Corporate Finance; Is Successful Canadian Business Financing Fortuitous With These SME Banking And Lending Options?

OVERVIEW – Information on SME corporate finance and loan funding options in Canada . Are financing solutions for small to medium businesses ample enough ?

SME corporate finance
options means different things to different people. So when it comes to ‘ loan funding’ and general financing solutions in the SME sector the question often arises: Is that ‘ good luck’ fortuitous feeling possible when it comes to Canadian business financing? Let’s dig in.

It’s probably also worth spending a minute on what exactly the ‘SME’ in SME Commercial finance options means. Canadian banks and various commercial finance firms themselves probably have different definitions of what a ‘ small to medium enterprise’ business is when it comes to size, headcount, etc. In fact top experts will tell us that the definition of ‘ SME ‘ actually varies from country to country!

When it comes to government definitions in Canada believe it or not any business under 500 employees is SME!

Are there solutions to the age old problem of small and medium sized companies being unable to get all the financing they need from Canadian chartered banks? Frankly many business owners and financial managers simply don’t know two things:

What is the actual criteria for traditional bank financing?

What alternatives are available to guarantee loan funding and general business financing?

Bank financing relies on a business having a ‘ quality ‘ balance sheet and historical and present profit generation. Additionally they look to the owners of the business to have their personal finances in order. That typically means up to date tax filings, no tax arrears, and a positive personal credit report from one of Canada’s two credit bureaus.

It also makes a difference, when it comes to banking, if you’re applying for a line of credit or a term loan. Factors that will come into play for both of these will include cash flow ratios, profit seasonality, business net worth, and reasonable levels of current assets (A/R, inventory) and managed payables.

Letting you in on a bit of a secret, the most two focused on ratios typically are the working capital ration and total debt to equity.

Whether you’re looking for traditional or alternative financing it’s all about ensuring a generally positive picture is made relative to having up to date financials, and ensuring that profits are mostly kept in, and not removed from the company.

If your business doesnt quality for any, (or all) of the loan funding and financing you need it can only lead to disastrous consequences. Alternative finance solutions can provide your company with a strong measure of success. Those solutions include:

A/R finance / Confidential Receivable Financing

Inventory Finance (ideally suited for retailers and wholesalers/distributors)

Revolving Credit lines via a non bank ABL asset based line of credit

SR&ED Tax credit financing


Equipment financing/Sale Leasebacks

The good news reality? Corporate FinanceBusinesses that have sales and assets can always be financed. Avoid the self created urgencies of a cash flow crisis, now and in the future. Seek out a trusted, credible and experienced Canadian business Financing Advisor with a track record of success
who can assist you with your SME COMMERCIAL FINANCE needs.

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 :



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