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In the 16 years that I have known my friend Mario I have heard many different tales of his world travels and he is one of those people who have lived, worked and hitchhiked through different exotic countries. Mario is a Toronto high school teacher and teaches French and world issues. He spent time living and working in places like Thailand, Indonesia, Mexico and Quebec and came face-to-face with often vastly different cultures.Mario is also an immigrant in two different countries, Australia where he moved as a small child in the 50s, and Canada, where he arrived as a teenager. Here is his story, the story of an immigrant, traveler and global adventurer.1. Please tell us a bit about your background. Where were you born and where did you grow up?I was born in San Vita al Tagliamento in northeastern Italy in the province of Friuli. But my parents are of Calabrese origin from Southern Italy. After his military service in the north of Italy my father decided to stay there due to his fondness for Friuli culture. In 1953 my father moved our family to Australia where he worked with a French contracting firm and we settled in Brisbane, Queensland when I was 2.5 years old. It was there that I had my first memories of the immigrant reality which was a very simple house made of wood. The roof leaked into our house and we had plants growing through the floor in the kitchen. The conditions were very basic, but this would set the stage for 11 years of a very challenging cultural adjustment period, following which my father moved us to Canada in 1964.At that time, Italians faced a lot of discrimination, even harassment or sometimes violence in different forms, physical and psychological. My family was actually the target of a number of different forms of attack because we were immigrants. It made for a rather paranoid existence, constantly having to looking over your shoulder.Remember, this was the 50s and Australia was still governed within the framework of the “White Australia Policy”, a form of institutionalized apartheid. I witnessed various acts of brutality towards Australian aborigines with whom I was often mistaken, given the darkness of my skin. The proximity to the sea, however, made me appreciate the beauty of Australia in its purest form. During this time I developed a strong sense of self-reliance and I learned the importance of defending myself.In the mid 70s I returned to Australia and I noticed that the work of many of those earlier immigrants had born fruit in the form of comfortable lifestyles and accomplished middle-class experiences. Italians had finally become mainstream and accepted. This also corresponded with Australia’s new multi-cultural policy. Australia started to open up to different nationalities, which made for a more tolerant society.2. You are a gifted multi-lingual individual. How many languages do you speak and what are they?English and Italian are my first two languages. I also speak French, Spanish and Portuguese at a pretty high level. In addition, I also get by in Indonesian and I speak basic German and some phrases in Russian. The sound of different foreign languages fascinates me and I also appreciate that speaking the language is the key to these foreign cultures. Apart from the initial period during high school when I was exposed to English, French and German for the first time, the rest of my languages were acquired through living in the culture.3. What was it like when you first came to Canada?I remember it being very very cold since we arrived in Canada on February 16, 1964. My first observation was a very abrupt introduction to the Canadian climate. For a good several years I found it very difficult to adapt to the climate. On the other hand, as far as culture went, I could finally tap into my Italian-ness. It was actually in Toronto that the whole notion of being an Italian took on a new meaning for me because I felt accepted. I felt embraced here and felt that I could express my Italian heritage which led to me perfecting my Italian, considering I had suppressed speaking Italian in Australia. Once we came to Toronto I felt a desire to further go into the language.High school in Canada was an appreciation of many other languages. We were offered courses in French, German, Latin and Spanish at the high school level. The school I went to reflected the transitional nature of Toronto at that time, which had been very WASP (white, Anglo-Saxon, Protestant) until the 1960s and from then on started to change into a more cosmopolitan environment. There were people of different backgrounds which made you comfortable expressing yourself. By the time I went to university I was fairly at ease with my own intercultural identity.My appreciation for Portuguese started on a construction job in Tecumseh, Ontario, where 2 gangs of construction workers, one Italian, one Portuguese, were confined to a very small house, provided by the construction company and were forced to live and interact with one another. I started to appreciate the similarities and differences with Portuguese culture, which I found absolutely fascinating. This was my initiation into the Portuguese language.4. What were your earliest travel experiences?Apart from the immigrant boat travels, my first travel memories were when I hitchhiked to Niagara Falls and Barrie, a medium-size town 90 minutes north of Toronto, when I was 15 years old. This gave me a sense of independence and the ability to design my own path on any trip. I felt in control and decided where I wanted to go. We did not realize that we needed a passport to cross into the United States, so we learned the lesson that you need your documents in order when traveling to foreign countries.The next big trip was at the age of 17, crossing Canada with a fellow student in a VW beetle. We went to Vancouver for one month, picking strawberries, working on farms to survive. The second leg of that trip was to Mexico via California. This was the period of Height-Ashbury, the Summer of 68, and we truly experienced Flower Power in San Francisco. This left a lasting impression on me because of the freedom and the camaraderie among the youth. Anybody would open their house to you and you felt a bond with many young people.The paradox of this period was that it was during the Vietnam War. So just as you had young people bonding with each other, believing that peace was the answer to the world’s dilemmas, people were getting killed on the other side of the globe. The administration in Washington believed that war was the answer and these young people had in effect opted out of the system.Mexico in itself was an eye-opener. It was my initiation into Latino culture and decrepit third world conditions of the masses. This was my politicization when I realized the plight of the majority of humanity and it made me even more curious to go back and get in contact with these people.When I came back from Mexico it was very difficult to adjust to mundane middle-class values, just fitting into my place into my system. So I dropped out of 2nd year university and continued traveling without a set itinerary.I went to Europe first, starting with London, worked in a hospital, and then spent 2 months traveling Europe on a Eurail pass. After Spain I visited Morocco where I met a guy called Giovanni Pozzi who turned me onto images and illusions of Afghanistan, a place he had been to before. This created a great desire in me to also discover that part of the world.After Morocco I intended to meet up with Giovanni and travel with him from Brindisi, Italy, overland to Afghanistan. In September of 1971 I visited him in Milan after having gone back to discover my Italian heritage, and I then linked up with him in Brindisi from where we took a ferry to Greece and began our overland journey in the direction of Afghanistan.We made it to the Turkish-Iranian border after a harrowing incident on a Turkish train which derailed. Unfortunately I had not learned the lesson of my teen years and had not checked out visa requirements for Canadians. Iran required a visa for Canadians, so I had to return to an Iranian consulate on the Black Sea where I obtained my Iranian travel visa. Somehow Giovanni and I got separated and this was the beginning of true independent traveling. I learned never to depend on other people’s information, always double-check everything yourself.3. Please tell us of your experiences and impressions during your first trip to Asia.After traveling through Iran for about a week, which was during the repressive reign of the Shah, I hitchhiked with 2 Pakistani truck drivers from Tehran to Mashad, the site of the Blue Mosque, one of the most beautiful mosques in the Islamic world. From there we went to Herat, Kandahar and Kabul in Afghanistan, where I was privy to some of the most fantastic images of Afghan culture. I saw horsemen in bright green silk pants, in attire suited more to the Middle Ages than the 1970s. Afghanis appeared to be a very proud people, dignified and ferociously independent.After a short stay in Kabul I went through the Khyber Pass into Peshawar in Pakistan. This too was an amazing view into the gun culture of this region. Every man had a gun 4, 5 feet long and it was truly an overwhelming sight to see this much weaponry on display. Unfortunately this was to continue since a war would erupt between Pakistan and India at this time, and after leaving Pakistan I ended up traveling through India during a time of war.I was traveling on trains with a mobilized army, a people in frenetic motion not knowing what to do. The whole country was in a state of tension. Foreigners were asked to leave the country, so after a month in New Delhi I had to change my plans of visiting Ceylon (present-day Sri Lanka) and take the next flight out of Calcutta in the direction of Bangkok. The flight ticket at that time cost US$80 one way in 1971. Calcutta was also the site of millions of refugees pouring in from what would eventually become Bangladesh. They literally overtook Calcutta. I was about to sleep outside when I was approached by a couple of Anglo-Bengalis who insisted that it was absolutely improper for a European to sleep on the ground that way. They then insisted that I go and stay with them for a couple of nights. Their only requested favour in return was to send them a Levi jacket when I’d get back to Australia.4. From India you moved on to Thailand. Please tell us about your experience in South East Asia.In Bangkok of 1971 I would stay at the Atlantic Hotel for $1 a night, Bangkok was still a relatively small capital at that time. I left Bangkok and headed south, hitchhiking where I was brutally initiated to Thai culture. I was at the back of a pickup truck and dangling my feet out of it, the pickup truck was passed by another vehicle whose occupants got out and threatened me, pointing to my feet. Luckily a young Canadian from Saskatoon, Murray Wright, was sitting in the front of my pickup and explained that it was a big mistake to show the soles of your feet. This is a major insult in Thai culture. I then realized that when traveling it is very important to understand non-verbal communication as well. This was a major lesson for me.This meeting with Murray was fortuitous. He had had an accident building a Japanese sugar factory and asked me if I would take over his job as a carpenter. This led to one month working with Thais and understanding to some degree Thai culture. It was also my first experience of amoebic dysentery, a tropical disease, which nearly killed me. This is how I was initiated to eating conditions in the developing world.

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?

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.