Business Loans In Canada: Financing Solutions Via Alternative Finance & Traditional Funding

Business loans and finance for a business just may have gotten good again? The pursuit of credit and funding of cash flow solutions for your business often seems like an eternal challenge, even in the best of times, let alone any industry or economic crisis. Let’s dig in.

Since the 2008 financial crisis there’s been a lot of change in finance options from lenders for corporate loans. Canadian business owners and financial managers have excess from everything from peer-to-peer company loans, varied alternative finance solutions, as well of course as the traditional financing offered by Canadian chartered banks.

Those online business loans referenced above are popular and arose out of the merchant cash advance programs in the United States. Loans are based on a percentage of your annual sales, typically in the 15-20% range. The loans are certainly expensive but are viewed as easy to obtain by many small businesses, including retailers who sell on a cash or credit card basis.

Depending on your firm’s circumstances and your ability to truly understand the different choices available to firms searching for SME COMMERCIAL FINANCE options. Those small to medium sized companies ( the definition of ‘ small business ‘ certainly varies as to what is small – often defined as businesses with less than 500 employees! )

How then do we create our road map for external financing techniques and solutions? A simpler way to look at it is to categorize these different financing options under:

Debt / Loans

Asset Based Financing

Alternative Hybrid type solutions

Many top experts maintain that the alternative financing solutions currently available to your firm, in fact are on par with Canadian chartered bank financing when it comes to a full spectrum of funding. The alternative lender is typically a private commercial finance company with a niche in one of the various asset finance areas

If there is one significant trend that’s ‘ sticking ‘it’s Asset Based Finance. The ability of firms to obtain funding via assets such as accounts receivable, inventory and fixed assets with no major emphasis on balance sheet structure and profits and cash flow ( those three elements drive bank financing approval in no small measure ) is the key to success in ABL ( Asset Based Lending ).

Factoring, aka ‘ Receivable Finance ‘ is the other huge driver in trade finance in Canada. In some cases, it’s the only way for firms to be able to sell and finance clients in other geographies/countries.

The rise of ‘ online finance ‘ also can’t be diminished. Whether it’s accessing ‘ crowdfunding’ or sourcing working capital term loans, the technological pace continues at what seems a feverish pace. One only has to read a business daily such as the Globe & Mail or Financial Post to understand the challenge of small business accessing business capital.

Business owners/financial mgrs often find their company at a ‘ turning point ‘ in their history – that time when financing is needed or opportunities and risks can’t be taken. While putting or getting new equity in the business is often impossible, the reality is that the majority of businesses with SME commercial finance needs aren’t, shall we say, ‘ suited’ to this type of funding and capital raising. Business loan interest rates vary with non-traditional financing but offer more flexibility and ease of access to capital.

We’re also the first to remind clients that they should not forget govt solutions in business capital. Two of the best programs are the GovernmentSmall Business Loan Canada (maximum availability = $ 1,000,000.00) as well as the SR&ED program which allows business owners to recapture R&D capital costs. Sred credits can also be financed once they are filed.

Those latter two finance alternatives are often very well suited to business start up loans. We should not forget that asset finance, often called ‘ ABL ‘ by those Bay Street guys, can even be used as a loan to buy a business.

If you’re looking to get the right balance of liquidity and risk coupled with the flexibility to grow your business seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success who can assist you with your funding needs.

Business Capital Solutions In Canada: Accessing Proper Cash Flow & Commercial Financing

Business capital requirements in Canada often boil down to some basic truths the business owner/financial mgr/entrepreneur needs to address when it comes to financing for businesses.

One of those truths? Knowing the true state of their financial condition and what financing they do and don’t qualify for when it comes to meeting commercial lending requirements in Canadian business.

Business Loans In Canada

Whether you are smaller or start-up firm looking for information on how to get a business loan or a larger established firm looking for growth financing or acquisition opportunities we’re highlighting 3 mistakes that commercial loan seekers like your company need to avoid making when addressing, sourcing and negotiating your cash flow / working capital and commercial financing needs.

1. Understand the true condition of your company finances – These are almost always successful addressed when you spend time on your financials and understand how your financial statements reflect your access to commercial loans & business credit in general

2. Ensure you have a plan in place for sales growth and financial needs as it relates to commercial financing

3. Understand that actual hard facts about cash flow which is, of course, the lifeblood of your company

Can you honestly answer or feel positive about all those 3 points. If so, pass Go and collect $ 100.00!

A good way to address your company’s finance plans is to ensure you understand growth finance solutions, as well as how to manage in a downturn – i.e. not growing, losing money, etc; It’s never fun to fund yourself in an economic or industry downturn such as the COVID pandemic of 2020!

When we talk to clients of new or established businesses it seems they are almost always talking about sales, so the ability to understand and focus on the differences in their profits and cash fluctuations is key.

How do cash flow and sales plans and projections affect the type of financing you require? For one thing sales growth usually starts out by consuming your cash, not generating it. A poor finance plan will drag your business down and addressing financing simply gets tougher and tougher.

Three basics always emerge when it comes to your search for the right business capital and financing.

1. The amount of financing you need

2. The type of financing (debt/cash flow/asset monetization) The business loan interest rate will be dramatically affected by whether you choose traditional or alternative financing solutions. Private business loans in Canada come from non regulated commercial finance companies most often known as ‘ alternative lenders ‘. These lenders are typically highly specialized in one ‘ niche ‘ of business financing and may be Canadian firms or branches of U.S. banks and non-bank lenders

3. How the financing is structured to be manageable with your day to day operations

What Finance Company In Canada Can Meet Your Borrowing Needs & Why Is Capital Important In Business

Let’s identify and break down key financings your firm should know about and understand if they are applicable and achievable to your business. They include:

A/R Financing / Factoring / Confidential Receivable Finance

Inventory finance / floor planning / retail inventory

Working Capital term loans

Unsecured cash flow loans

Merchant working capital loans/advances – these loans are geared toward short term cash needs and are typically one year in duration. Loan amounts are typically 15-20% of your annual sales revenues.

Royalty finance

Asset based non bank business lines of credit

Tax credit financing (SR&ED bridge loans)

Equipment Leasing / Sale leasebacks – Equipment financing in Canada is used by almost 80% of all companies looking to acquire new, and used, assets.

Govt Guaranteed Small Business Loan program – Government Loans in Canada are sometimes referred to as ‘ SBL’, aka Note: BDC Finance solutions are available from this Canadian non-bricks and morter crown corporation. A small business loan via the government-guaranteed loan program comes with true flexibility around term loan duration, market rates, no pre payment penalties, and of course the low personal guarantee that is required by borrowers. These two ‘ government ‘ loan solutions are often perfect for financing a new business.

If you’re focused on not making mistakes in your business finance needs and want to capitalize on the solutions your competitors are probably already using seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your cash flow and commercial financing needs.

Stan has had a successful career with some of the world’s largest and most successful corporations.

His employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) In 2004 Stan founded 7 PARK AVENUE FINANCIAL – He is an expert in Canadian Business Financing.

The Benefits of Online Educational Programs

WOULD YOU CONSIDER AN ONLINE EDUCATIONAL PROGRAM? With the current challenges facing traditional colleges and universities, which includes higher tuition, budget cuts, and course shortages, many students as well as those that love learning have switched to online educational programs. With nearly three million students currently enrolled in fully online degree programs and eight million taking at least one online course as part of their degree program, online education has clearly become one of the most popular higher education alternatives.The continually improving reputation of online learning has also helped fuel its expansion, as initial skepticism has faltered in the face of evidence that shows that online learning can be just as effective as face-to-face education. I have taken several myself and the experience is quite unique as these programs are entirely convenient and flexible. They provide educational information that will build your business immediately. You will be surprised to know that some of these online courses are FREE! The emphasis however in taking free courses online is the personal knowledge obtained. The certificates received in some cases are however not from accredited educational institutes.ONLINE EDUCATIONAL PROGRAMS VERSUS TRADITIONAL EDUCATIONAL PROGRAMS All of this means that students, from working professionals to recent high school graduates, find many reasons to take all or some of their courses online. Below are some major advantages of online education:
Variety of programs and courses: From traditional four-year universities to completely online career colleges, higher education today offers a variety of options for learners. This means that no matter what students wish to study, from cooking to rocket science, they can find online education they need. They can also earn every academic degree online, all the way from a career certificate to a doctorate.
Lower total costs: Online educational programs can be a more affordable option than traditional colleges. Though not all online degrees have less expensive net tuition prices than traditional colleges, associated costs are almost always less expensive. There are no commuting costs, and there is also not any required course materials such as textbooks because every reading materials are made available for free online. In addition, many colleges and universities have begun to accept credits earned via free massive open online courses (MOOCs), the most recent advance in online education. Free online courses such as these can help students fulfill general education requirements at little to no cost.
More comfortable learning environment: These days, commercials featuring online students studying in their pajamas are becoming popular in describing one of the primary benefits of online education. There are no physical class sessions. Lectures and reading materials are electronically sent to the student, who will then read them and complete assignments. Students will not have to fight traffic, find parking spaces, leave work early to go to class, or miss important family time.
Convenience and flexibility: Online educational programs give students the opportunity to plan their study time around the rest of their day, instead of the other way around. Students can study and work when they are at their peak energy, whether that’s early morning or late at night. Course material is always accessible online and they are asynchronous, so there’s no need to schedule special trips to a library either. All of this makes online learning attractive.
Avoid commuting: During bad weather, colleges may cancel classes. Also, a traffic situation like in Lagos where I reside may pose a serious problem for those attending traditional education. Rather than be late or miss important class sessions, students in online educational programs can always “attend” by participating on discussion boards or in chat sessions, turn in their work on time, and watch lectures or read materials. Many students also find that the amount they save on fuel costs can be substantial if they don’t have to commute to a physical campus in general, no matter what the weather conditions may be.
Improve your technical skills: Even the most basic online educational programs requires the development of new computer skills, as students learn to navigate different learning management systems (LMS) and programs. The skills students learn to participate in their online courses translate to many professions, including creating and sharing documents, incorporating audio/video materials into your assignments, completing online training sessions, etc. All this form part of their learning too.
All these benefits highlighted above are clear reasons for the astronomical growth of e-learning. There are several e-learning institutes today offering certifications and degrees in modern topics. For those wondering whether it is a valid alternative, I say to you it is. For network marketers and those managing their businesses, online education becomes a better alternative as you will not have to leave your business to continue learning.