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Business financing in Canada. Going it alone has its benefits in business and life, but not necessarily so when you don't have the assistance and expertise to complete the financing you need, forge an acquisition, or complete a merger of sorts. That's when a (good) advisor or intermediary is worth their weight in gold. And he who has the gold...! The goal seems clear at the start - make an intelligent decision on purchasing or merger with a target, achieving via negotiation the right price, and then completing financing as needed. Part of the challenge is that top experts agree that the SME sector in Canada that the huge 'small to medium enterprise' segment comprising of hundreds of thousands of firms is somewhat underserviced. Bigger and or public companies tend to have all the advisors and assistance they need , but the Canadian business owner or manager looking for reasonably priced but expert assistance is somewhat under served. It's apparently a free country though, and you can go it alone but that seems mostly driven by a distrust of sorts of the type of expert advice that is out there, and at what cost. So how can the right intermediary or advisor help? It boils down to several key areas that include helping you validate criteria, putting and analyzing the proper information together, putting forth a deal structure that works, and finalizing the finances you need . So by now it hopefully seems clear that an expert, that ' expertise ' is key to picking someone to work with you. A good way to do that is ask for the TRACK RECORD of transactions closed and completed, along with the type. That record of success will hopefully reflect size of deals completed, a reputation of professionalism and confidentiality, and the ability to interact successfully and professionally with everyone involved in your deal or financing. Certain advisors or intermediaries might request ' exclusivity ' on the deal. That's certainly ok and happens a lot; we're personally in favor of people getting paid for tangible results - end of story.
The issue of fees /overall compensation/ work fee- retainer becomes a stumbling block for all parties on occasion, understandably so. What can you do to address these sorts of points? Numerous structures are available to ensure both everyone feels comfortable with who they are dealing with and how success will be measured. That might come in the form of a one time all inclusive Success fee, or combinations of an initial work fee/retainer, or in some cases a monthly retainer, the latter being our own least favorite.
The issues around overall price and value of the compensation of an advisor or intermediary really boils down into several categories. They include: Time spent on any transaction The level of overall commitment to a deal or financing The overall risk and reward of getting a deal or financing done, or not done! The concept of 'incentive 'as well as the useful information, advice, etc that can be brought to any deal. Ideally you want to be working with someone who either is or can be working on a first name basis with key players on your transaction. Reputation, specialization, and experience of course create a clear message that a successful deal or financing can be completed in the most efficient time possible. Key areas of focus should be: Financing contacts and reputation / negotiation skills/ unbiased advice that is not self serving/ setting reasonable expectations and no conflicts of interest. Also key is the ability to evaluate and present the financials on any deal in a positive manner. As you can imagine a lot of time can be spent on 'financing 'that was never really meant to be. The ability to source and present financing that's real and available is key. Along the way the intermediary or advisor should provide some strong level of financial/cash flow analysis, etc. So at the end of the day consider that real value of an advisor or intermediary is the time and experience to get a deal done or on track – the right combo of compensation and success. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor to assist you with your financing, acquisition or merger needs. 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 10 years - has completed in excess of 85 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: http://www.7parkavenuefinancial.com/business-financing-acquisition-merger-finance.html
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