Looking for a good workout ? Special LoansHere’s the bad news / good news around exiting special loans in Canada

OVERVIEW – Information on workout financing in Canada. Numerous alternatives exist around finance alternatives when your firm finds itself in, or going into, a ‘ Special Loans ‘ situation.


Workout Financing in Canada: As we all know there’s nothing like a good work out! When we meet with clients who find themselves in the ‘ bad news ‘ situation, namely ‘ Special Loans ‘it’s always good to know that the good news is the numerous turnaround finance alternatives available to owners/managers/shareholders. Let’s dig in.

We’re assuming that firms requiring the turnaround have traditional ‘ bank’ type financing in place. When it’s obvious that your current lenders, bank or otherwise are focusing on calling your loan there is no better time to start looking at solid alternatives.

In the case of banks calling a loan there is actually another piece of ‘ good news’ around being put in the special loans category. There’s no better example of the word ‘ limbo ‘ than the bank special loans category in Canada. Business owners/managers might well always want to change that working to ‘ purgatory ‘. However at the end of the day you are still being financed under the bank, albeit at a higher rate and tighter covenants and restrictions.

Here is your time to take a bit more of a ‘ stance ‘ on your overall finance situation – identifying a fix with the bank , or agreeing on a time and exit strategy – obviously new finance in place!

That ‘ fix ‘ with your bank or other commercial lender might include several scenarios:

New equity from owners

Sale of certain assets or parts of the business

Higher levels of the dreaded ‘ personal guarantee’

Re-doing the balance sheet vis a vis short and long term debt obligations – Here your company clearly must demonstrate viable long term cash flow generation when new forms of debt are considered

So what happened? Special LoansThat’s the legitimate question that owners / managers and other stakeholders to ask round the downslide of your firm’s financial health. Here numerous scenarios abound – We’ve met with many owners who offer some interesting versions of their current financial problems. In some cases their information is correct, just being managed improperly. Examples: ‘ We’ve grown to fast ‘ ; ‘ Lost a big contract/client ‘, ‘ We’re out of covenant on some of our operating metrics – i.e. DSO, DPO, Debt to Equity ‘.

Numerous workout financing turnarounds can be implemented. They can be done within the banking system but more often than not they involve alternative solutions – that includes:

Asset based Lending / ABL Non Bank Credit Lines
Bridge Loans
Sales Leasebacks
Cash Flow Loans – Secured/Unsecured

If you’re looking to have a solid workout on your financing turn around seek out and speak to a trusted, credible and experienced Canadian Business Financing Advisor who can assist you with SPECIAL LOANS scenario that fit your situation.

Writer Stan Prokop
7 Park Avenue Financial :


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 – Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :


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