Capital For Your Business ? What You Need To Know About Business Loan Financing In Canada

Many first time clients we meet are struggling with how to get capital for their business. Whether it is a loan financing or an asset monetization type strategy it’s really an age old question that Canadian business owners and financial managers struggle with on an ongoing basis.

Let’s uncover some keys to success for business financing that makes sense for your firm.

Trying to get proper business financing without a crisp business plan, executive summary, and financial history or projection is somewhat of a doomed strategy. Many clients we meet though are more ‘ entrepreneurial’ than financial, so they face challenges in the ability to properly present their needs in a realistic and credible fashion. That also might be why they seem to be more focused on growing and running their business, as opposed to financing it!

We meet many business owners who feel that their lender , be it the bank or a commercial financing company simply doesn’t understand their business .While we agree some bankers and finance lenders might be pre disposed to dislike certain industries you cant assume that’s always the case . They do have an emotional attachment to seeing that your loan or financing is repaid though – that’s where your job becomes much easier.

Canadian financing needs are often for different purposes. In some cases you might be focusing on the government small business loan, in other cases it could be equipment financing via a lease finance strategy. Or you could be considering monetizing certain assets such as receivables, inventory and equipment in asset based lines of credit. The bottom line – position your request directly to the type of lender you are working with.

We see many summaries or business plans that are focused on one of two areas – lenders, or investors. If you are focusing on lenders doesn’t it make sense that your focus should be collateral and cash flow – simply speaking, how you’re financing will be repaid. Clients looking for equity capital or strategic partnerships need to address a myriad of other issues – i.e. revenue growth targets, market success and penetration, etc.

In the case of bankers and commercial finance lenders you can expect some solid discussion around ‘ number relationships’ in your financials or projections. Others call them ratios or covenants; we prefer ‘ relationships.

So while every plan or summary with respect to financing you require has some common characteristics – i.e. owner bios, history of company, market info, etc you should expect that a banker or commercial financing proposal should include key aspects of debt financing .Those include: collateral issues, cash flow and relationship (ratio) analysis, and personal info on owners of the firm.

Is there one solid way to make a ‘ connection’ with the type of lender you are focusing on? In Canada the types of financing available to entrepreneurs can generally be categorized under the following – traditional bank financing, asset based lending, lease financing, working capital financing, and tax credit financing , government loan financing .

Again, its different financial solutions for different financial challenges. So consider this… that the way to ‘ connect ‘ with the financing you need might possibly be to connect with a Canadian business financing advisor who has strong credible and proven experience in the type of financing you need.

Bankers and commercial lenders are clearly going to be a bit more receptive to review a transaction with someone who they have worked with already. So find an advisor who has credibility in the area of financing that you need. A referral by a trusted financing advisor is invaluable.

Remember that banks and commercial finance firms are in business to lend you funds- so knowledgeable and prepared Canadian firms will always get access to the financing they needs. And you our suggested ‘ people link’ via a respected advisor to guarantee successful borrowing.