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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.

Photofacial – Anti-Aging Skin Care Treatments For Removal of Age Spots and Blood Vessels

Photofacial skin care treatments, also called IPL, short for Intense Pulsed Light, are very effective, no down time, safe methods for removing pigment, or brown spots, and excess or broken blood vessels from the facial skin. Browns spots, broken blood vessels around the nose, chin and cheeks are classic signs of sun damage and aging of the facial skin. Brown spots, often called age spots are caused by pigment that is produced by the skin to protect the skin from the harmful ultraviolet (UV) rays of the sun. New blood vessels grow into the skin in response to skin injury, first to wash out damaged skin debris and later to bring in healing factors. As our skin ages, the brown spots and broken blood vessels are left behind on the skin after the inflammation or skin injury has passed. These pigmented and red vascular spots create an aged variegated appearance to the facial skin which is called dyschromia, and is a sign of facial aging. Photofacial skin care treatments are the treatment of choice for benign facial skin pigmentation, age spots, brown spots and broken blood vessels and small red spots called telangiectasia on the face. Photofacial treatments are now preferred over laser treatments for these specific pigment and vascular lesions.What Causes Age Spots, Sun Spots, Red Blotches and Broken Blood Vessels on the Face Neck and Décolletage?Browns spots and broken blood vessels around the nose, chin, cheeks, neck, hands and Décolletage are classic signs of sun damage and aging of the skin. Brown spots, often called age spots are caused by pigment that is produced by the skin to protect the skin from the harmful ultraviolet (UV) rays of the sun. New blood vessels grow into the skin in response to skin injury by the sun. This process of new blood vessel growth is called inflammation.The new blood vessels bring blood into the facial skin first to wash out damaged skin cell debris and later to bring in skin healing factors.As our skin ages, the brown spots and broken blood vessels are left behind on the skin after the inflammation or skin injury has passed. These pigmented and red vascular spots create an aged variegated appearance to the facial skin which is called dyschromia, which is a sign of facial aging.Photofacial skin care treatments or IPL treatments are the non-surgical anti-aging skin care treatment of choice for benign facial skin pigmentation, age spots, brown spots and broken blood vessels, the small red spots called telangiectasia, on the face, hands, neck and Décolletage. Photofacial treatments are now preferred over laser treatments for these specific pigment and vascular lesions.How Do Photofacial or Intense Pulsed Light Non-surgical anti-aging Skin Care Treatments Work?Photofacial or IPL anti-aging skin care treatments use a bright flash of visible light, like the light of a camera flash to remove pigment and blood vessels non-surgically from the skin. This pulsed or flashed light is very different from a laser and in most instances, less powerful and less dangerous that laser light.I use a Photofacial IPL machine called the LuxGreen IPL made by Palomar Medical Laser Company in Burlington, Massachusetts. Palomar Medical is the premier manufacturer of Aesthetic Laser and Light therapy machines in the world. The LuxGreen Photofacial is the best Photofacial technology I have ever used. The LuxGreen Photofacial IPL machine is very effective and is the most comfortable for you the patient of any IPL device available.Photofacial skin rejuvenation works by passing a flash of bright light through a filter that only allows a specific color of light in the flash to pass through the filter and hit the skin. In the case of the LuxGreen Photofacial, only light with a wavelength of 550nm (nm=nanometers or one millionth of a meter and is the measure of the green light wavelength in the visible light spectrum) to pass through the IPL filter and hit the skin.The LuxGreen IPL 550nm light is selectively absorbed or taken up by the brown pigment in an age spot or the dark reddish brown color of blood in a blood vessel. When the Photofacial light energy is absorbed by the pigment or blood vessel, the heat from the Photofacial or IPL light destroys the pigment or blood vessel by heating it.This process is called Target Specific Photothermolysis. A specific target, that is a color, is heated (thermo) with a light (photo) beam and dissolved or destroyed (lysis).Using color filters placed in front of the Intense Pulsed Light beam, a wide variety of colors can be allowed through to treat many different skin conditions including hair removal (LuxRed), acne (LuxViolet), and others.What Will My Skin Look Like Immediately After a Photofacial Skin Care Treatment?Unlike lasers, which can cause the skin to peel and possibly leave scars, the Lux Green IPL treatments are very gentle on the skin. The pigment in the brown spot or age spot will darken very slightly, and the treated blood vessel will also darken a bit. However the skin will be intact. The treated areas may also be slightly pink for a few hours.We place ice or a cool pack on the treated area immediately and this also may make the skin pink. However, the pinkness may be covered with makeup immediately. You may return to work. And your skin will be nearly normal the next day.Does An Intense Pulsed Light Skin Care Treatment Hurt?There is minimal discomfort during an IPL care treatment. Anesthesia or numbing medicine is not required. When the IPL flash hits the skin you will feel a small snap or sting, but this is easily tolerated by all of my patients.How Many IPL Skin Care Treatments will I Need?Usually 3 IPL skin care treatments are required spaced 4-5 weeks apart for the best results. Multiple treatments are the price for gentle treatments that are not painful and do not injure the skin.Technically enough power can be used to remove the brown spot or blood vessel in one treatment, but this energy level would be painful, blister the skin and possibly leave a scar. This is what happened with old time laser treatments, and the new IPL is designed to remove pigment and blood vessels painlessly and with no trace or scar left behind. To accomplish this we need to stage the removal in 2-3 treatments 4-5 weeks apart. The results are well worth the wait.How Soon after My Intense Pulsed Light Skin Care Treatment Will I See a Result?Generally you will see the results of your IPL skin care treatment at 4-5 weeks. The brown spot will be lighter or gone and the red spot or blood vessel will be much smaller. Some patients with thin skin and very light pigment or small broken blood vessels will see complete removal after one treatment.However most people see definite improvement 5 weeks after the IPL treatment and require 2 more treatments for complete removal.How Many Intense Pulsed Light Skin Care Treatments Will I Need?If you have very fair thin skin with minimal sun damage and very light pigment or very tiny blood vessels you may only need one IPL treatment. However most people need 3 treatments scheduled 4-5 weeks apart for a complete result.Who Should I Consult For My Intense Pulsed Light (IPL) Skin Care Treatment?The best IPL machines are found in a physician’s office. Less powerful IPL machines are allowed to be used in Spas, but results are not as effective with these downgraded machines. In my experience patients do not get the results that they want in a spa, and often come to my practice for repeat treatments with the LuxGreen IPL after having already spent money for IPL in a spa.The other benefit of having your IPL treatment in a physician’s office is that you will be examined by a doctor who can properly diagnose your skin condition. Some brown lesions are dangerous and require medical evaluation and should not be treated with Intense Pulsed Light. If you have Rosacea or larger blood vessels on your face, a different therapy is required. These are medical treatments and should be done in a doctor’s office. Your skin will be evaluated for more serious skin conditions, and you will receive more effective Intense Pulsed Light skin care treatments.How Do I Find a Good Doctor to Do My Intense Pulsed Light Skin Care Treatment?Light based and laser non-surgical skin rejuvenation treatments are best done by a doctor who is well trained and specializes in anti-aging skin treatments. Your safest bet is to seek consultation with a board certified plastic surgeon or dermatologist who has experience in laser and light based therapies such as Intense Pulsed Light.I am of course prejudiced because I am a board certified plastic surgeon. However, a plastic surgeon is trained and capable of providing the full range of non-surgical and surgical skin anti-aging procedures and can customize your skin treatments to your unique face. Doctors who cannot provide all treatments are tempted to “fit your unique face” into the particular skin treatment they offer, and that is not the best situation for you.Good sources of honest objective information about choosing a physician are available at the following links:American Society of Plastic surgeonsAmerican Society of Aesthetic Plastic Surgeons

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Alternative Financing Vs. Venture Capital: Which Option Is Best for Boosting Working Capital?

There are several potential financing options available to cash-strapped businesses that need a healthy dose of working capital. A bank loan or line of credit is often the first option that owners think of – and for businesses that qualify, this may be the best option.

In today’s uncertain business, economic and regulatory environment, qualifying for a bank loan can be difficult – especially for start-up companies and those that have experienced any type of financial difficulty. Sometimes, owners of businesses that don’t qualify for a bank loan decide that seeking venture capital or bringing on equity investors are other viable options.

But are they really? While there are some potential benefits to bringing venture capital and so-called “angel” investors into your business, there are drawbacks as well. Unfortunately, owners sometimes don’t think about these drawbacks until the ink has dried on a contract with a venture capitalist or angel investor – and it’s too late to back out of the deal.

Different Types of Financing

One problem with bringing in equity investors to help provide a working capital boost is that working capital and equity are really two different types of financing.

Working capital – or the money that is used to pay business expenses incurred during the time lag until cash from sales (or accounts receivable) is collected – is short-term in nature, so it should be financed via a short-term financing tool. Equity, however, should generally be used to finance rapid growth, business expansion, acquisitions or the purchase of long-term assets, which are defined as assets that are repaid over more than one 12-month business cycle.

But the biggest drawback to bringing equity investors into your business is a potential loss of control. When you sell equity (or shares) in your business to venture capitalists or angels, you are giving up a percentage of ownership in your business, and you may be doing so at an inopportune time. With this dilution of ownership most often comes a loss of control over some or all of the most important business decisions that must be made.

Sometimes, owners are enticed to sell equity by the fact that there is little (if any) out-of-pocket expense. Unlike debt financing, you don’t usually pay interest with equity financing. The equity investor gains its return via the ownership stake gained in your business. But the long-term “cost” of selling equity is always much higher than the short-term cost of debt, in terms of both actual cash cost as well as soft costs like the loss of control and stewardship of your company and the potential future value of the ownership shares that are sold.

Alternative Financing Solutions

But what if your business needs working capital and you don’t qualify for a bank loan or line of credit? Alternative financing solutions are often appropriate for injecting working capital into businesses in this situation. Three of the most common types of alternative financing used by such businesses are:

1. Full-Service Factoring – Businesses sell outstanding accounts receivable on an ongoing basis to a commercial finance (or factoring) company at a discount. The factoring company then manages the receivable until it is paid. Factoring is a well-established and accepted method of temporary alternative finance that is especially well-suited for rapidly growing companies and those with customer concentrations.

2. Accounts Receivable (A/R) Financing – A/R financing is an ideal solution for companies that are not yet bankable but have a stable financial condition and a more diverse customer base. Here, the business provides details on all accounts receivable and pledges those assets as collateral. The proceeds of those receivables are sent to a lockbox while the finance company calculates a borrowing base to determine the amount the company can borrow. When the borrower needs money, it makes an advance request and the finance company advances money using a percentage of the accounts receivable.

3. Asset-Based Lending (ABL) – This is a credit facility secured by all of a company’s assets, which may include A/R, equipment and inventory. Unlike with factoring, the business continues to manage and collect its own receivables and submits collateral reports on an ongoing basis to the finance company, which will review and periodically audit the reports.

In addition to providing working capital and enabling owners to maintain business control, alternative financing may provide other benefits as well:

It’s easy to determine the exact cost of financing and obtain an increase.
Professional collateral management can be included depending on the facility type and the lender.
Real-time, online interactive reporting is often available.
It may provide the business with access to more capital.
It’s flexible – financing ebbs and flows with the business’ needs.
It’s important to note that there are some circumstances in which equity is a viable and attractive financing solution. This is especially true in cases of business expansion and acquisition and new product launches – these are capital needs that are not generally well suited to debt financing. However, equity is not usually the appropriate financing solution to solve a working capital problem or help plug a cash-flow gap.

A Precious Commodity

Remember that business equity is a precious commodity that should only be considered under the right circumstances and at the right time. When equity financing is sought, ideally this should be done at a time when the company has good growth prospects and a significant cash need for this growth. Ideally, majority ownership (and thus, absolute control) should remain with the company founder(s).

Alternative financing solutions like factoring, A/R financing and ABL can provide the working capital boost many cash-strapped businesses that don’t qualify for bank financing need – without diluting ownership and possibly giving up business control at an inopportune time for the owner. If and when these companies become bankable later, it’s often an easy transition to a traditional bank line of credit. Your banker may be able to refer you to a commercial finance company that can offer the right type of alternative financing solution for your particular situation.

Taking the time to understand all the different financing options available to your business, and the pros and cons of each, is the best way to make sure you choose the best option for your business. The use of alternative financing can help your company grow without diluting your ownership. After all, it’s your business – shouldn’t you keep as much of it as possible?