YOUR COMPANY IS LOOKING FOR CREATIVE GROWTH FINANCE SOLUTIONS!
Turbocharge Your Business Growth Plans & Expansion: Unlocking the Power of Growth Finance and 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
HOW DO YOU FINANCE GROWTH?
Short and long-term financing options in Canada are not always comparable to the U.S. borrowing options we read and hear about in the business news.
That is a double-edged sword for financing your company with the right loans, debt and cash flow options that allow the business owner and financial mgr to fund the company.
INTRODUCTION
Business owners have numerous reasons to plan for business expansion in financing a business - everything from purchasing new assets or technology, moving a business, and hiring personnel- Funding these projects can be a challenge - long-term growth should never be paid out of day-to-day cash flow from operations - that invites the inevitable cash flow crunch.
We're taking a look at the critical importance of growth financing solutions and using the right business finance strategies to grow a business without risk and pitfalls!
WHAT STAGE OF GROWTH IS YOUR BUSINESS IN?
A great article by the Harvard Business Review (HBR) called ' The 5 Stages Of Business Growth ' does a great breakdown of the different stages and challenges that each stage presents to the business owner.
Those 5 stages are :
Company formation
Survival
Success
Take off growth
Maturity
Each stage of a business has risk and requires a solid strategy to overcome challenges - Being able to finance the business in each of those stages is key to successful growth.
At 7 Park Avenue, Financial new clients tell us they feel strongly that there is a lack of proper business funding options for small and medium enterprise firms in the Canadian business landscape.
THE CHALLENGE OF GROWING A BUSINESS
Most businesses have to make difficult choices when it comes time for growth. Some may need additional financing; some will require new equipment, assets, or technology investments. Still, others might be faced with hiring more employees before getting appropriate payback on investments in people.
The issue of capitalization becomes even more complicated if an entrepreneur is looking ahead into the future where there are plans that call for expansion or a significant increase in revenue streams over the coming months or years. A cash-flow crunch could result from this decision, which has implications not only for your business's health but also for its long-term potential success.
THE BALANCE BETWEEN GROWTH AND OPERATIONS - FINANCING GROWTH PROJECTS
As a business grows a balance must be achieved between managing and financing day-to-day business operations while making the right investments in growth and profit potential. The right type of growth financing helps avoid cash flow issues that will hinder long-term sales growth.
THE IMPORTANCE OF MATCHING FINANCING TO THE ASSET
Business owners need to ensure they have the right type of financing in place for any capital expenditure - While everyday cash flow from operations funds rent, utilities, suppliers, and payrolls via a business line of credit where you pay interest on only funds used. Longer-term assets should be funded with financing that has repayment terms and a repayment period matching the useful life of the asset - here lease financing and equipment term loans/bank loan make good sense when financing growth via an asset purchase or major technology upgrade.
WHAT IS YOUR COMPANY'S BARRIER TO GROWTH?
That is clearly a ' barrier to growth, let alone survival in economic turbulence for those companies! Primarily we're talking about debt financing and ' asset monetization' to grow cash flow and working capital without taking on debt. Solutions such as business credit lines, either via the bank or a non-bank lender, are critical to operating any business.
Businesses are funded in different manners, whether new and out of the gate ', often funded by owner's personal investment and the proverbial ' friends and family. ' Debt financing for the SME sector in Canada has historically been difficult to achieve - that's why good financial management and asset turnover are some of the benefits of using internal sources of finance for growth.
Many new businesses, franchises included, are funded by the Canadian Government t Small Business Loan Program, which offers significant capital to new and growing businesses. A combination of generous limits, low rates, government guarantees and low personal guarantees makes this program very appealing to thousands of businesses every year.
We spoke of the business finance options in the U.S. It is important to note that there is probably a wider variety of options and lenders in the United States.
EXAMPLE: Canada set up its own version of the U.S. ‘SBA ' program. In Canada, we call it the 'SBL ' - It's a government-guaranteed loan with the federal government guaranteeing 85 % of your loan to the bank. In Canada, the program only finances equipment, leaseholds and real estate. In the U.S., numerous other options are available under the same program.
A different banking and financial system create the perception that more banks and lenders in the U.S. offer a larger variety of funding. But Canadian businesses should realize that a combination of traditional and alternative financing solutions exists for borrowing needs.
Our Canadian chartered banks are significant ' deposit takers'; thus, they are understandably risk-averse, leading, of course, to a stronger banking and financial system ( that's a good thing ), but on the other hand, limited business lending options to a certain degree.
The good news is that Alternative Lenders provide more choices every day to thousands of Canadian firms, due somewhat in part to U.S. business financing models becoming more popular in Canada. Short-term working capital loans, asset-based lending ( ' ABL ' ), and numerous A/R and Sales financing solutions are now readily available to the Canadian business borrower.
MATCH FINANCING TO THE NEED - THAT'S IMPORTANT!
You have plans to expand your small business. Say you'd like to buy new assets, invest in technology, hire sales representatives within your industry, or move into bigger office space! Your plans will cost money, so how will you pay for that to make it happen?
It's critical to match financing to the asset i. For example, when purchasing longer-term assets such as delivery trucks with a multiyear lifespan, it's better to seek out term loans that match their expected life spans and repayments terms accordingly, so they don't become a burden for cash flow or an issue later on in down cycles of business.
GROWTH BY ACQUISITION?
In some cases, you may wish to expand your focus on market growth and revenue via acquisition versus organic growth and the capital growth needs that come with that strategy. That could allow a business like yours to grow at an above-average rate compared to your industry. Talk to the 7 Park Avenue Financial team about acquisition financing tailored to your needs and target company.
TRADITIONAL FINANCIERS IN CANADA
Banks - traditional bank loans
Business Oriented Credit Unions
Insurance companies
Leasing Companies
Mortgage Institutions
Traditional financiers in Canada use the same approach for almost all borrowers, which of course, tends to restrict financing. In Canada, companies seeking SME COMMERCIAL FINANCE (small to medium-sized firms) constantly are challenged to finance sales and assets. Access to credit business lines is always a challenge; Our previously mentioned Asset-based credit lines in Canada have exploded in popularity.
WHAT FINANCING OPTIONS ARE AVAILABLE TO ENTREPRENEURS & BUSINESS OWNERS?
Growth financing solutions are a tool for achieving your business goals - The ability to leverage business assets helps a business stay competitive and capitalize on new opportunities via new staffing, new asset and technology acquisitions, and replenishment of inventory around new markets or acquisition needs. The right capital structure is key to success.
BUSINESS FINANCE OFFERINGS:
A/R Financing / Accounts Receivable Factoring/ Confidential receivable factor financing
Non-Bank Asset Based lines of credit
Equipment Financing
Sale leasebacks
Bridge Loans - asset-based
Tax Credit Financing (film and SR&ED)
Franchise Loans
Government Guaranteed Loans
Working capital term loans / Mezzanine financing
Merchant advances / short-term working capital loans
CONCLUSION - GROWTH FINANCING BUSINESS FINANCING TECHNIQUES FOR EXPANSION AND LONG-TERM SUCCESS
The ability to master growth finance and use the proper business financing strategies is key to expanding your business and making the most of your assets and cash flows. That allows the business owner to consider confidently any growth opportunity that arises knowing the company has a solid financial footing - Thast what long-term success and a stable company is about!
The terms of a business loan can be just as important, if not more so, than the interest rate. Can you defer principal repayments for an initial period? How much security does the growth finance lender need to make to ensure they're getting their money back?
It is important to find financing that suits your company's needs, and there are many different options available via traditional and alternative sources. For example, your company does not have a lot of cash flow but has growth potential; it might be best suited for debt or asset monetization.
Companies with strong cash flow may opt for more traditional loans to receive flexible terms and good interest rates while they grow their business further
Call 7 Park Avenue Financial about our personalized services. We are a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success who can assist you with loans, funding and growth finance and survival options specifically suited to your business needs and solutions to how a firm should finance its growth.
FAQ: FREQUENTLY ASKED QUESTIONS
What is growth finance?
Growth Finance is an opportunity for a company to achieve business expansion cost-effectively. The focus of growth financing should be on identifying the optimal financing solution for A company. The right financial structure that links seamlessly with both cash flow and potential value is important. Traditional and alternative, and non-standard corporate finance techniques and funding sources can be utilized to achieve growth potential without the need for equity financing or more of owner's own money.
How do you finance company growth?
Entrepreneurs / small businesses can fund business growth projects in one of two ways: by paying for them out of their everyday cash or using appropriate business financing.
Many entrepreneurs make the mistake of paying for growth projects out of everyday cash. Instead, you can use small business financing to help your company get ahead and stay competitive in today's economic climate. With a loan via the Canada Small Business Financing Program, borrowers can achieve low-interest rates on loans up to $1.1k backed by the government guarantee.
