Financing is a key consideration for every business and is an integral part of allowing the business to properly plan for its future and realize its potential.
Businesses require financing for many purposes, including;
- Asset Purchases (expand the capacity of your existing business by investing in equipment)
- Working Capital (helping to manage the short term cash flow pain that comes with increased business, usually from having to carry more inventory or a larger receivable balance from customers)
- Growth Capital (investing in expanding the your company’s product or service offering)
- Mergers & Acquisitions (acquiring another company to increase the size or scale of your business)
- Corporate Restructuring and Refinancing
When considering financing alternatives it is important to have an advisor that fully understands your company and its needs as well as the market in order to ensure the following:
- Maximize the probability of obtaining the optimal financing
- The right amount of financing
- The most favourable terms
- The most reasonable cost of financing (there are often fees associated with the transaction which must be considered in addition to the interest rate on a debt instrument)
- The best source of financing (lender or investor).
The types of financing used to meet financing needs might include:
- Conventional Term Loans (a loan that is paid back over a specific period of time, usually offered by one of the Big Banks)
- Operating Loans (normally used for working capital, the balance usually fluctuates with the business
- Revolving Lines of Credit
- Project Financing (secured and used to fund a very specific activity of the business)
- Factoring (often used against accounts receivable in order to turn receivables to cash more quickly than simply waiting for the customer to pay)
- Subordinated Debt
- Venture Capital
- Angel Capital
Contact our Calgary or Vancouver office to find out how we can help with your trust and estate tax planning needs.