Commercial Lending In Canada Pristoractional Business Finance Solutions

Business finance, we maintain, doesn’t have to be a mystery to the thousands of businesses in Canada that are constantly searching for commercial lending solutions that meets their requirements. And as for the word ‘ PRISTORACTIONAL ‘ – we made it up – it doesn’t exist, but the word ‘ SOLUTIONS ‘ does, and they can be found without any help from the worlds greatest minds! Let’s dig in.

Taking on debt or ‘ monetizing ‘ existing assets must always have repayment taken into consideration – from the bank or commercial lenders perspective that’s the focus.

Business owners/managers need to be able to demonstrate clear repayment – that demonstration comes from assets being monetized – (inventory / receivables), past historical cash flow, or current ongoing profit generation. Repayment of asset monetization financing (lines of credit, etc) must be demonstrated through asset turnover. We’re constantly amazed at how many owners/managers don’t understand how asset turnover plays into overall return on equity.

More amazement? Business plans that focus mostly on sales and ‘ hockey stick’ type projections without realistic assumptions on cash flow, collection turnover, etc.

If your business does in fact have profits you are significantly more eligible for financing such as term loans. Start up or early stage revenue firms who can demonstrate reasonable cash flow and profit projections are advised to check out the federal Govt Guaranteed Small Business Loan program. By the way it can be used to purchase an existing business also.

If your business has 1. historical, 2. present and 3. future (realistic) projected cash flows you are eligible for ‘ UNSECURED ‘ loans based solely on those cash flows, but we caution clients that holy trinity above must be proven.

Your ability to articulate your businesses ‘ OPERATING CYCLE ‘ allows you to access significant capital when it comes to financing current assets. Those financing options include:

Bank operating lines

Asset based non bank lines of credit

Receivable Financing

A/R financing

Refundable Tax Credit Financing (Most commonly the SR&ED program

PO Finance

Revenue based loans

Many businesses require the purchasing of assets that will allow that to either operate more efficiently or stay competitive. Here solutions abound in Equipment financing and leasing solutions. Any asset or technology from 2k to the millions can be financed based on asset equality and proof of repayment ability.

Aside from bank financing these financing facilities are very much based on your actual sales and ability to collect and turnover assets.

So whets the bottom line? Simply that with the right assistance and focus you can leverage your balance sheet, access cash flow through existing assets, or utilize current and future sales potential to monetize your business properly . Consider seeking out and speaking to a trusted, credible and experienced Canadian business financing advisor who can assist you in… solving the mystery!

Stan Prokop

New Payday Loan Regulations Boon Or Bane

This year saw the much awaited payday loan regulations being adopted by six provinces in Canada, the latest being Manitoba which introduced the most stringent regulations in October 2010. Consumer protection forums have been quite vocal about their demands for payday loan regulations for many years now and finally they seem to have had some impact considering the way each province has introduced new rules and regulations with respect to the payday loan industry.

Of course now that these new rules are in place in several provinces in Canada, a new debate has started over whether the new regulations are actually beneficial or are creating a new kind of problem for payday loan borrowers as well as lenders. At the outset, all new regulations have been welcomed by the industry and have had a positive impact for borrowers. The primary objective of these rules; which is to stop unfair business practices and protect consumer rights has been achieved. At the same time, new guidelines for payday loan companies, agents and even brokers has been able to clearly differentiate between the legitimate lenders from those who were simply trying to get the most out of a precarious financial situation of a consumer. In that regard, new payday loan regulations introduced throughout Canada has certainly been beneficial to say the least.

However, there has been a growing concern as well lately with many payday loan storefronts and agencies shutting shop especially in the province of Manitoba. Since October 2010, there have been shutdowns almost every week and has left many of the individuals dependent on these payday loan centers with a worsening financial situation. This has been blamed on the new regulations that had been introduced in Manitoba which is clearly the toughest rules in the country. Even the Canadian Payday Loan Association had warned the respective governments that there would be consequences of the tough stance taken by them. Apart from Manitoba, many payday storefronts in other provinces as well are facing a fight to survive and may end up closing its doors as well over the next few months.

Love it or hate it, the fact remains that many families across Canada use payday loans on a regular basis to ease their monthly financial burdens. Hence analysts believe that while the new regulations being introduced all over the country is definitely a good thing, there has to be some kind of balance that is created so that it ends up as a win-win situation for everyone involved.