YOU ARE LOOKING FOR LENDER FINANCING / LENDER LOANS!
FUNDING FOR LENDERS & DIRECT LENDER FINANCE CANADA
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Funding for lenders in Canada is all about the right commercial financing solution for your firm. You're a specialty finance firm with the normal challenges of running a direct lender business in a good economy, much less a pandemic economy!
Your funding requirements for alternative lender loan growth are unique, and your best bet is working with a firm that has special insights into your business and the needs for a specialized business loan/funding. That ever-evolving capital need of specialty lender finance is why you want to work with 7 Park Avenue Financial.
Why Grow Your Business With Increased Lender Financing Business Loans Capability?
The majority of specialty lenders in Canada who require additional lender financing/lender loans tend to operate locally or at most in all of Canada. Dun and Bradstreet advise that lender finance banks and major financial institutions lending to business have decreased in many areas.
That decrease plus capital market volatility provides opportunities for those augmenting their lending needs for small and medium-sized firms - allowing those clients to sell their products or services.
The combination of responsiveness and flexibility in structuring capital transactions that work is a solid formula for success. Growing and expanding your lending power via finance lenders is JOB #1 at 7 Park Avenue Financial.
Lending solutions from lender finance companies to specialty finance firms cover many niche industries. You might be an asset-based lender, a receivable financing/factoring firm or in smaller niches such as SR&ED loan financing and short-term line of credit working capital loan /merchant cash advance.
Lender financing needs have grown dramatically with the rise of the internet - no secret there. Clients of 7 Park Avenue Financial typically have provincial or national operations but are always looking for areas to expand. Specialty finance firms typically are non-deposit taking and not heavily regulated, allowing more freedom for growth and serving both the small business sector and larger corporations.
Business has dramatically moved to nontraditional specialty lenders who operate outside of the mainstream of traditional banks. Although coming with higher rates, the concept of a faster approval turnaround has enabled many businesses to operate and grow outside traditional bank financing. That drives the demand for your lender financing needs.
Small businesses are increasingly turning to non-traditional lenders as mainstream financing is more difficult to secure. Payments giant PayPal has begun offering online merchants financing options that don't require credit checks and carry no periodic interest or miscellaneous fees. Applications for lease types of loans are usually handled online and offer quick turnarounds and higher interest rates.
Lender finance is all about borrowing from the right financial firm or intermediary. The business model is fundamentally quite simple - borrow at a rate lower than what you earn on client loans, i.e. your yield!
Factors Affecting Lender Finance Financing Cost
The rates you will pay depend on a small number of key factors that boil down to overall credit risk and regulatory risk, as well as the general level of competition in the lender finance market. Non-Prime lending comes with greater credit risk but offers opportunities for profit with solid infrastructure and well-documented credit processes.
The Opportunity Of Increased Financing Capabilities & The Capability To Grow Your Business
The opportunity, with increased financing capability to dominate your specialty niche or to take on an under-serviced area of business financing, coupled with taking advantage of the lower cost of capital now available to specialty finance firms, is very appealing to CEO's and CFO's. Financing is available via term loans, revolving credit facilities, or other arrangements that might be syndicated. In other cases, a business acquisition might be contemplated.
What Drives The Need For Increased Financing? Meeting Industry Challenges
Access to reasonable interest rates and overall business and consumer confidence drives the need for increased lending capital. Your firm's ability to originate business, write deals, and then service your portfolio will distinguish itself from the pack.
Competing In Your Lender Niche
A smaller company will always compete when they are leaders in their specialty niche, allowing them to compete with banks and huge firms with unlimited access to capital. Dun & Bradstreet advises that in the specialty finance industry, 75% of the total market is dominated by a small handful of tremendous players that cater to the needs of small businesses and the SME sector and business owners searching for alternative funding solutions to run/grow their businesses.
The Rise Of ' Fintech ' Lenders & Fintech Consumer Lending
The internet and 'online lending' have also allowed many firms to disrupt market positions held previously by larger financial corporations. That's what 'Fintech Lending' is all about, alternative business financing that can compete effectively with traditional finance lenders. Here your business processes and the technological ability of your firm will differentiate you from the competition.
Safe to say that many other specialty finance niches are becoming more successful every day - including law firm funding, small business working capital loans, merchant cash advance companies, royalty finance, software financing, retail financing, microloans, collateral-based bridge loans and numerous others.
Key Trends In The Specialty Finance Vertical
Non-traditional lenders in Canada are experiencing strong growth, hence the need for access to lender finance solutions. Business models that bypass Canadian chartered bank financing, coupled with intensive use of online marketing, make for a better ability to mine the potential client base. Firms that can minimize loan loss while taking advantage of the lower interest rate environment are key to long-term success in alternative financial services.
Your firm's actual needs might even be outside normal lending needs, such as the areas of acquisitions or startup. In some cases, you might be a captive finance company looking to expand your parent company's growth. Unfortunately, not all companies in Canada have access to public or syndication-type markets, especially if your firm is smaller.
Your firm, therefore, prefers a more customized credit solution. Ensuring you have a strong business model and good fundamentals is key in access to lender finance solutions in good and less than good economic cycles.
HOW DOES LENDER FINANCE WORK?
The key to specialty lending in lender finance loans is innovative and custom solutions for your client base - that is a recipe for allowing your firm to reach its financial objectives. Your goal is to access certainty in your future financing needs. It's about creating a balance between your credit facilities and your company goals around long-term goals, which might even include a merger or acquisition.
Well-run specialty finance firms can achieve profitability when many industries struggle in a difficult economic environment. There should never be a 100% direct correlation to everything else in the economy, pandemics included, credit crises included! In fact, when we talk to specialty finance firms, new opportunities and new geographic opportunities abound. Your challenge is, of course, to be able to fund and capitalize on those opportunities.
The Importance Of Well Trained Staff & Technology Capabilities In Any Financial Institution
Typically specialty finance firms seeking lender finance have solid in-house credit staff and technology and can demonstrate they can source transactions. Naturally, everyone is always on the hunt for opportunistic acquisitions of growth opportunities.
Conclusion
We have demonstrated that additional secured financing can significantly benefit asset-based lenders, factoring companies, equipment lessors and numerous other niche specialty finance companies who increasingly service the Canadian commercial borrower.
The whole lender-to-lender funding process provides operating facilities and term loans to those servicing both commercial and retail borrowers. At 7 Park Avenue Financial, we're committed to originating the right financing based on our knowledge of the right lender finance solution for a financing program customized to your needs. We're positioned to address your needs quickly and focus on the shortest closing time possible on your funding and loan application.
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Stan Prokop
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