OVERVIEW – Information on how business credit lines can be accessed by Canadian companies seeking revolving lines of credit and what types of facilities should be considered.
Business credit lines in Canada often have business owners and financial managers feeling ‘ QUESTIONINGLY’. We’re told that use of that term leaves issues ‘ open to controversy’ and demands information and clarification. Which type (there are only 2!) of facility works for you and are is your firm eligible for one or both? Let’s dig in.
As the debate rages around the ability of companies to access SME COMMERCIAL FINANCE needs the one thing that is clear is that the commercial lending landscape has changed. Many alternatives available to business are often misunderstood or simply not known to the owner/mgmt team. Do Canadian firms realize that probably way less than 1% of firms looking for VC/Private Equity/Angel funding ever succeed. We often doubt it.
That brings us back to… ‘CHOICES’. Only 2 real solutions are available regarding the need for a revolving credit facility. Those solutions:
Canadian Chartered banks
Commercial Finance Companies offering Asset Based Credit Lines
Banks enjoy ‘ top of mind ‘ when it comes to source of financing – it sure helps when Canadian banks enjoy the reputation of having the best capitalization and financial strength in the world. Working with the right banker (notice we said banker, not bank) not only gives you access to credit lines but also term loans, leases, etc) that’s the good news.
The issue? The stability of the banking system requires that loans be solidly backed up by collateral, cash flow, personal guarantees, and the banks insistence that certain… shall we call them ‘ relationships’ on your balance sheet stay intact. Any one of those can knock your firm out and have your company classified as ‘ unbankable’
The problem that our clients have is that they are often using cash and not producing it! That’s why our second solution, the asset based line of credit… aka the ‘ ABL’ is a perfect alternative for business credit line needs.
Instead of focusing on ratios and formulas for cash flow coverage this type of facility focuses on your business assets. Your receivables, inventory and even fixed assets (yes your fixed assets!) are combined into one borrowing facility that allows you to draw on funds as needed. Surprisingly the borrowing leverage on these 3 different asset accounts is even more generous than bank lines – although they almost always come at a higher borrowing cost
If you’re looking for clarification on ‘ QUESTIONINGLY ‘ when it comes to business credit lines and borrowing alternatives to your firm seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success
who can assist you in your borrowing needs.
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 100 Million $ of financing for Canadian corporations . Info /Contact :
7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS CREDIT LINE EXPERTISE
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 ‘
ABOUT THE AUTHORStan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.
Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.
7 Park Avenue Financial
Canadian Business Financing