Capable Of Changing Your Mind On Alternative Financing Techniques ?
Information on alternative business financing in Canada . What loan alternatives are available to Canadian business when traditional solutions can’t be accessed, aren’t enough , or don’t work
Loan alternatives in Canada come in a variety of forms in Canada. ‘Alternative business financing ‘ is a term we’ve often thought a bit unusual on occasion, if only for the fact that commonly used business finance alternatives are in many cases tens of years old, and in some cases thousands ! For your firm to be successful in accessing the capital it needs it’s a question of an ‘art’ and a ‘ science ‘. Let’s dig in.
Business lending in Canada took a major step back in the recession of 2008. Business owners and financial managers are told today that we’re back to an abundance of capital – however it never seems to be for them!
It’s tough enough to grow your business in a good economy let along one that doesn’t provide the right loan alternatives. What then is traditional financing and what’s alternative? ask our clients. The simple answer is that it’s financing solutions outside of Canadian chartered banks. The solutions provide do the same thing – they provide cash flow, capital, and loans, but rates, terms, structures, and day to day mechanics are often different.
Stats vary from country to country of course but top experts say that in many cases almost 25% of businesses that apply for bank credit are declined. Typical requests from the bank come in two categories – term loans and revolving credit facilities.
‘ASSET BASED FINANCE ‘ is the general category for putting together all the different solutions for asset and cash flow financing. These solutions include:
A/R Financing (Factoring) (Our recommendation for clients here is CONFIDENTIAL RECEIVABLE FINANCE
Tax Credit Finance
Asset based ABL lines of credit
Purchase Order Financing
Sale Leasebacks /Bridge Loans
Working Capital Term Loans / Mezzanine unsecured cash flow loans
Crowd funding/ Royalty finance techniques
Our first example, A/R non bank financing has only been around a thousand years or so… right around the time the Dead Sea was just only getting sick! That’s our tongue in cheek comment on why ‘ Alternative ‘ is in fact more common than most people think. This single alternative form of cash flow finance has a strong appeal to thousands of business owners/financial managers because it immediately ‘ cash flows ‘your sales. The trick is to pick the right facility at rates, terms and day to day mechanics that makes sense.
While there is no doubt that banks still provide in Canada the huge majority of ‘ Traditional ‘ financing the newer forms of capital access are in many cases complimentary to the bank – but essentially are often the real alternative when bank capital can’t be accessed.
More and more accountants, lawyers and business peers are recommending loan alternatives outside the bank structure. This pool of capital is large and diverse. In our experience many key financial problems are in fact solved by non traditional finance – and some of the most successful companies in Canada and the world were in fact started by owners and managers who went looking outside the traditional landscape.
If you want to know how Canadian business financing has evolved, and how to navigate the seemingly ‘ maze ‘ of financial solutions
seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you to explore both the art and science of loan alternatives.
Author: 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 :
7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS FINANCING ALTERNATIVES EXPERTISE
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Canadian Business Financing