Many entrepreneurs and business owners, refer to us with deals having real estate component and sometimes operating line request. This could be related to a purchase of a new location, and cash on top of it in order to pay for renovations, moving and other cash flow requirements. Wecanfinancial.ca has great experience in operating line, small business loans combination with a commercial mortgage placements and are prepared to serve business owners at the best level of service.
Our associates generally advise entrepreneurs to include small business loan financing or operating line financing every time commercial mortgage is required. This combination allows a well-funded property acquisition with enough cash on hands to execute business transition. Properly prepared business plan, and financial plan, with step by step development strategy, and spending tactics should be developed by a professional adviser. This business plan and financial plan will drive the placement of operating line or small business loan, and allow entrepreneur to concentrate on execution of the proper plan. Wecanfinancial.ca has a lot of good points on this topic, and different other loan options could be paced together with a commercial mortgage if required.
A short term cash flow requirement for the business also has to be properly estimated. Our associates have massive budgeting experience, for different types and segments of economy. Entrepreneurs also know well what their business requirements are, therefore together with our knowledgeable associates working capital requirements could be planned our really well.
Many business owners also ask questions in regards to minimum debt service requirements, and how to avoid unsecured financing rejection knowing that debt service rations are very tight. Normally when we prepare strategic development plan, and working capital uses, we prepare monthly cash flow plan incorporating expected conservative revenue gains. With increased revenue, debt service coverage also should be going up, helping with an approval process.
Another questions we get from our clients and entrepreneurs is how to obtain an operating line of the highest limit amount possible, during the cash flow crunch. Normally operating line approval process and limit is based on historic performance of the business, and accounts payable ageing report. We suggest most business owners to apply for operating line, and also possibly for a commercial mortgage during the time of the year when Accounts receivable tend to be the highest. This allows entrepreneurs obtaining higher operating line limits, and us as a service provider having better tools at hands to secure the best terms for operating lines and small business loans combined.
Another important point as usually stressed is the importance of properly prepared business plan and financial plan. Business plan has to include accurately calculated financing levels for both commercial mortgage and operating line, with correct interest rates and payment amounts. Most lenders offering commercial mortgages would calculate debt service rations while underwriting the deal, if other financing products are not properly calculated, the process could be complicated while closing.
The same counts for operating line financing or small business loan financing. Financial institution that is willing to review this option for our client, would love to have full debt service picture in front of them, both personally and on corporate level as well. Commercial mortgage could be one of the biggest portion of the monthly corporate debt therefore accuracy of the calculations are of the outmost importance.
We will prepare a list of articles on how to write a proper business plan, in order to help our clients starting on the strategic planning and proper cash flow management strategy, please follow our posts regularly.
Very often commercial mortgage is not available to entrepreneurs from institutional lenders due to lack of cash flow or historic data on the business. WECANFINANCIAL has a vast experience of placing private commercial mortgage on purchase assuming business owner inject substation personal equity in the deal. Operating line or small business loan can be placed together with private commercial mortgage.
Happy financing every one !