Is Your Firm Just Surviving Without The Right Financial Solutions?
Business finance in Canada still relies a lot on the old days. If that’s how owners and financial mgrs look at things these days they just might be surprised at the amount of debt financing and cash flow solutions available if you’re aware of the criteria and how they work. Let’s dig in.
Again going back to those old days the lending model for companies place a high reliance on your ability to prove cash flow as what our good bankers call ‘ primary source of repayment’.
The good news? Many new techniques have emerged over the last number of years that allow your firm to access capital. It’s a combination of new lending solutions combined with technologies and techniques that allow a lot more flexibility loan and cash flow solutions.
What we’re talking about could well be described as ‘transactional lending’ ; loans and cash flow monetization strategies that focus on your assets and less reliant on what traditional bank lending tends to be focused on . That focus historically has been ratios and covenants, debt load, gross margins, etc. Those are all important but any deviation in those will often lead to sever credit limitations on your firms borrowing ability.
Many smaller transactions , especially in the SME COMMERCIAL FINANCE space in fact utilize some quick ‘ credit scoring ‘ techniques that could quickly have your firm borrowing up to several hundred thousand dollars Bank borrowing traditionally has been based on ‘ relationships’ with your bank and a fair amount of contact over time.
We never under emphasize with our clients the ongoing need to be able produce timely financial statement and asset reporting data, typically aged payables, receivables, inventory lists, etc.
It’s critical to understand that most financing solutions should typically be matched to a direct need. A basic list of financing solutions available to almost every business includes:
A/R Financing/ Confidential receivable finance
Inventory Loans
Tax Credit Bridge Loans (Typically SR&ED)
Sale Leasebacks
Asset based business credit lines
Unsecured cash flow loans
Govt Guaranteed Small Business Loans (maximum to $ 1,000,000.00)
Equipment Leasing
When you can meet requirements for personal credit, collateral, and owner equity in the business bank financing offers the lowest financing cost with a strong amount of flexibility.
The ability of owners, mgrs, entrepreneurs to successfully address the limitations they face in financing their business will go a long way to long term financial success. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your short and long term financial requirements.
Stan Prokop — founder of 7 Park Avenue Financial –
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years — Completed in excess of 100 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing. Info & Contact Details :