As a Canadian business owner and financial manager you realize you need business credit or a commercial loan, if not all the time, some of the time. Funds for your business are required for what everyone refers to as ‘working capital ‘. That challenge is wrestled with everyday by your firm – purchasing inventory, paying employees, investing in assets, and, unfortunately, waiting for customers to pay. And you of course are still waiting – for those customers to pay.
Business credit is achieved in a variety of manners. Financing alternatives are available for the start up firm to major corporations – there are only 4 ‘minor’ challenges around those alternatives.
1. Are you as a business owner aware of all the different financing alternatives
2. What are the advantages ( and disadvantages ) of those options
3. What do they cost, how do they Work?
4. Where do I get them?!
And yes, we were being a bit facetious, because those are not MINOR challenges!
We can safely say that if your company is credit worthy, has solid financials, is profitable, is in the right industry, and has lots of assets and collateral that you can be financed in totality by a Canadian charted bank .But there are thousands of businesses in Canada that don’t have those qualifications, but they still require credit lines and receivable financing, inventory advances, equipment financing, potential real estate mortgages, etc
If you business can’t access all the financing you need then its time to look at some of those options and alternatives we spoke about. Receivable financing is right up there today in popularity .Also called ‘factoring’ it is the immediate sale of receivables that generates immediate working capital for your firm. It is easy to obtain, efficient, and eliminates a lot of the requirements that come with typical lending standards. This is probably the fastest growing part of business financing today in Canada, and we encourage business owners to speak to a credible, successful and experienced expert in this field to ensure they understand the basics around cost, daily paperwork flow, and potential pitfalls around some of the loopholes some factors insert in their paperwork with your firm.
One of Canada’s quasi government entities offers a specialized working capital term loan. The loan is essentially unsecured, has a competitive interest rate, and injects positive and permanent working capital into your firm. Check out that option.
Many clients always refer to the term ‘Government grants and loans ‘. The two most popular programs, if we can call them that, are the government Small Business Loan as well as the SR&ED program which provides non repayable grants on your research and development. The former, the infamous ‘ SBL ‘ loan, finances equipment and leaseholds at great rates, terms , and structures, with even limited personal guarantees.
So whats our bottom line on business credit and commercial loan alternatives – keeping it simple we can say that you should be aware of alternatives, they do exist. Traditional financing is available, and alternative financing is abundant – work through the mechanics with some experienced assistance and determine what type of business credit options work for your company.