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A Generic Business Credit Line ! That’s Really What A Non Bank ABL Solution Is.. Really!
OVERVIEW – Information on asset based lending in Canada. Companies can achieve the business credit line they require through ABL finance - Here's why and how !
Asset based lending in Canada is the closest thing to a ' generic ' business credit line facility in Canada. So why do we describe to clients ' ABL ' solutions in that manner? The answer is simply that it's a one size fits all solution to working capital and cash flow needs. It's generic in that it's always, and we mean ' always ' about your business assets. Let's dig in.
The proof in the pudding about ' ABL ' is that top experts in finance tell us that asset based lending gains in traction every day - and again, generic if only for the reason that start up, small and medium sized and large firms all can use this facility .
If ABL credit lines are that generic how then does the business owner and financial manager find the right facility for his firm, and who does he or she find it from ? Here it's all about what we call ' the tiers ‘. There are several types of lenders and you have to know the size and quality of your transaction and who is best matched to finance it. Working with an expert in the area will of course help! We're reminded of one of our mentors who once said ' tuition is very expensive in the school of experience ‘, and when it comes down to a strategic financing decision the cost of a bad experience can be expensive in many ways.
Why do businesses gravitate towards asset finance solutions? The answer is painfully simple - it's a challenging financing environment for companies searching for SME COMMERCIAL FINANCE. Once owners and finance mgrs pick up on the fact that access to ABL provides liquidity and often makes a firm more financially competitive it's easy to see why that road is one that is better travelled.
Some confusion around ' ABL ' is that many business folks consider it as only an equipment financing solution - however in our context it’s a business credit line that finances all your current and fixed assets - typically A/R, inventory, and equipment. Like bank credit lines it's a ' senior facility ', and provides aggressive financing on those assets.
The uniqueness of this type of business credit line is that those assets named above are all financed under one revolving facility. The best ' deliverable ' for ABL is its ability to allow you to borrow aggressively on the real assets in your business, based on their ' real values '. Bottom line = higher borrowing margins!
So who's using, and / or checking our ABL finance? Its companies that can access any or enough bank financing, and for firms that can’t meet ratio, covenant, and personal guarantee requirements typically mandated by the bank.
Bottom line?
In summary, investigate ABL as a viable working capital option - work with an expert in the area, and you will find that if you opt for this financing solution your liquidity and overall cash flow should improve significantly ! Seek out and speak to a trusted, credible and experienced Canadian business financing advisor to explore ‘generic ‘business credit line solutions.
Stan Prokop - founder of 7 Park Avenue Financial –
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Office = 905 829 2653
' Canadian Business Financing with the intelligent use of experience '
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.
Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.
Stan Prokop
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