YOU ARE LOOKING FOR CANADIAN BUSINESS FUNDING!
WORKING CAPITAL LOAN FINANCING
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Financing & Cash flow are the biggest issues facing business today
Unaware / Dissatisfied with your financing options?
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Email - sprokop@7parkavenuefinancial.com
TRADITIONAL AND ALTERNATIVE BUSINESS FUNDING IN CANADA
Does a working capital loan requirement loom on your company's horizon? Business funding is all about timing - the right financing solutions for your business needs that change over time.
That additional cash flow from the loan covers the gap when that proverbial 'cash flow crunch' arises. That's when business owners want to know the best business funding options available for their circumstances and business financial planning that makes sense when financing a business when bank loans for businesses might not be achievable.
THE DEBT VERSUS EQUITY QUESTION IN FUNDING BUSINESSES
Working capital loans are typically debt financing but can be one of the best business funding solutions available - removing the need for business owners and entrepreneurs to have equity dilution or additional ownership investment in their business - let alone the risk or having to pledge additional personal assets.
THERE ARE DIFFERENT TYPES OF WORKING CAPITAL LOANS! WHICH ONE SUITS YOUR COMPANY
Confusion sometimes arises from the different types of working capital loans in the current Canadian business financing environment. The banks typically provide traditional loans of these types, and they are longer-term in nature - typically 2- 5 years. They place a powerful emphasis on the historical cash flow of your firm and typically a need to see some solid cash flow forecasts. Your overall credit profile will help dictate interest rate favorability and help your firm take advantage of the best access to business capital.
NEW MODERN RULES IN WORKING CAPITAL FINANCE
In recent times (hence our 'modern rules'), several viable alternatives have arisen in the Canadian market. These alternative financing solutions are more often than not easier to obtain and provide capital to fix the shorter-term challenges businesses face.
Although they are no pure ' working capital loans, ' per see, small business owners of many companies will lean towards a/r financing and short-term cash advances ( typically 12-month duration ) versus a line of credit type facility.
SHORT TERM CASH LOANS
The short-term business funding and cash business loan solutions are typically repaid via a fixed amount weekly or monthly. Surprisingly in some cases, your bank is debited daily for a fixed amount in certain situations - Many firms consider it the best way to get business funding quickly.
Examples might be retailers or restaurants - The industry has termed these ' Merchant Cash Advances. ' Probably the most important requirement to achieve this type of loan is your bank statements which show the inflows and outflows of cash, as well as a good personal credit score of owners. It allows for a formula to be created, determining the loan amount. Here's a secret.
It's typically 10-20 percent of your annual sales. Owners need to know and understand the interest rates on these short-term cash loans, given they are higher - but access to quick capital is key. A typical term on these loans is 12 months to 24 months maximum, and repayment terms are often structured to your specific cash flow.
RECEIVABLES FINANCING & WORKING CAPITAL NEEDS FOR SMALL BUSINESSES
Accounts Receivable financing solutions pertain predominantly to firms that sell on a B2B basis. They invoice their sales, and the cash flow for the business comes down to the timing of those payments by your firm's clients. No surprise that over the years, the day's sales outstanding have, in fact, increased for many firms - placing the reliance on borrowing and working capital loans.
If your firm has tax credits due under Canada's Sred program, a short-term sr&ed tax credit loan will accelerate your cash refund for project r&d costs. This funding works for your costs whether you are filing a sred claim for research and development for the first time or have utilized the program before.
THE BUSINESS CREDIT LINE
Larger firms can also explore non-bank business lines of credit - called 'asset-based lines of credit ' - one of the best business funding solutions available in Canada. These facilities will margin your a/r and inventory and even place a borrowing value on equipment and real estate if, in fact, you own the business premises. It's all about financing for business utilizing current assets on the balance sheet, as well, of course, as managing current liabilities such as payables.
CONCLUSION - BEST SMALL BUSINESS FUNDING
Exploring government funding for small businesses? Many companies that are ' early stage' will always challenge raising capital as a ' start-up ' for funding the business. When government grants and government loans and venture capital/angel investor scenarios won't ever work, talk to our team about real-world financing solutions and funding programs that might not otherwise be available from traditional financial institutions.
99.9% of the time, venture capitalists are never the answer for small and medium-sized businesses. Government programs for funding for business ventures , business grants and startup funds is often viewed as a time consuming and lengthy process -
Government new business funding does work through the Canada Small Business Financing program. While it is a term loan structure, thousands of start ups every year utilized the program to acquire assets and fund leasehold improvements. A bdc small business loan for financing support is also an option.
If you are interested in a working capital loan that provides business funding for your short or long-term needs, seek out and speak to 7 Park Avenue Financial about additional small business funding - We are a trusted, credible and experienced Canadian business financing advisor with a track record of success in alternative and traditional business finance.
Talk to our team for more information about other types of Canadian business financing that suit your needs.
FAQ: FREQUENTLY ASKED QUESTIONS
What is a business incubator?
The world needs more innovation. As a result, business incubators are becoming increasingly popular in communities all over the globe as they help to launch cutting-edge new businesses into their next phase of development. They are often centred for research and education on healthcare, as an example, with ties to other institutions like hospitals and universities that have embraced innovations.
What is venture capital?
With the ever-growing need to have a competitive edge in today's society, Venture Capital is becoming increasingly popular. It provides businesses with means of acquiring equity and finances promising companies and organizations within high-risk industries such as Information Technology Communications Biotechnology. Venture capitalists want organizations and companies with high potential in other sectors as well.
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