YOUR COMPANY IS LOOKING FOR SOURCES OF FUNDING FOR
BUSINESSES
CANADA BUSINESS FUNDING SOLUTIONS
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
Suite 301
Oakville, Ontario
L6J 7J8
Direct Line = 416 319 5769
Email = sprokop@7parkavenuefinancial.com
TIPS AND STRATEGIES TO SECURE BUSINESS FUNDING
Business funding sources in Canada often have business owners/financial managers looking for the right ' connection' they need when looking for capital and financing solutions. When it comes to entrepreneurship finance, often the situation seems clear as mud... or molasses?
Let's dig in for those sources of funds for business and funding programs that will work for your business. Whether you are looking for startup business funding or growth financing & business lending to continue your business success, we have the necessary solutions.
Financing solutions for your business might revolve around business loans from banks or commercial financing companies as well as asset-based lenders - It's essential to focus on eligibility criteria and the information required in the application process - in some cases government funding solutions might be an alternative to bank loans and other forms of equity capital.
Molasses? We're referring to the Great Molasses Flood of 1919 in Boston - where a large molasses tank burst, streets were flooded, and 21 folks lost their lives! That isn't the same anxiety that business people experience around finance choices, but it often sure feels like it.
IDENTIFYING SOURCES OF FINANCING / SMALL BUSINESS FUNDING OPTIONS
How then does the owner/mgr, particularly in the SME (small to medium enterprise) space make those right ' connections' relative to sources of funds for business, and, as importantly, what can they expect? It's critical to know what any source of capital delivers on. That changes with the current financial profile of your company and the perceived risk that lending sources associate with your business... or industry as you search for sources of funds.
WHAT ARE THE MAIN SOURCES OF BUSINESS FUNDING FOR YOUR COMPANY?
Ultimately your company has only three main choices of finance solutions regarding how to fund a business - internal cash flow, taking on debt, or equity injection.
When owners/managers start the financing process and are looking for sources of funding a business and the right connection to the capital, they are often most concerned about the cost of that capital. These days, depending on the risk profile your company generates, that rate can be 2.5% per month or 2.5% per annum. Most clients we meet want the latter!
WHAT ARE THE KEY FACTORS THAT AFFECT BUSINESS FUNDING APPROVAL?
Size of your company
Stage of Growth - i.e. start-up, early stage, growing, mature, etc
Assets on the balance sheet
Cash flow generation potential
Industry and your reputation
"Capital isn't scarce; vision is." - Sam Walton
GOVERNMENT FUNDING FOR SMALL BUSINESS ( THE BEST FUNDING FOR A SMALL BUSINESS STARTUP?)
CANADIAN GOVERNMENT FUNDING PROGRAMS
Looking for Startup & Entrepreneur Funding? Needless to say, funding for business startup scenarios is also challenging
THE CANADA SMALL BUSINESS FINANCING PROGRAM
At 7 Park Avenue Financial, we often recommend a Government of Canada Small Business Loan, which provides a significant amount of capital and a guarantee on your loan by the federal government of Canada for economic development initiatives to support businesses and general economic stimulus. The loan can also be used to buy an existing business or franchise.
Start-up business funding is always a challenge in traditional and alternative finance. Thousands of firms utilize the Government Guaranteed Business Loan yearly to get the required capital.
All small business owners should look into government programs when available as personal investment is limited based on similar requirements by banks and other traditional lenders / financial institutions.
Talk to the 7 Park Avenue Financial team to learn more about how federal funding works for a business owner via the CSBFL small business loan.
CANADIAN GOVERNMENT GRANT AND FUNDING PROGRAMS
Some entrepreneurs look into Canadian government grants, which can be a long process with no guarantee of results around your business development - although numerous Canadian government funding programs & grants exist , including minority business grants.
While many entrepreneurs explore small business grant funding/government loans, this is a long and tedious process without guaranteeing that your grant loan will be approved. The majority of government grants for small businesses are reserved for established SMEs (i.e. 3+ years incorporated, 5+ payroll employees, $500,000+ annual revenue)
GRANT PROS AND CONS
Entrepreneurs should ensure they understand the pros and cons of grants - while they provide much-needed money that is not repayable, achieving grant financing is challenging and can take a significant amount of time when applying for industry-specific grants
Many owners/financial managers we meet are often incorrectly focused on the type of business funding solutions & financing they need. They don't even understand the wide level of choices they have in cash flow financing and debt financing.
A BUSINESS PLAN WILL HELP TO SECURE FUNDING
Always ensure you have a business plan and cash flow projection that positions your company properly with a bank or commercial lender. No personal assets are required to be pledged under the SBL Loan program.
At 7 Park Avenue Financial business plans, we prepare for clients are all about financing, not marketing! We focus on financial statements and cash flow projections.
Always ensure you have a business plan and cash flow projection that positions your company properly with a bank or commercial lender. No personal assets are required to be pledged under the government SBL Loan program.
SOURCES OF BUSINESS FINANCING - TRADITIONAL AND ALTERNATIVE FINANCING OPTIONS
Funding A Business and funding a small business is challenging, but here at 7 Park Avenue Financial, you'd be amazed at the choices we can deliver on funding businesses.
Canadian chartered banks
Receivable and Inventory Finance providers
Asset-based lenders - financing both assets and credit lines
Leasing companies - equipment purchase financing for small and medium-sized businesses
Sale-leaseback specialists
Mezzanine finance
Royalty finance solutions
PO / Contract finance
Merchant cash flow advances
Commercial real estate financing
Funding SR&ED tax credits for r&d funding opportunities around the refundable tax credit
A NOTE ON VENTURE CAPITAL FINANCING
Many firms spend too much time looking for VC financing, angel investors, etc., - only the smallest percentage of firms in Canada qualify for VC funding with venture capitalists or an angel investor and they typically seem to be in areas such as software, digital media, biotechnology, telecom, etc. We caution clients on pursuing this road to funding if they are not prepared and cannot demonstrate huge revenue growth and demonstrable traction in the early stages of revenue.
Naturally, some solutions and sources of finance are shorter-term focused and provide a temporary fix. In contrast, other solutions can bring working capital and cash flow finance in the millions and could be considered long-term financial strategies.
Safe to say it's essential to know whether you need a temporary ' fix ' or a long-term capital solution. That allows you to position your company and negotiate from a level of strength with a funding company or bank.
"The best time to plant a tree was 20 years ago. The second best time is now." - Chinese Proverb.
CONCLUSION - BUSINESS FUNDING OPTIONS
Most business owners are unaware of the many financing options available to their firms and the business financial planning required to access funding for Canadian businesses.
If you're looking to avoid that ' clear as molasses' feeling we described in sources of funding business, speak to 7 Park Avenue Financial for advisory services expertise - a trusted, credible and experienced Canadian business financing advisor who can assist you with financing and capital needs for small businesses ( and large ) in Canada.
Regarding how to get funding for a business, we're on your side and here to help with traditional bank financing, financial support from government business funding, and alternative finance solutions. For more information on other types of financing your business needs, talk to us here at 7 Park Avenue Financial.
FAQ: FREQUENTLY ASKED QUESTIONS / MORE INFORMATION /PEOPLE ALSO ASK
What are three sources of capital?
The three main sources of financing capital in Canada are personal / owner equity, debt financing, and specialty finance solutions in alternative finance. These funding sources influence the final decision to finance the business potential for a business venture. The challenges of finding a first investor for equity are significant when start-ups are concerned.
What are the types of financing?
All types of financing are related to either equity or debt financing - they allow businesses to fund ongoing business needs, finalize purchases and make investments in the business. Equity financing is the most expensive type of finance but brings no debt to the balance sheet.
What is commercial business funding?
Commercial business funding is financing from financial institutions such as chartered banks, business credit unions, and equity capital via angel investors or venture capital firms. Funding is in the form f loans or equity investments in the business.
How can I qualify for commercial business funding?
To qualify for commercial business financing, borrowers should be able to provide a business plan and demonstrate to lenders the business credit history and owners' personal credit history. The ability to establish sales revenue growth and profit potential is essential. A business lender will also review factors such as the type of industry the company is in.
What are some common types of commercial business funding?
Common types of commercial business funding include traditional bank loans, business credit lines, invoice financing/factoring, equipment leasing and merchant cash advances/short-term working capital loans.
What are government loans for business funding?
Government loans for business funding via private and public sector financing are business loans provided by the government or, in some cases, guaranteed by the government that help SMEs succeed in economic development activities to access capital and commercial loans at competitive interest rates with longer amortizations.
How can I qualify for government loans for business funding?
To qualify for government loans for business funding purposes, borrowers must meet the eligibility criteria of the loan program, with typical criteria for loan guarantees being sales revenues and profit potential. The borrower should be prepared to provide a detailed business plan for the company - The business development bank / 'bdc' is a crown corporation focused on loans to entrepreneurs with programs to support underrepresented entrepreneurs such as aboriginal businesses/ and indigenous entrepreneurs / aboriginal entrepreneurs, as well as women-owned businesses - bdc offers small business financing money via working capital loans, real estate loans, and consulting services for business support.
What are government grants for business funding?
Government business grants for business funding are financing from government agencies that do not require repayment and are typically awarded to businesses that are developing products, services, or a business idea and technology that contribute to economic development. Many grant programs are ' matching programs' that require capital investment from the business grant recipient. Grants typically require companies to meet eligibility criteria in their area of research and development, and often, detailed budgets and proposals are required. Some firms hire ' grant writers' familiar with the grant funding process.
IRAP - The industrial research assistance program is one of the most popular and accessible grants for government financing programs. Tax breaks and wage subsidies are very accessible in Canada for businesses willing to review the types of grants they might be eligible for. Some programs, such as Community Futures, are tied explicitly to regional economic growth.
