Canada Business Loans: Financing Solutions via Alternative Finance & Traditional Funding

It seems that business loans and financing for businesses have improved. Even in times of economic recovery, the pursuit of credit and financing of cash flow solutions can seem like an ever-present challenge. Let’s dig in.

There has been a lot more change in corporate loan financing options since the 2008 financial crisis. Canadian financial managers and business owners have access to everything, from peer-to–peer company loans to various alternative financing options, as well as traditional financing from Canadian chartered banks.

The popularity of online business loans is due to the Merchant Cash Advance Programs in the United States. The loan amount is based on your annual sales. This ranges from 15-20%. Although the loans can be costly, they are easy to get for small businesses. This includes retailers who sell on a credit or cash basis.

Your firm’s situation and your ability to fully understand the options available to you when searching for SME COMMERCIAL FANCANCE options will determine which option is best. Small to medium-sized businesses (the definition of “small business” varies depending on what you mean by it. Often, this is defined as companies with less than 500 employees.

What then is the best way to create a road map for external financing solutions and techniques? It is easier to think of it as a way to group these financing options under:


Asset-Based Financing

Other hybrid type solutions

Experts agree that alternative financing options available to your company are comparable to Canadian chartered bank financing in terms of a broad range of funding. An alternative lender is usually a private commercial finance firm that specializes in one of the many asset finance areas.

Asset Based Finance is the most popular trend. ABL ( Asset Based Lending) success is dependent on the ability of firms to access funding through assets like inventory, accounts receivables, and fixed assets without putting too much emphasis on profits and cash flow.

The other major driver of trade finance in Canada is factoring. In some cases, it’s the only way for firms to be able to sell and finance clients in other geographies/countries.

Online finance is on the rise and it cannot be stopped. The technological pace is at an almost feverish pace, whether it’s for accessing crowdfunding or working capital term loans. To understand the challenges of small businesses accessing capital, one only needs to read a daily business newspaper like the Globe & Mail and Financial Post.

Financial managers/business owners often find their company at a “turning point” in their business’ history. This is when they need financing or cannot take on new opportunities. Although it is sometimes impossible to put or get new equity into a business, most businesses that require SME commercial financing are not, shall we say, “suited” for this type of financing and capital raising. While business loans interest rates are higher than traditional financing, they offer greater flexibility and easier access to capital.

We are also the first ones to remind our clients to not forget about govt solutions for business capital. The GovernmentSmall Business Loan Canada (maximum availabilty = $ 1,000,000.00), and the SR&ED program allow business owners to recover R&D capital expenses. Once filed, sred credits can be financed.

These two financing options are often well-suited for business start up loans. Asset finance, also known as “ABL” by the Bay Street guys can be used to purchase a business.

You can get the right mix of liquidity and risk, while still allowing your business to grow. Talk to an experienced Canadian business financing advisor who has a track record in business finance success.

Stan has enjoyed a long and successful career in some of the most successful companies around the globe.

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