Business capital requirements in Canada often come down to a few basic truths that the business owner/financial manager/entrepreneur must address when it comes to business financing.

One of those truths? Know the true state of their financial condition and what financing they qualify for and what they do not qualify for when it comes to qualifying for business loans in Canadian businesses.

Business loans in Canada

Whether you are a smaller or new business looking for information on how to get a business loan or a larger established business looking for growth financing or acquisition opportunities, we highlight 3 mistakes business loan applicants like your business should avoid making when address, obtain and negotiate your cash flow/working capital and business financing needs.

1. Understand the true condition of your business finances – These are almost always successfully addressed when you spend time on your finances and understand how your financial statements reflect your access to business loans and business credit in general.

2. Make sure you have a plan for sales growth and financial needs related to business financing

3. Understand the real hard facts about cash flow which is, of course, the lifeblood of your business

Can you honestly answer or feel positive about those 3 points? If so, swipe Go and get $100.00!

A good way to approach your company’s financial plans is to make sure you understand growth financing solutions, as well as how to manage a recession, ie not growing, losing money, etc.; It’s never fun to fund yourself in an economic or industrial downturn like the 2020 COVID pandemic!

When we talk to new or established business clients, it seems like they’re almost always talking about sales, so the ability to understand and focus on the differences in their earnings and cash fluctuations is key.

How do sales and cash flow plans and projections affect the type of financing you need? For one thing, sales growth typically starts by consuming your cash, not generating it. A poor financial plan will drag your business down and tackling financing just gets harder and harder.

Three basic concepts always come up when it comes to finding the right capital and financing for your business.

1. The amount of financing you need

2. The type of financing (debt/cash flow/asset monetization) The interest rate on business loans will be dramatically affected if you choose traditional or alternative financing solutions. Private business loans in Canada come from unregulated commercial finance companies, better known as “alternative lenders.” These lenders are often highly specialized in a “niche” of business financing and can be Canadian companies or branches of US banks and non-bank lenders.

3. How financing is structured to be manageable with your daily operations

Which finance company in Canada can meet your loan needs and why capital is important in business

Let’s identify and break down the key financings that your company should know about and understand if they are applicable and achievable for your business. They include:

Accounts Receivable Financing / Factoring / Confidential Accounts Receivable Financing

Inventory financing / floor planning / retail inventory

Working Capital Term Loans

Cash Flow Unsecured Loans

Merchant Working Capital Loans/Advances: These loans are geared toward short-term cash needs and typically last for one year. Loan amounts are typically 15-20% of your annual sales revenue.

royalty finance

Nonbank Asset-Based Business Lines of Credit

Tax Credit Financing (SR&ED Bridge Loans)

Equipment Leasing/Leaseback Sale: Equipment financing in Canada is used by nearly 80% of all businesses looking to acquire new and used assets.

Government Guaranteed Small Business Loan Program – Government loans in Canada are sometimes referred to as ‘SBLs’, also known as Note: BDC financial solutions are available through this non-bricks and mortar Canadian corporation . A small business loan through the government guaranteed loan program comes with true flexibility in terms of loan term length, market rates, no prepayment penalties, and of course, the low personal guarantee you get. borrowers require. These two ‘government’ loan solutions are often perfect for financing a new business.

If you are focused on not making mistakes in your business financing needs and want to capitalize on solutions that your competitors are probably already using, find and speak with a trusted, credible and experienced Canadian Business Financial Advisor who can help you with your cash flow. and business financing needs.