available for the business loans and funding you need to succeed.
Small and medium-sized companies rarely qualify for the venture capital sought by major tech firms, etc - they want ' main street' /'real world' lending solutions. Let's dig in!
COMMERCIAL LOANS FOR BUSINESSES
Most commercial loans are for established businesses that have been in business for years - startup financing is always a challenge in Canada. Whether it is a startup or a business already doing well financing can help grow and expand while maintaining efficient day-to-day operations.
A commercial loan can be secured or unsecured - secured loans are asset and collateral-based - assets financing includes accounts receivable, inventory, fixed assets and technology, rolling stock, and real estate.
Unsecured loans tend to be cash flow based and can come in the form of unsecured bank lines of credit or cash flow mezzanine type financing solutions that focus on the quality of the cash flows of the business to meet debt obligations.
ELIGIBILITY REQUIREMENTS FOR COMMERCIAL BUSINESS FINANCING
Business loan requirements will typically include basic information on the business including financing statements and cash flow projections - Often a business plan is required and in almost all instances will help with funding approval. 7 Park Avenue Financial prepares business plans for clients that meet and exceed bank and commercial lender requirements.
A full-scale business plan might well be required for larger financing - we're typically talking 1 Million ++ $, and that includes solid executive summaries, cash flow forecasts, etc. But in the ' SME “market (small to medium enterprise) (where a lot of action takes place!) that's definitely not necessarily the case.
We'll point out though that any small business owner/financial mgr in the SME environment who can't provide basic info such as financial statements, owner info, background story, etc is somewhat doomed to failure in achieving their company financing goals. In some cases, a third-party business financing advisor/consultant might be the best person to move your financing needs forward.
Borrowing limits will always be based on the type of financing needed as well as interest rates commensurate with the credit quality of the business.
Keep in mind also that whether it’s a small or large amount of due diligence you will always be required to submit a proper application and relevant backup info - For example - aged receivables, payables, articles of incorporation., tax obligations, etc.
The personal credit history of borrowers will always come up in most commercial loan applications, and in small business financing in Canada, the personal credit of owners is closely tied to how they run their companies in the eyes of lenders. Credit bureau scores can be easily checked at firms such as Equifax and a good minimum score tends to be in the 650 range.
WHAT ARE THE FINANCING NEEDS OF CANADIAN BUSINESS
Many companies in Canada are always working on various .. let us call them ' projects ' which require business capital. The challenge is what type of debt capital or cash flow finance will assist them with any particular project. In some cases, it might simply mean complementary funding to existing loans or business credit lines.
Although there seem to be more ' service ' oriented companies than ever before thousands of firms continue to have the basic needs revolving around the investment in receivables and inventory they make in funning and growing their business. Conservation of cash is always important when it comes to running day-to-day operations while keeping long-term goals in mind.
BOOST BUSINESS GROWTH WITH THE RIGHT FINANCING STRATEGY
Many firms like yours might work hard to obtain larger new orders or contracts in perhaps new geographic or product and service segments of your business. Getting those large new orders/contracts places a strain on day-to-day working capital and cash flow needs, so solutions such as purchase order financing or a short-term working capital loan might well be the solution.
Other needs for capital might revolve around basic sales and marketing dollars or the ability to purchase additional products at a significant discount when the opportunity arises. We've met many business owners of the years here at 7 PARK AVENUE FINANCIAL who shared with us stories about being able to pay C.O.D. for an order, thereby allowing them to negotiate up to a 5% discount on that prepayment.
Let's not forget that your suppliers carry inventory and a/r investments also! What will always distinguish a company focused on borrowing capital is its ability to show a well-experienced management team and the ability to produce financial reporting as required by any bank or commercial lender.
Always ensure you understand the implications that come with new financing when you already have a senior lender in place. The best solution is of course to have a proper ' cobbled together ' suite of finance solutions that bring the desired level of capital and flexibility.
AVOID EQUITY DILUTION IF POSSIBLE
Debt financing and cash flow financing are non-dilutive in nature - Don't forget that any new owner/equity capital has the effect of diluting ownership - so although debt and cash flow solutions might seem expensive they are always cheaper than giving up equity ownership via the dilution process.
Naturally new capital can come in the form of new owner equity (not what we are talking about here today) or debt and asset monetization. ( That's what we're talking about today ), namely true borrowing and working capital solutions.
DON'T LET LACK OF FUNDING HOLD YOU BACK - UNCOVERING INNOVATIVE FINANCING SOLUTIONS
ALTERNATIVE LENDING SOLUTIONS
Traditional loans from financial institutions such as banks aren't always accessible by many businesses - As well banks have lengthy application processes and much more strict criteria for loan approval and eligibility. Alternative Financing solutions are available to the business owner for :
Refinancing
Cash Flow Moneitzation
Asset and technology purchases
Business expansion
What you are starting a business or focused on improving cash flow solid financing solutions can help you stay ahead of the game, grow sales, and be able to meet business needs around unexpected expenses.
What then are the basic financial solutions available in SME COMMERCIAL FINANCE? They typically include the following, and all come with a different interest rate and repayment structure -
A/R Financing - (includes factoring, Confidential Receivable Financing)
Inventory Finance
Bank credit lines/term loans
Non-bank full business credit lines – ‘ ABL’ loans
Equipment Finance/sale-leasebacks - equipment loans
GOVERNMENT LOANS AND GRANTS
Government of Canada Guaranteed Small Business Loan Program (this just in! New limit is $1,000,000.00) - Probably the best government-sponsored financing program - Many business owners/ entrepreneurs quite rightly look to the government of Canada for financing programs in the Small business sector. No secret that economists tell us that the 'SME' sector in fact drives the Canadian economy.
The Canada Small Business Financing Program - ' CSBFP' is a great start for those looking for capital. Although not as robust an offering as its U.S. SBA / small business administration counterpart, the 'SBA' program ( what's with all these acronyms?!) is a viable way to start and grow a business. Monthly payments are made under a term loan structure and a limited personal guarantee is required.
Of interest is the fact that many franchises are financed through this program, it's close to a perfect fit for that!
Government business loans are available to Canadian business owners who are looking for financing. Although the Canadian government has many different programs in place to help all businesses, they tend to focus on providing small business loans the most. After all, keeping small to medium-sized businesses afloat helps add to local economies and makes the country a more diverse and interesting place to live.
Government small business loans may be a viable option for Canadian entrepreneurs looking to grow their businesses. Here is some information about Canada’s loan program to help finance small businesses, known as the Canada Small Business Financing Program or CSBFP. Eligibility is for that firm with under 10 M in sales, and even proprietorships and partnerships can apply. The primary assets financed under the program include leaseholds and equipment and even real estate. The program is often, as we noted in the case of franchises, used to purchase an existing business from a seller or franchisor.
Many clients we talk to here at 7 Park Avenue Financial are misinformed about what can or cannot be financed under the program - etc.
SR&ED Loans- Refundable tax credit financing
Royalty Finance
Franchise Loans
Working Capital Loans - Merchant Cash Advance
Unsecured cash flow loans
Our experience tells us that timelines often drive the financing need, with, unfortunately, many clients demonstrating reactive as opposed to proactive financing searches. Some transactions definitely require more time than others to successfully be completed, and unfortunately, some firms don't have the financial resources to control their destinies! Aka ' running out of cash!
Can we provide a guarantee around your business financing needs? Yes, we can! We guarantee that your financing search may well become time-consuming and frustrating and challenging!
CONCLUSION - BUSINESS FINANCING, LOANS FUNDING - A ROADMAP TO FINANCIAL STABILITY AND GROWTH
Looking for the right financing options to help your business survive.. and grow?! Whether it's a commercial loan from traditional financiers or an alternative lending and funding option it's important to be well-informed about your options. Get the right business advice about your financing needs and get ready to watch your business grow
When it comes to debt and working capital financing call 7 Park Avenue Financial, a trusted, credible, and experienced Canadian business financing advisor who can assist you with your business finance needs.
FAQ: FREQUENTLY ASKED QUESTIONS / PEOPLE ALSO ASK / MORE INFORMATION
What are the main types of financing for businesses?
The main types of financing for a business include:
Business credit cards and working capital loans / online lenders
Term loans/installment loans
Government Loans
Lines of Credit
Commercial mortgages
Equipment financing /leasing
Business owners own financial resources
What is the difference between secured and unsecured business loans?
Secured business loans such as business term loans are backed by collateral, such as business assets such as real estate, vehicles, or machinery. Personal assets are sometimes used as collateral for bank-type financing. In contrast, unsecured business loans do not require collateral and are based on the borrower's creditworthiness and when used as a business line of credit the borrower will pay interest only on funds used. Because secured loans provide the lender with collateral in case the borrower defaults, they typically have lower interest rates and longer repayment terms than unsecured loans.
What types of funding solutions are available for small businesses in Canada?
In Canada, small businesses have access to a variety of funding solutions at competitive interest rates, including commercial loans, business loans, alternative lending solutions, and funding options for specific business needs such as business expansion, starting a business, improving cash flow, and property finance. Each funding solution has its own eligibility criteria, borrowing limits, and interest rates, so it's important to do research to find the right fit for your business. Government small business loans work well for a number of startup and early-stage financing needs and are available from banks and credit unions. The maximum loan amount under the government loan program is 1.1 Million dollars.
How can I apply for a business loan?
To apply for a business loan for business finances the business owner will need to provide a detailed business plan, financial statements, and cash flow projections. The interest rate on a business loan is typically based on the Bank of Canada policy rate, plus an additional amount that reflects the level of risk being taken by the lender. It's important to do your research on different lenders and their application processes to find the right fit for your business needs. Minimum personal credit score requirements in the 650 range is required on most business loans ( as well as personal loans ) - Timing on receipt of loan funds should always be considered as alternative financing typically delivers a faster financial solution.
