Commercial financing options in Canada surely must seem like the Great Canadian capital mystery to many business owners and financial managers. Solving business finance solutions is all about understanding the ‘ access ‘ to capital and having an understanding of the commercial lending landscape in Canada when it comes to SME (Small to Medium Enterprises) working capital and asset financing. Let’s dig in.

Business owners and financial managers know there are a lot of reasons why businesses fail, or why they can’t attract money. We acknowledge poor mgmt, poor execution, failed strategies, etc… but our focus is on ‘ FUNDING’!

While Canadian banks almost always are the ‘ go to ‘ in commercial finance it is clear to all (at least us anyway) that their concentrated power in Canadian financing occasionally works against the SME borrower!

Canadian banks do address certain needs for solid commercial financing options. If your business is established, has cash flow, profits, reasonable financials… you’re in! Alternately the banks are the operating partner in the Govt SBL program – with the government guaranteeing loans up to 350k for equipment, leaseholds, computers, software, and real estate. It’s a recommendation we make for many clients.

Because venture capital and private equity funds have hundreds of millions of dollars in them these days this forces transactions to be done that are on a large scale. That eliminates most of the SME sector unless you’re in an exciting technology area – but many firms are not. Therefore they waste days, weeks, months, years chasing capital that it never meant for them. Bottom line – a failed strategy.

Another key issue in Canadian business finance is ‘ GROWTH ‘. Many clients we meet wrestle constantly with achieving growth financing. Our preferred solutions and recommendations include:

A/R & PO/Contract Financing
Asset Based Credit Lines
Cash flow loans
Tax Credit Finance
Sale Leaseback strategies
Equipment Finance

Here’s a surprise. Many businesses that would qualify for growth / operating commercial financing options don’t get approved. Why? Because they can’t provide simple basics such as clean financials, or an executive summary or business plan that outlines where the business is going. By the way, that includes a cash flow forecast.

Another key issue is focusing on the difference between debt and asset monetization. Both strategies work, but you need to understand your current balance sheet and cash flow to determine which one of those two solutions will get you to the goal line.

If you or your company is looking to acquire a company there are some solid ways to finance a merger or acquisition scenario. In general a company with assets and cash flow prospects can fairly easily be financed either thru a bank term loan and revolver, or alternatively a non bank asset based lender.

Understanding what’s really viable, and what the qualifiers are, when it comes to a commercial finance solution only makes sense. That allows you to now say ‘ We’ve solved the Great Canadian Capital Mystery ‘! Seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a track record of helping Canadian business find the capital they require.