YOUR COMPANY IS LOOKING FOR START-UP FINANCING!
STARTUP FUNDS FOR BUSINESS IN CANADA / FUNDING BUSINESSES
You've arrived at the right address! Welcome to 7 Park Avenue Financial
Financing & Cash flow are the biggest issues facing business 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
Unlock the secret to turning your business dream into reality without breaking the bank!
7 Park Avenue Financial originates business financing solutions for Canadian Businesses – We offer Start-Up Financing and working capital solutions – Save time and focus on profits and business opportunities
7 Park Avenue Financial: “Canadian Business Financing with the intelligent use of experience”
BUSINESS START-UP FINANCING
Startup funding in Canada provides entrepreneurs with the ' propeller' they need to achieve business start-up financing that makes sense for entrepreneurs requiring start-up financing that achieves ownership goals and potential job creation in Canadian business activities.
Yes, you can try the venture capital, angel investors, government grants to receive funding, etc. route, but be aware that financing is mostly applicable to .01% of companies in Canada! Let's dig in.
DO BANKS IN CANADA FINANCE THE START-UPS?
As we've suggested in the past, business owners typically gravitate to the bank when they envision the capital they need to start their businesses.
The bottom line is that bank loans for small and medium-sized businesses in Canada always present a challenge to those looking for business capital - as compared to large businesses who have more easy access to capital for the total cost of their venture.
Getting a business loan at an interest rate and terms and conditions that make sense for your business can be an uphill battle depending on how much money you need and the personal credit criteria demanded by most financial institutions - sometimes more so for a high-growth company as ironic as that might seem.
The mission, though, should you choose to accept it!, is to understand the criteria Canadian chartered banks impose on a new business. Unfortunately, they are looking for firms with track records, cash flows, and acceptable owner equity. That’s a tad difficult when you are in start-up mode.
WHAT ARE BUSINESS FINANCING ALTERNATIVES IN FINANCING A START-UP?
So are there alternatives? Absolutely. It's all about ensuring that you and any prospective lender, alternative or traditional, have the incoming working capital cash flows to make debt or operating commitments positive.
Although many businesses can claim to have started with no cash flow, the consensus is that an owner-equity commitment is required.
WHAT IS THE CANADIAN VERSION OF THE 'SBA' LOAN
Our version of the U.S. Small business program in Canada is called the 'SBL ' loan. That brings a solid partner to your startup venture - the Canadian government via a guaranteed loan.
WHAT IS THE DOWN PAYMENT REQUIRED IN A GOVERNMENT LOAN
If you have a reasonable personal credit history and at least 10%-20% permanent equity in your business, you're a solid candidate for a ‘BIL ' loan. Financing can be a term loan structured at a variable or fixed interest rate. New equipment, as well as used assets, may be financed.
HOW IMPORTANT IS CREDIT HISTORY IN FINANCING STARTUPS
It's critical in start-up financing to understand that a traditional (bank) or alternative lender wants to know the business owner's credit history.
In Canada, the ' magic ' score at a credit bureau to be approved for traditional financing is 650.. ie ' good credit ' at those credit bureaus.
ARE BUSINESS PLANS NEEDED FOR STARTUP FUNDING
A solid business plan and cash flow are also prerequisites for start-up funding. That document will demonstrate to lenders how you will handle suppliers, tackle operational expenses, and handle term and operating obligations. 7 Park Avenue Financial business plans meet and exceed the requirements of banks and commercial lenders
WHAT ARE THE KEY SOURCES OF FINANCING IN A NEW BUSINESS
Because start-up businesses don’t have access to all the cash they need, financing sources must be considered.
They include:
Personal resources
Govt small business loans ' SBL' The government of Canada small business loan is one of the most popular methods of financing new businesses.
A/R financing
Tax Credit Finance - ' SR&ED'
Start-Up Working Capital Cash Flow Term Loans
PO/Supplier Financing
WHAT IS THE INTEREST RATE FOR STARTUPS?
The rate/terms/structure will depend on the type of financing you need and the amount.
While interest rates are significantly higher for start-up alternative finance they are a substitute for giving up equity so early on in the venture. One of our associates refers to it as ' renting equity', and it's an interesting term.
GIVING UP EQUITY IS NOT DESIRABLE
Of course, private equity firms and 'VCs' will take a significant amount of ownership in any investment made. Truthfully, most startups and small businesses don't remotely qualify for equity start-up funding in the long term as they lack the desired high growth potential.
4 KEY POINTS IN SUCCESSFUL EARLY-STAGE FINANCING
Do we have a shortlist for startup financing? We do, and it would include:
Assessing personal equity
Ensuring you have a solid business plan and cash flow
Consider both alternative and traditional sources of capital.
Utilize 3rd part resources such as your accountant/lawyer/ financial advisor / key supplier.
KEY TAKEAWAYS
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Understanding different funding sources: Familiarize yourself with options like bank loans, angel investors, and government grants.
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Developing a solid business plan: Create a comprehensive roadmap that outlines your vision, market analysis, and financial projections.
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Mastering pitch techniques: Learn to communicate your business idea and its potential to investors effectively.
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Managing cash flow: Grasp the importance of maintaining positive cash flow for sustained growth and operations.
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Building a strong credit profile: Recognize the impact of personal and business credit scores on financing options.
CONCLUSION
The entrepreneurial dream is alive and well in Canada if you want to start a business- and in fact, is a key part of economic development in Canada.
Call 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who will ensure you know the rules for achieving startup success in Canada for the various stages of your venture.
FAQ
What are the advantages of securing startup financing?
Startup financing provides the capital to launch and grow your business, cover initial expenses, hire staff, and invest in equipment or inventory. It can also offer flexibility and reduce personal financial risk.
How can proper financing impact my business's growth potential?
Adequate financing allows you to scale your operations, invest in marketing, and seize opportunities as they arise. It provides a buffer for unexpected challenges and lets you focus on building your business rather than constantly worrying about cash flow.
Are there benefits to exploring multiple financing options?
Exploring various financing options can help you find the best terms, interest rates, and repayment structures for your specific needs. It also allows you to diversify your funding sources, reducing dependence on a single lender or investor.
Can startup financing help establish business credit?
Absolutely. Securing and responsibly managing startup financing can help build your business credit profile, making obtaining future loans or credit lines easier as your company grows.
How does startup financing contribute to long-term business success?
Proper financing sets a strong foundation for your business, allowing you to make strategic decisions, weather initial challenges, and position your company for sustainable growth and profitability.
What role does location play in securing small business startup financing?
Location can significantly impact financing options, as some regions offer specific grants or incentives for local businesses. Urban areas may have more diverse funding sources, while rural locations might have specialized programs to encourage economic development.
How does industry type affect startup financing opportunities?
Different industries may have varying financing options available. Tech startups might attract more venture capital, while traditional businesses may find success with bank loans. Some industries also have sector-specific grants or government programs.
What are the potential drawbacks of accepting venture capital funding?
While venture capital from various financial institutions and private equity firms can provide substantial funding for business growth or acquisitions, it often comes with the expectation of rapid growth. It may require giving up a significant portion of equity and control in your company. This pressure can sometimes lead to decisions prioritizing short-term gains over long-term sustainability in the early stages of a business
How can I improve my chances of securing startup financing?
Improving your chances involves several steps: developing a solid business plan, building a strong credit score, networking with potential investors, perfecting your pitch, and demonstrating early traction or proof of concept for your business idea.
What are some common mistakes to avoid when seeking startup financing?
Common mistakes include underestimating capital needs, failing to research all available options, neglecting to read the fine print in financing agreements, overvaluing the business in negotiations, and not having a clear plan for using the funds effectively.
What is the difference between debt and equity financing for small business startups?
Debt financing involves borrowing money that must be repaid with interest, typically through loans or credit lines. Equity financing involves selling a portion of your company ownership in exchange for capital, usually to investors or venture capitalists. Each has advantages and considerations regarding control, risk, and long-term financial impact.
How do investors typically evaluate startups for potential financing for Canadian businesses?
Investors often look at several key factors: the strength and experience of the founding team, the size and growth potential of the target market, the uniqueness and viability of the business idea, early traction or proof of concept, and the overall financial projections and return on investment potential.
What role does a business plan play in securing financing for small business loans for a startup?
A well-crafted business plan is crucial for securing financing. It demonstrates your understanding of the market, outlines your strategy for success in business loans, and provides detailed financial projections. It serves as a roadmap for your business and a tool to convince potential lenders or investors of your venture's viability and potential for growth.
