Know How To Finance A Business ? Financing Choices Are About Timing And Strategy In Funding Choices
Stan Prokop
Canadian Business Financing | Cash Flow Financing | Asset Based Lending | Equipment Finance | Lender Financing | Purchase Order Financing | Acquisition Financing | SAAS Financing | Acquisition Financing
YOUR COMPANY IS LOOKING FOR CANADIAN BUSINESS FINANCE ALTERNATIVES!
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 - [email protected]
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?Unlock your business potential: Discover the Canadian financing options that can catapult your company to new heights.
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7 Park Avenue Financial originates business financing solutions for Canadian Businesses – We offer Canadian Business Financing and working capital solutions ?– Save time and focus on profits and business opportunities
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7 Park Avenue Financial: “Canadian Business Financing with the intelligent use of experience”
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CANADIAN BUSINESS FINANCE SOLUTIONS
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Is there a right way and a wrong way to finance a business in Canada? We think we can show you there is, as well as point out the risks and benefits.
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By the way, it is, in fact, possible to change horses in midstream to adapt to today’s changing times when it comes to business financing and your company.
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WHAT TYPE OF FINANCING DO YOU NEED - SHORT-TERM OR LONG-TERM?
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Lately, we have been prone to say that the concept of ' term' is critical in assessing and choosing the right business finance.
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By terms, we simply mean short, intermediate and long term, as all of those have a number of different implications.? And to compound the challenge for the business owner and manager both the type and? ' term ' of the financing can impact the amount of funds that flow in and out of your business.
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FACTORS TO CONSIDER IN FINANCING
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So what are some of the things you need to consider when choosing a financing solution?? There are several factors, probably all as equally important. They include:
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Cost/rates,
Amount of risk you are taking
How does your overall business capital structure change with any one particular sort of financing
What cash flow, working capital, and profits will that financing deliver... or take from your company?
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It's easy sometimes to get confused about the timeframe when searching for a funding decision.
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We meet and talk to many clients looking to solve an immediate problem and somehow miss considering the growth and future of their firm.?
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A simple example might be a banking arrangement - i.e. not considering whether you can live through the tough times based on covenants, guarantees and collaterals that you have either offered up or have been demanded of you.
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PLAN YOUR CASH FLOW SHORTAGE!
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One of the most proactive things the business owner/manager can do is focus on planning to be short of cash and what solutions might be available. Why? Because cash flow shortfalls always happen—for pretty much everyone!
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The most challenging decision many business owners have to face if giving up equity and ownership of their business because debt levels are too high or the right financing is unavailable.
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4 FINANCING SOLUTIONS YOU CAN ACCESS TODAY
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So what are some of the short and intermediate financing solutions available - They include:
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Supplier financing
Non-bank lines of credit - focusing on your sales and assets
Bank lines of credit
Equipment leasing
Government loans - financing for equipment, intangible assets, leasehold improvements tenant intangible assets and working capital costs - A limited unsecured personal guarantee is also a feature of the Government loan program - The participating lender's prime lending rate is 3% over prime.Borrowers can also access? government crown corp? BDC loan solutions
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DON'T OVERLOOK SUPPLIER FINANCING AND HOW IT AFFECTS CASH FLOW
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Supplier financing is almost always overlooked when it comes to cash flow financing. Negotiating better payment terms or taking supplier prompt pay discounts can save firms thousands of dollars.
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ROYALTY FINANCING
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Royalty-based financing is gaining traction in Canada's creative industries. This innovative model allows businesses to receive capital in exchange for a percentage of future revenues, aligning investor returns with company success without diluting ownership.
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IS TRADITIONAL BANK FINANCING THE SOLUTION
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Bank financing in Canada takes many forms when you can achieve approval. Those forms include lines of credit, term loans, and fixed-asset financing for long-term assets.??
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?We caution clients that the crux of the bank relationship should revolve around what you must provide in the form of collateral, covenants, and reporting. Banking solutions in Canada are much less diverse than in the U.S.
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Many Canadian business owners don’t know that alternative business financing can be arranged outside of Canadian chartered banks. While these solutions might be more expensive, they solve problems! Most banks offer the Canada small business financing program,? and there are regional programs as well.
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KEY TAKEAWAYS
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领英推荐
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CONCLUSION
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What financing solution suits your business? Call? 7? Park Avenue Financial,? a trusted, credible, experienced Canadian business financing advisor today.
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FAQ
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What are the main advantages of Canadian business financing?
Canadian business financing offers numerous benefits to both alternative lenders and traditional financial institutions, including access to capital for growth, improved cash flow management, and the ability to invest in new technologies or equipment without depleting cash reserves.
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What are the benefits of a business line of credit?
A business line of credit offers several key advantages for companies:
Flexibility in borrowing: You can draw funds as needed, up to your approved limit, without reapplying each time.
Pay interest only on used funds: Unlike traditional loans, you only pay interest on the amount you've actually borrowed.
Improved cash flow management: It provides a safety net for covering unexpected expenses or managing seasonal fluctuations in revenue.
Building credit: Responsible use of a line of credit can help strengthen your business credit profile over time.
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How can Canadian business financing help my company expand?
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By providing the necessary capital, Canadian business financing via a small business loan or cash flow working capital solutions enables companies to fund expansion projects, hire new employees, increase inventory, or enter new markets, facilitating faster and more sustainable growth.
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Are there flexible repayment options available with Canadian business financing?
Many Canadian business financing solutions offer flexible repayment terms, allowing businesses to align their payments with cash flow cycles and reduce financial strain during slower periods. Some lenders may require a personal guarantee.
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Can Canadian business financing help improve my company's credit profile?
Responsibly managing and repaying business financing to secure funds can help establish and improve your company's credit profile, potentially leading to better terms on future financing opportunities.
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How quickly can I access funds through Canadian business financing?
The speed of accessing funds varies depending on the financing option chosen. Some alternative lenders offer quick approvals and funding within days, while traditional bank loans may take several weeks to process.
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What types of collateral are typically required for Canadian business financing?
Collateral requirements vary depending on the financing type and lender. Common forms include real estate, equipment, inventory, and accounts receivable. Some financing options, like unsecured loans, may not require collateral.
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How do Canadian business financing options differ for startups versus established companies?
Due to limited credit history and revenue, startups often face more challenges in securing traditional financing. They may rely more on government grants, angel investors, or startup-specific loan programs, while established companies can access more financing options.
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Are there industry-specific Canadian business financing programs available?
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Many industry-specific financing programs exist in Canada, targeting sectors such as technology, agriculture, and manufacturing. These programs often offer tailored terms and conditions to address the unique needs of businesses in these industries.
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What role do credit scores play in obtaining Canadian business financing?
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Credit scores are crucial in determining eligibility and terms for many financing options. Higher scores generally lead to better interest rates and more favourable terms. Both personal and business credit scores may be considered, especially for small businesses.
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How can seasonal businesses best leverage Canadian business financing options?
Seasonal businesses can benefit from financing options like lines of credit or revenue-based financing, which offer flexibility in borrowing and repayment. These solutions allow companies to manage cash flow during off-seasons and capitalize on peak periods.
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What are the key factors lenders consider when evaluating a Canadian business financing application?
Lenders typically evaluate factors such as credit history, cash flow, collateral, business plan, and industry outlook. They assess the company's ability to repay the loan and its potential for growth and success.
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How do interest rates for Canadian business financing compare to personal loans?
Interest rates for business financing often vary based on the type of financing, lender, and risk assessment. Due to increased risk, they may be higher than personal loans. However, some government-backed programs offer competitive rates to encourage business growth.
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What documentation is typically required when applying for Canadian business financing?
Standard documentation includes financial statements, tax returns, bank statements, business plans, and cash flow projections. Lenders use these documents to assess the financial health and viability of the business seeking financing.
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What are merchant cash advances and how do they work?
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Merchant cash advances (MCAs) are a form of alternative financing for businesses. Here's how they work: MCAs provide upfront cash to businesses in exchange for a portion of future sales. This is not a traditional loan, but rather a purchase of future revenues. Repayment is typically made through a percentage of daily credit card sales. This means payments fluctuate with your business's income. Approval is often based on sales history rather than credit score, making MCAs accessible to businesses with less-than-perfect credit. Funding can be obtained quickly, sometimes within days of application approval.? Funds are deposited in a lump sum into your business account and are repaid via weekly or monthly installments. The cost is usually expressed as a factor rate rather than an interest rate. For example, a factor rate of 1.2 means you'll repay $12,000 on a $10,000 advance. MCAs can be useful for short-term cash needs but are generally more expensive than traditional financing options. They're best suited for businesses with high volumes of credit card transactions. Before opting for an MCA, careful consideration of the terms and impact on cash flow is crucial. While they offer quick access to funds, the high costs can strain a business's finances if not managed properly.
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Are there government grants in Canada for businesses?
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Yes, there are numerous government grants available for businesses in Canada. Federal and provincial governments offer various grant programs to support Canadian businesses. These grants often target specific industries, regions, or business objectives. Eligibility criteria vary widely depending on the program. Factors like company size, industry sector, and project type are typically considered. Many grants focus on innovation, research and development, job creation, and export expansion. For instance, the Industrial Research Assistance Program (IRAP) supports technology innovation. Some grants are designed to assist specific groups, such as women entrepreneurs, Indigenous business owners, or youth-led startups. Regional development agencies like FedDev Ontario or Western Economic Diversification Canada provide grants tailored to local economic priorities. It's important to note that while grants can be an excellent source of funding, they often require detailed applications and may have strict reporting requirements. Businesses should carefully review all terms and conditions before applying.
' Canadian Business Financing With The Intelligent Use Of Experience '
?STAN PROKOP 7 Park Avenue Financial/Copyright/2024
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Stan Prokop is the founder of 7 Park Avenue Financial and a recognized expert on Canadian Business Financing. Since 2004 Stan has helped hundreds of small, medium and large organizations achieve the financing they need to survive and grow. He has decades of credit and lending experience working for firms such as Hewlett Packard / Cable & Wireless / Ashland Oil