Need to finance an expansion? Whether SME’s are looking to develop international contacts, widen distribution networks, or put a marketing plan together, a new Business Development Bank of Canada loan can help.
Click here for full details…
November 30, 2008
Financing the Transaction (bbp)
With the current economic downturn, we should see buyers who have lost their jobs, for whatever reason, searching for a way to support themselves and their families. Many will hope to find new jobs; others will decide to look at going into business for themselves. From this second group, some will start from scratch, others will investigate franchising, and still others will look to buy an existing business.
October 23, 2008
Your business exit strategy… without blowing the deal. (bbp)
Most small business owners are not familiar with the dynamics of selling a company, because they have never done so before. There are numerous potential “deal breakers.” Avoiding the following ten mistakes should mitigate the possibility of an aborted transaction. (Russ Robb, author of Selling Middle Market Businesses: A Guide Book for Intermediaries. ) See full article for 10 sale-saving suggestions.
Agility through logistics planning (bdc)
Whether you manage your logistics yourself, or you outsource part or all of the job to a third-party logistics provider, the goal is to improve your agility – the speed at which your business can respond to changes in consumers’ desires and in the business environment.
Industry Canada offers a toolkit for logistics and supply-chain management. The kit outlines some of the main cost categories of logistics and supply-chain management, and it provides data to help users benchmark their logistics performance for their particular industry.
You can begin to make your business more agile by examining the different aspects of logistics planning, and seeing where you can implement changes. Then you can use the principles of operational efficiency to reduce waste wherever possible. You may wish to hire an external consultant to review your business processes from a fresh perspective.
For the full article, click here.
August 5, 2008
Forecasters are sharpening their pencils (edc)
It is the forecaster’s prerogative to revise the outlook. And whether it’s the weather, a flight arrival or the economy, the closer we are to the event, the clearer the forecast becomes. Recent turmoil has prompted sizable changes to the near-term economic outlook. What are pundits now saying? See the full EDC article
August 4, 2008
Online Real Estate Resources from Charrissa Cawley
Charrissa Cawley provides an absolute download of Internet-based resources on her teleseminar call with Larry Goins. Here are some website resources from her 10 step success system:
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1. Locate Properties 2. Research Properties comparables & tax info rent research 3. Inspecting Properties 4. Analysis (details on teleseminar) |
5. Negotiate (details on teleseminar)
6. Buy it Right (details on teleseminar)
7. Rehabbing 8. Getting Appraised 9. Refinancing (details on teleseminar)
10. Sell or exchange rent/sell advertising |
August 2, 2008
Find cash for your business… 18 alternatives
A lack of cash flow is the one component that can cripple a business no matter what size. This is the great equalizer. Find ways to survive your cash crunches and set plans to eliminate or at least reduce the impact of this serious business killer.
Do you have options … you bet! This blog will explore 18 options. Where do you look?
First, look at your receivables. This is cash that you have already earned. Do you let your customers string you out to 60 days of more? Is it because you are driven by sales and do not like collections?
If your bank turns you down or they won’t help without personal guarantees take a look at your receivables. Consider factoring your accounts receivables. Factor your receivables only works if you are in a growth mode.
Second, investigate contract financing. This option solves the dilemma of financing the performance of a contract. This is another area where the banks will not usually help.
Lease backs on your existing capital investments can turn your assets into immediate cash. This could include anything from manufacturing equipment to company vehicles that your business currently owns outright.
Third, arrange for a line of credit at your bank. Can you get access to this source of funds without committing your first borne? Remember, banks do not take risks. You will only get loans from them if they can establish your ability to pay back their funds. Your business will have to be well established with a proven track record for sales, good receivables and tangible assets.
Get to know your bank manager not just the commercial business rep. Do this in times when you don’t need money. You might get lucky.
Export Development Corporation – will guarantee lines of credit through your bank for invoices of finished domestic and export products on proof of delivery.
Canadian Commercial Corporation – will guarantee lines of credit for the production of products for export. Currently products must fall within some very narrow parameters. The CCC will provide contract financing if your product or service could be classified to fit within the aerospace, homeland security or biotech sectors.
Community Futures groups have access for funding as well. These funds may only be available outside of the metropolitan area.
Grants, subsidies and loans – Federal and Provincial governments offer a wide range of grants, subsidies and loans. Many of these funds are in the form of bank guarantees. They guarantee your loan which reduces the risk to your bank. There are always strings … reporting requirements, royalties, time frame restrictions and many others. Know exactly what these are before you agree. It is not always your best choice.
Market Assessment of Research & Technology (MART) and Industrial Research and Assistance Programs (IRAP) provide grant funds for specific research and product development applications. These and other government sources provide access to funding for selected types of business development investments.
Tax Credits and Cash Refunds for Technical Research & Experimental Development- SR & ED Programs – The federal government will consider reimbursement for expenditures for specific R&D expenses already completed. These funds come either in cash or in the form of tax credits.
Small Business Loans – From time to time, your bank may be interested in providing specific types of small businesses with funds. This is not out of the goodness of their hearts. They are usually government backed plans based on encouraging development in particular types of businesses. Ask your bank if they have any of these types of loans available. They will not volunteer these options. You must take the initiative.
Employee Job Cost Sharing – As you build your business you may qualify for a number of different types of job cost sharing. Employment Insurance and the Western Diversification Fund are examples of this type of funding. They will pay up to 50% of your new employee’s wages for specific period of time. Once again there are restrictions such as recent graduates of computer certifications or retrained welfare recipients. You have to dig for these sources.
Now let’s look at investment options:
The first is to identify exactly where your business is in terms of equity financing. There are at least six critical categories:
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- Seed Funding – usually refers to a good business idea that has not yet started.
- Start-up Funding – the idea has been developed to an early stage of development but has not yet established sales revenues.
- Early Stage Development – sales revenues have begun to be earned and the operations more fully established.
- Growth Stage – the business is well on its way to success and is approaching breakeven status with excellent prospects for increased volume.
- Mezzanine Stage – usually considered once sales revenues exceed one million dollars and investment is necessary to take the company to the next level (e.g. need a manufacturing plant or expand market presence in other Provinces or countries.
- Venture Stage – a time when major investment is necessary to move forward. Usually in the 5 million plus range which will enable the company to move sales revenues up to 100 million.
Investment is risk capital. The investors take this risk into consideration and this risk is reflected on the interest or equity positions they require to satisfy their investment. Let’s start with the least complicated option:
Find a working partner with money – A working partner is like a marriage. Once you have agreed to work together and your new partner has advanced the investment you must work together – for better of for worse. Be sure you get to know the person before you commit. Does the individual share your passion for the business and is he or she willing to work as hard as you to ensure its success. This is not always the end result.
Love Money – investment up to $200,000 to $300,000 – This source of funds is your family and friends that know and believe in you. This group of investors will likely take a small equity position in your company just to help you get started. Love money is probably the way most businesses get started. It is a means to build your business beyond your own financial resources.
Angels – Angel investors provide funding usually limited to no more than $ 500,000. In most cases these investors provide funds smaller portions of $ 20,000 to $ 50,000 each. The Provincial government in BC provides exemptions for these types of investors of up to 50 including your love money investors without filing an investment prospectus that must be approved by the Securities Commission.
Venture Capital Corporations – VCC’s – $ 500,000 to $ 25,000,000 – The BC Government has provided an investment window for VCC’s which offer an incentive to investors which is hard to ignore. An investor in a VCC can enjoy an immediate tax credit is up to $30,000 that he or she can apply in the current years income.
For this incentive he or she must be willing to commit their funds for a period of not less than five years. This gives you the opportunity to build your company without a need to pay back the investment for that term. This source of funds is usually oversubscribed.
Merchant Banks – $ 1,000,000+ – Most of the major banks have a merchant bank division. These investors are sophisticated lenders who do not take an equity position and therefore do not dilute your equity. Their funds are loaned usually as debentures. You must present a significant business case to attract this financing. Usually, you have significant business assets, great sales and outstanding growth potential to qualify.
Venture Capital Companies - $ 5,000,000+ When your business is ready for this stage of financing you must be ready for the hoops that you will have to leap through. VC will expect a significant equity position and will require a return on investment of up to 45% based on their assessment of the risk related to the investment. There are a number of groups of players in this category:
- Labour Sponsored VC – a fund which offers a partnership from the public in exchange for tax
- Business Development Bank – provides venture capital funds and merchant bank funds
- Provincial growth funds
- Private venture capital funds
July 30, 2008
Canada expands its footprint
June 19th was International Trade Day, but what does this mean for Canadian business? Well, with 13 new offices in five countries and four new regional offices in Canada, it means trade and investment just got a little easier. Click this for more.
Letter of Intent – Binding or Non-Binding (SBB)
The primary reason for a Letter of Intent (sometimes referred to as a “Letter or Understanding” or “Memorandum of Understanding” or “Agreement in Principal”), is to get the “ball rolling” and provides some measure of commitment between the parties. It is often used to state in writing the price, terms and understandings of the transaction.
A letter of intent is usually intended to be non-binding. However, a letter of intent may be determined to be binding under certain circumstances.
- If a letter of intent is non-binding, it must clearly state that it is “non-binding”.
- The letter of intent should be as brief as possible. It’s better to include just enough details to cover the basics.
- Verbiage such as, “agree to bargain”, “make every reasonable effort”, “proceed in good faith” may be determined to create a binding agreement.
- If the letter of intent includes a Confidentiality Clause/Agreement, it may be ruled as binding. A Confidentiality Agreement, separate from the Letter of Intent, should be executed between the parties.
For the full article from School of Business Brokerage, please click this.
July 29, 2008
Kenny Rushing’s Top 10 Real Estate Secrets Exposed
Now take a look at Kenny. He will take away all of our excuses with the power of the Internet. His rise to success in real estate raises the bar as his blog walks us through the snakes and the scenarios related to real world investing.
Also featured, Tim Mai gives his illustrative video thumbs-up to Kenny’s format of the 100 mistakes that he shares with the world (for a mildly nominal fee). Kenny`s policy of transparency in wholesaling, dealing with rehabs, commercial acquisition, home & land separation, and working with private lenders is all accessable to us in a nice, concise, time-efficient video format… check out his blog if you have ever wanted the short version of a long process…
