Tweet

Toronto Working Capital Financing

Guest post by: Stan Prokop

Article Overview: The articles reviews working capital financing alternatives for Canadian business owners and financial managers seeking long term permanent solutions or temporary solutions from their current assets .

Toronto Working Capital Financing

Working Capital Financing remains a strong priority for Canadian business owners and financial managers that feel they are emerging from the recent recession and still require working capital to grow.

We continually between with Canadian business owners who want to understand their working capital options. Working capital facilities consist of either cash term loans, or receivable and inventory financing facilities.

As a Canadian business owner you need to understand the problem before you address the solution - that is why we constantly recommend that you sit down with a trusted and experience business financing advisor who has credibility in delivering financial solutions for your cash flow needs.

If working capita financing was a challenge prior to the recession you can pretty well multiply that challenge by 100% in the current business environment. There is not a day when we don't see an article or a television story surrounding the challenges of Canadian business financing, or, on the unfortunate side, the demise of a great Canadian business due to the current difficult financial environment.

Business owners in Canada see themselves as unique of course, and quite frankly we would agree that every business has its own business model, operating cycle, cash conversion cycle, and unique financing needs.

When a business owner asks us for working capital advice we point out that working capital is both permanent in nature, and temporary. By permanent we mean cash working capital term loans - this loan injects long term working capital into your business, is paid off over several years, and is paid at usually a fixed rate on a monthly basis . We currently are aware of only two options for term working capital loans; both of these options are unsecured in nature. That is to say they rank behind any current secured or senior lenders you might have in place currently. On a term working capital loan rates vary with respect to your overall credit quality and size of transaction. In some cases no owner guarantees are required, depending on the overall structure. One of these type of loans is in effect underwritten by a government crown corporation, which brings with it significant rate advantages, as the government entities price their transaction to current low yielding bond rates .

We hasten to say that if your firm is contemplating a fixed term working capital loan (also called a 'mezz 'loan or 'cash flow loan 'that you clearly have to be able to demonstrate that you can service the debt. Service the debt is finance lingo for 'being able to make the payment! Typical criteria in approving such a facility are cash flow coverage, ebitda analysis, and on occasion the guarantee of shareholders.

In summary, working capital loans vary in nature, they can be fixed cash term loans, or also revolving facilities focusing on current asset collateral such as receivables and inventory.

The bottom line is of course to understand your needs before you search for a solution. If you don't have full expertise in this area work with a trusted business financing advisor to ensure you can maximize on the best solution for your working capital needs.

Related Articles
  Working Capital Financing
  Real World Advice on Cost of factoring of receivables in Toronto – Board the Receivable factoring Bus!
  Working Capital Financing – Commercial Financing Solutions
  Small Business Loans for Working Capital Financing In Canada
  Working Capital Financing – Canadian Challenges and Solutions
  Sources of Financing for Working Capital Cash flow in Canada
  Business Inventory and Purchase Order Financing Canada
  Business Working Capital Financing
  A Great Working Capital and Cash flow Strategy
  Surviving A Working Capital Financing and Funding Challenge
  Film Tax Credit Financing in Canada – Accelerating Payment of your Tax Credits
  Finding Information on Small Business Loans
  Alternative Financing in Canada and others
  Information on the Film tax credit for Canadian Independent Productions in Film and Television and Digital Animation
  Working Capital Finance Loan Advice – What Business Credit Is Available For Your Firm ?
  Working Capital Financing – Does My Firm need a Working Capital Loan
  Avoiding Blunders in working capital financing and Cash flow Financing
  5 Smart Simple Canadian Working Capital Cash Flow Financing Loan Techniques !
  Inventory and Purchase Order Financing in Canada
  Get A Cash Flow Solution In Place For Working Capital Financing – Your 2011 New Year Resolution

Article Tags: cash flow financing, unsecured loans, working capital financing



Related Forum Posts
How to valuate a business - Hi Garth - here is how we did it at Northern Crown Capital when I was helping them raise venture capital for Toronto-based entrepreneurs. Assume the start date is 2003 so 2008 projections are 5 years out: How Northern Crown Capital Valuates a Business 2008 Financial Projections Earnings Before Tax $5,865,000 Tax Rate 42% Taxes $2,463,300 Net Earnings $3,401,700 Amount Seeking to Raise Today $3,500,000 Discounted Value of Future Opportunity, 5 Years Out 2008 P/E Ratio 15 Value of Company in 2008 $51,025,500 Discount Rate Applied 30% Year 2008 $51,025,500 Year 2007 $35,717,850 Year 2006 $25,002,495 Year 2005 $17,501,747 Year 2004 $12,251,223 Value of Company at Investment in 2003 $12,251,223 Less: Investment Amount $3,500,000 Present Value $8,751,223 Discount for Risk & Private Company 40% Less: Discount for Risk & Private Company $3,500,489 Private Company Value $5,250,734 Present Value (What the Owner Keeps) $5,250,734 60.00% Financing (What the Investor Gets) $3,500,000 40.00% Total $8,750,734 100.00% I hope this helps!
Re: What is Your Favorite Thing About Owning A Business? - [quote="freddyb45":1t3lpfi8]For me it's the fact that all the time and effort you put in is worth a lot more, due to it making you "business" more profitable. Working for yourself is also a positive, although employing people you can trust is quite different.[/quote:1t3lpfi8] I like this idea. Working for yourself means you are investing in your own future, not someone else's, although there is value in working for someone else first to gain experience and confidence. Working for yourself does not automatically mean success, fame and fortune. For most entrepreneurs, it takes much work and dedication to get to the point of financial success and comfort - sometimes years. But the benefit is, again, you know you are investing in yourself and building equity for your own future. GT :-]
Del Castienne - International Business and Project Brokers - In addition to the above, Del Castienne is an international brokerage firm specializing in various entrepreneural services. Del Castienne is more than just a brokerage, as we facilitate Private International Venture Capital for Business and Projects from Commodity Speculation Transactions, MBO, MBI, M&A, Bridging Finance, Patents, Branding, JV, Corporate Advisory Services, Business Plan Development, etc.. Del Castienne is linked to 1200 private international Venture Capital consortiums and Funding Syndicates with a funding capacity of $ 115 billion and 5000 international Investment Bankers and Business & Project Brokers. This in itself should provide you with a gateway to the best source of funding in the world. Through Del Castienne any entrepreneur can have up to a potential success rate of 25% (conditions apply) with absolutely no up front costs. Del Castienne charges a maximum of 5% commission which is far below the international standard of 10% - 12% on project value. If you are tired of running back and forth with countless dissappointments, please give us an opportunity to assist you. Our minimum Venture Capital amount is $1 million and we a Commitment Letter can be provided with in 30 days after formalities are in place and your information was received.
Write ups not successful? - [quote:2kry5vyo] Despite being written up in the Toronto Sun, Metro News, Entrepreneur Start Ups Magazine and listed as a resource in Entrepreneur Magazine people in Toronto still don't know about us. [/quote:2kry5vyo] At the risk of sounding cruel...which I do not mean to be... ifyou're getting those kinds of writeups, people in Toronto [i:2kry5vyo]must [/i:2kry5vyo]know about you. It might be that you're just not offering a service that the majority of them want or need. Time to expand into other areas or just change fields entirely?
I need a mailing address for office space in Toronto - HI there I am in London UK starting a financial services business. I am from Toronto and I would like to list a Toronto office on the website. Does anyone know where I might be able to use someone's office mailing address? Just to pick up mail once in a while, although mail will very rarely be sent there. Any ideas on how to get around this? Many thanks Jamie


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Tips to Take Control of Credit Card Debt

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.