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Financing a business in Canada. We recently spoke about a BDC Canada CEO survey that we participated in around how Canadian business owners and financial managers felt these days about their ability to access capital. That got us to thinking, since the survey posed a lot of questions and not that many answers. So it would seem that your 2 cents in questions plus our 2 cents in answers equals a solid 4 cents of Canadian financing solutions. (That would be about 3.5 cents U.S. with the way foreign exchange is working these days!) So let's dig in. So let's look at some of those answers and questions posed hopefully add a strong sense of hope and solutions around key issues. Canadian business owners/manager s felt the 2 key issues around new financing typically tend to be the amount they are able to obtain and the rates and costs that are attached to that financing. We would point out that in the current environment business finance is accessed through traditional and also alternative capital. Each of those has a different cost. So while alternative financing going to be more expensive 99% of the time its also safe to say that it can deliver on more financing when amounts sought are not available from our banks, insurance companies, business credit unions, etc. A good example? It the business revolving line of credit. Chartered banks offer business credit facilities at rates pretty well in the prime rate area these days. So your cost of capital is low - but approval or approved amounts are more difficult to access. So we encourage clients to weigh access to financing, not just the cost solution. Higher financing costs can be offset by increased growth and profits, as well as operating efficiencies. Collateral was also a key issue for Canadian business owners. As it is safe to say that all business financing worth its weight is ' SECURED ' by a bank or commercial finance company your ability to negotiate the right collateral will play a key role in overall finance success. In some cases you may wish to use the services of a Canadian business financing advisor who is familiar with the lay of the land and has a reputation among lenders commensurate with your needs. We were somewhat floored by the following comment in the BDC survey - ' Generally speaking participants in the survey were open to most of the elements that characterize equity financing except when it comes to dilution' . Is it just us but doesnt any sort of new equity dilute ownership?!! We're strong proponents of debt and asset monetization financing that generates capital and cash flow. Are you using any of the following Canadian business finance solutions to generate funding and working capital without equity dilution? A/R Financing
Equipment financing / Sale leasebacks
Bank commercial credit facilities
Non bank asset based revolving lines of credit
SRED Tax credit monetization
Bridge loans
Inventory financing outside of business credit lines
Securitization While no firm would ever use all of the above solutions it's safe to say that any number of these could deliver capital and growth opportunities to your firm. So when you combine 2 cents of Canadian business concerns with our 2 cents of solutions all of a sudden 4 cents (3.5 U.S.) doesnt seem that bad! Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your funding 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 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/financing-a-business-funding-canada.html
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