OVERVIEW – Information on business financing in Canada. Traditional bank financing can’t always supply the capital needed . Asset finance and other ‘ fintech ‘ loans provide the capital for growing businesses
Business financing challenges in Canada require the owner/financial mgr to be constantly on the alert for finance and funding options that ‘ beef up ‘ your firms ability to successfully run and grow the company. Let’s dig in.
Asset finance options are a common tool to get your funding and capital going. Why? Simply because in times gone by companies in the SME sector didn’t necessarily, because mainly of their size, have the options available to them that they do today.
That’s the essence of the current ‘ fintech’ revolution in Canada – allowing many commercial finance firms to be the bank alternative. We never fail to mention though that if your firm does qualify for bank financing the current environment provides a lot of capital at low rates with maximum flexibility.
There are of course equity, or quasi equity related forms of financing, but we’re often the first to point out that they are for the smallest per cent age of businesses in Canada. Those options, should you wish to check them out include convertible debt, securitization, Crowd funding, Peer to Peer funding, angel investments, private equity, etc.
The key take away here is that in some limited cases a capital equity injection might make sense. Most often they don’t though as many firm can’t demonstrate the earning power, market position, and financial reporting consistency that is required in these forms of funding.
Although many business people are against the concept of govt intervention in business we’re also the first to say ‘ feel free to intervene’ when it comes to 2 great Govt financing programs in Canada. The CSBFL program provides govt guaranteed loans up to $ 1,000,000.00 if your firm requires financing for new assets of equipment leasehold improvements.
Additionally the Canadian SR&ED program refunds billions annually to thousands of firms who apply to recapture their R&D capital investment. Key Point: SR&ED refundable tax credits can also be financed while you’re waiting for your refund.
We often ‘ preach ‘ to clients the importance of understanding the specific stages of your life cycle in your company , and understanding the risk and opportunities that come from more leverage via a business loan .
Where did all these somewhat newer financing alternatives come from? We’re talking about:
A/R Financing / Confidential Receivable Factoring
Tax Credit Financing
Asset based non bank lines of credit
Working capital term loans
Merchant cash advance loans
The answer seems to always come back to the 2008 global financial crisis and the fact that many banks and insurance companies who traditionally funded businesses simply withdrew from many business finance market segments. Enter the Fintech revolution!
Traditional bank lending and loan criteria pose a problem to many firms because they can’t satisfy some or all of the banks criteria. High growth firms, ironically, are often punished by bank lending criteria as profits and cash flow targets are tougher to pin down.
If you’re focused on addressing the business financing options you have available today and in the future seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your cash flow and debt needs.
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 :
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Office = 905 829 2653
‘ Canadian Business Financing with the intelligent use of experience ‘