Business Finance Options Canada – Start Up & Commercial Loan Corporate Credit Facilities

Updated: May 30, 2011

It's not uncommon for clients to know what or how much they need for their Canadian business financing needs. What their challenge usually concerns knows what their financing choices are, what the various benefits are, and most importantly, how to go about securing that financing. Let's review!

When you think about it we are talking essentially about sources of funds - and that comes from either borrowing facilities of personal or corporate equity. We're not going to focus too much today on personal resources - typically those are collateral home mortgages, credit cards, and the proverbial friends and family. We'll let you address those yourselves - instead let's focus on corporate borrowing, whether you are a start up or an established business.

So what are the key essentials in corporate credit facilities? They are supplier credit (most business owners don't unfortunately consider that as a source of financing, but it is, working capital financing, and loans form banks and the government. (The Canadian SBL loan program goes to 350k and we firmly believe its one of the best facilities available to small and medium sizes business in Canada).

When you think about it no one financing solution will rarely cover off everything you need. In reality it's a combination of borrowing structures that will allow you achieve all the working or long term corporate credit and capital you need. For example, the majority of equipment in Canada is finance via equipment leasing and financing - which in the 2011 environment enjoys a very robust popularity.

However, lease equipment financing is long term capital, matched against the useful life of the asset - in many cases you are instead looking for operating capital, the ever required ' cash flow ' that is the life blood of your company . That capital is sourced via a bank operating line of credit, a working capital facility via a non bank lender, or a major asset based lending facility that comprises receivables, inventory and fixed assets.

One of the most popular and growing methods of financing today is termed ' factoring ‘. Other names it goes by are receivable finance, invoice discounting, and our favorite C I D, which stands for confidential invoice discounting. This type of financing gives you all the working capital and cash flow you need, hence its popularity, but is more expensive than traditional corporate credit facilities via a bank. It's a very misunderstood form of finance; essentially it's the sale of your receivables as you generate revenue.

Our afore mentioned C I D facility is a factoring or invoice discounting facility that doesn't force you to tell your customers that you are financing your firm thru this type of arrangement .

In summary, the type of capital and the amount of business finance you require depends on which stage or cycle your business is in , either start up or advanced and mature .

You can best understand the type of financing you need by ensuring you have a solid handle of your operating expenses and capital costs requirements. Cash flow projections and a list of potential other collateral are always helpful... allowing you to feel confident that you can appro0ach external financing successful.

Featured Research
  • Is Your ERP Solution Out of Date?

    Enterprise Resource Planning (ERP) is a modern, large-scale software program designed to help businesses improve the internal flow of important corporate processes and communication. more

  • How Video Conferencing is Transforming Healthcare

    The telemedicine revolution is finally happening. Experts have been discussing the potential for patients and healthcare providers to connect remotely for years, but the market is just now moving to adopt it—in a big way. Data suggests this market will grow over 14% annually through 2020! more

  • How to Update Your Contact Center Software

    If improving customer experience is important to you (it should be), then 2017 may be a good year to reevaluate the software you use for your contact center. With customer preferences shifting, the importance of an efficient contact center has never been higher. You cannot afford to simply focus on keeping costs low. Significant competitive advantages are available to businesses who manage this area effectively. more

  • Leading the IT Revolution

    The status of technology within an organization is rapidly evolving—and so is the role of the CIO. With breakthrough capabilities enabled by new technologies, a growing shortage of available developers, and an increasingly tech-savvy business user, the role of IT—and the CIO in particular—is morphing into one of strategic advisor to the business and driver of innovation within the company. more

  • Leading the IT Revolution

    The status of technology within an organization is rapidly evolving—and so is the role of the CIO. With breakthrough capabilities enabled by new technologies, a growing shortage of available developers, and an increasingly tech-savvy business user, the role of IT—and the CIO in particular—is morphing into one of strategic advisor to the business and driver of innovation within the company. more