Funding Business Turnaround. Growth Financing Secrets And Tips For Canadian Business
Funding business turnaround. Whether it's growth financing or rescuing a company from that terrible spot known as ' dire straits' no business owner/manager wants to ' crash '. So imagine our surprise when we read and talked to the mgmt of a firm that put out a great article entitled ' WHY COMPANIES CRASH! '
But wait a minute, when we read the article and discussed it with the writer we found it focused on some great, but not financial issues. Those issues included salary and compensation models that didn't work, strange organization structures, and poor or non existent business goals. Great stuff, and we'll leave those areas to consultants and others, but that is not our focus, which is failure due to no financing, poor financing, or wrong financing. Let's dig in!
As we can imagine financing at a time when its lease available to your firm is.... difficult! While we might assume ( or hope ) that Canadian chartered banks are the best or most likely to save a firm the hard core reality is that bank loan rates and margins and a non tolerance for excessive risk quickly rise to disappoint when growth and turnaround finance is needed the most.
In fact when Canadian chartered banks feel that your firm reaches ' CODE 10' on their risk meters they actually move your account to a special loans category and increase your borrowing costs. Not what you had hoped!
Firms that have assets and growth and survival possibilities of course want to avoid bankruptcy and face the burden of losses owners, lenders and investors in your firm.
Assets are what often saves a firm that is a great place to start. While assets can of course be sold off and liquidated. At that time surely the business owner couldn't have any more bad luck... but wait, and then Revenue Canada shows up also. It couldn't be worse.
But that's when creative financing strategies employing the concept of asset based lending can save the day. By carefully assessing and appraising the ongoing value of assets such as receivables, inventory, unencumbered fixed assets,, real estate ( if applicable ), and tax credits and patents.
Careful crafting of such a facility allows a firm to pay off existing banks or lenders, come to suitable terms with those friendly CRA folks, and have ongoing capital for maintaining supplier and customer expectations.
When properly negotiated and documented proper borrowing structures can be put in place without onerous ratios and covenants that often control your ability to address growth financing.
Numerous single and combination of finance strategies exist for funding business turnaround and growth. They include:
SUPPLY CHAIN / PO FINANCING
AR FACTORING
INVENTORY FINANCE
BRIDGE LOANS
SALE LEASEBACKS
TAX CREDIT FUNDING / SRED ACCRUAL FINANCING
NON BANK COMMERCIAL LINES OF CREDIT (ABL)
When you're faced with the prospect failing due to financing seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your critical needs.
Stan Prokop
But wait a minute, when we read the article and discussed it with the writer we found it focused on some great, but not financial issues. Those issues included salary and compensation models that didn't work, strange organization structures, and poor or non existent business goals. Great stuff, and we'll leave those areas to consultants and others, but that is not our focus, which is failure due to no financing, poor financing, or wrong financing. Let's dig in!
As we can imagine financing at a time when its lease available to your firm is.... difficult! While we might assume ( or hope ) that Canadian chartered banks are the best or most likely to save a firm the hard core reality is that bank loan rates and margins and a non tolerance for excessive risk quickly rise to disappoint when growth and turnaround finance is needed the most.
In fact when Canadian chartered banks feel that your firm reaches ' CODE 10' on their risk meters they actually move your account to a special loans category and increase your borrowing costs. Not what you had hoped!
Firms that have assets and growth and survival possibilities of course want to avoid bankruptcy and face the burden of losses owners, lenders and investors in your firm.
Assets are what often saves a firm that is a great place to start. While assets can of course be sold off and liquidated. At that time surely the business owner couldn't have any more bad luck... but wait, and then Revenue Canada shows up also. It couldn't be worse.
But that's when creative financing strategies employing the concept of asset based lending can save the day. By carefully assessing and appraising the ongoing value of assets such as receivables, inventory, unencumbered fixed assets,, real estate ( if applicable ), and tax credits and patents.
Careful crafting of such a facility allows a firm to pay off existing banks or lenders, come to suitable terms with those friendly CRA folks, and have ongoing capital for maintaining supplier and customer expectations.
When properly negotiated and documented proper borrowing structures can be put in place without onerous ratios and covenants that often control your ability to address growth financing.
Numerous single and combination of finance strategies exist for funding business turnaround and growth. They include:
SUPPLY CHAIN / PO FINANCING
AR FACTORING
INVENTORY FINANCE
BRIDGE LOANS
SALE LEASEBACKS
TAX CREDIT FUNDING / SRED ACCRUAL FINANCING
NON BANK COMMERCIAL LINES OF CREDIT (ABL)
When you're faced with the prospect failing due to financing seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your critical needs.
Stan Prokop
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