Removing The Obstacle Course In Canadian Business Financingfunding in and outside the bank

OVERVIEW – Information on how business owner/managers can achieve the right type and mix of business financing solutions for survival and growth. Removing obstacles in funding your business requires the right info and strategy

Business financing in Canada – your company’s finances are of course serious business, this isn’t a television reality show obstacle course. Let’s examine some external real world possibilities around funding your business, (externally and internally) with a focus on removing some of those obstacles. Let’s dig in.

Suffice to say there are numerous reasons business owners/managers find themselves looking for external methods of financing their business. The good reasons include of course ‘ growth, in some cases there are liquidity challenges around day to day operations, let alone growth.

The planets align more perfectly when you’re looking for proper capital while running your business ‘ properly’ at the same time. Here we’re talking about focusing on issue such a profit and turnover of assets and optimal use of assets.

Financing your firm via external methods revolves around 3 simple choices-

Taking on new debt

Monetizing the assets you already have (both current assets and long term assets can both be monetized

Searching for an equity solution (Certainly possible but much more limiting as issues such as owner dilution and costs and probabilities around equity capital need to be addressed

More often than not the early stages of a firm’s initial financing capability will often determine the future course of growth and success. Here cash flow becomes a daily challenge (or hourly?!).

Where do top experts and studies tell us entrepreneurs go for capital? In order of search priority the leading contenders for business capital solutions are:

Banks

Corporate Credit Cards

Commercial Finance Companies

Equipment lessors

Govt business loans

Asset based lenders – providing receivables, inventory and fixed asset financing

VC / Private Equity groups

At times many business owners are ‘ tapped out ‘ personally , and the day to day struggle of managing assets and delaying payables becomes JOB #1 almost everyday.

Key to accessing the right type of funding for your business is the concept of understanding your risk profile. Suffice to say much of the entrepreneurs’ business time has been wasted applying for financing that was never meant to be. As our survey pointed out businesses head in droves to the bank, only to find their ‘ risk profile ‘ is significantly out of line with Canadian chartered bank requirements. While ‘ eye to eye’ contact was almost a necessity in the past today’s bank scoring models and commercial banking structures don’t always lend themselves to face to face meetings to make your case.

Many business owners might be surprise that large bank deals are in fact ‘ syndicated’; with bank loans being sold by your bank to others in the secondary market.

The fundamentals of any business financing application process include a business plan (not always required by certainly helping), historical and current financials, a cash flow/profit forecast, (usually the most important item!) and info on the owners. The results from all that drive that ‘ risk profile’ we’ve been talking about.

If you’re looking to seriously explore external financing in areas such as bank facilities, or numerous other alternative financing vehicles ( some of which you may never have even heard of !) 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 removing … obstacles!


Author Stan Prokop
7 Park Avenue Financial :
http://www.7parkavenuefinancial.comBusiness 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 & FUNDING EXPERTISE

 

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Canadian Business Financing