YOUR COMPANY IS LOOKING FOR A BUSINESS LOAN IN CANADA!
MEETING THE SMALL BUSINESS COMMERCIAL AND CORPORATE LOANS FINANCING CHALLENGE
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?
CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs
EMAIL - sprokop@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8
BUSINESS LOANS CANADA COMMERCIAL LOANS AND FINANCE IN CANADA
Business loans in Canada, unfortunately, don’t come in an ' out of the box ' path to instant approval. So let's explore some real-world ' market intelligence' around commercial loans in Canada. How do you get a business loan via commercial lenders is a common new client question here at 7 Park Avenue Financial. Let's dig in.
PREPARING FOR YOUR BUSINESS COMMERCIAL LOAN APPLICATION
The reality of preparing for a small business loan financing involves considering who the submission is for. In some cases, it might be for a bank, in other cases a commercial finance firm. The far end of the spectrum of private equity or VC-type financing definitely requires a business plan. However, that’s ' equity '... and we’re talking debt!
While some online lenders for commercial lending offer approvals within 24 hours these are short-term loans with non-traditional repayment at significantly higher rates. It's important to also note that new businesses will always have the challenge of obtaining business credit versus a more established business with a track record of some sort.
So a key point out of the gate is to focus business loan submissions around cash flow and repayment. We'll let our VC/Private equity friends worry about the economy, your industry, market potential, etc... we're focusing on getting approved for a business loan and repayment for business needs such as a line of credit.
Owners looking for a good competitive interest rate around business loans and line of credit solutions should be able to demonstrate a good personal credit history and credit score - many alternative financing solutions do not place a large emphasis on personal credit. Bank commercial loans particularly tie interest rates and credit approval directly back to the owner as opposed to the company.
WHAT ARE THE 4 KEY ISSUES IN ACHIEVING SMALL BUSINESS FINANCING SUCCESS FOR DIFFERENT LOAN TYPES?
So if we had to emphasize the key points around commercial loans for business and business loan success in Canada they would categorically be:
Quality of collateral
The ability to meet ratios and covenants that might be required
Cash flow analysis -historical and future
Personal financial info/credit of the business owners
ARE CANADIAN BANKS THE SMALL BUSINESS SOLUTION
When it comes to business loans from a business bank or a business-oriented credit union, it's important for the business owner/financial manager to understand that ' branch banking' isn’t really what it used to be! That's because the majority, if not all business credit decisions are made by underwriters at head office. That's why it's critical to get a strong recommendation on your submission from your branch banker.
There's an old joke that goes as follows: ' It's technically impossible to give a banker too much information '. We're not sure we agree 100% with that because we deal with some great bankers , but it's pretty close we would say, so your ability to answer 'negative issues' and ' questions' with quality financial and business information is key.
While at one time ' the bank' was pretty well the only funding solution available the world of alternative financing has many numerous other solutions available such as :
A/R Financing
Inventory Loans
Access to Canadian bank credit
Non-bank asset-based lines of credit - asset-based credit lines provide ongoing access to working capital and cash flow needs - Transactions can be structured as a revolving business line of credit or a bridge loan term loan type structure depending on the assets collateralized. These facilities are ideal for a growing business than cannot meet bank credit approval criteria. Companies pay interest on only the amount of the facility that is used.
SR&ED Tax credit financing
Equipment / fixed asset financing
Cash flow loans
Royalty finance solutions
Purchase Order Financing
Business Credit Cards
Commercial Real Estate Lending - Traditional commercial real estate loan solutions, as well as bridge loans, asset-based real estate loans
Short Term Working Capital Loans/ Merchant Advance online banking solutions - Loan amount is based on sales volume and owner's personal credit history.
Securitization
Commercial Mortgages
FOCUS ON CASH FLOW AND DEBT REPAYMENT
Loans are always going to be repaid from cash flow, so if you're not bringing new or more personal equity into your company be prepared to demonstrate the cash flows and collateral quality of your financials.
WHAT ARE THE REQUIREMENTS FOR A GOVERNMENT BUSINESS LOAN
If you’re applying for a Government SBL loan, via the Canada Small Business Loan Program, through your bank the challenge for this type of commercial loan is very straightforward. This is Canada's counterpart to the U.S. ' SBA loans ' for new , startup and smaller businesses that might not be fully ' bankable'.
Borrowers need to simply understand the very clear criteria around this program and fulfill the application needs with that info. Those criteria are fundamental - a business plan, personal credit info, cash flow forecast, a premises lease, and business owner info/experience. Talk to the 7 Park Avenue Financial team about qualifying for the program.
The ' sbl ' program funds equipment and technology, leasehold improvements and commercial real estate purchases up to a 1 Million dollar approved limit. These loans are not lines of credit to be used for operating costs and day-to-day funding of business needs. Thousands of small businesses, including franchise purchasers use this program annually.
These loans are term loans deposited in a lump sum into your business bank account, with typically an amortization period that is typically three to five years, at a low competitive interest rate and flexible repayment terms around the approved limit of the facility.
CONCLUSION - BUSINESS LOANS AND FINANCING
There's no ' out of the box' instant solution for small business loans in Canada. But some homework and common sense will go far. The ability to apply for a loan and get approved for the financing you require is key to long-term business success. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a track record of success; providing you with that business loan intelligence you need to help you meet your business goals and help business grow!
FAQ: FREQUENTLY ASKED QUESTIONS / MORE INFORMATION / PEOPLE ALSO ASK
What is the meaning of a commercial loan?
Commercial business loans via a commercial loan lender or banks are financial transactions to address both short term financing needs and long term loans to fund assets and business growth . Financing is typically used for working capital and asset acquistion around areas such as plant and equipment, technology infrastruture or revolving lines of credit to fund investment in current assets such as accounts receivables and inventory.
