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Business capital in Canada. Is this in fact the ' GOLDEN AGE ' for Canadian companies seeking business credit and funding. We're not 100% sure ourselves ; we read that rates are low and capital is abundant - while at the same time clients tell us it's never been as tough to satisfy lender criteria or access innovative capital solutions. The reality is that many business owners who arent in the Financial Post top 1000 in Canada spend a lot of their time ' finding ' financing .The goal seems kind of easy - find enough financing for your business at a cost that makes sense and gives you the amount of risk that the Canadian business owner and financial manager are prepared to live with. That ' risk ' of course comes with the fact that too much debt, and might we add the wrong kind of debt can cripple a firm. At the end of the day we can maintain there are essentially 5 ways to finance your firm - two of them, raising equity and issuing a bond or debenture are NOT the subject today. What we're talking about is innovative ways of supplier financing, lease and asset financing, and business lines of credit from banks or independent commercial finance companies. Many businesses don't fully realize of focus on the fact that supplier credit is in fact a key driver of your firm's cash flow. Just negotiating long terms with your key vendors allows you to generate positive cash flow - That's a fine line though as you ultimately need the support of suppliers. The last thing you want is for them to turn the ' credit tap ' off. Yes, you can buy the fixed assets you need for your firm - but over 80% of companies in Canada in fact lease their assets. Whether its trucks, cars, computers, telecom equipt and heavy machinery the business owner has the option of leasing assets for anywhere from, typically, 2-5 years. That allows you to use up the ' useful life' of your equipment and match it to cash outflow vis a vis the payments. Accounting has specific rules around the type of leasing arrangements that you enter into, primarily revolving around whether you are entering into a capital lease ' to own', or an operating lease ' to use '. Bank and commercial credit business capital in Canada supply businesses with revolving lines of business credit and funding. They allow your firm to draw down and pay back up, based on pre set limits, the amount of funding you need for your business. The security of course is the assets of the business. As a business owner you have to choose the right amount of debt and equity. The finance guys call that your ' capital structure'. Is there a perfect mix or ratio for that? The answer is... not really; it depends on the risk, flexibility, and amount of control you have in any particular financing. So, is it the Golden Age of business borrowing. Our opinion is... not really. But you do have options and there are probably many innovative ways to finance your firm you have not contemplated. These include receivable finance, inventory financing, and asset based lines of credit, securitization, lease financing, and tax credit monetization. Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in your business capital and funding needs in Canada. Stan Prokop - founder of 7 Park Avenue Financial – http://www.7parkavenuefinancial.com Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing. Info re: Canadian business financing & contact details: http://www.7parkavenuefinancial.com/business_capital_credit_funding_canada.html
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