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.

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.

Why Sales and Marketing MUST Align

Let’s talk about a sales and marketing problem most companies have struggled with for years. I’m not talking about lead generation, market share, or customer retention, although it does impact each of those things and so much more. I’m talking about the chasm that separates Sales and Marketing.Take a look at a typical day in the life of both Sales and Marketing to see if you can relate…A Day in the Life of a MarketerA marketer works hard to generate leads for her sales team. She optimizes conversion opportunities across her company’s website, delivers email campaigns, builds landing pages and delivers valuable gated content. Her work generates a steady stream of leads, which she immediately passes along to the sales team. Because, after all, more leads is better, right?Our marketer toils away each day to create valuable marketing content and sales support materials. She sends emails to the sales team to notify them each new piece of content as it is finalized. She even uploads each new item to the company’s Dropbox account so everyone can access it.Ah, sweet success!But not for long…Her blood boils when she learns her sales reps haven’t even so much as looked at the leads she has been generating. She shivers with frustration when she finds out most of the sales team is somehow unaware of most of the content she has created. How can this be possible?Marketing feels undervalued and ignored.A Day in the Life of a Sales RepOn the other side of the Grand Sales and Marketing Canyon, a sales rep spends her day responding to urgent prospect requests, traveling from meeting to meeting, communicating with customers, reacting to unexpected changes with buyers – hers is a life of constant chaos and change.She often needs content in order to respond to immediate needs of her prospects. However, this leads to frustration because the materials she has access to are not the materials she needs. They are outdated or – worse yet – they don’t even seem to exist. This often means she ends up creating content on the spot. This requires time she simply doesn’t have. She can’t understand why Marketing doesn’t produce the content she needs.To top it off she receives endless notifications from Marketing about new leads she to follow up with, adding pressure to her already stress-filled day. She doesn’t have time to stay on top of communication with her own prospects, let alone a list of new leads from Marketing. Besides, Marketing leads never seem to be qualified and following up with them always seems to be a waste of her time.Sales feels misunderstood and unsupported by Marketing.Sound familiar? Yeah, I thought so.Unfortunately, this situation is incredibly common. Marketers are not alone in their feelings of being undervalued and ignored. In fact, as much as 80% of marketing leads will never be acted upon by Sales. And according to the American Marketing Association, a whopping 90% of selling content is never actually used in selling.Sales reps, too, are justified in their frustration. The CMO council found that instead of selling, sales people spend upwards of 40% of their time creating their own messaging and tools. Also, according to HubSpot, only 27% of leads sent to sales by marketing are qualified first.Pretty sad statistics, right? So why is it happening? It’s that chasm I mentioned earlier between Sales and Marketing. These two teams are disconnected in a big way and it’s taking a toll on the companies they work for.It’s time to close the gap and align Sales and Marketing once and for all. While you would probably agree, you may not fully understand why it’s so important or what you can do about it.Why Sales and Marketing MUST AlignReason #1: Your Customers See ItAccording to the IDC, as much as 57% of customers feel that salespeople are poorly preparedor not prepared at all for initial meetings.Could it be that these sales reps didn’t have the resources they needed to properly prepare for these initial meetings? After all, these meetings with prospective customers are pretty important to sales reps – they are key milestones in the sales process! The vast majority of sales reps would certainly want to be prepared for them so they could be as successful as possible. They just didn’t have the content they needed to adequately prepare.Sales reps need content to effectively engage prospects and close sales. But not just any content will do. They need content that speaks directly to the needs, challenges and preferences of prospects. And they need to be able to access the most current versions of it whenever they need it.What To DoTake the first step toward Sales and Marketing alignment and talk to the sales reps directly. Work to clearly understand the challenges they face throughout the sales process. Ask them about the gaps they see in your marketing content. Try to understand how they need to access content and when and where they need it most. Attempt to learn what marketing support has worked and what has not – and why. Listen to their feedback and list the ways you can better serve your sales reps.One strategy I like to use is asking sales reps to write down questions they frequently receive from prospects. Then, use this list of FAQs as a list of content you can create to directly support the sales reps the next time they encounter such inquiries.The important takeaway here is that marketers can take the first step toward Sales and Marketing alignment by starting a simple conversation with sales reps. Just ask them what they need and work out a way to deliver it.Reason #2: Lead OverloadWhen Sales and Marketing aren’t aligned, inefficiencies are bound to happen. Like the examples given above, chances are pretty good that Marketing is delivering leads that Sales will never touch. With increasing adoption of marketing automation platforms and their ability to help marketers do more than ever before, marketers are capable of generating a lot of leads. That’s great. What’s not so great is when they just pass them all along to sales.Why is this such a problem? When sales reps are given more leads than they are physically able to follow up with, they become saturated… and those leads get neglected Here’s an example:Let’s say you’ve been striving to reach a lead generation goal of 30 leads per rep per week. That sounds great! That is, until you learn that each rep typically has about two hours per week to follow up with leads and each lead typically requires about 20 minutes of follow up time. You now realize that each rep has the capacity to follow up with just six leads each week. You have been working hard to send them 30.See the problem here? In this scenario, you would be sending them 24 more leads than they can physically handle. Every. Single. Week.What you thought was great marketing success was actually overloading sales. And it was leading to neglected leads.What To DoAs the previous example briefly mentioned, one of the first steps in solving this problem is by talking to your sales reps and Sales leadership directly to understand the realistic number of leads each rep can follow up with each week. Then adjust the number of leads you deliver accordingly.This doesn’t mean you aim try to generate fewer leads. Not at all. Instead, it means you might need to nurture them and better qualify them before handing them off to Sales.More work for marketing? Perhaps. But wouldn’t it be worth it if your work was actually used? By nurturing leads before handing them off to Sales, you increase the chances of the leads you deliver actually becoming customers.On average, according to a Demand Gen Report nurtured leads produce a 20% increase in sales opportunities versus non-nurtured leads. What’s more, companies that excel at lead nurturing generate 50% more leads that are truly sales-ready. Even better – they produce these leads a third of the cost of companies that aren’t so great at lead nurturing.Invest some time in better understanding Sales and each rep’s capacity for following up with leads. Then refine your lead nurturing process to improve the quality and rethink the quantity of leads you deliver to sales.Reason #3: Revenue Gone to WasteWhen sales reps spend time searching for or creating content, this not only duplicates the efforts of marketing, it also pulls them away from important sales opportunities. And those wasted opportunities add up to wasted revenue – lots of it.Consider this: A study by IDC found that by saving a single sales rep just 60 minutes of prep time each week, a company could realize additional revenue generation $300,000 or more per rep! In a company with just 10 reps, that’s $3 million each year. If you’ve got 100 reps, that’s a staggering $300MM per year.If just 60 minutes of prep time can translate into $300,000 in revenue, just imagine how much potential revenue is wasted in your organization as sales reps struggle to find the content they need.What To DoClear out the clutter. As you work to build a better relationship with your sales reps and establish more frequent, meaningful communication, look for ways you can reduce the clutter – in both of your lives.Quite often, technology can help here. There are apps available today to help manage content. Anything from Google Drive to Basecamp, Dropbox to Salesforce – any number of tools can serve as a virtual marketing library for your content. Each one is available anywhere and on any device with an internet connection so sales reps should have no problem getting the content they need whenever they need it.If you can commit to making only the most current versions of content available in this marketing library, ask your sales reps to also make a commitment. Ask them to retrieve these up-to-date versions of content whenever they need to use it – instead of using outdated content stored elsewhere or creating their own.Close the gap between Sales and Marketing. Reach out to Sales to better understand their challenges and needs. Work together to better serve your customers. Sure, it will improve your business and probably increase revenue, but it will also improve your workplace happiness, and can you really put a price on that?