Business capital requirements in Canada generally boil down to a few basic facts that business owners/finance managers/entrepreneurs need to address when financing their business.
One of those truths? Find out the true state of their financial situation and what financing they are eligible for and not eligible for when meeting the commercial loan requirements of Canadian businesses.
Commercial loans in Canada
Whether you are looking for small start-up companies how to obtain a commercial loan information, or find large mature companies to increase financing or acquisition opportunities, we emphasize the commercial loan seekers in such as your company need to avoid making three mistakes when solving problems, purchasing and negotiation of your cash flow/working capital and business financing needs.
1. Understand the true state of your company’s finances – When you take the time to deal with finances and understand how your financial statements reflect your access to commercial loans and business credit in general, these issues are almost always resolved successfully
2. Make sure you have a plan for sales growth and financial needs related to business financing
3. Knowing the real facts about cash flow is, of course, the lifeblood of your company
Can you answer honestly or feel positive about all 3 points? If so, pass Go and collect $100.00!
A good way to address your company’s financial plan is to make sure you understand growth financial solutions and how to manage in downturns — i.e., no growth, no loss, etc.; Raising money for yourself during an economic or industry downturn like the 2020 COVID pandemic is never fun!
When we talk to customers of new or established businesses, they always seem to be talking about sales, so the ability to understand and pay attention to differences in their profit and cash fluctuations is key.
How do cash flow and sales plans and projections affect the type of financing you need? For one thing, sales growth usually starts by eating into your cash, not generating it. Poor financial planning will drag down your business and it becomes increasingly difficult to solve financing problems.
When it comes to finding the right kind of business capital and financing, three basic elements always come up.
1. The amount of financing you need
2. Type of financing (debt/cash flow/asset monetization) Commercial loan rates will be greatly influenced by whether you choose traditional or alternative financing options. Private commercial loans in Canada come from unregulated commercial finance companies, often referred to as “alternative lenders”. These lenders are often highly specialized in a “niche” of commercial finance, which may be Canadian companies or branches of U.S. banks and non-bank lenders
3. How is the financing structure managed through your daily operations
Which financial companies in Canada can meet your borrowing needs and why is capital important in business
Let’s identify and break down the key financing that your company should know and understand whether they are applicable to your business and can achieve. They include:
Accounts receivable financing/factoring/Confidential accounts receivable financing
Inventory Finance/Floor plan/Retail inventory
Working capital term loan
Unsecured cash flow loan
Merchant Working Capital Loans/advances – These loans are for short-term cash needs and usually last one year. The loan amount is usually 15-20% of your annual sales.
Credit line for asset-based non-bank business
Tax credit Financing (SR&ED Bridge Loan)
Equipment leasing/sale-leaseback — Almost 80% of companies in Canada are using equipment finance to acquire new and used assets.
Government Guaranteed Small Business Loan Program – Government loans in Canada are sometimes called “SBL”, also known as Note: This Canadian non-entity Crown corporation provides BDC Financial solutions. Small business loans offered through the Government Guaranteed Loan Program offer real flexibility in terms of term loan terms, market interest rates, no upfront penalties, and low personal guarantees required by borrowers. These two “government” lending solutions are often well suited to financing new businesses.
If you are focused on making no mistakes in your business financing needs and would like to take advantage of solutions that your competitors may already be using, seek out and speak with a trusted, trusted and experienced Canadian business finance advisor who can help you with your cash flow and business financing needs.
Stan has had a successful career in some of the world’s largest and most successful companies.
For the past 25 years, his employers have been ASHLAND OIL, DIGITAL EQUIPMENT CORPORATION (1977-1980), CABLE & WIRELESS PLC (1980-1990), (1991-1993)) and HEWLETT PACKARD (1994-2004) 2004 7 PARK AVENUE FINANCIAL – He was a specialist in financing for Business F in Canada.
Stan’s business finance articles are published on many Internet sites and his blog mixes business finance information with his commentary on Canadian business