Telecommunications is a term associated with technologies. These technologies include such luxuries like cell phones, land lines, satellite phones, radio stations, and television networks. The majority of people in the world can not live without these telecommunications, so much as to people who are having money issues are more likely to give up other luxuries such as buying name brand clothing, eating out at restaurants, or purchasing “play toys” like boats or motorcycles in order for the family to be able to use their cell phones at any point in time, and have 24/7 access to television. There is an extensive need of telecommunications specifically in the field of cell phones where everybody is using more of cell phones instead of the traditional landlines.Mobile phones companies have had a great amount of success with the booming industry. Some companies have made their money through charging unrealistic amounts to customers for unnecessary services and others have made money through having an extremely large customer base because of good services. Cellular phones companies have figured out how to keep new entrants down because of the high cost to start-up a new cell phone company in an area which already has three or four cell phone companies established in the area. This low entrant status has given the existing companies the chance to charge what ever price they want to customers.To be competitive in the cell phone industry, a company must be able to integrate new ways of making the customer feel that they are getting more than what they pay for. Many companies have offered a select number of calling plans. There are many cell phone plans from many different providers. Not all plans will be the same from country-to-country, state-to-state. The United States might charge more in bigger cities than in smaller towns. The United States might also charge more than say any of the European countries because the United States is much larger and has more people. Customers should be aware of what the company is charging the customer and what features and services are offered for free and which are an additional cost to the plan.Cellular phone companies have issues in the telecommunications industry. Some companies have had problems with particular producers and the specific products the companies want from the producers and that company not being able to get the product they requested. Other companies have had issues with people hacking into their systems and stealing information about customers and what websites they view on their internet capable phones. One company in particular is fighting against some hackers that stole their customer’s e-mail addresses of one of the company’s popular product. But even though the company has had issues with their products, the company has still managed to do impeccably well, inventing new products in other industries of the telecommunications world, considering the hack of email addresses could have been a major down set for the company.All in all, cell phone companies have done tremendously well in the telecommunications industry. Although some companies have had to struggle through some bad times, most cell phone companies have gained a competitive advantage in the industry. Their competitive advantage is enough to make others not want to start their own company but to purchase from these successful companies. Cell phone usage is through the roof and will probably continue to rise with newer technologies coming out every single day. Telecommunications is part of people’s everyday lives and people will not be less willing to give it up with the world becoming more and more technologically advanced.
Business Capital Solutions In Canada: Accessing Proper Cash Flow & Commercial Financing
Business capital requirements in Canada often boil down to some basic truths the business owner/financial mgr/entrepreneur needs to address when it comes to financing for businesses.
One of those truths? Knowing the true state of their financial condition and what financing they do and don’t qualify for when it comes to meeting commercial lending requirements in Canadian business.
Business Loans In Canada
Whether you are smaller or start-up firm looking for information on how to get a business loan or a larger established firm looking for growth financing or acquisition opportunities we’re highlighting 3 mistakes that commercial loan seekers like your company need to avoid making when addressing, sourcing and negotiating your cash flow / working capital and commercial financing needs.
1. Understand the true condition of your company finances – These are almost always successful addressed when you spend time on your financials and understand how your financial statements reflect your access to commercial loans & business credit in general
2. Ensure you have a plan in place for sales growth and financial needs as it relates to commercial financing
3. Understand that actual hard facts about cash flow which is, of course, the lifeblood of your company
Can you honestly answer or feel positive about all those 3 points. If so, pass Go and collect $ 100.00!
A good way to address your company’s finance plans is to ensure you understand growth finance solutions, as well as how to manage in a downturn – i.e. not growing, losing money, etc; It’s never fun to fund yourself in an economic or industry downturn such as the COVID pandemic of 2020!
When we talk to clients of new or established businesses it seems they are almost always talking about sales, so the ability to understand and focus on the differences in their profits and cash fluctuations is key.
How do cash flow and sales plans and projections affect the type of financing you require? For one thing sales growth usually starts out by consuming your cash, not generating it. A poor finance plan will drag your business down and addressing financing simply gets tougher and tougher.
Three basics always emerge when it comes to your search for the right business capital and financing.
1. The amount of financing you need
2. The type of financing (debt/cash flow/asset monetization) The business loan interest rate will be dramatically affected by whether you choose traditional or alternative financing solutions. Private business loans in Canada come from non regulated commercial finance companies most often known as ‘ alternative lenders ‘. These lenders are typically highly specialized in one ‘ niche ‘ of business financing and may be Canadian firms or branches of U.S. banks and non-bank lenders
3. How the financing is structured to be manageable with your day to day operations
What Finance Company In Canada Can Meet Your Borrowing Needs & Why Is Capital Important In Business
Let’s identify and break down key financings your firm should know about and understand if they are applicable and achievable to your business. They include:
A/R Financing / Factoring / Confidential Receivable Finance
Inventory finance / floor planning / retail inventory
Working Capital term loans
Unsecured cash flow loans
Merchant working capital loans/advances – these loans are geared toward short term cash needs and are typically one year in duration. Loan amounts are typically 15-20% of your annual sales revenues.
Royalty finance
Asset based non bank business lines of credit
Tax credit financing (SR&ED bridge loans)
Equipment Leasing / Sale leasebacks – Equipment financing in Canada is used by almost 80% of all companies looking to acquire new, and used, assets.
Govt Guaranteed Small Business Loan program – Government Loans in Canada are sometimes referred to as ‘ SBL’, aka Note: BDC Finance solutions are available from this Canadian non-bricks and morter crown corporation. A small business loan via the government-guaranteed loan program comes with true flexibility around term loan duration, market rates, no pre payment penalties, and of course the low personal guarantee that is required by borrowers. These two ‘ government ‘ loan solutions are often perfect for financing a new business.
If you’re focused on not making mistakes in your business finance needs and want to capitalize on the solutions your competitors are probably already using seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your cash flow and commercial financing needs.
Stan has had a successful career with some of the world’s largest and most successful corporations.
His employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) In 2004 Stan founded 7 PARK AVENUE FINANCIAL – He is an expert in Canadian Business Financing.
Business Loans In Canada: Financing Solutions Via Alternative Finance & Traditional Funding
Business loans and finance for a business just may have gotten good again? The pursuit of credit and funding of cash flow solutions for your business often seems like an eternal challenge, even in the best of times, let alone any industry or economic crisis. Let’s dig in.
Since the 2008 financial crisis there’s been a lot of change in finance options from lenders for corporate loans. Canadian business owners and financial managers have excess from everything from peer-to-peer company loans, varied alternative finance solutions, as well of course as the traditional financing offered by Canadian chartered banks.
Those online business loans referenced above are popular and arose out of the merchant cash advance programs in the United States. Loans are based on a percentage of your annual sales, typically in the 15-20% range. The loans are certainly expensive but are viewed as easy to obtain by many small businesses, including retailers who sell on a cash or credit card basis.
Depending on your firm’s circumstances and your ability to truly understand the different choices available to firms searching for SME COMMERCIAL FINANCE options. Those small to medium sized companies ( the definition of ‘ small business ‘ certainly varies as to what is small – often defined as businesses with less than 500 employees! )
How then do we create our road map for external financing techniques and solutions? A simpler way to look at it is to categorize these different financing options under:
Debt / Loans
Asset Based Financing
Alternative Hybrid type solutions
Many top experts maintain that the alternative financing solutions currently available to your firm, in fact are on par with Canadian chartered bank financing when it comes to a full spectrum of funding. The alternative lender is typically a private commercial finance company with a niche in one of the various asset finance areas
If there is one significant trend that’s ‘ sticking ‘it’s Asset Based Finance. The ability of firms to obtain funding via assets such as accounts receivable, inventory and fixed assets with no major emphasis on balance sheet structure and profits and cash flow ( those three elements drive bank financing approval in no small measure ) is the key to success in ABL ( Asset Based Lending ).
Factoring, aka ‘ Receivable Finance ‘ is the other huge driver in trade finance in Canada. In some cases, it’s the only way for firms to be able to sell and finance clients in other geographies/countries.
The rise of ‘ online finance ‘ also can’t be diminished. Whether it’s accessing ‘ crowdfunding’ or sourcing working capital term loans, the technological pace continues at what seems a feverish pace. One only has to read a business daily such as the Globe & Mail or Financial Post to understand the challenge of small business accessing business capital.
Business owners/financial mgrs often find their company at a ‘ turning point ‘ in their history – that time when financing is needed or opportunities and risks can’t be taken. While putting or getting new equity in the business is often impossible, the reality is that the majority of businesses with SME commercial finance needs aren’t, shall we say, ‘ suited’ to this type of funding and capital raising. Business loan interest rates vary with non-traditional financing but offer more flexibility and ease of access to capital.
We’re also the first to remind clients that they should not forget govt solutions in business capital. Two of the best programs are the GovernmentSmall Business Loan Canada (maximum availability = $ 1,000,000.00) as well as the SR&ED program which allows business owners to recapture R&D capital costs. Sred credits can also be financed once they are filed.
Those latter two finance alternatives are often very well suited to business start up loans. We should not forget that asset finance, often called ‘ ABL ‘ by those Bay Street guys, can even be used as a loan to buy a business.
If you’re looking to get the right balance of liquidity and risk coupled with the flexibility to grow your business seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success who can assist you with your funding needs.