OVERVIEW – Information on start up sources of finance for Canadian business owners and entrepreneurs . Early stage financing is challenging without this information
Start up sources of finance in Canada easily keep the business owner/entrepreneur up at night. Let’s dig in.
Is anything more uniquely challenging than financing needs of a startup? Is it even possible that early stage financing could turn out to be, as they say, your new BFF? Nothing is truer than the fact that capital acquisition chances are less certain in an early stage environment
Key to understanding the ‘ capital raise’ is ensuring your business has a suitable match of debt and equity. The good news is that when you are up and running many sources of capital to monetize assets and sales are fairly plentiful. They typically include debt and asset monetization vehicles that allow you to generate internal cash. Those typically include:
PO / Contract financing
Monetization of SR&ED tax credits – these bridge loans are a great way to cash flow refundable tax credits under the govt R&D program for those that file claims
Receivable Financing / Inventory Finance
Asset based credit lines that turn receivables/inventory/hard assets into on single business line of credit
Those 4 methods are ‘ asset monetization’ strategies – also available is debt in the form of a Govt small business loan or a working capital term loan from Canada’s crown corp. bank.
Many business owners, some of whom are ‘ newbies’ are not 100% sure of the amount of financing they require, much less they could get approved for. Potential clients we meet who state ‘ as much as we can get ‘ simply require… well… you guessed it… a lot of work.
The proven way to calculate the amount of start up financing you need is to prepare a proper opening balance sheet and cash flow projection. Properly complete it will give you a strong handle on the inflows/outflows as well as, most importantly, the timing of the funding you will need – either in term debt for new assets or for business credit line needs.
Can a realistic, even conservative projection fail? It can if it doesnt allow for the timing of working capital flows. Businesses in the SME sector can generate a lot of cash, more than they might think, by proper management of receivables, payables, and utilizing sources of funds such as equipment leasing. It’s then that the owner/manager must consider external capital. And as expensive as debt might seem to small or emerging businesses it’s always cheaper than diluting ownership equity.
If you’re in search of the right amount of start up, growth, and early stage financing for your businesses seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who just might be the bridge to your new BFF – solid start up sources of finance.
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 START UP / EARLY STAGE FINANCING EXPERTISE
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