Can business loans and finance for a business be good again? Finding credit and financing cash flow solutions for your business often seems like an eternal challenge, even in the best of times, let alone in any industry or economic crisis. Let’s dig in.

Since the financial crisis of 2008 there have been many changes in the financial options of lenders for corporate loans. Canadian business owners and financial managers are inundated with everything from peer-to-peer business loans, various alternative financing solutions, as well as, of course, the traditional financing offered by licensed Canadian banks.

The online business loans referenced above are popular and grew out of merchant cash advance programs in the United States. Loans are based on a percentage of your annual sales, usually in the 15-20% range. Loans are certainly expensive, but many small businesses find them easy to obtain, including retailers that sell with cash or credit card.

Depending on the circumstances of your business and your ability to truly understand the different options available to businesses seeking SMME TRADE FINANCING options. Those small and medium-sized businesses (the definition of ‘small business’ certainly varies as to what is small, often defined as businesses with fewer than 500 employees!)

So how do we create our roadmap for external financing techniques and solutions? An easier way to see it is to classify these different financing options into:

Debts / Loans

Asset-Based Financing

Alternative hybrid solutions

Many of the best experts argue that the alternative financing solutions currently available for your business are, in fact, on a par with Canadian chartered bank financing when it comes to the full spectrum of financing. The alternative lender is usually a private commercial finance company with a niche in one of several areas of asset finance.

If there is one significant trend that is ‘catching on’ it is asset-based financing. The ability of companies to obtain financing through assets such as accounts receivable, inventory, and fixed assets without much emphasis on balance sheet structure and earnings and cash flow (these three elements drive the approval of bank financing largely). measure) is the key to success in ABL (Asset Based Lending).

Factoring, also known as ‘accounts receivable financing’, is the other big driver of trade financing in Canada. In some cases, it’s the only way businesses can sell to and finance customers in other geographies/countries.

The rise of ‘online finance’ cannot be slowed down either. Whether accessing ‘crowdfunding’ or taking out term loans for working capital, the pace of technology continues at a pace that seems feverish. One only has to read a business journal like the Globe & Mail or the Financial Post to understand the challenge small businesses face in accessing business capital.

Business owners/financial managers often find their company at a “tipping point” in its history: that moment when financing is needed or when opportunities and risks cannot be seized. While putting or raising new capital in the business is often impossible, the reality is that most companies with SME business financing needs are not, shall we say, ‘right’ for this type of financing and capital raising. Business loan interest rates vary from non-traditional financing, but offer more flexibility and easier access to capital.

We are also the first to remind clients not to forget government solutions in business capital. Two of the best programs are the GovernmentSmall Business Loan Canada (max drawdown = $1,000,000.00) as well as the SR&ED program that allows business owners to recoup R&D capital costs. Sred credits can also be financed once submitted.

These last two financing alternatives are often very well adapted to business start-up loans. Let’s not forget that asset financing, often called ‘ABL’ by Bay Street types, can even be used as a loan to buy a business.

If you’re looking to get the right balance of liquidity and risk, along with the flexibility to grow your business, find and speak to a trusted, credible and experienced Canadian business financial advisor with a track record of business financial success who can help you with your business financial needs. financing.