Financing options limit manufacturers

RE: More innovation? Try more manufacturing (Nov. 11)

Yes, a good suggestion, but unfortunately not a workable solution in the foreseeable future.

It is nearly impossible for existing or would-be manufacturers to get financing here. Trying to get the Canadian banks or even private lenders on side is generally a futile exercise. And trying to access government funds still creates a nightmare for applicants.

I am of the opinion that most small independent companies still trying to survive are severely under-capitalized. Financial backers in Canada tend to be extremely risk averse. Understandably, since most sane investors want assurance they will eventually be repaid handsomely. As a result, the financial ratios that have developed to see if a business qualifies for financing means that only those that don’t need loans need apply. Innovation is not given the respect that it deserves mainly because financial decision-makers have a hard time getting their heads around how to assign any concrete value to it. If the company does not have hard assets that can be easily converted into cash, there are too few financing options available to help you stay afloat. Glynis Van Steen, Oakville