OVERVIEW – Information on business loans in Canada . Numerous types of financing sources from banks and finance companies are available . What works best for your business?
Business loans in Canada , unfortunately, don’t come in a one size fits all package. So which financing sources make sense for your company, whether it’s a Chartered bank solution of those offered by mainstream or specialized niche finance companies? Let’s dig in.
Along with ‘ variety ‘ a business loan also comes with different terms, conditions and structures. We’re not trying to complicate the situation but the business owner/mgr quickly sees that the challenge in this form of Canadian business financing revolves clearly around knowing what your needs and are matching those needs to your firms situation.
What distinguishes ‘ loans ‘ from other forms of financing (equity, or current asset monetization) is fixed terms and typically, but not always, fixed interest rates. Current low rates of course make the financing cost scenario very attractive.
Business owners are also encouraged to understand the difference between ‘ secured’ and ‘ unsecured ‘ loans. Safe to say an ‘ unsecured’ loan is difficult to obtain unless fairly strict financial criteria are met.
When it comes to SME COMMERCIAL FINANCE needs one of the best examples of an ‘ unsecured’ loan is the Govt Guaranteed Small Business Loan. It provides financing up to 1,000,000.00 for two asset categories that meet most needs for start up and growing businesses. Those asset categories are ‘ equipment ‘ and ‘ leasehold improvements’.
Confusion reigns supreme when business owners often construe a ‘ line of credit’ as a loan, when in fact you’re just cash flowing your current assets – accounts receivable and inventory. These loans fluctuate and while there is a rate attached to the borrowing costs fluctuates as you draw down or pay down the revolving facility.
Non bank business credit lines are available via what’s known as an Asset Based Line Of Credit. Known as ‘ ABL’s they actually combined your fixed assets with your receivables and inventory, all into one fluctuating facility.
Various subsets of asset based financing are also not really ‘ loans’ .They include Accounts receivable financing/factoring and inventory finance facilities.
Two traditional forms of loans are mortgages and equipment loans. These are typically larger facilities to secure buildings and land or shop floor assets or technology. A lease is not a loan, but it also has a fixed term and rate. Most clients we meet are happy just to get approved for a lease or a loan, and often don’t understand some of the accounting distinctions between the two!
The providers of ‘ loans in Canada are banks, commercial finance companies, insurance companies, and, as we noted, the government.
Owners and mgrs can quickly see that any number of combinations of business loans from the right financing sources can meet their operating and growth needs. In most cases it’s a simple fact of knowing what amount of financing you need, being able to demonstrate your firms financial condition, and ensuring you understand which finance companies or bank can fit your needs. Not feeling like you can go it alone? Seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with your financing 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 LOAN FINANCING 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 AUTHOR
Stan 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