Do you have a qualified business opportunity in Saskatoon or are you looking to expand your existing company?
Bond Capital is a direct lender of mezzanine financing, private equity, subordinated debt and many other alternative forms of capital.
Business loans can be tough to find in Saskatoon. Most small and medium-sized business owners end up going to the bank to try and get approval for the capital they need to grow their business. Unfortunately, banks have conservative lending criteria that demands that they take on as little risk as possible. Because of this, many worthy companies cannot get access to the finance and capital they need to grow their business and thus cannot compete. The result can lead to decreased growth and productivity which can mean lost jobs and a decline in the local economy.
Fortunately, there are alternatives to getting a business loan that allow small and medium-sized companies to acquire the capital they need at a cost that is amenable to the business strategy and plan. The following are the four other kinds of capital that a small or medium-sized company may be able to get access to:
- Senior Debt - this is what a typical bank offers but there are other sources of corporate loans that fall into this category. These loans have low interest rates but because of that low interest, the corporate lender will demand protection to ensure that if the company cannot repay its debts, they are the first to be paid out during any liquidation activity. Other risk-mitigating terms, such as a regular repayment schedule, can put undue pressure on a business that is using the loan to grow or expand.
- Mezzanine Debt - appropriately named, mezzanine debt sits between equity and senior debt both in terms of risk and cost to the business. Mezzanine debt is generally considered the best alternative for companies that have been turned down by banks because the cost to the business is much lower than equity and the terms are far more favourable when compares to senior debt.
- Equity - a common alternative to a business loan from a bank is to sell shares in the company. Equity is typically the most expensive form of capital because investors typically demand a greater than 25% return.
- Debt Alternatives - this is essentially debt restructuring where terms and payment schedules are re-negotiated to allow a company a greater chance of repaying the debt. This is only advantageous if a company already has a certain level of debt, is at risk of not being able to repay such debt, and the interest rates are such that a re-negotiation will allow the company to reduce its borrowing costs.
