Financing a business in Canada can sometimes make the entrepreneur / business owner / manager feel like they are ' stalking ' (without the creepy connotations!). How can that experience be turned into a positive one given the challenges and often stress of searching for growth capital or operating finance solutions? Let's dig in.
It's a given that any lender (whether that be traditional banks or commercial finance companies/alternative financiers) will want to ensure the odds of success in your company are positive. That requires the owner/manager/entrepreneur to ensure that certain aspects of the business be presented in a clear fashion.
Along with the often prepared sales forecasts must come the often forgotten cash flow forecast, financial statement presentation! It also helps to position your company in the best light when it comes to knowing your competition or industry stats.
How you intend to grow , and by how much is as important- as that often will direct you to the type of financing you need - that might be term loans, operating lines of credit, lease financing, or asset monetization.
The advantages of selecting the right funding are clear - it allows you to achieve your growth expectations in a more quick and realistic manner. If your business is somewhat, or a lot, capital intensive the financing associated with those capital needs must be addressed early on. Naturally the financing needed might be ' operating' in nature (salaries, rent, insurance, etc) or our previously mentioned ' capital 'in nature. (Technology, plant equipment, software, real estate, etc)
Because Canadian banks tend to be ' cash flow ' lenders any firm in start up or early stage will find it very difficult to attract capital they need in our previously mentioned categories. In many cases that's where ' Alternative ' non bank financing comes in. This financing includes:
Receivables Finance
Inventory financing
Sale leasebacks/ bridge loans
Monetization of SR&ED Tax credits for research funds recovery
Asset based non bank operating lines of credit
Sales/Royalty financing
PO Financing
A great example of a ' hybrid' traditional/alternative finance solution is the Canada Govt Guaranteed Small Business Loan which can provide up to 350,000.00 of financing for start ups and young businesses with less than 5 Million dollars in revenue or projected sales.
Unfortunately the inexperienced in their ' stalking ' for business finance solutions can do serious damage to their businesses. That might mean taking on too much debt, the wrong debt for the need - impacting the balance sheet in a way that cannot be undone without harm.
Business owners often forget to ensure that business life is separated from their personal financial history - so all efforts should be expended to ensure only a minimum amount of personal collateral is pledged to the business lender - bank or otherwise .
Financing needs can often be quantified by some simple planning - along the lines of understanding your needs, knowing you can fulfill them ( traditional/alternative ) and ensuring you have assets or a financial package that highlights repayment .
If you're looking for assistance and some ' stalking ' help in addressing the right financing for your needs seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your growth capital and funding requirements.
Stan Prokop
It's a given that any lender (whether that be traditional banks or commercial finance companies/alternative financiers) will want to ensure the odds of success in your company are positive. That requires the owner/manager/entrepreneur to ensure that certain aspects of the business be presented in a clear fashion.
Along with the often prepared sales forecasts must come the often forgotten cash flow forecast, financial statement presentation! It also helps to position your company in the best light when it comes to knowing your competition or industry stats.
How you intend to grow , and by how much is as important- as that often will direct you to the type of financing you need - that might be term loans, operating lines of credit, lease financing, or asset monetization.
The advantages of selecting the right funding are clear - it allows you to achieve your growth expectations in a more quick and realistic manner. If your business is somewhat, or a lot, capital intensive the financing associated with those capital needs must be addressed early on. Naturally the financing needed might be ' operating' in nature (salaries, rent, insurance, etc) or our previously mentioned ' capital 'in nature. (Technology, plant equipment, software, real estate, etc)
Because Canadian banks tend to be ' cash flow ' lenders any firm in start up or early stage will find it very difficult to attract capital they need in our previously mentioned categories. In many cases that's where ' Alternative ' non bank financing comes in. This financing includes:
Receivables Finance
Inventory financing
Sale leasebacks/ bridge loans
Monetization of SR&ED Tax credits for research funds recovery
Asset based non bank operating lines of credit
Sales/Royalty financing
PO Financing
A great example of a ' hybrid' traditional/alternative finance solution is the Canada Govt Guaranteed Small Business Loan which can provide up to 350,000.00 of financing for start ups and young businesses with less than 5 Million dollars in revenue or projected sales.
Unfortunately the inexperienced in their ' stalking ' for business finance solutions can do serious damage to their businesses. That might mean taking on too much debt, the wrong debt for the need - impacting the balance sheet in a way that cannot be undone without harm.
Business owners often forget to ensure that business life is separated from their personal financial history - so all efforts should be expended to ensure only a minimum amount of personal collateral is pledged to the business lender - bank or otherwise .
Financing needs can often be quantified by some simple planning - along the lines of understanding your needs, knowing you can fulfill them ( traditional/alternative ) and ensuring you have assets or a financial package that highlights repayment .
If you're looking for assistance and some ' stalking ' help in addressing the right financing for your needs seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your growth capital and funding requirements.
Stan Prokop
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