tag:blogger.com,1999:blog-33192789490786544572024-03-10T23:21:44.264-04:00Canadian Business Financing - 7 Park Avenue FinancialOur blog highlights Canadian Business Financing solutions via receivable finance , equipment finance, working capital financing, asset based lending, business acquisition financing,franchise finance, and tax credit monetization via SRED and Film Tax Credits.
Our goal is to educate and assist Canadian businesses with their financing needs.
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Welcome to 7 Park Avenue Financial
Call Now ! - Direct Line - 416 319 5769 Stan Prokophttp://www.blogger.com/profile/03768625989302489257noreply@blogger.comBlogger3048125tag:blogger.com,1999:blog-3319278949078654457.post-6288642974094009172023-12-13T13:31:00.000-05:002023-12-13T13:31:06.408-05:00Financing Tax Pigs?!! Your SRED (SR&ED Tax Credits) Tax Credit Claims Are Still 100% Financeable!<p> </p>
<p> </p>
<p align="center"><b><span style="font-size: 18px;">YOUR COMPANY IS LOOKING FOR FINANCING FOR YOUR SR&ED SRED TAX CREDIT!</span></b></p>
<h2 style="text-align: center;"><span style="font-size: 18px;">Funding Innovation: Maximizing SR&ED Tax Credits for Your Business</span></h2>
<p align="center"><span style="font-size: 18px;">You've arrived at the right address! Welcome to 7 Park Avenue Financial</span></p>
<p align="center"><span style="font-size: 18px;">Financing and cash flow are the biggest issues facing businesses today</span></p>
<p align="center"><span style="font-size: 18px;">ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?</span></p>
<p align="center"><span style="font-size: 18px;">CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs</span></p>
<p align="center"><span style="font-size: 18px;">EMAIL - <a href="mailto:INFO@7parkavenuefinancial.com">sprokop@7parkavenuefinancial.com</a></span></p><h1 align="center"><span style="font-size: 18px;"> </span></h1><h1 align="center"><span style="font-size: 18px;">SR&ED Tax Credit Claims Financing: Igniting Canadian Innovation | 7 Park Avenue Financial <br /></span></h1>
<p align="center"> </p>
<p align="center"><br /></p><p align="center"><span style="font-size: 18px;">Read this article because it uncovers how SR&ED tax credit financing can supercharge Canadian firms' innovation and growth.</span></p>
<h2 style="text-align: center;"> </h2>
<h2 style="text-align: center;"><span style="font-size: 18px;">SR&ED Tax Credit Financing: A Strategic Boost for Canadian Firms</span></h2>
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<span style="font-size: 16px;">Introduction<span _fck_bookmark="1" style="display: none;"> </span></span></h2>
<p><span style="font-size: 16px;"><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span><br />
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Ouch! Make that a double ouch! Tax pigs? That was the assessment of one of Canada's leading economics and business professors when it came to Canadian firms who line up (we assume he meant at the trough?!?!) to get their fair share of what he called 'tax preferences' in Canada.<br />
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In Canada, the <a href="https://www.7parkavenuefinancial.com/sred-finance-tax-credit-financing-sr-ed-funding.html">SR&ED tax credit program</a> holds both promise and scrutiny as it fuels innovation and raises questions about its fiscal impact</span></p>
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<span style="font-size: 16px;">Billions From Tax Programs</span></h2>
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<p><br />
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<span style="font-size: 16px;">The thrust of the article, which appeared in one of the two leading business newspapers in Canada, was that Canada is losing billions, yes that’s billions with a capital B... to a long list of tax programs from which it derives little benefit.</span></p>
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<span style="font-size: 16px;">Those programs include:<br />
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Atlantic Tax Credit<br />
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Film Tax Credits<br />
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Accelerated Depreciation Credits<br />
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Flow-Through Share Credits<br />
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GST Preferences<br />
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SR&ED Tax Credit Claims (SRED)</span></p>
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<span style="font-size: 16px;">Exploring the Debate - SR&ED Ta Credit Claims</span></h3>
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<p><br />
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<span style="font-size: 16px;">We won't weigh in on the author's premise, which was pretty well to put these programs on the 'chopping block' to get government spending in line.</span></p>
<p><br />
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<span style="font-size: 16px;">We thought that perhaps we should seek an honest politician for some clarity on the issue, but in the interest of time vis-a-vis the 'honest politician' oxymoron our point is simply that if certain <a href="https://www.7parkavenuefinancial.com/financing-sr-ed-canada-program-claims-sred-cra.html">government tax credit programs such as SRED</a> and film exist, and you qualify and file for them...Then you can finance them.</span></p>
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<h3><br />
<span style="font-size: 16px;">Financing Tax Credits</span></h3>
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<span style="font-size: 16px;">The financing of these credits brings valuable cash flow and working capital into the thousands of firms that qualify for the program.</span></p>
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<h3><br />
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<span style="font-size: 16px;">The SRED Program</span></h3>
<p><br />
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<span style="font-size: 16px;">Let's look at the <a href="https://www.7parkavenuefinancial.com/sred_tax_credit_secured_loan.html">SRED program and the SR ED credit</a>. This is the Scientific Research and Experimental Development Tax Credit Program which is a federal incentive for SR ED claims that companies file with their income tax return around their r&d in scientific or technological uncertainty projects. </span></p>
<p> </p>
<p><span style="font-size: 16px;">It's administered by both CRA and your respective province and has encouraged over the years thousands of Canadian companies to work on r&d. Private, i.e. non-public firms can earn approximately up to 35% on the first 3 Million they spend on projects that qualify, and 20% on the amount in excess.</span></p>
<p><br />
<span style="font-size: 16px;">Canadian business currently uses this SRED credit for claims on wages, material, equipment, and certain overhead allocations.</span></p>
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<h3><br />
<span style="font-size: 16px;"> Legitimacy of SR&ED Tax Credit</span></h3>
<p><br />
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<span style="font-size: 16px;">The question has therefore become, is all this SR&ED tax credit work legitimate, as almost 4 Billion per annum is spent annually in non-refundable tax credits for Canadian firms? Over 24,000 firms have applied annually for the credits.</span></p>
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<span style="font-size: 16px;">Financing Your SRED Tax Credit</span></h3>
<p><br />
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<span style="font-size: 16px;">The bottom line is that if you have an <a href="https://www.7parkavenuefinancial.com/sr_ed_tax_credit_sred_financing_factor_sred.html">SRED (SR&ED) tax credit there is financing available </a>on the credit. Your credit is monetized either at the time of filing or in some cases in an accrual financing plan as you spend. Claims typically are financed at 70% of SRED value, the other 30% is in essence a buffer.</span></p>
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<span style="font-size: 16px;">Quick Turnaround for Tax Credit Financing</span></h3>
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<span style="font-size: 16px;"><a href="https://www.7parkavenuefinancial.com/sred_tax_credit_financing_and_factoring.html">SR ED Tax Credit financing </a>can typically be completed in 14-21 days, with the essential collateral behind the financing, of course, being the SRED itself</span></p>
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<span style="font-size: 16px;">The Role of SRED Consultants</span></h3>
<p><br />
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<span style="font-size: 16px;">Canadian firms that use the program can claim up to the last two years of R&D, and the claims are typically prepared by professionals simply known as 'SRED CONSULTANTS'.</span></p>
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</h3>
<p><br />
<span style="font-size: 16px;">At <b>7 Park Avenue Financial, </b>we believe SR&ED tax credit claims should be viewed not merely as government incentives but as valuable financial instruments. </span></p>
<p> </p>
<p><span style="font-size: 16px;">These claims become assets that businesses can use strategically to secure funding for future growth. By leveraging their tax credits as collateral, companies can access capital from lenders or investors. This approach transforms tax credits from passive benefits into active tools for financing innovation, allowing businesses to propel themselves into the future.</span></p>
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<span style="font-size: 16px;">SOME UNCOMMON TAKES ON SR&ED</span><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></h4>
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<p><br />
<b><span style="font-size: 16px;"> Sustaining Innovation: Leveraging SR&ED Tax Credits for Capital Growth</span></b></p>
<p><br />
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<span style="font-size: 16px;">This perspective highlights the role of SR&ED tax credits in sustaining and nurturing a culture of innovation within Canadian firms.</span></p>
<p> </p>
<p><span style="font-size: 16px;">Instead of viewing these credits solely as financial rewards, they are seen as catalysts for continuous development. Businesses can strategically reinvest the tax credits they earn into research and development efforts. This approach ensures that innovation remains at the heart of their operations, fueling sustainable growth and competitiveness in an ever-evolving market.</span></p>
<p><br />
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<b><span style="font-size: 16px;">Safeguarding Investment: How SR&ED Tax Credit Financing Protects Innovation</span></b></p>
<p><br />
<span style="font-size: 16px;">This perspective focuses on the protective aspect of SR&ED tax credit financing.</span></p>
<p> </p>
<p><span style="font-size: 16px;">It emphasizes that, beyond being a source of funding, tax credit financing acts as a safety net for innovation-driven initiatives. By monetizing their tax credits, businesses create a financial buffer that shields their research and development projects from budget constraints and uncertainties. This approach safeguards the investments made in innovation, ensuring that they can progress unimpeded and reach their full potential.</span></p>
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<span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_78S" style="display: none;"> </span><br />
Key Takeaways</span></h4>
<p><br />
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<span style="font-size: 16px;"> SR&ED represents the government's financial incentive for scientific research and experimental development in Canada.<br />
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Tax Preferences: These are various programs, such as the SRED program, aimed at incentivizing specific activities through tax benefits.<br />
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Government Spending: The article discusses the need to align these tax programs with government spending priorities.<br />
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Financing: Exploring financing options for tax credits is crucial, enabling firms to access working capital.<br />
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SRED Program: Understanding the Scientific Research and Experimental Development Tax Credit Program, its benefits, and administration.<br />
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Legitimacy: Questions regarding the legitimacy of SR&ED tax credit work and its impact on government finances.<br />
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Future Prospects: The article hints at upcoming federal budgets that will influence the fate of the SRED program.<br />
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Monetization: The process of converting tax credits into cash flow through financing.<br />
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Quick Turnaround: The speed at which tax credit financing can be completed, aiding firms in need of timely capital.<br />
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SRED Consultants: Professionals who assist in preparing and optimizing claims for the SRED program.</span></p>
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<span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_78S" style="display: none;"> </span>Conclusion<span _fck_bookmark="1" id="cke_bm_78E" style="display: none;"> </span></span></h5>
<p><br />
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<span style="font-size: 16px;">Some argue that the SR&ED tax credit program has become an unsustainable burden on Canadian taxpayers, while others see it as a vital catalyst for technological advancement and economic growth<br />
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So, is your firm a tax pig? It seems a bit harsh, and we're still looking for that honest politician to find out where the SRED tax credit is going in Canada. </span></p>
<p> </p>
<p><span style="font-size: 16px;">In the meantime, if you have a claim, and want to monetize call 7 Park Avenue Financial, a trusted, credible, and experienced Canadian business financing advisor who can help fund your sr ed refund.</span></p>
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<span _fck_bookmark="1" id="cke_bm_80S" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_78S" style="display: none;"> </span>FAQ<span _fck_bookmark="1" id="cke_bm_79E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h6>
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<b> What is SR&ED tax credit financing?</b><br />
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The sr ed program is a way for Canadian businesses to turn their earned tax credits via sr ed tax incentives and refundable tax credits into immediate cash flow, fostering innovation and growth.<br />
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<b> How does SR&ED financing benefit my business?</b><br />
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The sr ed tax incentive program provides crucial working capital, enabling you to invest in research, development, and expansion while awaiting tax credit refunds.<br />
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<b> Are all businesses eligible for SR&ED financing?</b><br />
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Most Canadian firms that qualify for SR&ED tax credits can access financing, including startups, SMEs, and larger corporations.<br />
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<b> Is SR&ED financing a lengthy process?</b><br />
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No, it's efficient, typically taking 14-21 days, and offers a buffer of 30% on top of your credit amount.<br />
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<b> What role do SRED consultants play in this?</b><br />
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SRED consultants assist in preparing and optimizing your tax credit claims, ensuring you get the maximum benefit under the sr ed tax credit program<br />
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<b> How can I determine if my business qualifies for SR&ED tax credits?</b><br />
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Eligibility is based on research and development activities; consult with a tax expert on sred and income tax or use government guidelines.<br />
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<b> What industries benefit the most from SR&ED tax credit financing?</b><br />
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Industries heavily involved in research and innovation, such as technology, manufacturing, software, biotech, and pharmaceuticals, often benefit significantly if they conduct research in areas of scientific of technological advancement.</span><br />
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<span style="font-size: 16px;"> <b> Are there risks associated with SR&ED financing?</b><br />
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While it can provide valuable capital, it's essential to understand the terms and fees associated with financing to make informed decisions.<br />
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<b> Can I finance tax credits from previous years?</b><br />
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Yes, you can finance credits from your refundable tax credit sred claim from the last two years, offering more flexibility in managing your finances.<br />
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<b> Does SR&ED financing affect my ability to claim future tax credits?</b><br />
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No, financing your tax credits won't impact your eligibility to claim them in the future; it's a separate financial arrangement.<br />
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<b> What is the average interest rate for SR&ED tax credit financing?</b><br />
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Interest rates vary among lenders but typically range from low double digits to high double digits annually.<br />
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<b> Are there government-backed programs for SR&ED financing?</b><br />
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No, SR&ED financing is typically offered by private lenders and non-bank financial institutions to Canadian-Controlled private corporations.</span></p>
<p><br />
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<span style="font-size: 16px;"><b>What documents are required to secure SR&ED financing?</b><br />
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Lenders typically require your tax credit claim documents, financial statements, and information about your eligible expenditures under the sr ed program to qualify for the financing of your sred refundable investment tax credit.</span><br />
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<div class="blogger-post-footer">7 Park Avenue Financial
Canadian Business Financing </div>Stan Prokophttp://www.blogger.com/profile/03768625989302489257noreply@blogger.com0tag:blogger.com,1999:blog-3319278949078654457.post-3385593883375241782023-12-13T09:03:00.003-05:002023-12-13T09:03:55.443-05:00SRED Financing In Canada : The Power of SR&ED Loans<p align="center"> </p>
<p align="center"><b><span style="font-size: 18px;">YOU ARE LOOKING FOR SR&ED FINANCING FOR YOUR CANADA SRED CLAIM</span></b></p>
<h2 style="text-align: center;"><span style="font-size: 18px;">The Insider’s Roadmap to SR&ED Financing Success in Canada</span></h2>
<p align="center"><span style="font-size: 18px;">You've arrived at the right address! Welcome to 7 Park Avenue Financial </span></p>
<p align="center"><span style="font-size: 18px;"> Financing & Cash flow are the biggest issues facing business today</span></p>
<p align="center"><span style="font-size: 18px;"> ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?</span></p>
<p align="center"><span style="font-size: 18px;">CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs</span></p>
<p align="center"><span style="font-size: 18px;">Or Email us with any question on Canadian Business Financing </span></p>
<p align="center"><span style="font-size: 18px;">Email - sprokop@7parkavenuefinancial.com</span></p>
<h1> </h1><h1>Funding R&D: The Essential Guide to SR&ED Financing Your SR&ED Claim | 7 Park Avenue Financial</h1>
<p align="center"> </p><p align="center"> </p>
<h2 style="text-align: center;"><span style="font-size: 16px;">Revolutionize Your R&D: Smart SR&ED Financing Strategies</span></h2>
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<p> </p>
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<h2><span style="font-size: 16px;">Introduction to SR&ED Financing<span _fck_bookmark="1" style="display: none;"> </span></span></h2>
<p> </p>
<p><span style="font-size: 16px;">In the realm of Canadian business innovation, the Scientific Research and Experimental Development (SR&ED) program stands as a cornerstone. It offers a pathway for businesses to engage in research and development with financial support from the government. Understanding the nuances of this program is crucial for any business looking to leverage innovation for growth.</span></p>
<p><span style="font-size: 16px;">SR&ED financing in Canada is revolutionizing how businesses approach and fund their research and development, unlocking unprecedented opportunities for innovation</span></p>
<p> </p>
<h2><span _fck_bookmark="1" style="display: none;"> </span></h2>
<h2><span style="font-size: 16px;">Understanding SR&ED Claims<span _fck_bookmark="1" style="display: none;"> </span></span></h2>
<p> </p>
<p><span style="font-size: 16px;">SR&ED claims are designed for businesses that invest in R&D activities. These claims allow companies to receive tax credits or refunds, fostering a culture of innovation. The eligibility criteria for SR&ED claims are specific, focusing on projects that advance scientific knowledge or technology.</span></p>
<p> </p>
<p> </p>
<h2><span _fck_bookmark="1" style="display: none;"> </span></h2>
<h2><span style="font-size: 16px;">The Benefits of Financing SR&ED Claims<span _fck_bookmark="1" style="display: none;"> </span></span></h2>
<p> </p>
<p> </p>
<p><span style="font-size: 16px;">Financing SR&ED claims can provide immediate cash flow, enabling businesses to reinvest in further R&D and operational activities. This approach helps businesses maintain momentum in their innovation endeavors without waiting for tax credit processing.</span></p>
<p> </p>
<p> </p>
<h2><span style="font-size: 16px;">Navigating the SR&ED Financing Process</span></h2>
<p> </p>
<p> </p>
<p><span style="font-size: 16px;">The process of financing an SR&ED claim involves several steps, starting from the identification of eligible R&D activities to the application for financing. It's essential to understand each stage to maximize the benefits. </span><span style="font-size: 16px;"><a href="https://www.7parkavenuefinancial.com/How_To_Finance_Canadian_SRED_SR_ED_Claim.html" target="_new">Learn More</a></span></p>
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<h3><span style="font-size: 16px;">SR&ED Tax Credits: Maximizing Your Benefit<span _fck_bookmark="1" id="cke_bm_135E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h3>
<p> </p>
<p> </p>
<p><span style="font-size: 16px;">To make the most of SR&ED tax credits, businesses need to accurately document their R&D activities and expenditures. Proper documentation ensures that companies can claim the maximum amount eligible under the program.</span></p>
<p> </p>
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<h3><span style="font-size: 16px;">Key Considerations for SR&ED Claim Financing<span _fck_bookmark="1" id="cke_bm_135E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_135E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h3>
<p> </p>
<p><span style="font-size: 16px;">When seeking financing for SR&ED claims, it's crucial to consider factors like the credibility of the financier, the terms of financing, and the alignment of the financing with your business's cash flow needs. </span><span style="font-size: 16px;"><a href="https://www.7parkavenuefinancial.com/sred-finance-tax-credit-financing-sr-ed-funding.html" target="_new">Explore Options</a></span></p>
<p> </p>
<p> </p>
<h2><span style="font-size: 16px;">Innovative Funding Solutions for SR&ED</span></h2>
<p> </p>
<p><span style="font-size: 16px;">There are various innovative funding options available for SR&ED claims, including traditional bank loans, specialized SR&ED financing, and venture capital. Each option has its own set of benefits and considerations. </span><span style="font-size: 16px;"><a href="https://www.7parkavenuefinancial.com/financing-sr-ed-canada-program-claims-sred-cra.html" target="_new">Discover More</a></span></p>
<p> </p>
<p> </p>
<h2><span style="font-size: 16px;">SR&ED Investment Tax Credit: A Closer Look</span></h2>
<p> </p>
<p> </p>
<p><span style="font-size: 16px;">The SR&ED Investment Tax Credit is a significant aspect of the SR&ED program, offering a percentage of qualified expenditures as a tax credit to businesses. Understanding how to maximize this credit is key to effective SR&ED financing.</span></p>
<p> </p>
<p> </p>
<h3><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_135S" style="display: none;"> </span>Expertise in SR&ED Financing: 7 Park Avenue Financial<span _fck_bookmark="1" id="cke_bm_135E" style="display: none;"> </span></span></h3>
<p> </p>
<p><span style="font-size: 16px;">7 Park Avenue Financial brings decades of experience and expertise in SR&ED financing. Our team is dedicated to helping businesses navigate the complexities of SR&ED claims and financing, ensuring the best possible outcomes. </span><span style="font-size: 16px;"><a href="https://www.7parkavenuefinancial.com/sred-credit-loan-financing-sr-ed-tax-credits.html" target="_new">Learn About Our Expertise</a></span></p>
<p> </p>
<h3><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_135S" style="display: none;"> </span>Choosing the Right SR&ED Financing Partner<span _fck_bookmark="1" id="cke_bm_135E" style="display: none;"> </span></span></h3>
<p> </p>
<p><span style="font-size: 16px;">Selecting the right financing partner for your SR&ED claim is crucial. Look for a partner with a deep understanding of the SR&ED program and a track record of successful financing arrangements. </span><span style="font-size: 16px;"><a href="https://www.7parkavenuefinancial.com/sr_ed_tax_credit_sred_financing_factor_sred.html" target="_new">Find the Right Partner</a></span></p>
<p> </p>
<h4><span style="font-size: 16px;">SR&ED Financing: The Path to Business Growth</span></h4>
<p> </p>
<p><span style="font-size: 16px;">SR&ED financing is more than just a financial tool; it's a pathway to sustainable business growth. By providing the necessary funds for R&D activities, SR&ED financing helps businesses stay at the forefront of innovation.</span></p>
<p> </p>
<ol>
<li>
<p><span style="font-size: 16px;"><b>Alternative Lenders Over Traditional Banks</b>: While traditional banks are the go-to for many, alternative lenders can offer more flexible, tailored financing solutions for SR&ED claims. These lenders might provide quicker approvals and more personalized service. Traditional banking institutions are increasingly irrelevant in the realm of SR&ED financing, as their rigid structures and lack of flexibility hinder the dynamic needs of innovative Canadian businesses</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Leveraging SR&ED Financing for Market Expansion</b>: Beyond merely funding R&D, the cash inflow from SR&ED financing can be strategically used for market expansion activities, thereby turning a tax credit into a tool for broader business growth.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>SR&ED Claims as a Strategic Planning Tool</b>: Businesses can use the anticipation of SR&ED claim financing not just as a reimbursement mechanism but as a core part of their annual strategic and financial planning. This proactive approach can influence R&D direction and intensity, aligning innovation efforts closely with financial planning and business goals.</span></p>
</li>
</ol>
<p> </p>
<p> </p>
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<h4> </h4>
<h4><span style="font-size: 16px;">Key Takeaways<span _fck_bookmark="1" id="cke_bm_135E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h4>
<p> </p>
<p> </p>
<ol>
<li>
<p><span style="font-size: 16px;">SR&ED Canadian government initiative offering tax incentives for businesses conducting research and development. Understanding its scope and eligibility criteria is crucial.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Financing Benefits</b>: SR&ED financing provides immediate cash flow, enabling continuous investment in innovation without waiting for tax credit reimbursements.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Claim Process</b>: Recognizing eligible R&D activities and accurately documenting expenses are pivotal for successful SR&ED claims.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Choosing a Financing Partner</b>: Selecting a knowledgeable and experienced financier in SR&ED claims is vital for maximizing financial benefits and streamlining the process.</span></p>
</li>
</ol>
<p> </p>
<h5><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_135S" style="display: none;"> </span>Conclusion: Empowering Your Business Through SR&ED Financing<span _fck_bookmark="1" id="cke_bm_135E" style="display: none;"> </span></span></h5>
<p> </p>
<p><span style="font-size: 16px;">SR&ED financing is a vital component in the ecosystem of Canadian business innovation. Call<a href="https://www.7parkavenuefinancial.com/home-page.html"> 7 Park Avenue Financial</a>, a <a href="https://www.7parkavenuefinancial.com/Management-Credentials.html">trusted, credible and experienced Canadian business financing advisor </a>who can assist you with the intricacies of SR&ED financing, empowering them to achieve their growth and innovation objectives. </span></p>
<p> </p>
<p><span style="font-size: 16px;">Start your SR&ED financing journey with us today and unlock the potential of your business. </span><span style="font-size: 16px;"><a href="https://www.7parkavenuefinancial.com/sred_financing_sred_finance_loans_canada.html?desktop=false" target="_new">Begin Your Journey</a></span></p>
<p> </p>
<h6><span style="font-size: 18px;">FAQ</span></h6>
<p> </p>
<p> </p>
<p><span style="font-size: 16px;"><b>What is SR&ED financing in Canada?</b><br />
<br />
SR&ED financing refers to specific funding solutions that leverage tax credits from the <a href="https://www.canada.ca/en/revenue-agency/services/scientific-research-experimental-development-tax-incentive-program/what-are-sred-tax-incentives.html">Scientific Research and Experimental Development program</a>, aiding Canadian businesses in supporting their research and development activities.<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<b>How does SR&ED financing benefit businesses?</b><br />
<br />
It provides immediate cash flow, enabling companies to reinvest in R&D and operational activities, fostering continuous innovation and business growth.<br />
<br />
<br />
<br />
<br />
<b>Who is eligible for SR&ED financing?</b><br />
<br />
Canadian businesses engaging in qualifying research and development activities can apply. Eligibility depends on meeting specific criteria set by the SR&ED program.<br />
<br />
<br />
<br />
<br />
<b>What types of projects qualify for SR&ED financing?</b><br />
<br />
Projects that contribute to technological advancement, resolve scientific uncertainties, and involve systematic investigation are typically eligible for SR&ED financing.<br />
<br />
<br />
<br />
<b>How does one apply for SR&ED financing?</b><br />
<br />
Applying involves documenting eligible R&D activities, submitting a claim for SR&ED tax credits, and seeking financing based on anticipated or approved credits.<br />
<br />
<br />
<br />
<br />
<br />
<br />
<b>Can startups access SR&ED financing?</b><br />
<br />
Yes, startups who are Canadian controlled private corporations engaged in qualifying R&D scientific research activities around scientific or technological uncertainty can access SR&ED financing, provided they meet the program's criteria.<br />
<br />
<br />
<br />
<br />
<br />
<br />
<b>Are there risks involved in SR&ED financing?</b><br />
<br />
As with any financing, risks can include the variability of credit approval and the potential of not fully capitalizing on the credit if not well-managed.<br />
<br />
<br />
<br />
<b>How long does it take to receive SR&ED financing?</b><br />
<br />
The timeline varies, depending on the processing of the SR&ED claim and the specifics of the financing agreement.<br />
<br />
<br />
<br />
<b>Can SR&ED financing be combined with other funding?</b><br />
<br />
SR&ED financing can often be integrated with other forms of business funding, enhancing overall financial strategy.<br />
<br />
<br />
<br />
<b>Is there a maximum amount for SR&ED financing?</b><br />
<br />
The maximum financing amount for sr ed tax credits typically depends on the size of the SR&ED claim and the specific terms set by the financier.</span></p>
<p><br />
<br />
<br />
<br />
<br />
<span style="font-size: 16px;"><b>Does the industry of a business affect SR&ED financing eligibility?</b><br />
<br />
No, the industry is not a primary factor in a sr ed refund claim. Eligibility is based on the nature of the R&D activities around scientific or technological advancement rather than the industry.<br />
<br />
<br />
<br />
<b>Are there specific expenses that qualify for SR&ED financing?</b><br />
<br />
Eligible expenses typically include salaries, materials, overhead, and contract costs directly related to eligible expenditures around R&D activities.<br />
<br />
<br />
<br />
<b>Can SR&ED financing impact a company’s tax situation?</b><br />
<br />
Yes, it affects tax planning since SR&ED tax credits can alter a company’s tax liability and income tax payable, making strategic financial planning essential.</span><br />
<br />
<br />
<br />
<br />
</p>
<div class="blogger-post-footer">7 Park Avenue Financial
Canadian Business Financing </div>Stan Prokophttp://www.blogger.com/profile/03768625989302489257noreply@blogger.com0tag:blogger.com,1999:blog-3319278949078654457.post-14494817059599286672023-11-09T10:50:00.004-05:002023-11-09T10:50:52.030-05:00Boost Your Business Liquidity: The True Cost of Receivable Factoring<script src="//platform.linkedin.com/in.js" type="text/javascript"> lang: en_US</script><script data-counter="top" data-url="https://www.7parkavenuefinancial.com/home-page.html" type="IN/Share"></script><br />
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<p align="center"><b><span style="font-size: 18px;">YOU ARE LOOKING FOR INFO ON FACTORING ACCOUNTS RECEIVABLE AND THE FACTOR COST OF THIS FINANCING! </span></b></p>
<h2 style="text-align: center;"><span style="font-size: 18px;">The Business Lifeline: Leveraging Factoring for Cash Flow</span></h2>
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<p align="center"><span style="font-size: 18px;">EMAIL - <a href="mailto:INFO@7parkavenuefinancial.com">sprokop@7parkavenuefinancial.com</a></span></p><p align="center"><span style="font-size: 18px;"> </span></p><h1 align="center"><span style="font-size: 18px;">Factor Cost Factoring Accounts Receivable | 7 Park Avenue Financial </span></h1>
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<p><b><span style="font-size: 14px;">Click <a href="https://www.7parkavenuefinancial.com/FINANCING-TRACK-RECORD.html">here</a> for the business finance track record of 7 Park Avenue Financial</span></b></p>
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<p align="center"> </p>
<p align="center"><b><span style="font-size: 18px;">Invest time in this article because it details factoring's financial implications, a cornerstone for savvy cash flow management</span></b></p>
<p align="center"> </p>
<h2 style="text-align: center;"><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_154S" style="display: none;"> </span></h2>
<h2 style="text-align: center;"><span style="font-size: 18px;">Factoring Unveiled: A Deep Dive into the Costs and Returns</span><span _fck_bookmark="1" id="cke_bm_154E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></h2>
<p> </p>
<h2><span _fck_bookmark="1" style="display: none;"> </span><br />
<span style="font-size: 18px;">The Growing Popularity of Accounts Receivable Financing in Canada</span><span style="font-size: 16px;"><span _fck_bookmark="1" style="display: none;"> </span></span></h2>
<p> </p>
<p><br />
<br />
<span style="font-size: 16px;">Canadian business owners and financial managers who are considering <a href="http://www.7parkavenuefinancial.com/finance-factoring-receivable-financing-canada.html">financing accounts receivable</a> often ask us how they can calculate, or more so, understand the factor cost of factoring accounts receivable.<br />
<br />
There are a whole bunch of factors (excuse the pun) that seem to be coming together to make the financing of accounts receivable a high-growth, popular, and accepted method of business financing in Canada.</span></p>
<p> </p>
<p><span style="font-size: 16px;">The reality is that even just a few years ago most business owners did not even realize that they could <a href="http://www.7parkavenuefinancial.com/invoice_factoring_in_canada_receivable_financing.html">sell their accounts receivable</a> to a private non-bank firm, gaining valuable working capital, i.e. cash flow! in the process.</span></p>
<p> </p>
<h2><span _fck_bookmark="1" style="display: none;"> </span><br />
<br />
<span style="font-size: 18px;">The Drive Towards Factoring</span><span style="font-size: 16px;"><span _fck_bookmark="1" style="display: none;"> </span></span></h2>
<p> </p>
<p><br />
<br />
<span style="font-size: 16px;">Business is being driven to this method of Canadian business financing out of a very basic need - meet payrolls, make fixed-term obligations, and purchase products and services.</span></p>
<p> </p>
<p><span style="font-size: 16px;">And when your customers make you wait, 30, 60, and unfortunately 90 days for your funds all of a sudden <a href="http://www.7parkavenuefinancial.com/factoring_companies_in_canada_program_ar_finance.html">factoring</a>, also known as invoice discounting and receivable financing becomes very popular. Not hard to understand.</span></p>
<h2><br />
<br />
<span style="font-size: 18px;">The Need for Understanding Accounts Receivable Factoring Cost</span></h2>
<p><br />
<br />
<span style="font-size: 16px;">Business owners want to know more about factoring and receivable financing simply because they recognize that cash flow challenges hinder them from growing, and yes, even surviving.</span></p>
<p><span style="font-size: 16px;">And, we are sorry to say, many clients simply can’t get the bank financing they need to fund and grow their business - that isn't necessarily a condemnation of Canadian chartered banks, it’s a case of individual financing challenges within the current credit crunch and global economic challenges.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>Opportunity Cost of Not Factoring</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">While the nominal fees associated with factoring are often discussed, the opportunity cost of not factoring is rarely considered. </span></p>
<p> </p>
<p><span style="font-size: 16px;">For some businesses, not leveraging factoring could mean missed opportunities for growth or lost discounts from suppliers for early payment. By focusing on the cost of factoring alone, businesses may overlook the potential revenue growth or savings that could have been realized if they had immediate access to the cash tied up in receivables. This can include the ability to take on new projects, invest in marketing, or simply negotiate better terms with suppliers for bulk purchases.</span></p>
<p> </p>
<h2><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_135S" style="display: none;"> </span><br />
<br />
<span style="font-size: 18px;">Analyzing Factor Cost</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_135E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h2>
<p><br />
<br />
<span style="font-size: 16px;">So, let’s cover off what you need and want to know about factor cost and the true way in which you should be looking at the pricing around factoring accounts receivable in Canada.</span></p>
<h3><br />
<span style="font-size: 18px;"><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_135S" style="display: none;"> </span><br />
Key Drivers of Factoring Pricing</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_135E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h3>
<p><br />
<br />
<span style="font-size: 16px;">There are three; let's call them 'drivers' in the pricing process of financing your receivables in the factoring agreement. Those three drivers are the time in which it takes for your invoice to be paid, and we mean right down to the day when it comes to invoice factoring rates.</span></p>
<p> </p>
<p><span style="font-size: 16px;">Secondly, the factoring firm calls their pricing a 'discount' - so the actual discount rate they quote you becomes critical in your knowledge of understanding your true cost of financing A/R. </span></p>
<p> </p>
<p><span style="font-size: 16px;">Finally, to keep things simple we often explain to clients in the initial discussion that they receive immediate cash for their receivables once they finance them, i.e.a same-day cash advance</span></p>
<p><br />
</p>
<h3><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_135S" style="display: none;"> </span></h3>
<h3><span style="font-size: 18px;">The Reality of Receivable Advances</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_135E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h3>
<p> </p>
<p><br />
<br />
<span style="font-size: 16px;">However, the reality is that the industry advances a (significant) portion of your accounts receivables, the rest is a holdback. Typically this portion is 90%, but many firms calculate total financing not just on the holdback but the invoice amount.</span></p>
<p> </p>
<h3><br />
<span style="font-size: 18px;"><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_135S" style="display: none;"> </span><br />
Timing of the Holdback Release</span></h3>
<p><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_135E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span><br />
<br />
When do I get the holdback? Ask clients. The answer is that they receive the holdback as soon as the actual invoice is paid.</span></p>
<p><br />
</p>
<p><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_135S" style="display: none;"> </span></p>
<h3><span style="font-size: 18px;">The Focus on Discount Rate</span></h3>
<p><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_135E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span><br />
<br />
We think it's clear that the discount rate, of the three key drivers we have mentioned, is the most focused on by clients. Because the commercial receivable financing industry is not regulated, firms charge what markets will bear.</span></p>
<p> </p>
<h4><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_135S" style="display: none;"> </span></h4>
<h4><span style="font-size: 18px;">Key Takeaways</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_135E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h4>
<p> </p>
<ol>
<li>
<p><span style="font-size: 16px;"><b>Discount Rate/Factor Fee</b>: This is the primary cost associated with factoring and is a percentage of the invoice value. It represents the fee charged by the factoring company for providing immediate funds and is often the most significant component of the overall cost. Understanding how this rate is calculated and what it encompasses will give you insight into a large part of the factoring expense.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Advance Rate</b>: This determines how much money you receive upfront and influences your immediate cash flow. Typically, an advance rate is around 70-90% of the invoice value. The remainder, minus the factor fee, is paid to you once your client settles the invoice. This rate directly affects the liquidity you gain through factoring.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Time to Payment (Recourse Period)</b>: The amount of time it takes for the factoring company to get paid by your customers affects the receivable factoring cost. The longer an invoice goes unpaid, the higher the fee can be, especially in recourse factoring where the business eventually takes back the risk of non-payment.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Volume and Quality of Receivables</b>: These influence the factoring company’s risk and thus impact the cost of factoring receivables. A higher volume of invoices can lower the factor fee due to economies of scale, while the better credit quality of your customers may reduce the perceived risk, potentially leading to more favourable rates.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Additional Fees</b>: These can include service fees from the invoice factoring company, as well as administrative fees, or penalties for early termination of the contract or for invoices paid late by your customers. Understanding these additional costs is vital as they can significantly impact the overall cost of factoring if not managed properly.</span></p>
</li>
</ol>
<p> </p>
<p> </p>
<p><span style="font-size: 16px;">Companies using <a href="http://www.7parkavenuefinancial.com/factoring-confidential-ar-finance.html">Confidential a/r financing</a> can realize all the benefits of collecting their own invoices with the same costs as traditional factoring solutions.</span></p>
<br type="_moz" />
<h5><br />
<br />
<span style="font-size: 18px;"><span _fck_bookmark="1" id="cke_bm_135S" style="display: none;"> </span> Conclusion: Understanding Your Factoring Returns</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_135E" style="display: none;"> </span></span></h5>
<p><br />
<br />
<span style="font-size: 16px;">In summary, understanding the returns of your commercial factor firm will better assist you in determining if this overall receivable financing strategy is for you.</span></p>
<p> </p>
<p><span style="font-size: 16px;">Call<a href="http:// https://www.7parkavenuefinancial.com/financing-services.html"> <b>7 Park Avenue Financial</b></a>, a <a href="http:// https://www.7parkavenuefinancial.com/Management-Credentials"><b>trusted, credible and experienced Canadian business financing advisor</b></a> to better understand the benefits of this growing method of financing your company.</span></p>
<p> </p>
<h6><span style="font-size: 18px;"><span _fck_bookmark="1" id="cke_bm_135S" style="display: none;"> </span>FAQ</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_135E" style="display: none;"> </span></span></h6>
<p> </p>
<h3> </h3>
<p><span style="font-size: 16px;"><b>What is factoring accounts receivable?</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">Factoring accounts receivable is a financial transaction where a business sells its outstanding invoices to a factor company at a discount, in exchange for immediate cash.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>How does factoring improve cash flow?</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">To understand <span class="Text__StyledText-sc-8gmuv2-0 bNsrvW"><span class="Text__StyledText-sc-8gmuv2-0 gwXHqi notranslate"><span><span>how does </span><mark style="background-color: transparent; color: inherit; font-weight: 600;">Accounts Receivable Factoring Work</mark></span></span></span></span><span style="font-size: 14px;"><span class="Text__StyledText-sc-8gmuv2-0 bNsrvW"><span class="Text__StyledText-sc-8gmuv2-0 gwXHqi notranslate"><span><mark style="background-color: transparent; color: inherit; font-weight: 600;"></mark><mark style="background-color: transparent; color: inherit; font-weight: 600;"></mark></span></span></span></span><span style="font-size: 16px;"><span class="Text__StyledText-sc-8gmuv2-0 bNsrvW"><span class="Text__StyledText-sc-8gmuv2-0 gwXHqi notranslate"><span><mark style="background-color: transparent; color: inherit; font-weight: 600;"></mark><mark style="background-color: transparent; color: inherit; font-weight: 600;"></mark><span> requires focusing on the process of</span></span></span></span> selling your unpaid invoices to a factor, where you receive most of the cash immediately, thus improving your working capital and cash flow without waiting for customer payments.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>What is a discount rate in factoring?</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">The discount rate is the fee that a factoring company charges for providing immediate cash in exchange for your invoices. It's a percentage of the invoice value.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b> Is factoring a loan?</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">No, invoice factoring is not a loan. It's the sale of your accounts receivable at a discount to an invoice financing company for immediate cash.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b> What are the risks associated with factoring?</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">The main risk is the potential cost of factoring fees / factoring rates, which can be higher than traditional financing if not managed properly. There's also the reliance on your customers' creditworthiness since late payments may increase fees on the invoice factoring cost. Managing asset turnover and days outstanding in receivables reduces financing costs.</span></p>
<h3> </h3>
<p><span style="font-size: 16px;"><b> Can any business use factoring for its accounts receivable?</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">Most businesses that generate invoices can use factoring services, but it's best suited for those with reliable customers and a steady volume of accounts receivable who might not be able to access approval for a bank line of credit.</span></p>
<p> </p>
<p> </p>
<p><span style="font-size: 16px;"><b> Are there different types of factoring services?</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">Yes, there are two main types: recourse and non-recourse factoring. Recourse factoring requires the business to buy back unpaid invoices, while non-recourse does not - in the latter the factoring company accepts risk for bad debt and collection.</span></p>
<p> </p>
<p> </p>
<p><span style="font-size: 16px;"><b>Does factoring affect my business's credit rating?</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">Factoring doesn't typically affect your credit rating as it's not a loan. However, it requires your customers to have good credit since their payment history impacts the factor's risk.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b> How quickly can I receive funds through factoring?</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">Funds from factoring can often be received within 24 to 48 hours after the factor has approved your invoices for purchase.</span></p>
<p> </p>
<p> </p>
<p><span style="font-size: 16px;"><b> Can I choose which invoices to factor?</b></span></p>
<p><span style="font-size: 16px;">Yes, many factoring companies allow you to select specific invoices to factor, giving you control over your financing needs and costs.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>How Can Factoring Be A Strategic Credit Management Tool?</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">Factoring is frequently viewed as a financing tool, but it can also be a strategic element in managing a company's credit risk. </span></p>
<p><span style="font-size: 16px;">By selecting a factoring arrangement with recourse, a business can effectively outsource its credit control and debt collection processes, which may reduce overhead costs and mitigate the risk of bad debt. In contrast, non-recourse factoring can serve as a form of credit insurance, protecting a company against customer insolvency.</span></p>
<div class="blogger-post-footer">7 Park Avenue Financial
Canadian Business Financing </div>Stan Prokophttp://www.blogger.com/profile/03768625989302489257noreply@blogger.com0tag:blogger.com,1999:blog-3319278949078654457.post-73901593227628915582023-11-07T11:37:00.005-05:002023-11-07T11:37:58.639-05:00Revolutionize Your Cash Flow with Receivables Business Financing & Factoring<script src="//platform.linkedin.com/in.js" type="text/javascript"> lang: en_US</script><script data-counter="top" data-url="https://www.7parkavenuefinancial.com/home-page.html" type="IN/Share"></script><br />
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<p align="center"><span style="font-size: 18px;"><b>YOU ARE LOOKING FOR RECEIVABLES BUSINESS FINANCING AND FACTORING</b>!</span></p>
<h2 style="text-align: center;"><span style="font-size: 18px;">Instant Capital: Transform Your Receivables into Cash </span></h2>
<p align="center"><span style="font-size: 18px;">You've arrived at the right address! Welcome to 7 Park Avenue Financial </span></p>
<p align="center"><span style="font-size: 18px;"> Financing & Cash flow are the biggest issues facing businesses today</span></p>
<p align="center"><span style="font-size: 18px;"> ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?</span></p>
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<p style="text-align: center;"><span style="font-size: 18px;"> EMAIL - <a href="mailto:INFO@7parkavenuefinancial.com">sprokop@7parkavenuefinancial.com</a></span></p><h1 style="margin-left: 40px; text-align: left;"><span style="font-size: 18px;">Mastering Business Receivables Financing : A Factoring Strategy for Growth</span></h1><p style="text-align: center;"><span style="font-size: 18px;"> </span></p>
<p style="text-align: center;"><span style="font-size: 18px;">Discover the untapped potential of factoring because your receivables could be the key to immediate cash flow and growth</span></p>
<p style="text-align: center;"> </p>
<h2 style="text-align: center;"><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_153S" style="display: none;"> </span></h2>
<h2 style="text-align: center;"><span style="font-size: 18px;">The Factoring Advantage: Funding Solutions for Modern Businesses</span><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></h2>
<p> </p>
<p> </p>
<h2>Introduction to Receivables Financing</h2>
<p> </p>
<p><span style="font-size: 16px;">Have you forgotten something? Perhaps it is just a case of overlooking or not knowing all your alternatives in business financing for working capital. <a href="http://www.7parkavenuefinancial.com/factoring_receivables_financing_companies_canadian.html">Factoring receivables</a> for cash flow is just one of those strategies you may have missed, not heard about, or not have fully understood accounts receivable financing, or investigated.</span></p>
<p> </p>
<h2>Understanding Factoring</h2>
<p> </p>
<p> </p>
<p><span style="font-size: 16px;">Let's do a basic 'primer' on this somewhat unknown or misunderstood form of business financing. Many Canadian business owners or financial managers mistake factoring or the selling of your receivables as a 'loan'.</span></p>
<p> </p>
<p><span style="font-size: 16px;">That is not the case, it’s simply the case of monetizing or cash-flowing your probably largest current asset, your receivables, and paying a financing charge or discount fee for the service.</span></p>
<p> </p>
<h2><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_153S" style="display: none;"> </span></h2>
<h2><span style="font-size: 18px;">How Factoring Works</span><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></h2>
<p> </p>
<p><span style="font-size: 16px;">In general, approximately 90% of the value of an invoice is advanced to you pretty well the same day that you issue your invoice. Your regular obligation is to provide proof of delivery or acceptance of that invoice related to your goods and services.</span></p>
<p> </p>
<h2><span style="font-size: 18px;">Factoring is Not Just for Small Businesses</span><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_153S" style="display: none;"> </span></h2>
<p> </p>
<p><span style="font-size: 16px;">We think that <a href="http://www.7parkavenuefinancial.com/finance-factoring-receivable-financing-canada.html">factoring receivables</a> seems to be viewed as a small business financing tactic. Still, we can assure readers that some of the largest corporations in Canada utilize the tactic also - in some cases, it's simply jazzed up with a fancier name such as '<b>securitization</b>' or financing via 'asset-backed commercial paper ', etc. So the big boys are doing it also! Don't forget that.</span></p>
<p> </p>
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<h3><span style="font-size: 18px;">Factoring as a Gateway to Global Expansion</span></h3>
<p> </p>
<p><span style="font-size: 16px;">An uncommon perspective on <a href="http://www.7parkavenuefinancial.com/invoice_factoring_in_canada_receivable_financing.html">receivables business financing</a> is viewing factoring as a stepping stone to international trade.</span></p>
<p> </p>
<p><span style="font-size: 16px;">By utilizing <a href="https://www.7parkavenuefinancial.com/factoring-ar-financing-cash-flow-finance.html">factoring services</a>, companies can more readily finance international sales without the typical barriers associated with cross-border transactions, such as currency fluctuations, differences in legal systems, and the increased risk of non-payment. </span></p>
<p> </p>
<p><span style="font-size: 16px;"><a href="http://www.7parkavenuefinancial.com/debt-factoring-business_factor_companies.html">Debt Factoring</a> can provide the necessary cash flow to explore new markets and maintain operations while waiting for payments from overseas clients, effectively allowing businesses to scale globally with less financial strain.</span></p>
<p> </p>
<h2>Choosing the Right Factoring Partner</h2>
<p> </p>
<p><span style="font-size: 16px;">When clients talk about moving forward on this type of business financing, the largest challenges seem to be their ability to understand pricing, pick the right firm to work with, and finally, ensure that the daily flow of paperwork around this type of business financing makes sense.</span></p>
<p> </p>
<p><span style="font-size: 16px;">If the wrong factor partner is selected, there are countless stories of firms that have experienced a negative level of customer intrusion around the whole factoring receivables process. </span></p>
<p> </p>
<p><span style="font-size: 16px;">So choose your partner well, and probably the best info or advice we share in this regard is to seek the services of a trusted, experienced and credible business financing advisor who can steer you toward financing and cash flow success.</span></p>
<p> </p>
<h3><span style="font-size: 18px;">Qualification and Costs</span></h3>
<p> </p>
<p><span style="font-size: 16px;">A common question related to our 'primer' on factoring (also called invoice discounting or receivable financing) is: 'Do we qualify?' </span></p>
<p> </p>
<p><span style="font-size: 16px;">The short and positive answer is absolutely!: if you have receivables, you qualify, that's what this form of business financing is about.</span></p>
<p> </p>
<h3><span style="font-size: 18px;">Addressing Factoring Financing Concerns</span></h3>
<p> </p>
<p><span style="font-size: 16px;">Many business owners or their financial managers struggle with the cost of this type of financing which typically is in the 1 to 1.5% range in Canada.</span></p>
<p> </p>
<p><span style="font-size: 16px;">The bottom line on the costs is simply that they will vary relative to the size of your receivables, the perceived credit quality, and the type of firm you contract with in this regard. That’s where the help of a Canadian business financing expert can help you immensely.</span></p>
<p> </p>
<p><span style="font-size: 16px;">In fact, more often than not that expert can demonstrate how you can significantly reduce the cost of financing receivables to almost zero in some cases, but certainly a reasonable amount in most situations.</span></p>
<p> </p>
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<p><span style="font-size: 16px;">Understanding the <a href="http://www.7parkavenuefinancial.com/factoring_companies_in_canada_program_ar_finance.html">cost implications of factoring</a> is pivotal for businesses considering this financial tool for cash flow management. Factoring rates, often perceived as higher than traditional lending rates, must be assessed in the context of their impact on a company's cost of capital.</span></p>
<p> </p>
<p><span style="font-size: 16px;">These fees are generally a percentage of the invoice value and can range from 1% to 2%, depending on the industry, volume of receivables, customer creditworthiness, and the factor's policies. </span></p>
<p> </p>
<p><span style="font-size: 16px;">While these rates may initially seem steep compared to conventional loans, the overall cost of capital might be lower when considering the ancillary benefits, such as improved cash flow, credit risk mitigation, and administrative savings.</span></p>
<p> </p>
<p><span style="font-size: 16px;">Negotiating factoring rates is a strategic approach to lowering the overall cost of capital. Businesses must conduct due diligence to understand the fee structure — which might include service fees, credit check fees, and other potential costs — and compare them with the comprehensive costs of other credit facilities. </span></p>
<p> </p>
<p><span style="font-size: 16px;">It is essential to engage in transparent discussions with factors, armed with a clear understanding of one’s outstanding invoices and the credit quality of customers, to negotiate more favourable terms. The key advantage here is that, unlike fixed traditional lending rates, factoring fees can be more flexible and tailored to a company's specific needs and risk profile. </span></p>
<p> </p>
<p><span style="font-size: 16px;">Companies might find that the effective rate of capital through factoring is competitive, especially when they account for the speed of access to cash, the reduction in bad debt expenses, and the elimination of the costs associated with managing receivables internally.</span></p>
</div>
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<p> </p>
<p> </p>
<h3><span style="font-size: 18px;">Benefits of Factoring and A/R Financing Strategies</span></h3>
<p> </p>
<p> </p>
<p><span style="font-size: 16px;">Optimizing working capital and balancing cash flow are critical aspects of a business's financial health. Factoring and Accounts Receivable (A/R) financing are two tools that can effectively manage these areas. Here’s how a business can leverage these options:</span></p>
<p> </p>
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<li><span style="font-size: 16px;">Immediate cash flow from credit sales via factoring, enhancing liquidity.</span></li>
<li><span style="font-size: 16px;">Reduced collection period due to factors managing collections.</span></li>
<li><span style="font-size: 16px;">The creditworthiness of customers is critical, benefiting businesses with strong clientele but weaker credit.</span></li>
<li><span style="font-size: 16px;">Capital from factoring is used for reinvestment, discounts, or growth without debt.</span></li>
<li><span style="font-size: 16px;">Factoring doesn't increase debt ratios; it's off-balance-sheet financing.</span></li>
<li><span style="font-size: 16px;">Factoring lines grow with receivables, offering flexible funding based on need.</span></li>
<li><span style="font-size: 16px;">Non-recourse factoring transfers bad debt risk to the factor, stabilizing cash flow.</span></li>
<li><span style="font-size: 16px;">Savings on in-house credit and collections department costs with factoring for companies using traditional factoring versus <a href="http://www.7parkavenuefinancial.com/factoring-confidential-ar-finance.html">Confidential Receivable Finance</a></span></li>
<li><span style="font-size: 16px;">Predictable cash flow from factoring aids in financial planning and reporting.</span></li>
<li><span style="font-size: 16px;">Businesses can concentrate on core activities as factoring handles A/R management.</span></li>
<li><span style="font-size: 16px;">Factoring firms' credit assessments assist in setting customer credit limits.</span></li>
<li><span style="font-size: 16px;">Factoring provides cash flow to manage seasonal demand, supporting inventory or staff increases.</span></li>
</ul>
</div>
</div>
</div>
<p> </p>
<p> </p>
<h4><span style="font-size: 18px;">Factoring as a Financial Health Indicator:</span></h4>
<p> </p>
<p><span style="font-size: 16px;">Rather than just a tool for immediate cash needs,<a href="http://www.7parkavenuefinancial.com/factoring_accounts_receivable_financing_canada.html"> factoring </a>can be leveraged as an indirect indicator of a company's financial health and efficiency.</span></p>
<p> </p>
<p><span style="font-size: 16px;">Companies that engage in factoring can use their funding speed, the discount rate they receive, and the ease of the transaction process as metrics to assess their creditworthiness and operational efficiency. These factors can reflect how the market views its credit strength, the quality of its customer base, and its internal processes. </span></p>
<p> </p>
<p><span style="font-size: 16px;">Continuous improvement in these areas, mirrored by more favourable factoring terms over time, can signal to stakeholders that the business is on a solid financial trajectory.</span></p>
<p> </p>
<h4><span _fck_bookmark="1" style="display: none;"> </span></h4>
<h4><span style="font-size: 18px;">Key Takeaways</span><span _fck_bookmark="1" style="display: none;"> </span></h4>
<p> </p>
<ol>
<li>
<p><span style="font-size: 16px;">Understanding that factoring is not a loan but a way to sell your accounts receivable at a discount for immediate cash can be considered the cornerstone of receivables financing. This gives businesses immediate working capital instead of waiting for the payment terms of 30, 60, or 90 days.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>The Process of Factoring</b>: Comprehending how factoring works is crucial. Essentially, when a business invoices its client, a factoring company pays the business a significant percentage of the invoice value upfront (usually around 90%) and then collects the total amount from the client. Once the client pays, the business receives the remaining 10%, minus a fee for the factoring service.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Costs of Factoring</b>: Grasping the costs involved, typically a percentage of the invoice value, gives an understanding of the trade-off between the immediate availability of funds and the expense of the service. The fees can range from 1% to 2.5%, which can be critical for cash flow planning.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Qualification Criteria</b>: Knowing that essentially any business with accounts receivable can qualify for factoring provides insight into its accessibility as a financing option.</span></p>
</li>
</ol>
<p> </p>
<h5><span style="font-size: 18px;">Conclusion: Embracing Factoring as a Canadian Business Financing Solution</span></h5>
<p> </p>
<p><span style="font-size: 16px;">So, what's our primer summary on receivables and business financing via factoring? If you’re reading this you probably have a business financing challenge. A/R financing is a method to eliminate that challenge. </span></p>
<p> </p>
<p><span style="font-size: 16px;">Working hard on your finances is commendable; working smart with an expert is necessary. Investigate the solution that will bring cash to your firm’s door tomorrow.</span></p>
<p> </p>
<p><span style="font-size: 16px;">Call <a href="https://www.7parkavenuefinancial.com/financing-services.html">7 Park Avenue Financial</a>, a <a href="https://www.7parkavenuefinancial.com/Management-Credentials">trusted, credible and experienced Canadian business financing advisor</a> who can assist you with your business financing and cash flow needs.</span></p>
<p> </p>
<h6><span style="font-size: 18px;"><span _fck_bookmark="1" id="cke_bm_135S" style="display: none;"> </span>FAQ: FREQUENTLY ASKED QUESTIONS / PEOPLE ALSO ASK /MORE INFORMATION<span _fck_bookmark="1" id="cke_bm_135E" style="display: none;"> </span></span></h6>
<p> </p>
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<br />
<br />
<span style="font-size: 16px;"><b>What is factoring in business finance?</b><br />
<br />
<br />
Factoring is a financial transaction where a business sells its accounts receivable (invoices) to a third party (a factor) at a discount to obtain immediate cash.</span></div>
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<br />
<br />
<span style="font-size: 16px;"><b>How does factoring improve cash flow?</b><br />
<br />
<br />
Receivable Factoring provides immediate cash against your outstanding invoices, reducing the waiting period for customer payments and enhancing your cash flow for operational needs.<br />
<br />
<br />
<b> Is factoring considered a loan?</b><br />
<br />
No, factoring is not a loan. It is the purchase of your accounts receivable for immediate cash, so it doesn't add debt to your balance sheet.</span></div>
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<br />
<br />
<span style="font-size: 16px;"><b>What are the typical costs associated with factoring?</b><br />
<br />
Costs for accounts receivable factoring can vary but typically range from 1% to 1.5% of the invoice value, depending on factors important to the accounts receivable financing company such as the volume of receivables and the creditworthiness of your customers.<br />
<br />
<b> Who can use factoring services?</b><br />
<br />
Any business that issues invoices can use the services of factoring companies. It is suitable for businesses, from small enterprises to large corporations to use an accounts receivable factoring company to improve their cash flow.<br />
<br />
<br />
<b> Can start-ups or small businesses benefit from factoring?</b><br />
<br />
Factoring is especially beneficial for start-ups and small businesses that need to stabilize cash flow and manage working capital when a business line of credit is not available and the factoring cash advance solution for unpaid invoices provides a working capital solution.</span></div>
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<br />
<span style="font-size: 16px;"><b>Does factoring affect my business's relationship with clients?</b><br />
<br />
Factoring can be managed discreetly without impacting client relationships. It's essential to choose accounts receivable factoring companies with a good reputation reputable and respect client confidentiality.<br />
<br />
<b>What is the difference between recourse and non-recourse factoring?</b><br />
<br />
Recourse factoring means the business must buy back any unpaid invoices from the factor, while non-recourse factoring does not require this, offering more risk protection.<br />
<br />
<b>How quickly can I get funds through factoring and how does accounts receivable factoring work on getting paid?</b><br />
<br />
Funds are typically available almost immediately after the factor verifies the invoices, often the same day or within 24 to 48 hours.<br />
<br />
<br />
<b> What documents do I need to start factoring?</b><br />
<br />
<br />
You must provide your invoices, proof of delivery for the goods or services billed, and possibly other documentation related to your customers and accounts receivable for a proper invoice factoring solution.</span><br />
<br />
<br />
</div>
</div>
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<div class="blogger-post-footer">7 Park Avenue Financial
Canadian Business Financing </div>Stan Prokophttp://www.blogger.com/profile/03768625989302489257noreply@blogger.com0tag:blogger.com,1999:blog-3319278949078654457.post-82076576387151972612023-10-29T12:09:00.000-04:002023-10-29T12:09:17.287-04:00Bridge Loans for SRED: Turning Tax Credits into Cash Flow<script src="//platform.linkedin.com/in.js" type="text/javascript"> lang: en_US</script><script data-counter="top" data-url="https://www.7parkavenuefinancial.com/home-page.html" type="IN/Share"></script><br />
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<p align="center"><span style="font-size: 18px;">Or Email us with any question on Canadian Business Financing </span></p>
<p align="center"><span style="font-size: 18px;">EMAIL - <a href="mailto:INFO@7parkavenuefinancial.com">sprokop@7parkavenuefinancial.com</a></span></p><p align="center"><span style="font-size: 18px;"> </span></p><h1 align="center"><span style="font-size: 18px;">Maximizing Business Growth with SR&ED Financing Bridge Loans | 7 Park Avenue Financial </span></h1>
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<h2>Unleashing the Power of SR&ED Claim<span _fck_bookmark="1" style="display: none;"> </span></h2>
<p> </p>
<p><span style="font-size: 16px;">Gimme a reason. That’s what clients often ask when we talk to them about the benefits of both filing an SR&ED claim and then considering <a href="http://www.7parkavenuefinancial.com/How_To_Finance_Canadian_SRED_SR_ED_Claim.html">SRED financing as a cash flow strategy</a> around SRED funding for sr ed credits/sr ed projects in Canada for cash management and cash flow and working capital.</span></p>
<p> </p>
<h2><span _fck_bookmark="1" style="display: none;"> </span></h2>
<h2>The SR&ED Program: A Valuable Resource<span _fck_bookmark="1" style="display: none;"> </span></h2>
<p> </p>
<p><span style="font-size: 16px;">You want reasons, and we have reasons for you to consider...Businesses of all sizes in Canada utilize the<a href="http://www.7parkavenuefinancial.com/financing-sr-ed-canada-program-claims-sred-cra.html"> SR&ED program in Canada </a>to be eligible to receive a huge portion of their expenses in R&D via a non-repayable tax credit.</span></p>
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<h3><span style="font-size: 18px;">Surprising Benefits of SRED Financing</span><span _fck_bookmark="1" id="cke_bm_135E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></h3>
<p> </p>
<p><span style="font-size: 16px;">When we tell clients they can utilize an SRED financing strategy to increase cash flow and working capital via the R&D credit, well, frankly, they almost can't believe it.</span></p>
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<h3><span style="font-size: 18px;">Eligibility and Components of an SR&ED Claim</span><span _fck_bookmark="1" id="cke_bm_135E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></h3>
<p> </p>
<p><span style="font-size: 16px;">There isn’t a day when the government issues cheques for millions of dollars on the Scientific Research and Experimental Development (aka SRED!) Program, so let’s all agree that you are eligible for your share. And if you're working on processes and products and redesign in your industry then the salaries, products and equipment and even some overheads are taken into account when you file an SRED claim.</span></p>
<p> </p>
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<h3><span style="font-size: 18px;">SR&ED Claim Process</span><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></h3>
<p> </p>
<p><span style="font-size: 16px;">The SR&ED claim process is tied to the Canada Revenue Agency. They receive your claim and process it at the same time you file your year-end tax return. If you are okay with 'waiting’... and most of our clients are not, you will get a significant cheque back from Ottawa in a number of months.</span></p>
<p> </p>
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<h3><span style="font-size: 18px;">Accelerating Your SR&ED Refund</span><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></h3>
<p> </p>
<p><span style="font-size: 16px;">Clients are always asking us how long they have to wait for a refund, and if there is any way to speed up the process. Far be it from us to be the ones to be telling someone from the government to speed up the process. But what we do advise clients to consider is to finance their <a href="http://www.7parkavenuefinancial.com/sred-finance-tax-credit-financing-sr-ed-funding.html">SRED funding</a> credit as soon as they file it.</span></p>
<p> </p>
<h3><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_153S" style="display: none;"> </span></h3>
<h3><span _fck_bookmark="1" id="cke_bm_135S" style="display: none;"> </span><span style="font-size: 18px;">Financing Your Tax Credit</span><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_135E" style="display: none;"> </span></h3>
<p> </p>
<p><span style="font-size: 16px;">Why would you want to <a href="http://www.7parkavenuefinancial.com/sred-credit-loan-financing-sr-ed-tax-credits.html">finance a tax credit</a>? </span></p>
<p><span style="font-size: 16px;">There are only two reasons, cash flow and working capital now! By monetizing your tax credit you are in a position to take the government rebate and put it to positive use within your company. And what are those positive uses? It's the basics - reduce your payables, buy new equipment, reinvest in your entire SR&ED claim process to increase your competitive advantage...and on it goes. Basically, use those funds for any worthwhile purpose.</span></p>
<p> </p>
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<h3><span style="font-size: 18px;">Speed and Simplicity of Financing</span><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></h3>
<p> </p>
<p><span style="font-size: 16px;">How long does it take to <a href="http://www.7parkavenuefinancial.com/sred-tax-credit-loan-financing-sr-ed-credits.html">finance a claim</a> and what's involved? That's not an atypical question. In our experience claims are financed within two to three weeks. And could the process be any more simple - it's all about completing a simple business financing application, utilizing your SRED claim as collateral, and undergoing any normal due diligence. Claims of any size can be financed, it typically makes sense to finance claims that are in excess of 100k... but smaller claims can be monetized also.</span></p>
<p> </p>
<p><span style="font-size: 18px;"><b>SR&ED Financing for Startups and Small Businesses</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">While larger companies often utilize SR&ED financing, it's less commonly known that startups and small businesses can benefit immensely from it. Startups can use SR&ED financing to accelerate their R&D initiatives, attract investors, and gain a competitive edge in their industries. This approach allows them to compete with more established players and secure funding while navigating early-stage challenges.</span></p>
<p> </p>
<h4><span _fck_bookmark="1" id="cke_bm_135S" style="display: none;"> </span><span style="font-size: 18px;">Environmental and Sustainable SR&ED Financing</span><span _fck_bookmark="1" id="cke_bm_135E" style="display: none;"> </span></h4>
<p> </p>
<p><span style="font-size: 16px;">In an era of growing environmental awareness, some businesses are focusing on R&D projects related to sustainability, renewable energy, and eco-friendly technologies. <a href="http://www.7parkavenuefinancial.com/sred_tax_credit_financing_and_factoring.html">SR&ED financing </a>can be used to support projects aimed at reducing carbon footprints, conserving resources, or developing sustainable products. This uncommon take aligns SR&ED claims with broader environmental and social goals, contributing to a greener future while benefiting from tax incentives.</span></p>
<p> </p>
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<h4><span style="font-size: 18px;">Key Takeaways</span><span style="font-size: 18px;"><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h4>
<p> </p>
<p><br />
<span style="font-size: 16px;">SR&ED financing is a working capital financing strategy that leverages the Scientific Research and Experimental Development (SR&ED) program in Canada to secure funding for research and development projects.<br />
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Bridge Loans: These are short-term loans designed to provide immediate funding while waiting for SR&ED tax credits. Bridge loans bridge the gap between filing a claim and receiving the actual credit.<br />
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SRED Claims: Refers to claims made under the SR&ED program, where businesses can recover a significant portion of their R&D expenses through non-repayable tax credits.<br />
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Cash Flow Management: Understanding how SR&ED financing and bridge loans can improve a company's cash flow, helping it meet financial obligations and invest in growth.<br />
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Canada's SR&ED Program: A brief overview of the Canadian government's program that incentivizes businesses to conduct research and development activities through tax incentives.<br />
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Collateral: SR&ED claims can be used as collateral for bridge loans, reducing risk for lenders and making financing more accessible.<br />
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Application Process: A simplified explanation of the process involved in applying for bridge loans, which typically includes completing a financing application and undergoing due diligence.<br />
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Timely Financing: The importance of financing SR&ED claims promptly to put the funds to productive use within the business.</span></p>
<p> </p>
<h2><span style="font-size: 18px;">Conclusion</span></h2>
<p><span style="font-size: 16px;">Call <a href="https://www.7parkavenuefinancial.com/financing-services.html">7 Park Avenue Financial</a>, a <a href="http:// https://www.7parkavenuefinancial.com/Management-Credentials">trusted, credible and experienced Canadian business financing advisor</a> around SRED funding Canada claims for Canadian businesses. And use that cash flow which you have achieved in a timely fashion to grow your business strategically and achieve sales and profits.</span></p>
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<h6><span style="font-size: 18px;">FAQ FREQUENTLY ASKED QUESTIONS PEOPLE ALSO ASK MORE INFORMATION</span></h6>
<p> </p>
<p><br />
<span style="font-size: 16px;"><b>What is SR&ED Financing?</b><br />
<br />
SR&ED financing involves using bridge loans to access immediate funds while awaiting tax credits for research and development efforts for eligible expenditures in Canada. The goal of the program is to support research and encourage Canadian businesses to invest in R&D and overcome technical challenges in their respective industries. Software development firms are a large part of sred claims filed in Canada.<br />
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<b>How do Bridge Loans Benefit Businesses?</b><br />
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Bridge loans bolster cash flow, enabling companies to invest in growth, fund material costs, and reduce payables, and stay competitive while waiting for the tax incentive and SR&ED refunds.<br />
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<b>Can Any Business Apply for SR&ED Bridge Loans?</b><br />
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Yes, businesses eligible for SR&ED tax credits can apply for bridge loans, typically with claims exceeding 130k being the most viable candidates. Work in areas such as sales promotion quality control, etc does not qualify under the program and is not true ' technological advancement'.<br />
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<b>How Quickly Can I Secure SR&ED Financing?</b><br />
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In most cases, the SR&ED financing process takes two to three weeks, offering a swift solution to cash flow challenges. Accrued sr ed work can also be financed prior to a final filing of your claim with your income tax return.<br />
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<b>What's the Role of Collateral in Bridge Loans?</b><br />
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SR&ED claims often serve as collateral for bridge loans, reducing risk for lenders and making financing more accessible to businesses.<br />
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<b>Are there tax implications for SR&ED financing?</b><br />
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SR&ED financing is generally tax-neutral for Canadian controlled private corporations, as it involves accessing your own tax credits early, but consult your tax advisor for specifics.<br />
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<b>What is the typical interest rate for bridge loans?</b><br />
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Bridge loan interest rates can vary but are often competitive, and they provide valuable benefits to many businesses beyond traditional loans via the tax refund itself.<br />
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<b>Can SR&ED financing impact my eligibility for future tax credits?</b><br />
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Generally, SR&ED financing doesn't impact eligibility for future credits, but it's wise to consult with experts for tailored advice around your work in sred and scientific and technological uncertainty to ensure you have furthered technical knowledge in your r&d efforts to achieve technological advancement and avail your business of tax refunds.</span></p>
<p><br />
<span style="font-size: 16px;"><b>Are SRED bridge loans only for large companies?</b><br />
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No, bridge loans can benefit businesses of all sizes, especially those with substantial R&D expenditures seeking cash flow optimization.<br />
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<b> What if my SR&ED claim is smaller? Can I still apply for financing?</b><br />
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Yes, even smaller SR&ED claims can be financed under the sr ed investment tax credit program for work in scientific and technological advancement- it depends on your business's unique financial needs and goals.</span><br />
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</p>
<p><b><span style="font-size: 14px;">Click <a href="https://www.7parkavenuefinancial.com/FINANCING-TRACK-RECORD.html">here</a> for the business finance track record of 7 Park Avenue Financial</span></b></p>
<div class="blogger-post-footer">7 Park Avenue Financial
Canadian Business Financing </div>Stan Prokophttp://www.blogger.com/profile/03768625989302489257noreply@blogger.com0tag:blogger.com,1999:blog-3319278949078654457.post-23655383011789894532023-10-26T08:49:00.007-04:002023-10-26T08:49:57.144-04:00How Does Receivables Finance Work?<script src="//platform.linkedin.com/in.js" type="text/javascript"> lang: en_US</script><script data-counter="top" data-url="https://www.7parkavenuefinancial.com/home-page.html" type="IN/Share"></script><br />
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<h2 style="text-align: center;"><span style="font-size: 18px;">You Are Looking for Confidential Cash Flow Factoring! </span><span style="font-size: 18px;"><span _fck_bookmark="1" style="display: none;"> </span></span></h2>
<h2 style="text-align: center;"><span style="font-size: 18px;">Accounts Receivable Factoring: The Secret to Steady Cash Flow</span></h2>
<p align="center"><span style="font-size: 18px;">You've arrived at the right address! Welcome to 7 Park Avenue Financial </span></p>
<p align="center"><span style="font-size: 18px;"> Financing & Cash flow are the biggest issues facing businesses today</span></p>
<p align="center"><span style="font-size: 18px;"> Unaware / Dissatisfied with your financing options?</span></p>
<p align="center"><span style="font-size: 18px;">Call Now! - Direct Line - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs</span></p>
<p align="center"><span style="font-size: 18px;">Email - <a href="mailto:INFO@7parkavenuefinancial.com">sprokop@7parkavenuefinancial.com</a></span></p>
<p align="center"> </p>
<h1 align="center"><span style="font-size: small;">Cash Flow Factoring Accounts Receivable For Cash Flow | 7 Park Avenue Financial</span><br /></h1>
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<h2 style="text-align: center;"><span style="font-size: 18px;">Transforming Business Cash Flow with Receivable Factoring</span></h2>
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<p style="text-align: center;"><b><span style="font-size: 16px;">Understand the intricacies of AR finance because this article offers actionable insights to maximize your cash flow</span></b></p>
<p> </p>
<h2><span _fck_bookmark="1" style="display: none;"> </span></h2>
<h2>Introduction to AR Finance<span _fck_bookmark="1" style="display: none;"> </span></h2>
<p> </p>
<p><span style="font-size: 16px;"><a href="http://www.7parkavenuefinancial.com/finance-factoring-receivable-financing-canada.html">Accounts receivable AR Finance</a> isn't as much a 'secret strategy' as opposed to a method to turn your company sales into a virtual cash flow machine; in effect, past obstacles of cash flow have now become a working capital/cash solution.</span></p>
<p> </p>
<h2>The Importance of Cash Flow</h2>
<p> </p>
<p><span style="font-size: 16px;">You only have to look at some 'search engine' stats to find that thousands of Canadian businesses search every day for what they hope is valuable real-world assistance around their business financing needs. </span></p>
<p> </p>
<p><span style="font-size: 16px;">From early-stage companies to mature medium-sized and even larger corporations ... it's always about unlocking cash flow in their sales and receivables.</span></p>
<p> </p>
<h2><span style="font-size: 18px;">Debunking Misconceptions and Concerns</span><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_153S" style="display: none;"> </span></h2>
<p> </p>
<p><span style="font-size: 16px;">When clients of 7 Park Avenue Financial talk to us about their financing challenges, we've found it is easy. Clients can be forgiven for getting bogged down in such issues as the cost of this financing, how it works, and even more importantly, dispelling what they may have heard about 'factoring' and 'invoice discounting'.</span></p>
<p><span style="font-size: 16px;">Business owners and their financial managers are of course, all for a 'good thing'; and they want to know <a href="https://www.7parkavenuefinancial.com/factoring-ar-financing-cash-flow-finance.html">how accounts receivable financing works</a>, as well as wanting to avoid the pitfalls and negative perceptions that come with this method of cash flow finance.</span><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></p>
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<h2><span style="font-size: 18px;">Comparison with Other Financing Methods:<span _fck_bookmark="1" style="display: none;"> </span></span></h2>
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<p><span style="font-size: 16px;"><a href="http://www.7parkavenuefinancial.com/factoring_financing_accounts_receivable_invoices.html">Factoring</a> stands out distinctly when compared to traditional financing options like bank loans or lines of credit, as well as other alternative financing methods.</span></p>
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<b><span style="font-size: 18px;"><span _fck_bookmark="1" id="cke_bm_135S" style="display: none;"> </span>Cost:</span></b></h3>
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<span style="font-size: 16px;"> Factoring: Generally, the factoring fee might be perceived as more expensive than traditional financing, with fees typically ranging between 1-5% of the invoice amount, depending on various factoring companies' view volume, industry, and the creditworthiness of the business's clients.</span></p>
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<b><span style="font-size: 18px;">Bank Loans & Lines of Credit:</span></b></p>
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<span style="font-size: 16px;">These often come with lower interest rates than factoring, especially if the borrowing entity has a good credit history. However, there are often additional costs, such as origination fees, service charges, and potential penalties.</span></p>
<p><br />
<span style="font-size: 16px;">Alternative Financing: Methods like<a href="http://www.7parkavenuefinancial.com/working_capital_loans_cash_financing_finance.html"> <b>merchant cash advances</b></a> or peer-to-peer lending might have varying costs, sometimes higher than traditional loans, depending on the risk assessment of the business.</span></p>
<p><br />
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<span style="font-size: 18px;">Flexibility:</span><br />
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<span style="font-size: 16px;"> Factoring: Offers high flexibility as it's based on the business's sales. As sales grow, the amount of financing available generally increases. Plus, businesses can choose which invoices to factor.<br />
Bank Loans & Lines of Credit: These have set limits. While lines of credit offer some flexibility in terms of when and how much to borrow, they still have a cap. Loans provide a lump sum, which must be repaid according to the agreed-upon schedule.</span></p>
<p><br />
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<span style="font-size: 18px;"><b>Speed:</b></span><br />
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<span style="font-size: 16px;"> Factoring: One of the fastest ways to get financing. Once set up with a factoring company, businesses can often get cash within 24-48 hours of submitting an invoice.<br />
Bank Loans & Lines of Credit: The approval process can be lengthy, sometimes taking weeks or even months, especially if it's the business's first time borrowing.</span></p>
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<b><span style="font-size: 18px;">Qualification Criteria:</span></b><br />
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<span style="font-size: 16px;"> Factoring: Mainly based on the creditworthiness of the business's clients, not the business itself. This can be beneficial for startups or companies with limited credit history.Bank Loans & Lines of Credit: Require a thorough credit check of the business and often its owners. Collateral might also be necessary.<br />
Alternative Financing: Criteria vary widely. Some methods might focus more on business performance than credit history.</span></p>
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<h3><span style="font-size: 18px;">Financing Challenges for SMEs</span></h3>
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<p><span style="font-size: 16px;">We're focusing our discussion here on smaller and medium-sized firms; safe to say that larger corporations have access to a lot more financing possibilities in the realm of traditional bank financing. Some firms that are public companies can utilize working capital strategies and business funding that SME (small to medium-sized) companies can't access.</span></p>
<p><span style="font-size: 16px;">These smaller firms, which of course, make up a huge part of the Canadian business landscape, have to rely on their internal cash flow management as well as utilizing any external finance they can access to fund ongoing operations, growth, and working capital.</span></p>
<p><span style="font-size: 16px;">The worst irony in business finance may be that many companies have to give up growth prospects simply because they can't access external business capital. That might mean new clients, new markets, foreign expansion, new product lines, etc.</span></p>
<p> </p>
<h3><span _fck_bookmark="1" id="cke_bm_153S" style="display: none;"> </span><span style="font-size: 18px;">Understanding Cash Flow Factoring</span><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span></h3>
<p> </p>
<h3><span style="font-size: 18px;">What is Confidential Cash Flow Factoring / How Does It Work</span></h3>
<p> </p>
<p><span style="font-size: 16px;">Cash flow factoring of accounts receivable is the ongoing sale, in whole or in part, of your sales invoices as you generate them and deliver products and services to your customers. </span></p>
<p> </p>
<p><span style="font-size: 16px;">The invoices are purchased at 1-2% % discount from your company, and you receive cash, 99% of the time, the same day, for those sales. So, in effect, all your sales now fuel that cash flow machine we spoke about previously.</span></p>
<p> </p>
<p><span style="font-size: 16px;">So far, so good, right? Where complications arise, especially in Canada, is the fact that this type of financing requires your client to be notified of the process, directly or indirectly, and payments are required to be forwarded to your factoring finance firm.</span></p>
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<p><span style="font-size: 16px;">Canadian business, in our eyes, is reluctant to involve their customers in their internal financing policies and challenges. As a result, many firms are skeptical of entering into accounts receivable finance in this manner.</span></p>
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<p><span style="font-size: 16px;">Under <a href="http://www.7parkavenuefinancial.com/factoring-confidential-ar-finance.html">non-notification accounts receivable confidential financing </a>the company bills and collects its own receivables, while achieving all the benefits of traditional factoring.</span></p>
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<p><span style="font-size: 18px;"><b>Customer Perception and Business Relations</b></span></p>
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<p><span style="font-size: 16px;">Common Take: Factoring, especially if not confidential, might sour the relationship with customers as they might perceive the business to be in dire financial straits.</span></p>
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<span style="font-size: 16px;">Uncommon Take: Smart businesses can frame factoring as a proactive financial strategy that ensures continuous and robust operations without any disruption. Instead of a sign of weakness, customers might see it as a mark of a business that plans ahead, ensuring that product or service delivery is never compromised due to cash flow issues.</span></p>
<p> </p>
<h3><span style="font-size: 18px;">The Best Solution In Financing Sales</span></h3>
<p> </p>
<p><span style="font-size: 16px;">Is there a solution? We told you there was a breakthrough called Confidential Invoice Discounting!</span></p>
<p><span style="font-size: 16px;">This type of financing comes at the same cost as 'old school' factoring, and allows you to bill and collect your receivables!</span></p>
<p><span style="font-size: 16px;">Your company gains all the benefits of that cash flow factoring machine we've turned your company into. This type of facility can easily be a part of a non-bank business line of credit known as an 'ABL' - that's an asset-based line of credit that allows your company to have a credit line that functions like bank credit lines.</span></p>
<p><span style="font-size: 16px;">Let those competitors, customers, and vendors remain precisely where you want them to be, outside your financing strategies and challenges! Let your competitors try and figure out how you're doing so well in both growth and profits.</span></p>
<p> </p>
<p><span style="font-size: 18px;"><b>Types of Factoring:</b></span></p>
<p> </p>
<p><span style="font-size: 16px;"><a href="http://www.7parkavenuefinancial.com/factoring_companies_in_canada_program_ar_finance.html">Factoring</a>, a financial solution for businesses to improve cash flow, comes in various forms to cater to specific needs. <b>Recourse and Non-recourse Factoring</b> are two primary classifications. In Recourse Factoring, the business selling its invoices remains liable if the debtor (the business's customer) fails to pay. </span></p>
<p> </p>
<p><span style="font-size: 16px;">This means that if the customer doesn't settle the invoice, the factoring company can "recourse" to the original business to recover the funds, often making this option cheaper since the factoring company's risk is lower. On the other hand, Non-recourse Factoring frees the selling business is when the factoring company assumes bad debt and collection risk.</span></p>
<p> </p>
<p><span style="font-size: 16px;">If the debtor fails to pay, the factor absorbs the loss, making this a safer, albeit often more expensive, option for businesses.</span></p>
<p> </p>
<p> </p>
<p><b><span style="font-size: 18px;">Key Takeaways</span></b></p>
<p> </p>
<p><br />
<span style="font-size: 16px;">Factoring is a financial transaction in which a company sells its accounts receivable (invoices) to a third-party factoring company at a discount. This is done primarily for the purpose of obtaining immediate cash flow.<br />
<br />
<br />
Process:<br />
<br />
<br />
Invoice Sale: Businesses deliver their products/services to their customers and then sell these invoices to the factoring company.<br />
Immediate Cash: The factoring company provides the original business with around 80% to 99% of the invoice amount upfront.<br />
<br />
Collection and Final Payment: The factoring company is then responsible for collecting the full invoice amount from the customer. Once collected, they will pay the remaining balance to the original business, minus their fees (typically 1-2%).<br />
<br />
Confidential Invoice Discounting:<br />
<br />
<br />
This is a variant of factoring where the customers aren't aware that the invoices have been sold. The business still manages the sales ledger and collects payments from customers, making it confidential. The benefit is that relationships with customers remain undisturbed, and businesses can still get immediate financing.<br />
<br />
<br />
Benefits:<br />
<br />
<br />
Immediate Liquidity: Businesses get access to immediate cash instead of waiting for clients to pay invoices, aiding in consistent cash flow and capital for investments or operations.<br />
<br />
<br />
Risk Transfer: The risk of non-payment or late payment can be transferred to the factoring company, depending on the agreement.<br />
<br />
<br />
Challenges:<br />
<br />
<br />
Cost: Factoring can be more expensive than traditional forms of financing due to the fees involved.<br />
<br />
<br />
Customer Relationships:<br />
<br />
In traditional factoring (non-confidential), customers are made aware that invoices have been sold, which may affect business relationships.</span></p>
<p> </p>
<h5><span style="font-size: 18px;">Conclusion</span></h5>
<p> </p>
<p><span style="font-size: 18px;">Call <a href="http:// https://www.7parkavenuefinancial.com/financing-services.html">7 Park Avenue Financial</a>, a <a href="https://www.7parkavenuefinancial.com/Management-Credentials">trusted, credible, and experienced Canadian business financing advisor</a> with a track record of business finance success, putting your firm into a proper Receivable finance facility, allowing you to reap the benefits of cash flow invoice financing.</span></p>
<p> </p>
<p> </p>
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<h6><span style="font-size: 18px;">FAQ: FREQUENTLY ASKED QUESTIONS PEOPLE ALSO ASK MORE INFORMATION<span _fck_bookmark="1" id="cke_bm_136E" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_135E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h6>
<p> </p>
<p><br />
<span style="font-size: 16px;"><b>What is factoring in the context of accounts receivable?</b><br />
<br />
It's a process where businesses sell their accounts receivable (invoices) to an accounts receivable factoring company at a discount to obtain immediate cash flow.</span></p>
<p><br />
<br />
<span style="font-size: 16px;"><b>How does Confidential Invoice Discounting differ from traditional factoring?</b><br />
<br />
Confidential Invoice Factoring / Discounting allows businesses to receive financing without notifying their customers, ensuring the sales and collection process remains undisturbed.</span></p>
<p><br />
<br />
<span style="font-size: 16px;"><b>What percentage of the invoice amount can a business typically receive upfront?</b><br />
<br />
Businesses usually get a cash advance between 80% to 90% of the invoice value amount immediately when factoring - The factoring company pays you the remaining balance, less a factoring fee when the client pays.</span></p>
<p><br />
<br />
<span style="font-size: 16px;"><b>Are there any risks or downsides to factoring accounts receivable?</b><br />
<br />
One challenge is the cost, as factoring can be pricier than other financing methods. Also, in traditional factoring, customers are informed of the invoice sale, which might affect relationships.</span></p>
<p><br />
<br />
<span style="font-size: 16px;"><b>Why would a business choose factoring over a traditional bank loan?</b></span></p>
<p><br />
<br />
<span style="font-size: 16px;">Factoring provides immediate liquidity, transfers the risk of non-payment, and doesn't add debt to the balance sheet, making it an attractive option for many SMEs.<br />
<br />
<br />
<b> Are there different types of factoring beyond Confidential Invoice Discounting?</b></span></p>
<p><br />
<br />
<span style="font-size: 16px;">Yes, besides Confidential Invoice Discounting, there's recourse and non-recourse factoring. Recourse factoring means the business is liable if the invoice isn't paid, while non-recourse transfers this risk to the factoring company.</span></p>
<p><br />
<br />
<span style="font-size: 16px;"><b>Is it common for all industries to use factoring as a financing method?</b><br />
<br />
Factoring unpaid invoices is more common in industries with long invoice cycles like manufacturing, textiles, or wholesale, but any industry can leverage it based on their cash flow needs to finance commercial business-to-business accounts receivables.</span></p>
<p><br />
<br />
<span style="font-size: 16px;"><b>Does factoring impact a business's credit score or rating?</b><br />
<br />
Factoring receivables typically doesn't affect a business's credit score directly as it's not a loan, but it can improve the company's financial health by boosting liquidity.</span></p>
<p><br />
<br />
<span style="font-size: 16px;"><b>Can a startup business use factoring for financing?</b></span></p>
<p><br />
<br />
<span style="font-size: 16px;">Absolutely! Startups often use factoring since they may not qualify for traditional bank loans due to a lack of credit history. Accounts receivable factoring works for any company that has commercial invoices to finance.</span></p>
<p><span style="font-size: 16px;">By utilizing accounts receivable factoring, companies can offer more adaptable payment options and decrease the time and resources needed to receive customer payments from customers and fund daily business operations.</span></p>
<p><br />
<br />
<span style="font-size: 16px;"><b>How long does the factoring process typically take?</b><br />
<br />
The initial setup with many factoring companies might take a week or two, but once established, businesses can usually receive funds within 24 to 48 hours of invoicing after a factoring agreement and factoring fees / receivable factoring cost are established.</span></p>
<p> </p>
<p><b><span style="font-size: 14px;">Click <a href="https://www.7parkavenuefinancial.com/FINANCING-TRACK-RECORD.html">here</a> for the business finance track record of 7 Park Avenue Financial</span></b></p>
<div class="blogger-post-footer">7 Park Avenue Financial
Canadian Business Financing </div>Stan Prokophttp://www.blogger.com/profile/03768625989302489257noreply@blogger.com0tag:blogger.com,1999:blog-3319278949078654457.post-63348773239948027102023-10-24T10:58:00.013-04:002023-10-24T11:00:24.742-04:00Business Financing Alternatives In Canada : Ignore Cash Flow & Working Capital At Your Own Peril!<p><script src="//platform.linkedin.com/in.js" type="text/javascript"> lang: en_US</script><script data-counter="top" data-url="https://www.7parkavenuefinancial.com/home-page.html" type="IN/Share"></script><br />
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<h2 style="text-align: center;"><span style="font-size: 18px;">Boost Your Business's Financial Health: Understand Cash Flow & Capital</span></h2>
<p align="center"><span style="font-size: 18px;">You've arrived at the right address! Welcome to 7 Park Avenue Financial</span></p>
<p align="center"><span style="font-size: 18px;">Financing & Cash flow are the biggest issues facing business today</span></p>
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<h1 align="center"><span style="font-size: medium;">Mastering Working Capital, Cash Flow & Business Financing in Canada | 7 Park Avenue Financial </span><span style="font-size: medium;"><br /></span></h1>
<p align="center"><span style="font-size: medium;"> </span></p>
<h2 style="text-align: center;"><span style="font-size: 18px;"><span _fck_bookmark="1" style="display: none;"> </span></span></h2>
<h2 style="text-align: center;"><span style="font-size: 18px;">The Canadian Business Owner's Guide to Efficient Financing</span><span _fck_bookmark="1" style="display: none;"> </span></h2>
<p align="center"> </p>
<p align="center"><span style="font-size: 18px;">Tackle the complexities of business financing head-on by reading this article because it offers vital insights into Canadian working capital and cash flow</span></p>
<p align="center"> </p>
<h2><span _fck_bookmark="1" style="display: none;"> </span></h2>
<h2>The Importance of Keeping the Pump Primed<span _fck_bookmark="1" style="display: none;"> </span></h2>
<p> </p>
<p><span style="font-size: 16px;">Business financing in Canada requires that you ensure that the pump is primed! Ignoring the alternatives you have for <a href="https://www.7parkavenuefinancial.com/cash_flow_financing_working_capital_cash.html">cash flow and working capital</a> is done at your own peril, especially in today’s ultra-competitive environment. We thought that the priming of the pump is a great expression and a good analogy. Let's dig in.</span></p>
<p> </p>
<p><span _fck_bookmark="1" id="cke_bm_135S" style="display: none;"> </span><span style="font-size: 16px;">The Origin of the "Priming the Pump" Phrase</span><span _fck_bookmark="1" id="cke_bm_135E" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_153S" style="display: none;"> </span></p>
<p> </p>
<p><span style="font-size: 16px;">Humorously Donald Trump actually said he invented the phrase! (“Have you heard that expression used before?" Trump continued. "Because I haven't heard it. I mean, I just ... I came up with it a couple of days ago and I thought it was good. It's what you have to do."</span></p>
<p> </p>
<p><span style="font-size: 16px;">But the term is most often associated with 20th-century economist John Maynard Keynes, a giant of the field and a favourite of liberals who favoured government spending.</span><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span></p>
<p> </p>
<h2><span style="font-size: 18px;">Key Role of Working Capital and Cash Flow</span></h2>
<p> </p>
<p><span style="font-size: 16px;">Access and management of your working capital and cash flow play a key role in <a href="http://www.7parkavenuefinancial.com/working-capital-financing-loans-business-credit.html">business financing </a>and your firm's growth and overall well-being. No one ever argues with us on that one.</span></p>
<p> </p>
<h3><span style="font-size: 18px;">Understanding Business Growth Financing</span></h3>
<p> </p>
<p><span style="font-size: 16px;">Your ability to get financing on items such as fixed assets, a/r, and inventory will ultimately depend on how successful and how fast your company can grow.</span></p>
<p> </p>
<p><span style="font-size: 16px;">Clients are somewhat amazed when we tell them that we can pinpoint the exact time when they will stop being successful! </span></p>
<p> </p>
<p><span style="font-size: 16px;">What do we mean by that? Simply that you have a great little tool to determine when you need that extra capital in your business. Most small and medium-sized businesses haven't heard of it, but we can assure you that larger more sophisticated corporations have a total handle on this one.</span></p>
<p> </p>
<h3><span style="font-size: 18px;">The Sustainable Growth Ratio</span></h3>
<p> </p>
<p><span style="font-size: 16px;">So what’s the tool - it's called the Sustainable growth ratio and it's a simple formula that shows you the most your firm can grow without bringing in new capital.</span></p>
<p> </p>
<p><span style="font-size: 16px;">For example, if you want to get a shareholder return on your total capital in the business of 20% you can reinvest all your earnings and keep your relative overall financial position the same. Want to grow faster, and then access more outside capital? Simple as that.</span></p>
<p> </p>
<h3><span _fck_bookmark="1" id="cke_bm_135S" style="display: none;"> </span><span style="font-size: 18px;">Challenges in Accessing More Capital</span><span _fck_bookmark="1" id="cke_bm_135E" style="display: none;"> </span></h3>
<p> </p>
<p><span style="font-size: 16px;">However accessing more capital from the viewpoint of our clients is either difficult or undesirable - Most owners don't want to reduce or dilute their ownership interests, etc.</span></p>
<p> </p>
<h3><span style="font-size: 18px;">Monetizing Business Financing Assets</span></h3>
<p> </p>
<p><span style="font-size: 16px;">The choice? It's simply monetizing your business financing assets such as receivables, inventory and unencumbered assets and creating working capital and cash flow via asset turnover.</span></p>
<h4> </h4>
<p><span style="font-size: 16px;">You create cash flow financing internally by addressing how you both manage and turnover receivables, inventory, and accounts payable.</span></p>
<p> </p>
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<p><span style="font-size: 16px;">Accounts payable you ask?! Yes, simply because as you slow your payables you generate real cash flow progress. Naturally, there is a fine line here between generating that cash and alienating your valued suppliers!</span><span _fck_bookmark="1" id="cke_bm_135E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></p>
<p> </p>
<h2>Real World Solutions to Canadian Working Capital Financing</h2>
<p> </p>
<p><span style="font-size: 16px;">We never want to be accused of talking about the problems and not the solutions, and we mean real-world solutions, not textbook <a href="http://www.7parkavenuefinancial.com/business-financing-sources-loans-cash-flow-capital.html">solutions to Canadian working capital financing</a>.</span></p>
<p> </p>
<h3><span style="font-size: 18px;">Available Alternatives for Cash Flow Financing</span></h3>
<p> </p>
<ul>
<li><a href="http://www.7parkavenuefinancial.com/finance-factoring-receivable-financing-canada.html"><span style="font-size: 16px;">Accounts Receivable Financing</span></a></li>
<li><span style="font-size: 16px;">Working Capital Loans / <a href="http://www.7parkavenuefinancial.com/merchant_advance_business_funding_cash_flow.html">MCA Merchant cash advances</a></span></li>
<li><a href="http://www.7parkavenuefinancial.com/equipment-finance-sale-leaseback-solutions-canada.html"><span style="font-size: 16px;">Equipment Leasing</span></a></li>
<li><a href="http://www.7parkavenuefinancial.com/sale-leaseback-lease-back-bridge-loan.html"><span style="font-size: 16px;">Sale leasebacks</span></a></li>
<li><a href="http://www.7parkavenuefinancial.com/abl-lending-asset-based-loan-rates.html"><span style="font-size: 16px;">Asset based non-bank line of credit</span></a></li>
<li><a href="http://www.7parkavenuefinancial.com/How_To_Finance_Canadian_SRED_SR_ED_Claim.html"><span style="font-size: 16px;">SR&ED Tax credit financing</span></a></li>
<li><span style="font-size: 16px;">Mezzanine financing</span></li>
<li><span style="font-size: 16px;">Business credit cards</span></li>
<li><a href="http://www.7parkavenuefinancial.com/purchase-order-financing-business-finance.html"><span style="font-size: 16px;">Purchase order financing</span></a><br />
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</li>
</ul>
<h4> </h4>
<h4><span style="font-size: 18px;">Key Takeaways</span></h4>
<p> </p>
<p><span style="font-size: 16px;">Working capital is the difference between a company's current assets and current liabilities.<br />
<br />
Measures operational efficiency and short-term financial health; ensures the company can fund operations and pay debts.<br />
<br />
<br />
<b>Cash Flow:</b><br />
<br />
Net amount of cash and cash-equivalents transferred in and out of a business.<br />
Positive operating cash flow indicates increasing liquid assets and financial health; negative cash flow may signal insolvency.<br />
<br />
<b>Business Financing:</b><br />
<br />
Ways companies secure funds for business growth, asset acquisition, or covering a company's working capital shortfalls.<br />
Enables businesses to operate, invest in growth, and handle unexpected costs.<br />
<br />
<b>Sustainable Growth Ratio</b>:<br />
<br />
Formula indicating a firm's growth potential based on current finances without needing extra financing.<br />
Helps businesses gauge growth rates without depending on external funds.<br />
<br />
<b>Monetizing Business Financing Assets:</b><br />
<br />
Converting business assets into cash or cash equivalents through sales, financing, etc.<br />
Generates cash quickly, especially when traditional financing is limited.</span><br />
<br />
<span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_153S" style="display: none;"> </span></p>
<h5> </h5>
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<h5><span style="font-size: 18px;">Conclusion</span><span style="font-size: 18px;"><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></h5>
<p> </p>
<p><span style="font-size: 16px;">In summary, we spoke of your desire or inability to attract long term capital to your business, the solution being short-term working capital decisions around how you finance on a day-to-day basis.</span></p>
<p><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_155S" style="display: none;"> </span></p>
<p><span style="font-size: 16px;">Call <a href="http:// https://www.7parkavenuefinancial.com/financing-services.html">7 Park Avenue Financial</a>, a <a href="https://www.7parkavenuefinancial.com/Management-Credentials">trusted, credible and experienced business financing advisor</a> on how to access the Canadian business financing you need. Today!</span><span _fck_bookmark="1" id="cke_bm_155E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></p>
<p> </p>
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<h6><span style="font-size: 18px;">FAQ</span><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></h6>
<p> </p>
<p><b><span style="font-size: 16px;">What are some common proactive steps a company can take to avoid working capital issues and a cash crunch?</span></b></p>
<p><span style="font-size: 16px;">Here are some proactive steps to avoid common working capital issues:</span></p>
<p><br />
<span style="font-size: 16px;">Regular Cash Flow Forecasting and review of the cash flow statement<br />
<br />
Efficient Inventory Management:<br />
<br />
Speed up Receivables:<br />
<br />
Extend Payables without Straining Relationships:<br />
<br />
Maintain a Reserve:<br />
<br />
Reduce Unnecessary Expenses:<br />
<br />
Manage Debt on the balance sheet:<br />
<br />
Monitor Key Financial Ratios:<br />
<br />
Diversify Customer Base:<br />
<br />
Implement Efficient Systems:<br />
<br />
Review Pricing Strategies:<br />
<br />
Negotiate Bulk Discounts:<br />
<br />
Regularly Review Financial Statements:<br />
<br />
Consider Seasonal Needs:<br />
</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>Why is cash flow so crucial for a business?</b></span></p>
<p><br />
<br />
<span style="font-size: 16px;">Positive cash flow indicates increasing liquid assets, enabling a company to invest, settle debts, and handle unforeseen expenses.<br />
<br />
<b>How does business financing benefit my company?</b></span></p>
<p><br />
<br />
<span style="font-size: 16px;">It offers funds to grow your business, buy essential assets, and manage unexpected financial shortfalls.<br />
<br />
<b>What is the Sustainable Growth Ratio?</b></span></p>
<p><br />
<br />
<span style="font-size: 16px;">A formula showcasing a firm's growth potential based on its current financial stance without additional financing.<br />
<br />
<b>Why should I consider monetizing business financing assets?</b></span></p>
<p><br />
<br />
<span style="font-size: 16px;">It’s a swift way to generate cash, especially when facing challenges in accessing traditional financing.<br />
<br />
<br />
<b>What are some common sources of business financing in Canada?</b></span></p>
<p><br />
<br />
<span style="font-size: 16px;">Apart from working capital, businesses often explore options like bank loans, venture capital, angel investors, and government grants that can aid in achieving positive working capital.</span></p>
<p><br />
<br />
<span style="font-size: 16px;"><b>Are there risks involved with relying too much on external financing?</b><br />
<br />
Yes, over-reliance can lead to significant debt for many businesses, potential loss of equity, or increased financial strain during economic downturns.</span></p>
<p><br />
<br />
<span style="font-size: 16px;"><b>How can I improve my business's cash flow?</b><br />
<br />
Strategies to avoid negative working capital scenarios include timely invoicing, efficient inventory management, renegotiating contracts, and exploring quick financing solutions like factoring as a working capital loan solution<br />
<br />
<b>What are the differences between equity financing and debt financing?</b></span></p>
<p><br />
<br />
<span style="font-size: 16px;">Equity financing for small business owners involves selling shares of your company to raise funds, while debt financing is borrowing money to be repaid with interest.<br />
<br />
<b>Is it advisable for startups to dive deep into external financing?</b></span></p>
<p><br />
<br />
<span style="font-size: 16px;">Startups should weigh the pros and cons. While external financing can fuel growth, it might also entail loss of control or high-interest repayments that don't withstand financial challenges</span></p>
<p><b><span style="font-size: 14px;">Click <a href="https://www.7parkavenuefinancial.com/FINANCING-TRACK-RECORD.html">here</a> for the business finance track record of 7 Park Avenue Financial</span></b></p>
<div class="blogger-post-footer">7 Park Avenue Financial
Canadian Business Financing </div>Stan Prokophttp://www.blogger.com/profile/03768625989302489257noreply@blogger.com0tag:blogger.com,1999:blog-3319278949078654457.post-76221306014784835572023-10-19T14:37:00.009-04:002023-10-19T14:38:46.299-04:00Purchase Order Financing In Canada : Made To Measure Trade Finance Solutions For PO & Contract Funding<script src="//platform.linkedin.com/in.js" type="text/javascript"> lang: en_US</script><script data-counter="top" data-url="https://www.7parkavenuefinancial.com/home-page.html" type="IN/Share"></script><br />
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<h2 style="text-align: center;"><span style="font-size: 18px;">Unveiling the Power of Purchase Order Financing in Trade Finance</span></h2>
<p align="center"><span style="font-size: 18px;">You've arrived at the right address! Welcome to 7 Park Avenue Financial</span></p>
<p align="center"><span style="font-size: 18px;">Financing & Cash flow are the biggest issues facing business today</span></p>
<p align="center"><span style="font-size: 18px;">ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?</span></p>
<p align="center"><b><span style="font-size: 18px;">CONTACT:</span></b></p>
<p align="center"><span style="font-size: 18px;">7 Park Avenue Financial<br />
South Sheridan Executive Centre<br />
2910 South Sheridan Way<br />
Oakville, Ontario<br />
L6J 7J8</span></p>
<p align="center"><span style="font-size: 18px;">Direct Line = 416 319 5769</span></p>
<p align="center"><br />
<span style="font-size: 18px;">Email = <a href="mailto:sprokop@7parkavenuefinancial.com">sprokop@7parkavenuefinancial.com</a></span></p>
<h1 align="center"><span style="font-size: small;"> </span></h1>
<h1 align="center"><span style="font-size: small;">Mastering Purchase Order Financing in Trade Finance | 7 Park Avenue Financial</span><br /></h1>
<p align="center"> </p>
<p align="center"> </p>
<h2 style="text-align: center;">Step into the world of Purchase Order Financing because it offers transformative solutions for businesses facing traditional financing barrier</h2>
<h2 style="text-align: center;"> </h2>
<h2 style="text-align: center;"><span style="font-size: 18px;">The Game-Changer in Trade Finance: Purchase Order Financing Explained</span></h2>
<p> </p>
<p> </p>
<h2>The Challenge Of Growth & Business Financing</h2>
<p><span style="font-size: 16px;"><a href="https://www.7parkavenuefinancial.com/Purchase-Order-Financing.html">Purchase order financing in Canada</a> solves a bad business nightmare. What nightmare? You got the PO / Contract! Now what? We're discussing trade finance solutions in your supply chain process- so let's dig in.</span></p>
<h2>Understanding Purchase Order Financing</h2>
<p><span style="font-size: 16px;"><a href="https://www.7parkavenuefinancial.com/purchase-order-financing-p-o-finance.html">Purchase order financing </a>is a great tool for firms that have an unusual purchase order and contract sales financing needs but are potentially unable to access traditional financing via banks or their own capital resources within their firm. In many cases, firms are smaller, or sometimes early stage - in some cases it's just too much success via that large order/contract!</span></p>
<h3>How Does Purchase Order Financing Work?</h3>
<p><span style="font-size: 16px;">So how does it work? And does your firm qualify? Other client questions include:</span></p>
<p><span style="font-size: 16px;">Great questions, now let's explore some answers!</span></p>
<h3>Which Firms Benefit Most?</h3>
<p><span style="font-size: 16px;">Typically Canadian firms looking for this type of financing are distributors, manufacturers, or perhaps wholesalers. A variety of industries in Canada have access to this type of financing, but those certainly tend to be the typical firms needing assistance from a purchase order financing company.</span></p>
<h2>The Classic Working Capital Gap</h2>
<p><span style="font-size: 16px;">Your need for<a href="https://www.7parkavenuefinancial.com/Purchase_Order_and_Inventory_Financing.html"> purchase order financing</a> arises out of what we call the classic working capital gap. What do we mean by that? It's a case of your suppliers requiring payment either upfront or within 30 days, with your firm unable to generate those funds for payment and therefore unable to fill large purchase orders and contracts in your favour. That's the classic working capital conundrum.</span></p>
<h3>Meeting Traditional Finance Requirements</h3>
<p><span style="font-size: 16px;">The obvious solution for low-cost large amounts of funds are Canadian chartered banks, but our observation is that many firms simply can’t satisfy the banks' requirements for this type of financing to occur. If your firm is growing, profitable, has a clean balance sheet and strong historical cash flows and history you of course have a solid chance of meeting bank requirements. But, as we said many firms can't satisfy all those requirements of traditional finance.</span></p>
<h2>Key Aspects of Purchase Order Financing</h2>
<h3>Application Process</h3>
<p><span style="font-size: 16px;">When you access PO financing you can have the comfort that your suppliers will be paid, and at the same time you generally have access to all the funds you need. Typical purchase order financing applications take anywhere from 2-4 weeks to complete and involve basic financial due diligence on your firm's ability to fulfill the order, who your customer is (they must be creditworthy), and your proper supplier sources must be identified and vetted.</span></p>
<h3>Who Qualifies?</h3>
<p><span style="font-size: 16px;">So, who exactly qualified for this type of financing? Naturally, your company must be in possession of a contract or order that is not cancelable by your client. The PO finance firm arranges to pay your suppliers directly via a cash advance, which alleviates all your cash flow and working capital concerns.</span></p>
<h3>Cost Considerations - Purchase order financing cost</h3>
<p><span style="font-size: 16px;">Let's cover a couple of tips and secrets around the cost of purchase order financing - It generally is in the 2-3% per month range in Canada, and that means you have to have solid gross profit margins in order to be able to sustain the finance charges in the purchase order financing agreement.</span></p>
<h3>The Bigger Picture</h3>
<p><span style="font-size: 16px;">Clearly, the higher cost of this type of financing covers the complexity and risk that the P O finance firm takes in paying for goods, waiting to get paid, and having the belief that your firm will fulfill the contract order.</span></p>
<h3>Intangible Benefits</h3>
<p><span style="font-size: 16px;">It has been our observation with certain clients that your successful completion of a <a href="https://www.7parkavenuefinancial.com/purchase-order-financing-business-finance-funding.html">purchase order finance</a> deal typically significantly enhances your relationship with your major suppliers and of course customers, that's a secret benefit that is intangible but invaluable at the same time.</span></p>
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<h4><span style="font-size: 18px;">Key Takeaways</span><span _fck_bookmark="1" style="display: none;"> </span></h4>
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<p><br />
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<span style="font-size: 16px;">Purchase order financing is a financial solution where businesses get capital to pay suppliers upfront for verified purchase orders. This ensures that firms lacking funds can fulfill large orders and contracts.<br />
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Why It's Needed - The Working Capital Gap:<br />
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Businesses often encounter a working capital gap, where suppliers require payment either upfront or within a short timeframe (like 30 days), but the business may not receive payment from their customers for a longer duration (60-90 days or more). This creates a cash flow problem, especially for growing firms or those with large orders.<br />
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How It Works:<br />
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A PO financing company pays the suppliers directly for supplier costs, raw materials, etc on behalf of the business. Once the supplier ships and goods are delivered and the final customer pays, the business then pays back the PO financing company, typically with some interest or fees added.<br />
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Costs and Qualifications:<br />
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The costs associated with PO financing generally fall in the range of 2-3% per month in Canada. To qualify, a company must have a non-cancelable order or contract, and the customer they're selling to must be creditworthy. There's also due diligence done on the firm's ability to fulfill the order.<br />
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The Role of Traditional Banks vs. PO Financing & Supply Chain Advance<br />
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While traditional banks as a traditional financial institution provide low-cost funds, many businesses, especially smaller or early-stage ones, might not meet the banks' stringent criteria. PO financing fills this void, providing the necessary funds even if the business doesn't have a strong balance sheet or long credit hist</span></p>
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<h5><span style="font-size: 18px;">Conclusion</span><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_153S" style="display: none;"> </span></h5>
<p> </p>
<p><span style="font-size: 16px;">Is P O financing for everyone? Maybe not. Could it be possibly the solution to major working capital needs if your business is growing and can't be financed traditionally - we certainly think so. </span></p>
<p> </p>
<p><span style="font-size: 16px;">Call <a href="http:// https://www.7parkavenuefinancial.com/financing-services.html">7 Park Avenue Financial</a>, a <a href="http:// https://www.7parkavenuefinancial.com/Management-Credentials">trusted, credible and experienced purchase order finance expert</a> to explore financing options for small business owners.</span><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></p>
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<h6><span style="font-size: 18px;"><span _fck_bookmark="1" id="cke_bm_153S" style="display: none;"> </span>FAQ</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span></span></h6>
<p> </p>
<p><span style="font-size: 16px;"><b>What exactly is Purchase Order Financing?</b><br />
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It's a financial tool that allows businesses to get capital to pay suppliers upfront for verified purchase orders, ensuring they can fulfill large contracts even if they lack the funds in their target markets.<br />
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<b>How does it aid businesses facing the working capital gap?</b><br />
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This financing method addresses the challenge where businesses need to pay suppliers quickly but may not receive payment from their customers for a longer period, thus ensuring smooth operations.<br />
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<b> Are there any specific qualifications to avail Purchase Order Financing?</b><br />
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Yes, firms should have a non-cancelable order or contract, and the end customer should be creditworthy. Also, there's a due diligence process to verify the company's ability to fulfill the order.<br />
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<b>How is this different from traditional bank financing?</b><br />
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While traditional banks offer low-cost funds, they have stringent criteria. Many businesses, especially smaller ones, might not qualify. Purchase Order Financing fills this gap, providing necessary funds even without a strong balance sheet.<br />
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<b>Are there any hidden costs associated with PO Financing?</b><br />
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Costs generally hover around 2-3% per month in Canada. It's essential to be aware of these charges and ensure that your profit margins can accommodate them.<br />
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<b> How does Purchase Order Financing benefit start-ups or newer businesses?</b><br />
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For start-ups lacking an extensive credit history or balance sheet strength, Purchase Order financing pros include the way PO Finance offers a way to secure necessary funds to fulfill large contracts establish a track record in their industry and maintain a sustainable debt structure in their business while addressing key cash flow gaps.<br />
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<b> Is Purchase Order Financing only available in Canada?</b><br />
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While the article focuses on the Canadian context, Purchase Order Financing is a global financial solution. Its availability and terms might vary depending on the region or country.<br />
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<b>How long does the PO financing process typically take?</b><br />
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The application process of vetting the customer's purchase order usually takes a week or so, which includes financial due diligence on the customer's creditworthiness and verification of order details.<br />
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<b>What happens if the end customer does not pay on time or defaults?</b><br />
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If the end customer doesn't pay, the business availing the financing is typically still responsible for repaying the PO financing company. It's crucial to ensure that the end customers are creditworthy before entering such agreements.<br />
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<b>Can any business apply for Purchase Order Financing, or is it industry-specific?</b><br />
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While distributors, manufacturers, and wholesalers are common beneficiaries, PO financing is not strictly industry-specific in global trade. Various sectors can leverage this solution, provided they meet the qualifications.</span></p>
<p> </p>
<p><b><span style="font-size: 14px;">Click <a href="https://www.7parkavenuefinancial.com/FINANCING-TRACK-RECORD.html">here</a> for the business finance track record of 7 Park Avenue Financial</span></b></p>
<div class="blogger-post-footer">7 Park Avenue Financial
Canadian Business Financing </div>Stan Prokophttp://www.blogger.com/profile/03768625989302489257noreply@blogger.com0tag:blogger.com,1999:blog-3319278949078654457.post-76004970570402477722023-10-16T12:36:00.006-04:002023-10-16T12:37:23.648-04:00How to Finance Working Capital – Imagine Your Canadian Company Had the Credit & Financing It Needed<script src="//platform.linkedin.com/in.js" type="text/javascript"> lang: en_US</script><script data-counter="top" data-url="http://http://businessfinancingcanada.blogspot.ca" type="IN/Share"></script>
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<p align="center"><b><span style="font-size: 20px;">You Are Looking for the Best Method to Finance Working Capital! </span></b></p>
<h2 style="text-align: center;"><span style="font-size: 18px;">How to Ace Your Business's Working Capital Needs</span></h2>
<p align="center"><span style="font-size: 20px;">You've arrived at the right address! Welcome to 7 Park Avenue Financial </span></p>
<p align="center"><span style="font-size: 20px;"> Financing & Cash flow are the biggest issues facing business today</span></p>
<p align="center"><span style="font-size: 20px;"> Unaware / Dissatisfied with your financing options?</span></p>
<p align="center"><span style="font-size: 20px;">Call Now! - Direct Line - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs</span></p>
<p align="center"><span style="font-size: 20px;">Email - <a href="mailto:INFO@7parkavenuefinancial.com">sprokop@7parkavenuefinancial.com</a> </span></p>
<p align="center"> </p><h1 align="center"><span style="font-size: small;">Mastering How To Finance Working Capital: Unlocking Cash Flow Solutions | 7 Park Avenue Financial </span><br /></h1>
<p align="center"> <br /></p>
<h2 style="text-align: center;"><span style="font-size: 18px;">Beyond Bank Loans: Diverse Ways to Finance Your Working Capital</span></h2>
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<p style="text-align: center;"><span style="font-size: 16px;">Stay with us because we're addressing Canadian firms' most pressing questions about working capital and offering actionable insights.</span></p>
<p style="text-align: center;"> </p>
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<h2><span style="font-size: 18px;">The Challenges of Working Capital Financing</span><span _fck_bookmark="1" id="cke_bm_336E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></h2>
<p> </p>
<p> </p>
<p><span style="font-size: 16px;">It is no secret to us here at <a href="https://www.7parkavenuefinancial.com/">7 Park Avenue Financial</a> that the<a href="https://www.theglobeandmail.com/"> Globe and Mail </a> Oct 16/2023 article on <a href="https://www.ic.gc.ca/eic/site/061.nsf/eng/h_03114.html#a01">SMEs</a> in Canada bemoaned the fact that traditional commercial banking capital for small and medium-sized companies is shrinking with more and more businesses having a hard time securing loans' ( ' CANADA MUST IGNITE SMALL BUSINESS SECTOR ' )</span></p>
<p> </p>
<p> </p>
<p><span style="font-size: 16px;">It almost seems like a pipe dream. Having the cash flow and financing you need. And yes, don’t take it personally; even the big guys have that same challenge. Let’s examine how your company can assess and address methods to finance net <a href="https://www.7parkavenuefinancial.com/working_capital_small_business_finance_loan_loans.html">working capital</a>, accessing credit and financing in a manner that works.</span></p>
<p> </p>
<h2>Internal and External Perspectives</h2>
<p> </p>
<p><span style="font-size: 16px;">An excellent way to look at things is both externally and internally. From the internal perspective, it’s a question of knowing the amount of working capital you need and managing your day-to-day current assets on the balance sheet(primarily A/R and inventory) to optimize cash flow.</span></p>
<p><span style="font-size: 16px;">And from the external perspective, it’s about assessing solutions, but more importantly, solutions that work. It's those inflows and outflows that count. Probably the simple way to look at it is simply knowing your operating costs while at the same time collecting sales, i.e. your A/R, as efficiently as possible.</span></p>
<p> </p>
<h2><span style="font-size: 18px;">Common Mistakes in Financing Working Capital</span></h2>
<p> </p>
<p><span style="font-size: 16px;">When clients tell us they have made mistakes in their decision to finance working capital, we can almost guess what happened. They have mismatched funds, meaning that cash flow and working capital from operations may have been used to pay for fixed assets.</span></p>
<p> </p>
<h2><span style="font-size: 18px;">Traditional and Alternative Financing Options</span></h2>
<p> </p>
<p><span style="font-size: 16px;">It's easier said than done, but the 'normal' way to finance your business is short-term lines of credit, typically through your bank. However, credit and financing are difficult for small and medium-sized firms that can’t meet all the criteria a chartered bank requires.</span></p>
<p> </p>
<h3><span style="font-size: 18px;">Permanent Working Capital Injection</span></h3>
<p> </p>
<p><span style="font-size: 16px;">One solid option is injecting what we can call permanent working capital into the business. It’s a cash flow loan, payable in fixed monthly installments. This type of transaction is typically available through Canada's government-owned business bank, and you have to have solid proof of historical cash flow to show you can repay the term loan, which is typically unsecured!</span></p>
<p> </p>
<h3><span style="font-size: 18px;">Asset Purchase Considerations</span></h3>
<p> </p>
<p><span style="font-size: 16px;">We spoke of matching funds correctly. That’s important. So, if you are considering asset purchases, utilize lease financing, minimizing your cash outflow, of course, and allowing your company to structure a long term lease payment that matches the useful life of the asset you're purchasing.</span></p>
<p> </p>
<h3><span style="font-size: 18px;">Mixing Personal and Business Finances</span></h3>
<p> </p>
<p><span style="font-size: 16px;">Smaller and medium-sized businesses, mostly smaller, tend to mix the owner's personal finances with the business. That has positive and negative effects. The <a href="https://www.7parkavenuefinancial.com/business_to_business_merchant_cash_advance_loans.html">merchant cash advance loan</a> has become popular as a working capital loan for many smaller businesses in the last few years, particularly retail. It allows you to monetize future sales, or 'cash flow ' today.</span></p>
<p> </p>
<p> </p>
<h2>Tools and Calculations for Working Capital</h2>
<p> </p>
<p><span style="font-size: 16px;">When addressing the need to finance working capital, you should have a handle on the assessment tools. It's not as complicated as you might think. Calculate your day's outstanding sales and a similar calculation for inventory. Those two calculations will show the total time it takes for a dollar to flow through your company. You have to bridge that gap now with cash flow financing.</span></p>
<p> </p>
<h3><span style="font-size: 18px;">The Receivables and Inventory Ratio</span></h3>
<p> </p>
<p><span style="font-size: 16px;">General rules of thumb indicate that you need 2 dollars of receivables and inventory for one dollar of payables. That’s never been our favourite calculation because it simply reflects the build-up of those current assets. We're more concerned about turnover.</span></p>
<p> </p>
<h3><span style="font-size: 18px;">Assessing Working Capital Solutions in Canada</span></h3>
<p> </p>
<p><span style="font-size: 16px;">So, how do Canadian firms assess working capital solutions? In many cases, it all comes down to two issues: the size of your cash flow needs and your firm's overall credit quality. Large firms with solid financials can access bank credit to address negative working capital as required.</span></p>
<h3> </h3>
<h3><span style="font-size: 18px;">Financing Solutions for Smaller and Medium-sized Firms</span></h3>
<p> </p>
<p><span style="font-size: 16px;">Smaller and medium-sized firms have numerous options; some are short-term in nature, and many times they come with a higher cost, but, and it's a big but, it allows you to generate all the cash flow you need to grow your business.</span></p>
<p> </p>
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<h3><span style="font-size: 18px;">Types of Financing Solutions</span><span style="font-size: 16px;"><span _fck_bookmark="1" style="display: none;"> </span></span></h3>
<p> </p>
<p><span style="font-size: 16px;">So, what are those solutions? They are <a href="http://www.7parkavenuefinancial.com/factoring_companies_in_canada_program_ar_finance.html">receivable financing</a>, <a href="http://ttp://www.7parkavenuefinancial.com/inventory-financing-finance-inventories.html">inventory financing</a>, <a href="http://www.7parkavenuefinancial.com/purchase-order-financing-business-finance.html">purchase order financing</a>, <a href="http://www.7parkavenuefinancial.com/sred-finance-tax-credit-financing-sr-ed-funding.html">tax credit financing</a>, and <a href="http://www.7parkavenuefinancial.com/abl_lines_of_revolving_credit_asset_based_lending.html">asset-based lending</a>. Some, or a combination of these solutions, will allow you to finance your company's working capital adequately and access the credit you need to grow and profit.</span></p>
<p> </p>
<h4><span style="font-size: 18px;">Key Takeaways</span></h4>
<p> </p>
<p><br />
<br />
<span style="font-size: 16px;">Working capital is the difference between a company's working capital current assets (like cash, accounts receivable, and inventory) and its current liabilities (like accounts payable). It represents the liquidity available to a business for day-to-day operations.<br />
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Importance of Working Capital:<br />
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Adequate working capital ensures that a company can maintain its operations and meet its short-term debts when they come due. It directly indicates a company's operational efficiency and short-term financial health.<br />
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Methods of Financing Working Capital:<br />
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Short-term Financing: Includes bank overdrafts, short-term loans, and trade credits.<br />
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Long-term Financing: Equity, long-term loans, and retained earnings. They're primarily used for fixed assets but can also fund working capital.<br />
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Mismatch of Funds:<br />
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Avoid using short-term funds for long-term requirements and vice versa. For instance, using working capital to purchase fixed assets can strain day-to-day operations.<br />
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Alternative Financing Options:<br />
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Alternative solutions like receivable financing, inventory financing, and merchant cash advances can be explored for businesses that can't access traditional bank credit.</span></p>
<p> </p>
<h5><span style="font-size: 18px;"><span _fck_bookmark="1" id="cke_bm_96S" style="display: none;"> </span>Conclusion: Seeking Expert Advice</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_96E" style="display: none;"> </span></span></h5>
<p> </p>
<p><span style="font-size: 16px;">Call <a href="http:// https://www.7parkavenuefinancial.com/financing-services.html"> 7 Park Avenue Financial</a>, a <a href="https://www.7parkavenuefinancial.com/Management-Credentials">trusted, credible and experienced Canadian business financing advisor</a>, on how these solutions work, what they cost, and how they can, either singularly or grouped, solve the Canadian working capital and credit enigma.</span></p>
<p> </p>
<h6><span style="font-size: 16px;">FAQ FREQUENTLY ASKED QUESTIONS PEOPLE ALSO ASK MORE INFORMATION</span></h6>
<p> </p>
<p> </p>
<p><span style="font-size: 16px;"><b>What exactly is working capital?</b><br />
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Working capital is the difference between a company's current assets and current liabilities, signifying the liquidity available for daily operations.<br />
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<b> Why is working capital crucial for my business?</b><br />
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It ensures your company can maintain its operations and meet its short-term financial obligations, reflecting its operational efficiency and financial health.<br />
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<b>Can I rely only on traditional bank loans for working capital?</b><br />
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While bank loans are common, there are alternative solutions like receivable and inventory financing, especially if you can't meet bank criteria.<br />
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<b>What's the risk of mismatching funds in working capital?</b><br />
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Using short-term funds for long-term needs (or vice-versa) can strain daily operations and lead to financial instability.<br />
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<b> Are there tools to help me manage working capital better?</b><br />
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Yes, by calculating day's sales outstanding and inventory turnover, you can understand how money flows through your business and where to bridge gaps.<br />
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<b>How does seasonality affect my business's working capital needs?</b><br />
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Seasonal businesses might require more working capital during peak periods to stock up on inventory and less during off-peak times. Planning ahead is essential.<br />
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<b>Are there risks associated with alternative financing options?</b><br />
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Yes, while they offer flexibility, alternative financing can come at higher costs, and some might have less favorable terms than traditional loans.<br />
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<b>How can I improve my business's working capital ratio?</b><br />
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Boost sales, speed up invoice payments, efficiently manage inventory, and renegotiate with suppliers for extended payment terms.<br />
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<b>Does working capital affect my business valuation?</b><br />
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Yes, adequate working capital indicates good financial health and operational efficiency, which can positively impact your business's perceived value.<br />
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<b> Can startups also benefit from working capital financing?</b><br />
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Absolutely! Startups, though they might have limited access to traditional bank loans, can explore alternative financing to support initial operations and growth.</span><br />
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</p>
<div class="blogger-post-footer">7 Park Avenue Financial
Canadian Business Financing </div>Stan Prokophttp://www.blogger.com/profile/03768625989302489257noreply@blogger.com0tag:blogger.com,1999:blog-3319278949078654457.post-78927126151628240342023-10-15T10:21:00.011-04:002023-10-15T10:22:22.880-04:00Surviving a Working Capital Cash Crisis – Real World Solutions & Techniques<script src="//platform.linkedin.com/in.js" type="text/javascript"> lang: en_US</script><script data-counter="top" data-url="https://www.7parkavenuefinancial.com/home-page.html" type="IN/Share"></script><br />
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<p align="center"><b><span style="font-size: 18px;">You Are Looking for Working Capital Financing! </span></b></p>
<h2 style="text-align: center;"><span style="font-size: 18px;">Unlocking Cash Flow: Solutions Every Business Owner Must Know</span></h2>
<p align="center"><span style="font-size: 18px;">You've arrived at the right address! Welcome to 7 Park Avenue Financial </span></p>
<p align="center"><span style="font-size: 18px;"> Financing & Cash flow are the biggest issues facing businesses today</span></p>
<p align="center"><span style="font-size: 18px;"> Unaware / Dissatisfied with your financing options?</span></p>
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<p align="center"><span style="font-size: 18px;">Email - <a href="mailto:INFO@7parkavenuefinancial.com">sprokop@7parkavenuefinancial.com</a> </span></p><h1 align="center"><span style="font-size: 18px;"> <br /></span></h1>
<h1 align="center"><span style="font-size: small;">Working Capital Cash Solutions: A Comprehensive Guide for Businesses | 7 Park Avenue Financial</span> <br /></h1>
<p align="center"><br /></p>
<p align="center"> </p>
<p align="center"><span style="font-size: 16px;">Read this article because it uncovers real-world techniques to navigate working capital challenges, ensuring your business thrives even in financial crunches.</span></p>
<p align="center"> </p>
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<h2 style="text-align: center;"><span style="font-size: 18px;">Solutions in Sight: Overcoming Working Capital Cash Crunches</span><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></h2>
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<h2>The Consequence of a Working Capital Cash Crunch</h2>
<p> </p>
<p><span style="font-size: 16px;">The alternative to surviving a <a href="http://www.7parkavenuefinancial.com/working_capital_loans_cash_financing_finance.html">working capital cash crunch</a>, temporary or permanent, is not surviving it and losing control of your business from a financial perspective. </span></p>
<p> </p>
<p><span style="font-size: 16px;">Let's examine real-world (we like those the best - the academic guys are very nice, though) techniques and solutions to your company's working capital and cash flow challenges via effective working capital management.</span></p>
<p> </p>
<p><span style="font-size: 16px;">In today's dynamic business environment, understanding and efficiently managing working capital can be the key to sustaining growth and navigating financial challenges. </span></p>
<p> </p>
<p><span style="font-size: 16px;">Working capital, the lifeblood of every business, ensures smooth day-to-day operations, helping companies meet their short-term liabilities. However, a cash crunch can derail these processes, often leading to severe repercussions. This article delves deep into the nuances of working capital, offering real-world solutions to cash flow challenges. </span></p>
<p> </p>
<p><span style="font-size: 16px;">From recognizing the underlying issues to exploring modern financing techniques, we provide comprehensive insights to empower Canadian businesses. Whether you're a seasoned entrepreneur or just starting, our guide on<a href="http://www.7parkavenuefinancial.com/sme-finance-commercial-financing-options-loans.html"> working capital cash solutions</a> is essential reading to master the art of financial agility.</span></p>
<p> </p>
<h2>Recognizing the Problem</h2>
<p> </p>
<p><span style="font-size: 16px;">You probably know you have a working capital problem; the turnaround strategy for that problem is challenging. When you think about it your constant sufficient cash flow challenge is the most obvious sign that you need a survival plan.- Take careful note of the following:<br />
<br />
Monitor Cash Flow Statements:<br />
<br />
Review cash flow statements regularly.<br />
Check cash conversion cycle.<br />
Decreasing cash inflow or increasing cash outflow could hint at potential issues.<br />
<br />
Accounts Receivable Aging:<br />
<br />
Monitor if customers take longer to pay - increased DSO ( days sales outstanding)<br />
Increasing days of receivables outstanding suggests potential liquidity problems that impact free cash flow<br />
<br />
Increasing Expenses:<br />
<br />
Watch for sudden or consistent cost increases.<br />
Problems arise if no corresponding revenue increase.<br />
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Declining Sales:<br />
<br />
Consistent sales decline is worrisome.<br />
Seasonal declines not planned for can cause cash shortages.<br />
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Inventory Levels:<br />
<br />
Excess inventory ties up funds.<br />
Monitor inventory turnover ratios.<br />
<br />
Rising Debt Levels:<br />
<br />
Consistently increasing short term debt without revenue growth is concerning.<br />
<br />
Decreased Gross Margins:<br />
<br />
The rising cost of goods sold without a sales price increase affects cash flow and requires the need to manage cash flow prudently<br />
<br />
Unplanned Capital Expenditures:<br />
<br />
Unexpected large expenses and those short term operating costs can deplete cash flows, requiring more working capital funding for short term obligations.<br />
Loan Covenant Violations:<br />
<br />
Violating loan terms can lead to faster repayment or extra fees.<br />
Impacts cash flow negatively.<br />
<br />
Economic Indicators:<br />
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External factors like economic downturns or new regulations affect cash flow.<br />
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Feedback from Suppliers:<br />
<br />
Quicker payment requests or shorter credit terms hint at perceived financial risks.<br />
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Employee Turnover:<br />
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Increased turnover may suggest operational problems affecting finances.</span></p>
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<h2><span style="font-size: 18px;">Differentiating Growth, Profits, and Cash Flow</span><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></h2>
<p> </p>
<p><span style="font-size: 16px;">Many business owners also equate growth profits and cash flow on the same terms; in reality, they are all VERY different! To be fair to the Canadian business owner, sometimes the factors affecting your working capital cash are external and out of your control. However, they still could lead you to insolvency of some sort.</span></p>
<p> </p>
<h3><span style="font-size: 18px;">Understanding Bank Operating Lines of Credit</span></h3>
<p> </p>
<p><span style="font-size: 16px;">Question - would you, as a business owner, ever consider your bank operating line of credit (assuming you have one?) as 'dangerous'?</span></p>
<p> </p>
<p><span style="font-size: 16px;">More traditional bank lines give you an advance against your receivables and inventory, those two most liquid assets after cash. If you are committed to a bank facility, you have a pre-set borrowing limit; it’s as simple as that. </span></p>
<p> </p>
<p><span style="font-size: 16px;">So if your business has good operating performance, is profitable, and you are expanding or growing, all that works carefully. So, how could a bank facility precipitate a working capital crisis? If your business shrinks or grows too quickly, you are locked into pre-set borrowing power. Your receivables and inventory go down or up if you're lucky enough to explode with growth, but your credit facility is still the same!</span></p>
<p> </p>
<h2><span style="font-size: 18px;">Solutions to the Working Capital Crunch</span></h2>
<p> </p>
<p><span style="font-size: 16px;">We never want to be accused of just reminding you about the crisis; we'd instead provide solutions and techniques to eliminate the working capital crunch.</span></p>
<p> </p>
<h3><span style="font-size: 18px;">Techniques and Solutions for Cash Flow Survival</span></h3>
<p> </p>
<p><span style="font-size: 16px;">So, let’s address some techniques and solutions for cash flow survival. These focus on accounts receivable and inventory. Think about it: if you have A/R and inventory, these amounts are one step away from liquidity. So, how do you monetize these assets on an ongoing basis, whether they going up or down?</span></p>
<p><span style="font-size: 16px;">Asset Based Lending</span></p>
<p><span style="font-size: 16px;">In Canada, the most logical solutions to restoring your cash flow normalcy are asset-based lending, a working capital facility, and combinations of receivable and inventory and <a href="http://www.7parkavenuefinancial.com/p-o-financing-inventory-financing-a-business.html">purchase order or contract financing</a>.</span></p>
<p> </p>
<p><span style="font-size: 16px;">Actual asset-based lending facilities are typically for larger facilities of several million dollars or more - they can double, if not triple, your access to working capital. How do they do that? Simply because they margin on an ongoing basis all your A/R and inventory at very high margin rates, and the facility grows as those two asset categories grow. They are the 'best bet' for surviving a working capital crunch.</span></p>
<p> </p>
<h4><span style="font-size: 18px;">Working Capital Facilities for Small and Medium-sized Firms</span></h4>
<p> </p>
<p><span style="font-size: 16px;">Small and medium-sized firms should look toward working capital facilities that combine <a href="http://www.7parkavenuefinancial.com/factoring_companies_in_canada_program_ar_finance.html">A/R and inventory lending</a>, have no fixed upper limit, but usually come with higher financing and borrowing costs.</span></p>
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<h4><span style="font-size: 18px;">Financing Contracts and Inventory Programs</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h4>
<p> </p>
<p><span style="font-size: 16px;">Finally, the average business owner and financial manager may not even be aware that contracts and large 'one-offs' purchase orders can be financed, and inventory financing programs can be implemented on a stand-alone basis.</span></p>
<p> </p>
<h3><span style="font-size: 16px;">Short and Long-Term Strategies</span></h3>
<p> </p>
<p><span style="font-size: 16px;">Surviving the working capital cash crunch comes with short-term solutions as we have noted, that provide immediate relief; as well... owners can consider long-term strategies such as working capital cash term loans and <a href="http://www.7parkavenuefinancial.com/sale-leaseback-lease-back-bridge-loan.html">sale-leaseback</a> of equipment or property.</span></p>
<p> </p>
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<h4><span style="font-size: 18px;">Key Takeaways<span _fck_bookmark="1" style="display: none;"> </span></span></h4>
<p><br />
<br />
<span style="font-size: 16px;">Working capital is the difference between a company's current assets (cash, accounts receivable, and inventory) and current liabilities (accounts payable). It represents the funds available for daily operations and is a key indicator of a company's short-term financial health.<br />
<br />
Significance of Cash Flow:<br />
<br />
Cash flow refers to the inflow and outflow of money in a business. Positive cash flow ensures a business can sustain its operations, pay its obligations, and invest in growth. Conversely, cash flow challenges can lead to operational hiccups, inability to meet financial commitments or even insolvency.<br />
<br />
Bank Operating Lines of Credit:<br />
<br />
Banks provide This facility allowing businesses to borrow up to a specific limit to manage their working capital needs. It's based on liquid assets like accounts receivable and inventory. However, it's crucial to understand that these lines have limits and can become problematic if a business grows too quickly or faces a downturn.<br />
<br />
Monetizing Accounts Receivable and Inventory:<br />
<br />
These are the most liquid assets after cash. Businesses can convert these assets into cash by leveraging tools like asset-based lending. This approach provides a flexible way to address cash flow challenges by using existing assets to generate liquidity.<br />
<br />
Asset-Based Lending & Other Financing Solutions:<br />
<a href="http://www.7parkavenuefinancial.com/abl-lending-asset-based-loan-rates.html"><br />
Asset-based lending</a> allows companies to borrow against their accounts receivable, inventory, and sometimes equipment or real estate. It's a way to get immediate cash based on the value of these assets. Other solutions include working capital facilities that combine A/R and inventory lending and techniques like contract financing or purchase order financing.<br />
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<h5><span style="font-size: 18px;">Conclusion<span _fck_bookmark="1" id="cke_bm_158E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h5>
<p> </p>
<p><span style="font-size: 16px;">Call <a href="http:// https://www.7parkavenuefinancial.com/financing-services.html">7 Park Avenue Financial</a>, a <a href="https://www.7parkavenuefinancial.com/Management-Credentials">trusted, credible, experienced Canadian business financing adviso</a>r, for advice and techniques for better financial performance and a <a href="http://www.7parkavenuefinancial.com/business-credit-canada-loans-finance.html">working capital solution for cash flow</a> survival.</span></p>
<p> </p>
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<h5><span _fck_bookmark="1" id="cke_bm_153S" style="display: none;"> </span><span style="font-size: 18px;">FAQ: FREQUENTLY ASKED QUESTIONS PEOPLE ALSO ASK MORE INFORMATION</span><span style="font-size: 18px;"><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span></span></h5>
<p> </p>
<p><span style="font-size: 16px;"><b>What is the primary purpose of working capital cash solutions?</b><br />
<br />
The primary purpose is to help businesses manage their short-term financial obligations, ensure smooth day-to-day operations and cash flow management, and prevent insolvency during cash flow challenges.<br />
<br />
<br />
<b> Why are bank operating lines of credit considered a double-edged sword?</b><br />
<br />
While they provide businesses with immediate cash based on their assets, they have borrowing limits. This can be problematic if a business grows too quickly or faces a sudden downturn, restricting liquidity.<br />
<br />
<b>How can asset-based lending benefit my business?</b><br />
<br />
Asset-based lending allows you to borrow against your most liquid assets, such as accounts receivable and inventory. It provides flexibility in accessing funds based on the value of these assets, offering immediate liquidity.<br />
<br />
<b>Is working capital only about cash flow?</b><br />
<br />
While cash flow is a significant aspect, working capital encompasses the broader difference between current assets and liabilities, ensuring a company's short-term financial health.<br />
<br />
<b>Can growth lead to working capital challenges?</b><br />
<br />
Yes, paradoxically, rapid growth can lead to cash flow challenges if the business needs flexible financial solutions to accommodate increased operational demands.<br />
<br />
<br />
<br />
<b> How does working capital differ from net working capital?</b><br />
<br />
Working capital represents the difference between a company's assets and liabilities. Net working capital, on the other hand, is the actual amount of current assets remaining after current liabilities have been paid.<br />
<br />
<b> Are there risks involved in asset-based lending?</b><br />
<br />
While asset-based lending offers immediate liquidity, there's a risk of over-leveraging, which might lead to losing control of the collateralized assets if the loan isn't repaid.<br />
<br />
<b>What role does inventory management play in working capital solutions?</b><br />
<br />
Efficient inventory management ensures you don't have excess stock tying up funds, thus optimizing your liquidity and working capital.<br />
<br />
<b>Can a positive cash flow business still face working capital challenges?</b><br />
<br />
Absolutely! A business might have positive cash flow but still face short-term financial obligations that exceed its readily available resources.<br />
<br />
<b> Are there industries that benefit more from working capital cash solutions for the company's financial health?</b><br />
<br />
While all businesses can benefit, industries with seasonal operations, long receivable cycles that impact the working capital ratio, or high inventory turnover often find working capital solutions especially valuable.</span></p>
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<br />
<b><span style="font-size: 16px;">What are the benefits of sale lease-back options?</span></b></div>
<p> </p>
<ul>
<li>
<ul>
<li><span style="font-size: 16px;">Provides immediate cash from owned assets.</span></li>
<li><span style="font-size: 16px;">Boosts cash flow, aiding balance sheet strength and funding growth without new debt.</span></li>
</ul>
</li>
<li>
<p><span style="font-size: 16px;"><b>Capital Efficiency:</b></span></p>
<ul>
<li><span style="font-size: 16px;">Deploy sale capital into core operations or higher-return areas.</span></li>
</ul>
</li>
<li>
<p><span style="font-size: 16px;"><b>Off-Balance Sheet Financing:</b></span></p>
<ul>
<li><span style="font-size: 16px;">Lease liability might not appear on the balance sheet.</span></li>
<li><span style="font-size: 16px;">Can enhance financial ratios and borrowing potential.</span></li>
</ul>
</li>
<li>
<p><span style="font-size: 16px;"><b>Tax Benefits:</b></span></p>
<ul>
<li><span style="font-size: 16px;">Lease payments can be tax-deductible.</span></li>
<li><span style="font-size: 16px;">Potential to avoid some property taxes by not owning the asset.</span></li>
</ul>
</li>
<li>
<p><span style="font-size: 16px;"><b>Fixed Payments:</b></span></p>
<ul>
<li><span style="font-size: 16px;">Leaseback agreements typically have predictable costs.</span></li>
<li><span style="font-size: 16px;">Assists in accurate budgeting and forecasting.</span></li>
</ul>
</li>
<li>
<p><span style="font-size: 16px;"><b>Preserve Business Operations:</b></span></p>
<ul>
<li><span style="font-size: 16px;">Continuity in operations as businesses retain asset access.</span></li>
</ul>
</li>
<li>
<p><span style="font-size: 16px;"><b>Potential for Profit:</b></span></p>
<ul>
<li><span style="font-size: 16px;">Asset appreciation can lead to profit when sold and leased back at market rate.</span></li>
</ul>
</li>
<li>
<p><span style="font-size: 16px;"><b>Flexibility:</b></span></p>
<ul>
<li><span style="font-size: 16px;">Lease terms can be tailored to the seller's needs.</span></li>
<li><span style="font-size: 16px;">Negotiable lease duration and payment structure.</span></li>
</ul>
</li>
<li>
<p><span style="font-size: 16px;"><b>Avoidance of Ownership Risks:</b></span></p>
<ul>
<li><span style="font-size: 16px;">Avoids risks like property depreciation.</span></li>
<li><span style="font-size: 16px;">Maintenance and repairs may be the new owner's responsibility.</span></li>
</ul>
</li>
<li>
<p><span style="font-size: 16px;"><b>Improved Return on Assets:</b></span></p>
<ul>
<li><span style="font-size: 16px;">Selling non-essential assets boosts the return on assets ratio.</span></li>
</ul>
</li>
</ul>
<p> </p>
</div>
<p><b><span style="font-size: 14px;">Click <a href="https://www.7parkavenuefinancial.com/FINANCING-TRACK-RECORD.html">here</a> for the business finance track record of 7 Park Avenue Financial</span></b></p>
<div class="blogger-post-footer">7 Park Avenue Financial
Canadian Business Financing </div>Stan Prokophttp://www.blogger.com/profile/03768625989302489257noreply@blogger.com0tag:blogger.com,1999:blog-3319278949078654457.post-83200200580297961412023-10-13T09:45:00.003-04:002023-10-13T09:45:36.757-04:00Business Credit Needs? Working Capital Via Alternative Financing Sources<script src="//platform.linkedin.com/in.js" type="text/javascript"> lang: en_US</script><script data-counter="top" data-url="https://www.7parkavenuefinancial.com/home-page.html" type="IN/Share"></script><br />
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<p align="center"><span style="font-size: 18px;"><b>YOUR COMPANY IS LOOKING FOR BUSINESS CREDIT FOR WORKING CAPITAL FINANCING! </b></span></p>
<h2 style="text-align: center;"><span style="font-size: 18px;">Unlocking the Power of Business Credit and Working Capital!</span></h2>
<p align="center"><span style="font-size: 18px;">You've arrived at the right address! Welcome to 7 Park Avenue Financial </span></p>
<p align="center"><span style="font-size: 18px;"> Financing & Cash flow are the biggest issues facing business today</span></p>
<p align="center"><span style="font-size: 18px;"> ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?</span></p>
<p align="center"><span style="font-size: 18px;">CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs</span></p>
<p align="center"><span style="font-size: 18px;">EMAIL - <a href="mailto:INFO@7parkavenuefinancial.com">sprokop@7parkavenuefinancial.com</a> </span></p><p align="center"><span style="font-size: 18px;"> </span></p><h1 align="center"><span style="font-size: 18px;">Mastering Business Credit & Working Capital Solutions for Growth | 7 Park Avenue Financial <br /></span></h1>
<h1 align="center"> </h1>
<p align="center"><br /></p>
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<p> </p>
<h2 style="text-align: center;"><span style="font-size: 18px;">Bridging the Cash Flow Gap: Business Credit Strategies Revealed!</span></h2>
<p> </p>
<p><span _fck_bookmark="1" style="display: none;"> </span></p>
<h2>Read on to navigate the complexities of business credit because understanding these strategies is pivotal to bridging your cash flow gaps effectively</h2>
<p> </p>
<h2><span _fck_bookmark="1" style="display: none;"> </span><br />
<span style="font-size: 18px;"> The Importance of Business Credit Requirements</span></h2>
<p> </p>
<p><br />
<span style="font-size: 16px;">Business credit requirements involve securing external additional business capital for your company. That involves a <a href="http://www.7parkavenuefinancial.com/working-capital-financing-loans-business-credit.html">working capital type loan</a>, as well as appropriate finance for a business that might come from traditional Canadian chartered bank financing line of credit, or alternative lending solutions. </span></p>
<p> </p>
<h2><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_153S" style="display: none;"> </span><br />
<span style="font-size: 16px;"><span style="font-size: 18px;">The Importance of Cash Flow:</span></span></h2>
<p><span style="font-size: 16px;"><b><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></b><br />
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Cash flow represents the net amount of cash being transferred in and out of a business. Positive cash flow means a company is adding to its cash reserves, allowing it to reinvest in the business, pay off debt, return money to shareholders, or save for future challenges. Consistent cash flow is essential to meet payroll, pay rent, purchase inventory, and essentially keep the business operational.</span></p>
<p> </p>
<p><br type="_moz" />
<br />
<span style="font-size: 16px;"><a href="http://www.7parkavenuefinancial.com/business-credit-facility-agreement-revolving-loan.html">Business credit</a> needs are anything if not... consistent! In many cases the access to capital/ loans/ financing is one of the biggest obstacles to growth for a large section of companies constantly searching for SME COMMERCIAL FINANCE solutions. So how does the owner/manager ensure they have access to commercial financing needed to grow the company? Let's dig in.</span></p>
<p> </p>
<p><br />
<br />
<span style="font-size: 16px;">No secret that every business, even larger corporations, eventually finds itself in a situation where it needs to secure additional capital. It doesn’t matter if it’s a startup trying to get itself off the ground or an established company looking to cover a cash-flow gap. The point is that having reliable access to working capital is crucial to your business and its success.</span></p>
<h2><br />
<br />
<span style="font-size: 18px;">Traditional vs. Alternative Lending Solutions</span></h2>
<p><br />
<span style="font-size: 16px;">Solutions might come from working capital loans or for larger businesses term loans can mezzanine type cash flow loans. Another key focus for many growing companies is to monetize current assets, typically A/R and inventory, that will allow you to cash flow your sales as you grow revenues.</span></p>
<p><br />
<br />
<span style="font-size: 16px;">Entrepreneurs, Business Owners and their financial managers looked to alternate lending sources when a traditional banking solution won't deliver on your 'cash flow gap'. That is whey alternate lenders have become increasingly popular in times of crisis or economic uncertainty.</span><br />
<br />
</p>
<h2><br />
<br />
<span style="font-size: 18px;">Understanding the Different Financing Options</span></h2>
<p> </p>
<p><span style="font-size: 16px;">Thankfully business needs can be nicely broken down into several categories as follows: day to day operating capital, immediate growth needs for new opportunities, equipment and asset acquisition, hard asset refinancing via <a href="http://www.7parkavenuefinancial.com/business-credit-canada-loans-finance.html">business credit</a>.</span></p>
<p><br />
<br />
<b><span style="font-size: 16px;">Business Credit Lines</span></b></p>
<p><br />
<span style="font-size: 16px;"><a href="https://www.7parkavenuefinancial.com/revolving-loan-business-line-of-credit.html">Business Credit Lines</a> - These facilities aren't necessary emergency facilities, they should be sought after and used by every business. Whether it's business credit cards for smaller businesses or bank credit line revolving facilities or <a href="http://www.7parkavenuefinancial.com/asset-based-business-line-of-credit-abl.html">non-bank asset based lines of credit</a> it's all about a day to day operating facility that works for your company. Approval lead times for these facilities are much shorter than when your firm contemplates longer-term loans from a senior lender.<br />
<br />
<b>Receivable Financing</b></span></p>
<p><br />
<span style="font-size: 16px;"><a href="http://www.7parkavenuefinancial.com/ar-financing-confidential-invoice-finance.html">Receivable Financing</a> - The ability to finance your invoices as you generate sales is a very attractive option for most SME firms in Canada. There is literally a renaissance of A/R financing solutions that allow you to cash flow sales as you generate revenue. Typical advances against your sales are in the 90% range. At 7 Park Avenue Financial, we recommend Confidential Receivable Financing as the most effective solution.<br />
<br />
<b>Short Term Working Capital Loans</b></span></p>
<p><br />
<span style="font-size: 16px;">Short Term Working Capital Loans - These loans have exploded onto the Canadian marketplace and are a popular borrowing option. The loans are typically in the range of 10-20% of your firm's annual sales and are repaid according to your business cash inflows, so that might be weekly or monthly as an example. These are unsecured loans with no external collateral required, although the lender might choose to register a financing statement against your business under Canada's PPSA laws. Important to note also that this type of business finance should not be considered if your firm is in a downward sales spiral.</span></p>
<p><br />
<br />
<span style="font-size: 16px;"><b>Unsecured Cash Flow Loans / Mezzanine Financing</b></span></p>
<p><br />
<span style="font-size: 16px;">Unsecured Cash Flow Loans / Mezzanine Financing - This funding option requires no external collateral or pledging of business assets. Naturally, your company must demonstrate it has a history of solid cash flow performance, with the loans typically tied to a 3-5-year maturity.<br />
<br />
<b>Other Financing Alternatives</b></span></p>
<p><br />
<span style="font-size: 16px;">The common 'go-to' solution in the eyes of owners/managers is to solicit chartered bank financing in Canada. If your firm has a strong balance sheet, profits, established history additional collateral etc. you'll find all the financing you need from our chartered banks who have virtually unlimited financing potential.</span></p>
<h3><br />
<br />
<span style="font-size: 18px;">Navigating Through Financial Challenges</span></h3>
<p><br />
<span style="font-size: 16px;">When the going gets tough, the tough get going goes the expression, so it is a case of getting somewhat 'creative' in your search for working capital. If your firm has assets and growth prospects we firmly believe you can get most, if not all the financing you need.</span></p>
<p> </p>
<h4><span style="font-size: 18px;">Key Takeaways</span></h4>
<p> </p>
<p><br />
<span style="font-size: 16px;">Working capital is the difference between a company's current assets (like cash, accounts receivable, and inventory) and its current liabilities (like accounts payable). It represents the short-term available resources a company has to run its day-to-day operations. A positive working capital indicates that a company can pay off its short-term liabilities with its short-term assets.<br />
<br />
<b> Business Credit Importance:</b><br />
<br />
Business credit is the ability of a company to obtain borrowed money. It can be in the form of bank loans, credit lines, or other financial instruments. A strong business credit profile allows a company to secure financing under favourable terms, which can be crucial for growth, managing cash flow, or handling unexpected expenses.<br />
<br />
<br />
<b> Sources of Working Capital Financing:</b><br />
<br />
Businesses can leverage multiple sources for working capital business loans, including:<br />
Traditional bank loans/business loan or lines of credit.<br />
<br />
Asset-based financing uses assets like accounts receivable or inventory as collateral.<br />
<br />
Short-term loans/merchant cash advances often with higher interest rates but quicker approval processes. A good credit score for owners is often required as well as info on the business owner's personal credit - This financing is structured as a lump sum installment loan with monthly payments<br />
<br />
Alternate lenders or non-banking financial institutions versus a traditional bank loan<br />
<br />
Receivable Financing (Factoring):<br />
<br />
This is a method where businesses sell their accounts receivable (invoices) to a third party (a factor) at a discount. It allows businesses to get immediate cash without waiting for customers to pay their invoices, and when comparing working capital loans a/r financing brings no debt to the balance sheet</span></p>
<h5> </h5>
<p> </p>
<h5><span style="font-size: 18px;">Conclusion: </span></h5>
<p><span style="font-size: 16px;">Call <a href="https://www.7parkavenuefinancial.com/financing-services.html">7 Park Avenue Financial</a>, a <a href="http://www.7parkavenuefinancial.com/Management-Credentials.html">trusted, credible and experienced Canadian business financing advisor</a> who can assist you with your funding needs.</span></p>
<p> </p>
<p> </p>
<h6><span style="font-size: 18px;">FAQ</span></h6>
<p><br />
<span style="font-size: 16px;"><b>What is the role of trade credit in working capital management?</b><br />
<br />
Trade credit is an agreement where a supplier allows a business to purchase goods or services and pay for them later, typically within 30, 60, or 90 days. It's a form of short-term financing that can help businesses manage their cash flow by extending the time they have to pay for inventory, thus preserving working capital and minimizing debt payments<br />
<br />
<b>How can a business improve its working capital ratio?</b><br />
<br />
The working capital ratio, calculated as current assets divided by current liabilities, indicates a company's short-term financial health. To improve this ratio, a business can increase its current assets (e.g., by collecting accounts receivable faster or managing inventory efficiently) or decrease its current liabilities (e.g., by negotiating longer payment terms with suppliers).<br />
<br />
<b> What are the risks associated with working capital loans?</b><br />
<br />
While working capital loans can provide quick cash for short-term needs, they may come with higher interest rates compared to long-term financing. There's also the risk of over-reliance when you get a working capital loan or merchant cash advance, where a business continually borrows for daily operations rather than improving cash flow from operations. If not managed carefully, this could lead to unsustainable debt levels. The ability of small business owners to provide business bank statements is vital<br />
<br />
<b> Can startups with no business credit history secure working capital financing?</b><br />
<br />
Yes, startups can obtain certain types of working capital financing, but it might be more challenging to take advantage of financing without an established credit history for a business line of credit. Lenders may look at other factors, such as the personal credit of the business owner, the business plan, projected revenues, or even to make sure to understand the industry the startup is in. Some alternative lenders or crowdfunding platforms might also be more open to working with startups with the business owner</span></p>
<p> </p>
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<b><span style="font-size: 16px;">What is a working capital line of credit for business?</span></b></div>
</div>
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<p><span style="font-size: 16px;">A working capital line of credit is a financing solution available to businesses, allowing them to access funds to meet short-term operational needs. Unlike a traditional term loan, which provides a lump sum of money upfront that is repaid over time, a line of credit offers flexibility in borrowing and repayment. Here's a breakdown:</span></p>
<ol>
<li>
<p><span style="font-size: 16px;"><b>Purpose</b>: The primary use for a working capital line of credit is to finance the day-to-day operational costs of a business. This can include purchasing inventory, covering payroll, addressing seasonality cash flow challenges, handling unexpected expenses, or taking advantage of sudden opportunities.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Flexible Access</b>: With a working capital line of credit, businesses can draw funds as needed, up to the credit limit. This is particularly useful for businesses with fluctuating cash flow needs.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Interest</b>: Interest is typically charged only on the amount drawn, not on the entire credit line. For instance, if a business has a $100,000 line of credit but only draws $20,000, they will pay interest only on that $20,000.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Revolving Credit</b>: It's "revolving," meaning that as the business repays the borrowed amount, that portion becomes available again for future use. Think of it like a credit card: if you pay off a part of what you owe, your available credit increases by that amount.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Secured vs. Unsecured</b>: Some lines of credit may be secured, meaning they require collateral (like real estate, equipment, or inventory) to back the borrowed amount. Others might be unsecured, which typically means higher interest rates because the lender is taking on more risk.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Qualification</b>: To qualify for a working capital line of credit, lenders typically look at a business's credit history, cash flow patterns, the overall financial health of the company, and sometimes the personal credit history of the business owners.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Benefits</b>: A working capital line of credit provides businesses with flexibility, allowing them to manage cash flow gaps without taking on long-term debt. It also provides a safety net for unforeseen expenses or opportunities.</span></p>
</li>
</ol>
<p><span style="font-size: 16px;">In essence, a working capital line of credit provides businesses with a cushion, allowing them to continue operations smoothly even during periods when cash inflows might be unpredictable or inconsistent.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>What is working capital credit?</b><br />
<br />
<br />
"Working capital credit" typically refers to a credit facility or financing arrangement that provides funds to cover a business's short-term operational needs, which is synonymous with the concept of the working capital line of credit I mentioned earlier.<br />
<br />
However, to understand this concept more broadly, it's essential to first understand "working capital."<br />
<br />
Working Capital: It's the difference between a company's current assets (like cash, accounts receivable, and inventory) and its current liabilities (like accounts payable). In simple terms, working capital measures the short-term liquidity of a business, representing the funds available to cover day-to-day operations.<br />
<br />
Working Capital Credit: It can be any form of short-term financing designed to boost or support a business's working capital. Types include:<br />
<br />
Working Capital Line of Credit: As previously described, this is a revolving credit facility that businesses can draw from and repay as needed, based on their operational requirements.<br />
<br />
Short-term Loans: These are lump-sum loans with short maturity periods (typically 12 months or less) that businesses must repay, often with interest, by a specific date.<br />
<br />
Trade Credit: This is a form of short-term financing where suppliers allow businesses to purchase goods or services and pay for them at a later date, effectively extending credit terms.<br />
<br />
Invoice Factoring or Discounting: This involves selling accounts receivable at a discount to a third party (the "factor"). The business receives immediate cash, and the factor assumes the responsibility for collecting the invoice payment.<br />
<br />
Overdraft Arrangements: Businesses can overdraw their bank accounts up to a certain limit, providing a buffer for short-term liquidity needs.<br />
<br />
The key takeaway is that working capital credit refers to various financial tools and arrangements that support a business's short-term operational needs. The choice of which type of working capital credit to utilize depends on the specific requirements, financial health, and strategic objectives of the business.</span><br />
<br />
<br />
<a href="http://www.7parkavenuefinancial.com/stan-prokop" rel="author"><span _fck_bookmark="1" style="display: none;"> </span></a></p>
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<p><b><span style="font-size: 14px;">Click <a href="https://www.7parkavenuefinancial.com/FINANCING-TRACK-RECORD.html">here</a> for the business finance track record of 7 Park Avenue Financial</span></b></p>
<div class="blogger-post-footer">7 Park Avenue Financial
Canadian Business Financing </div>Stan Prokophttp://www.blogger.com/profile/03768625989302489257noreply@blogger.com0tag:blogger.com,1999:blog-3319278949078654457.post-75846424684596597972023-10-10T09:19:00.003-04:002023-10-10T09:19:23.671-04:00Financing A Franchise? - Here's How Franchise Finance Works in Canada<script src="//platform.linkedin.com/in.js" type="text/javascript"> lang: en_US</script><script data-counter="top" data-url="https://www.7parkavenuefinancial.com/home-page.html" type="IN/Share"></script><br />
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<p align="center"><b><span style="font-size: 18px;">YOU WANT FRANCHISE FINANCE HELP! LET'S WORK TOGETHER TO GET YOU THE FRANCHISE FINANCING YOU NEED!</span></b></p>
<h2 style="text-align: center;"><span style="font-size: 18px;">Franchise Business Financing in Canada: Your Blueprint to Success</span></h2>
<p align="center"><span style="font-size: 18px;">You've arrived at the right address! Welcome to 7 Park Avenue Financial</span></p>
<p align="center"><span style="font-size: 18px;"> Financing & Cash flow are the biggest issues facing business today</span></p>
<p align="center"><span style="font-size: 18px;"> ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?</span></p>
<p align="center"><span style="font-size: 18px;">CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs</span></p>
<p align="center"><span style="font-size: 18px;">Or Email us with any question on Canadian Business Financing </span></p>
<p align="center"><span style="font-size: 18px;">EMAIL - <a href="mailto:INFO@7parkavenuefinancial.com">sprokop@7parkavenuefinancial.com</a></span></p><h1 align="center"><span style="font-size: 18px;"> </span></h1><h1 align="center"><span style="font-size: 18px;">Mastering the Landscape of Franchise Financing in Canada | 7 Park Avenue Financial </span></h1>
<p align="center"> </p>
<h2 style="text-align: center;"><br /></h2>
<h2 style="text-align: center;"> </h2>
<h2 style="text-align: center;"><span style="font-size: 18px;">Canadian Entrepreneurs: Your Key to Franchise Financing Success</span></h2>
<p align="center"> </p>
<p align="center"> </p>
<h2><span style="font-size: 18px;">Introduction</span></h2>
<p> </p>
<p><span style="font-size: 16px;">Canadian entrepreneurs and prospective business owners aspiring to invest in a franchise face the quintessential dilemma of obtaining suitable financing for a business loan to buy a franchise. While the journey towards <a href="http://www.7parkavenuefinancial.com/financing-franchises-canada-franchising-loans.html">owning a franchise</a> is exhilarating, ensuring a stable financial foundation is crucial. Let's dive into the intricacies of business cash flow financing and working capital solutions tailored for the Canadian business landscape.</span></p>
<p> </p>
<h2><span _fck_bookmark="1" style="display: none;"> </span></h2>
<h2><span style="font-size: 18px;">Navigating the Waters of Franchise Financing in Canada</span><span style="font-size: 18px;"><span _fck_bookmark="1" style="display: none;"> </span></span></h2>
<p> </p>
<p><span style="font-size: 16px;">Canada is ripe with franchise opportunities, but securing the right financing to support these ventures can be a daunting task. Being prepared and informed is your greatest asset.</span></p>
<h3> </h3>
<h3><span style="font-size: 18px;">The Myth of Traditional Financing</span></h3>
<p> </p>
<p><span style="font-size: 16px;">A common misconception among franchisees, especially those without a financial background, is that mainstream banks and credit unions will readily finance their franchise dreams. The truth is somewhat mixed. While <a href="http://www.7parkavenuefinancial.com/bank-franchise-loan-franchising-loans.html">no Canadian bank typically offers a specialized term loan</a> for total franchise financing (unless backed by hefty collateral, spotless credit, etc.), many provide financing through a specific avenue—the CSBF/BIL program.</span></p>
<p> </p>
<p> </p>
<h3><span style="font-size: 18px;">The CSBF/BIL Program: Your First Financing Stop</span></h3>
<p> </p>
<p><span style="font-size: 16px;">This program should be at the forefront of your financing strategy. But here's the catch: the program has limitations on what parts of the business it can finance. This means entrepreneurs need to independently finance certain segments, such as ongoing working capital or the franchise fee. Expert guidance can navigate you through these murky waters.</span></p>
<p> </p>
<h3><span _fck_bookmark="1" style="display: none;"> </span></h3>
<h3><span style="font-size: 18px;">The Power of Brand Association</span><span style="font-size: 16px;"><span _fck_bookmark="1" style="display: none;"> </span></span></h3>
<p> </p>
<p><span style="font-size: 16px;">Choosing a franchise with a robust brand identity and market presence can simplify your financing journey. The stronger the brand, the more comfortable lenders might feel in trusting your venture.</span></p>
<p> </p>
<h3><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_135S" style="display: none;"> </span></h3>
<h3><span style="font-size: 18px;">Deciding on Buying New vs. Established Franchises</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_135E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h3>
<p> </p>
<p> </p>
<p><span style="font-size: 16px;">Are you buying into a new franchise or taking over an existing one? Both options have their merits and challenges. For instance, <a href="http://www.7parkavenuefinancial.com/loans-for-franchises-franchise-loan.html">financing an existing franchise</a> might sometimes be more straightforward due to tangible assets, cash flow, and evident profitability.</span></p>
<p> </p>
<h3><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_153S" style="display: none;"> </span></h3>
<h4><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_135S" style="display: none;"> </span><br />
<span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span></span></h4>
<h4><span style="font-size: 18px;">Key Takeaways in Canadian Franchise Financing</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_135E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h4>
<p> </p>
<ol>
<li><span style="font-size: 16px;"><b>Owner Equity</b>: Your personal investment plays a pivotal role in the financing equation.</span></li>
<li><span style="font-size: 16px;"><b>BIL Program</b>: A lifeline for many franchisees, but with specific coverage limits.</span></li>
<li><span style="font-size: 16px;"><b>Asset & Working Capital Financing</b>: Balancing asset-specific financing with a working capital loan or operating facility can lead you to success.</span></li>
</ol>
<h4> </h4>
<h4><span style="font-size: 18px;">Franchise Financing Landscape in Canada:</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h4>
<p> </p>
<ul>
<li><span style="font-size: 16px;"><b>Canadian Specificity</b>: Canada has its own unique landscape of franchise opportunities and financing solutions.</span></li>
<li><span style="font-size: 16px;"><b>Mainstream Banks vs. Specialized Programs</b>: While traditional banks are not always the primary go-to for entire franchise financing, they play a significant role via specialized programs, particularly the CSBF/BIL program.</span></li>
<li> </li>
</ul>
<h3><span style="font-size: 16px;"><b>The CSBF/BIL Program</b>:</span></h3>
<ul>
<li><span style="font-size: 16px;"><b>Core Financing Mechanism</b>: This government-backed program is the backbone for many franchisees seeking financing in Canada. It provides support for asset-based requirements of a franchise.</span></li>
<li><span style="font-size: 16px;"><b>Limitations</b>: While being a major player in franchise financing, it doesn’t cover all costs, like ongoing working capital or the franchise fee.</span></li>
</ul>
<h3> </h3>
<h4><span style="font-size: 18px;"><span _fck_bookmark="1" id="cke_bm_153S" style="display: none;"> </span>Owner Equity & Personal Investment:</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span></span></h4>
<ul>
<li><span style="font-size: 16px;"><b>Significance</b>: Your personal stake or investment in the franchise plays a pivotal role in securing additional financing. Lenders want to see that you have skin in the game.</span></li>
</ul>
<h3> </h3>
<h3><span style="font-size: 16px;"><b>Brand Strength & Market Presence</b>:</span></h3>
<ul>
<li><span style="font-size: 16px;"><b>Lender Confidence</b>: The reputation and market position of the franchise you’re looking to invest in can make a significant difference in obtaining financing. Strong brands tend to inspire more confidence in lenders.</span></li>
</ul>
<h3> </h3>
<h3><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_153S" style="display: none;"> </span></h3>
<h3><span style="font-size: 18px;">Asset & Working Capital Financing:</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h3>
<ul>
<li><span style="font-size: 16px;"><b>Balanced Financing</b>: Beyond the initial purchase, managing day-to-day operations requires a blend of asset financing and working capital solutions. These can be achieved through a combination of term loans and operating facilities.</span></li>
</ul>
<p> </p>
<h5><span style="font-size: 18px;"><span _fck_bookmark="1" id="cke_bm_153S" style="display: none;"> </span>Conclusion</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span></span></h5>
<p> </p>
<p><span style="font-size: 16px;">Choosing the right franchise is just half the battle; obtaining the necessary <a href="http://www.7parkavenuefinancial.com/franchise_finance_funding_business_loan.html">financing</a> completes the journey. Call <a href="http:// https://www.7parkavenuefinancial.com/financing-services.html">7 Park Avenue Financial</a>, a <a href="https://www.7parkavenuefinancial.com/Management-Credentials">trusted, credible and experienced Canadian business financing advisor</a> can streamline this process, ensuring that you have a financial package tailored to your acquisition and growth requirements. Remember, in the realm of franchise financing, preparation and knowledge reign supreme.</span></p>
<p> </p>
<h6><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_153S" style="display: none;"> </span></h6>
<h6><span style="font-size: 18px;">FAQ: FREQUENTLY ASKED QUESTIONS / PEOPLE ALSO ASK / MORE INFORMATION</span></h6>
<p> </p>
<p><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></p>
<h3><span style="font-size: 16px;"><b>What are the typical prerequisites for obtaining franchise financing in Canada?</b></span></h3>
<p><span style="font-size: 16px;">To secure franchise financing in Canada, lenders usually look for:</span></p>
<ul>
<li><span style="font-size: 16px;">A comprehensive business plan outlining your vision and strategies.</span></li>
<li><span style="font-size: 16px;">A credit history review to assess reliability.</span></li>
<li><span style="font-size: 16px;">Details about the chosen franchise, including its market position and profitability.</span></li>
<li><span style="font-size: 16px;">Personal investment or owner equity to show commitment.</span></li>
<li><span style="font-size: 16px;">Collateral, which can be personal or business assets.</span></li>
</ul>
<h3> </h3>
<h3><span style="font-size: 16px;"><b>How long does the franchise financing approval process typically take in Canada?</b></span></h3>
<p> </p>
<p><span style="font-size: 16px;">The duration varies based on the lender and the complexity of the application. However, on average, once all required documentation is submitted, it can take anywhere from a few weeks to a couple of months. Working with specialized franchise financing advisors can sometimes expedite the process.</span></p>
<h3> </h3>
<h3><span style="font-size: 16px;"><b>How does the interest rate for franchise loans compare to regular business loans in Canada?</b></span></h3>
<p><span style="font-size: 16px;">Interest rates for franchise loans are generally competitive and might be slightly higher or lower than regular business loans. Factors influencing the rate include the franchisor's reputation, applicant's creditworthiness, the economic environment, and the lender's policies.</span></p>
<h3> </h3>
<h3><span style="font-size: 16px;"><b>Can I negotiate the terms of my franchise financing agreement in Canada?</b></span></h3>
<p><span style="font-size: 16px;">Yes, terms are often negotiable, especially if you're working with private lenders or alternative financing platforms. It's beneficial to review all terms carefully and consider consulting with a financial advisor or attorney to understand and potentially negotiate better conditions.</span></p>
<p> </p>
<h3> </h3>
<p> </p>
<p><span style="font-size: 16px;"><b>What makes franchise financing different from regular business loans in Canada?</b> </span></p>
<p> </p>
<p><span style="font-size: 16px;">Franchise financing is tailored specifically for purchasing or expanding a franchise. It often factors in the reputation of the franchise, specific costs like franchise fees, and might utilize specialized programs like the CSBF/BIL.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>How can franchise financing benefit a new entrepreneur in Canada?</b> </span></p>
<p> </p>
<p><span style="font-size: 16px;">Franchise financing provides a structured approach to obtaining capital, leveraging the strength of established franchise brands, which can make the lending process smoother for newcomers.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>Are there specific franchises in Canada that are easier to finance due to their reputation?</b> </span></p>
<p><span style="font-size: 16px;">Yes, franchises with a strong track record, brand identity, and consistent profitability often have better financing opportunities, as lenders view them as lower risk.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>Can franchise financing in Canada cover all costs associated with opening a franchise?</b> </span></p>
<p><span style="font-size: 16px;">While franchise financing can cover a significant portion, it may not cover all costs. Items like ongoing working capital or franchise fees might need additional funding sources.</span></p>
<p><span style="font-size: 16px;"><b>What's the role of personal investment or owner equity in the franchise financing process?</b> </span></p>
<p><span style="font-size: 16px;">Owner equity demonstrates commitment and reduces the lender's risk. It often plays a pivotal role in securing additional financing and obtaining favourable loan terms.</span></p>
<p> </p>
<p> </p>
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<p><span style="font-size: 16px;"><b>What Are Some Valuable Tips to Finance a Franchise?</b></span></p>
<p> </p>
<ul>
<li>
<p><span style="font-size: 16px;"><b>Understand the Total Cost</b>:</span></p>
<ul>
<li><span style="font-size: 16px;">Account for working capital in addition to the franchise price.</span></li>
<li><span style="font-size: 16px;">Incorporate sufficient working capital into loan requests.</span></li>
<li><span style="font-size: 16px;">Consider loan terms that protect working capital, such as postponing principal payment.</span></li>
</ul>
</li>
<li>
<p><span style="font-size: 16px;"><b>Shop Around for Your Loan</b>:</span></p>
<ul>
<li><span style="font-size: 16px;">Consult multiple institutions for better financing terms including a line of credit for ongoing business needs</span></li>
<li><span style="font-size: 16px;">Diversify financing sources to mitigate risks. A commercial bank loan is not the only option - Buyers should make sure they have an acceptable credit score</span></li>
</ul>
</li>
<li>
<p><span style="font-size: 16px;"><b>Grasp Your Contract's Terms</b>:</span></p>
<ul>
<li><span style="font-size: 16px;">Familiarize yourself with franchise purchase agreement nuances.</span></li>
<li><span style="font-size: 16px;">Understand lease ownership and repayment obligations, including royalties. Franchisor financing is rarely available directly although some franchisors partner with financial institutions to assist the franchise owner</span></li>
</ul>
</li>
<li>
<p><span style="font-size: 16px;"><b>Evaluate Your Investment Capacity</b>:</span></p>
<ul>
<li><span style="font-size: 16px;">Have funds available beyond the down payment for unexpected business needs.</span></li>
<li><span style="font-size: 16px;">Ensure availability of funds either personally or through bank loans and alternative lenders</span></li>
</ul>
</li>
<li>
<p><span style="font-size: 16px;"><b>Prepare Necessary Documentation</b>:</span></p>
<ul>
<li><span style="font-size: 16px;">Ensure availability of the franchise agreement draft, statement of personal finances, and a <a href="http:// https://www.7parkavenuefinancial.com/business-plans.html">business plan </a>for lenders.</span></li>
<li> </li>
</ul>
</li>
</ul>
</div>
</div>
</div>
<p><b><span style="font-size: 14px;">Click <a href="https://www.7parkavenuefinancial.com/FINANCING-TRACK-RECORD.html">here</a> for the business finance track record of 7 Park Avenue Financial</span></b></p>
<div class="blogger-post-footer">7 Park Avenue Financial
Canadian Business Financing </div>Stan Prokophttp://www.blogger.com/profile/03768625989302489257noreply@blogger.com0tag:blogger.com,1999:blog-3319278949078654457.post-83805870684496676752023-10-08T11:15:00.002-04:002023-10-08T11:15:46.960-04:00Methods of Financing Working Capital In Canada – Leveraging Current Assets<p> </p>
<p align="center"><b><span style="font-size: 18px;">You Are Looking for Financing – Working Capital Loans! </span></b></p>
<h2 style="text-align: center;"><span style="font-size: 18px;">Unlocking the Secrets of Successful Working Capital Financing</span></h2>
<p align="center"><span style="font-size: 18px;">You've arrived at the right address! Welcome to 7 Park Avenue Financial </span></p>
<p align="center"><span style="font-size: 18px;"> Financing & Cash flow are the biggest issues facing business today</span></p>
<p align="center"><span style="font-size: 18px;"> Unaware / Dissatisfied with your financing options?</span></p>
<p align="center"><span style="font-size: 18px;">Call Now ! - Direct Line - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs</span></p>
<p align="center"><span style="font-size: 18px;">Email - <a href="mailto:INFO@7parkavenuefinancial.com">sprokop@7parkavenuefinancial.com</a></span></p><p align="center"><span style="font-size: 18px;"> </span></p><p align="center"><span style="font-size: 18px;">Financing Working Capital: Unlocking the Power of Current Assets | 7 Park Avenue Financial <br /></span></p>
<p align="center"> </p>
<p align="center"><br /></p>
<p align="center"> </p>
<h2 style="text-align: center;"><span style="font-size: 18px;">Beyond Traditional Loans: Innovative Ways to Finance Your Working Capital</span></h2>
<p align="center"> </p>
<p><span _fck_bookmark="1" style="display: none;"> </span></p>
<h2><span _fck_bookmark="1" style="display: none;"> </span><br />
<span style="font-size: 18px;">The Irony of Business Success</span><span style="font-size: 18px;"><span _fck_bookmark="1" style="display: none;"> </span></span><span style="font-size: 16px;"><span _fck_bookmark="1" style="display: none;"> </span></span></h2>
<p> </p>
<p><br />
<span style="font-size: 16px;">Isn't it ironic that business can be actually quite good... Or even great..? This then becomes a problem only because in business survival and growth is all about <a href="https://www.7parkavenuefinancial.com/working_capital_small_business_finance_loan_loans.html"> financing working capital</a>... Turning those current assets of your firm into loans or monetization facilities for cash flow.</span></p>
<p> </p>
<h2><br />
<br />
<span style="font-size: 18px;">The Challenges of Business Liquidity</span></h2>
<p> </p>
<p><br />
<span style="font-size: 16px;">In a perfect world, Canadian business owners want to be able to meet their day to day operations, make any loan or lease payments and be able to plan to pay bills for upcoming expenses or growth. How could one statement like that induce so much stress?</span></p>
<p><br />
<br />
<span style="font-size: 16px;">A lot of that planning comes from the working capital current assets category of your financials, simply speaking your liquid assets such as cash on hand, receivables, and inventories if, in fact, your business has inventory. (Some services businesses just have A/R).</span></p>
<p> </p>
<h2><span _fck_bookmark="1" style="display: none;"> </span></h2>
<h2><span style="font-size: 18px;">How does efficient working capital management affect a company's profitability?</span><span style="font-size: 16px;"><span _fck_bookmark="1" style="display: none;"> </span></span></h2>
<p> </p>
<p><span style="font-size: 16px;">Efficient working capital management ensures that a company has a balanced mix of short-term assets and liabilities, allowing it to meet its obligations while investing in growth opportunities. </span></p>
<p> </p>
<p><span style="font-size: 16px;">By reducing holding costs of inventory, optimizing collection periods, and managing short-term debts wisely, a company can improve its cash flow and ultimately enhance profitability. Poor management, conversely, can lead to missed opportunities, higher financial costs, and potential insolvency.</span></p>
<p> </p>
<p><span style="font-size: 16px;">Working capital ratios, such as the current ratio and the quick ratio, are financial metrics used to assess a company's liquidity and short-term financial health. </span></p>
<p> </p>
<p><span style="font-size: 16px;">The current ratio is calculated as current assets divided by current liabilities, while the quick ratio excludes inventories from current assets. These ratios provide insights into whether a company can cover its short-term obligations using its short-term assets. Consistently low ratios might indicate liquidity issues, whereas very high ratios might suggest inefficiencies in using available resources.</span></p>
<p> </p>
<h3><span style="font-size: 18px;">What external factors can influence a company's working capital requirements?</span></h3>
<p> </p>
<p><span style="font-size: 16px;">Several external factors can impact a company's working capital needs. These include:</span></p>
<p> </p>
<ol>
<li><span style="font-size: 16px;"><b>Economic Conditions:</b> In a recession, customers might delay payments, increasing accounts receivable, while suppliers might demand quicker payments.</span></li>
<li><span style="font-size: 16px;"><b>Industry Trends:</b> Seasonal industries might require more working capital during peak seasons.</span></li>
<li><span style="font-size: 16px;"><b>Interest Rates:</b> High-interest rates can increase the cost of borrowing, affecting the decision to finance working capital through debt.</span></li>
<li><span style="font-size: 16px;"><b>Supplier Terms:</b> If suppliers offer favourable terms, a company might require less immediate liquidity.</span></li>
<li><span style="font-size: 16px;"><b>Competitive Landscape:</b> Intense competition might require businesses to hold more inventory or offer lenient credit terms, increasing working capital needs via the company's ability to do so</span></li>
</ol>
<p> </p>
<p><span style="font-size: 16px;">Recognizing these factors helps businesses anticipate changes in working capital requirements and adjust their strategies accordingly to make short term investments in the business</span></p>
<h3><br />
<span style="font-size: 18px;"><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_78S" style="display: none;"> </span><br />
Sources of Working Capital</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_78E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h3>
<p><br />
<span style="font-size: 16px;">Small and medium-sized businesses in Canada rely on either capital from their owner's personal resources, or their decision to take on loans and debt of some sort.<br />
<br />
But what type of loans makes sense when it comes to liquidity? Perhaps a better rephrasing of that question would be 'What is good working capital debt?' In our personal credit lives, we think of good debt, i.e. a mortgage, and bad debt 'credit cards'!</span></p>
<h4><br />
<br />
<span style="font-size: 18px;">Equity vs. Debt in Financing</span></h4>
<p> </p>
<p><br />
<span style="font-size: 16px;">Naturally considering new ownership or additional equity in your company or business (taking in a partner, etc.) is simply a dilution in the long run and somewhat downsizes the overall incentive for all owners to grow the firm.<br />
<br />
And when it comes to debt the amount of 'debt' or loans your firm can take on is certainly often limited relative to your own current financials and the state of borrowing in Canada, which vacillates from great to not great as you may have noticed!</span></p>
<p> </p>
<h4><span style="font-size: 18px;"><span _fck_bookmark="1" id="cke_bm_78S" style="display: none;"> </span> Solutions for Working Capital Constraints</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_78E" style="display: none;"> </span></span></h4>
<p> </p>
<p><br />
<span style="font-size: 16px;">So, what's the solution? Is financing working capital the way to go? (As opposed to term loans and more debt). It’s not as complicated as you think. And it all comes back to our friends, those two guys known as 'current assets'!<br />
<br />
A large part of working capital financing in your business can come from yourself. Real basics such as ensuring you aren’t paying your payables before you're collecting your receivables... if you're doing that you're simply creating a working capital shortage that you have self-imposed.<br />
<br />
And let’s discuss your solutions for working capital constraints. We get a huge kick out of receiving newsletters from banks that focus on how to manage your cash surpluses when they are writing about working capital and cash flow. We haven’t had one client come in today with a cash surplus problem, but it's only noon...</span></p>
<h4><br />
<span style="font-size: 18px;"><span _fck_bookmark="1" id="cke_bm_96S" style="display: none;"> </span><br />
Practical Solutions to Manage Working Capital</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_96E" style="display: none;"> </span></span></h4>
<p> </p>
<p><br />
<span style="font-size: 16px;">Canadian business owners and financial managers challenged with financing working capital have a solid handful of solutions. Naturally in a perfect world (you mean it's not?), you would prefer to not take on a term loan for permanent working capital. But back to that perfect world... that might mean you have an overdraft or bank line of credit. For many small and medium-sized businesses that simply is not attainable - or if it is, it’s not quite enough.<br />
<br />
Real-world solutions for financing working capital and current assets without loans involve what we call the monetization or cash flowing of those current assets, Which typically is a working capital facility, non-bank in nature (yes they are available and exist!) that allows you to draw daily, as needed on your a/r and inventory in the form of a business line of credit. Larger facilities of this nature are termed <a href="http://www.7parkavenuefinancial.com/abl-lending-asset-based-loan-rates.html">'<b>asset-based lines of credit</b></a>' - we call them ‘<b><a href="http://www.7parkavenuefinancial.com/abl_lines_of_revolving_credit_asset_based_lending.html">ABL’s</a>.</b>.. and they often are superior to bank facilities for a lot of different reasons.</span></p>
<h4><span _fck_bookmark="1" id="cke_bm_96S" style="display: none;"> </span><br />
<br />
<span style="font-size: 18px;">Alternative Working Capital Solutions</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_96E" style="display: none;"> </span></span></h4>
<p><br />
<span style="font-size: 16px;">Other working capital solutions, but nonetheless real, are <a href="https://www.7parkavenuefinancial.com/How_To_Finance_Canadian_SRED_SR_ED_Claim.html">financing your tax credits</a>, <a href="https://www.7parkavenuefinancial.com/purchase-order-financing-p-o-finance.html">purchase order finance</a>, or <a href="http://www.7parkavenuefinancial.com/factoring_companies_in_canada_program_ar_finance.html">securitization of your contracts or receivable</a>s.</span></p>
<p> </p>
<h4><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_78S" style="display: none;"> </span></h4>
<h4><span style="font-size: 18px;">Key Takeaways</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_78E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h4>
<p> </p>
<p><br />
<span style="font-size: 16px;">Working capital is the difference between a company's current assets (like cash, accounts receivable, and inventory) and current liabilities (like accounts payable).<br />
<br />
<br />
Importance: It represents the funds available to a business for day-to-day operations. A positive working capital indicates a company can cover its short-term liabilities with its short-term assets.<br />
<br />
<b>Role of Current Assets:</b><br />
<br />
<br />
Current assets are assets that are expected to be converted into cash or used up within one year, including cash, accounts receivable, and inventory.<br />
<br />
They are crucial liquidity indicators. Ensuring these are efficiently managed means businesses can quickly access cash.<br />
<br />
<b>The Need for Financing Working Capital:</b><br />
<br />
Businesses often require more liquid funds than on hand, especially during growth or seasonal fluctuations.<br />
<br />
Financing provides the necessary funds to keep operations running smoothly without disruptions due to cash flow gaps.<br />
<br />
<br />
<b> Main Methods of Financing Working Capital:</b></span></p>
<p><br />
<br />
<span style="font-size: 16px;">The common ways include short-term loans, bank overdrafts, accounts receivable financing, and asset-based financing.<br />
<br />
Understanding these methods gives insight into how businesses can maintain liquidity and seize growth opportunities without compromising operational efficiency.<br />
<br />
<b>Risks and Benefits of Financing:</b><br />
<br />
While financing provides immediate liquidity, it also introduces debt which comes with repayment obligations.<br />
<br />
Businesses must balance the benefits of immediate liquidity against the costs and obligations of taking on debt to ensure long-term financial health while accessing additional working capital and cash flows</span></p>
<h5><br />
<span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_96S" style="display: none;"> </span><span style="font-size: 18px;"><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_99S" style="display: none;"> </span></span></h5>
<h5><br />
<span style="font-size: 18px;">Conclusion<span _fck_bookmark="1" id="cke_bm_99E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_96E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h5>
<p> </p>
<p><br />
<span style="font-size: 16px;">Call 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor on the right method of leveraging cash flow from your assets and business. Today would be a good timeframe!</span></p>
<p> </p>
<h6><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_96S" style="display: none;"> </span></h6>
<h6><span style="font-size: 18px;">FAQ: FREQUENTLY ASKED QUESTIONS / PEOPLE ALSO ASK / MORE INFORMATION<span _fck_bookmark="1" id="cke_bm_96E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h6>
<p> </p>
<p> </p>
<p><span style="font-size: 16px;"><b>What exactly is "working capital" in the context of a business?</b><br />
<br />
Working capital refers to the difference between a company's balance sheet such as cash, marketable securities, accounts receivable, and inventory) and subtracting current liabilities (such as accounts payable and accrued expenses). Fixed assets are not a part of the calculation Net working capital represents the short-term available funds a business has to support its daily operations and meet its financial obligations. Business owners should understand how to calculate working capital formula and the working capital ratio.<br />
<br />
<b> Why is the financing of working capital important for businesses?</b><br />
<br />
Financing working capital is crucial because businesses, especially growing ones, often require more liquid funds than they have readily available. Ensuring adequate working capital helps businesses maintain smooth operations, cover short-term debts, and invest in opportunities, without the constant worry of running out of cash and achieving a negative working capital position.</span></p>
<p><br />
<br />
<span style="font-size: 16px;"><b>How are "current assets" different from other assets in a business?</b><br />
<br />
Current assets are short-term assets expected to be converted into cash or used up within a year. This includes cash, accounts receivable, and inventory as part of the company's short term liquidity.In contrast, long-term assets, like property, plant, and equipment, are used over longer periods and aren't readily converted to cash.</span></p>
<p><br />
<br />
<span style="font-size: 16px;"><b>What are some common ways businesses can finance their working capital to maintain a company's financial health?</b><br />
<br />
Businesses can finance their gross working capital through various methods, such as bank overdrafts, short-term loans, trade credit, factoring or accounts receivable financing, and asset-based financing. The best method to generate cash often depends on the business's financial health, industry, and specific needs around the company operating cycle. Financial modeling and cash flow forecasts are important tools in effective working capital management and understanding of the cash flow statement.</span></p>
<p><br />
<br />
<span style="font-size: 16px;"><b>Isn't taking on debt to finance working capital risky for a business?</b><br />
<br />
While any form of debt or long term debt comes with inherent risks, when managed prudently, debt can be a beneficial tool for a business. Financing working capital allows businesses to seize growth opportunities, manage cash flow gaps, and handle seasonal variations in revenues. The key is to ensure that the cost of the debt is outweighed by the benefits it brings, and that the business has a clear strategy for repayment.</span><br />
<br />
<br />
</p>
<div class="blogger-post-footer">7 Park Avenue Financial
Canadian Business Financing </div>Stan Prokophttp://www.blogger.com/profile/03768625989302489257noreply@blogger.com0tag:blogger.com,1999:blog-3319278949078654457.post-35935069034863278542023-10-06T11:50:00.007-04:002023-10-06T11:52:14.769-04:00Straight Talk On Why Asset Based Lines Of Credit Are Alternatives To Debt Financing<script src="//platform.linkedin.com/in.js" type="text/javascript"> lang: en_US</script><script data-counter="top" data-url="https://www.7parkavenuefinancial.com/home-page.html" type="IN/Share"></script><br />
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<h2 style="text-align: center;"><span style="font-size: 18px;">YOU ARE LOOKING FOR ASSET BASED LINES OF CREDIT AND INFO ON DEBT FINANCING! </span></h2>
<h2 style="text-align: center;"><span style="font-size: small;"><font>Revolutionize Your Business Finance with Asset Based Credit Facilities</font></span></h2>
<p align="center"><span style="font-size: 18px;">You've arrived at the right address! Welcome to 7 Park Avenue Financial </span></p>
<p align="center"><span style="font-size: 18px;"> Financing & Cash flow are the biggest issues facing business today</span></p>
<p align="center"><span style="font-size: 18px;"> ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?</span></p>
<p style="text-align: center;"><span style="font-size: 18px;">CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs</span></p>
<p align="center"><span style="font-size: 18px;">EMAIL - <a href="mailto:INFO@7parkavenuefinancial.com">sprokop@7parkavenuefinancial.com</a></span></p><p align="center"><span style="font-size: 18px;"> </span></p>
<p align="center">Asset Based Lines of Credit: A Smarter Business Financing Option | 7 Park Avenue Financial <br /></p>
<p align="center"><br /></p>
<p align="center"> </p>
<h2 style="text-align: center;"><span style="font-size: 18px;">Asset Based Lines of Credit as a Business Financing Solution and Bank Alternative</span></h2>
<p> </p>
<p><span style="font-size: 16px;">Canadian business owners and financial managers continue to hear about newer forms of business financing in Canada, mainly <a href="http://www.7parkavenuefinancial.com/abl_lines_of_revolving_credit_asset_based_lending.html">asset based finance</a> / <a href="http://www.7parkavenuefinancial.com/asset-based-lending-business-bank-abl.html">asset based lending</a>, and, even more remarkably, an asset based line of credit facility.</span></p>
<p> </p>
<h2><span _fck_bookmark="1" style="display: none;"> </span></h2>
<h2><span style="font-size: 18px;">Understanding Asset Based Finance</span><span style="font-size: 16px;"><span _fck_bookmark="1" style="display: none;"> </span></span></h2>
<p> </p>
<p><span style="font-size: 16px;">Clients always ask us the same thing - Is this a form of debt financing, and exactly what is the difference between this and a Canadian chartered bank facility? Let’s examine those questions more closely.</span></p>
<p> </p>
<p><span style="font-size: 16px;">In general<a href="http://www.7parkavenuefinancial.com/asset-based-business-line-of-credit-abl.html"> asset based finance</a> is a broad term which, could refer to several things. We have the same problem with other terms such as working capital and cash flow; they seem to be 'catch-all' phrases for several types of business financing and to make things more complicated they infer different things to different people.</span></p>
<p> </p>
<h2><span style="font-size: 18px;">Understanding the Terminology</span></h2>
<p> </p>
<p> </p>
<p><span style="font-size: 16px;">So let’s be clear, using asset-based lines of credit jargon we are talking about a business line of credit that a Canadian chartered bank offers, and comparing it to the new kid in town, as <a href="http://www.7parkavenuefinancial.com/asset-based-lending-lenders.html">asset-based line of credit</a> via an independent commercial finance company.</span></p>
<p> </p>
<h3><span _fck_bookmark="1" style="display: none;"> </span></h3>
<h3><span style="font-size: 18px;">Utilizing Asset-Based Credit Facilities</span><span style="font-size: 16px;"><span _fck_bookmark="1" style="display: none;"> </span></span></h3>
<p> </p>
<p><span style="font-size: 16px;">When your firm originates an asset-based credit facility, you are in effect, using the liquidity in your current assets (typically those are receivables and inventory) and in some cases, pulling some liquidity out of fixed assets such as equipment and real estate. Yes, you can access cash flow on a revolving basis out of your equipment and land if they are unencumbered.</span></p>
<p> </p>
<p><span style="font-size: 16px;">We still probably have most business owners confused because they are asking themselves right now that this seems exactly what my bank does (or what you would like them to do).</span></p>
<p> </p>
<h3><span style="font-size: 18px;"><span _fck_bookmark="1" id="cke_bm_153S" style="display: none;"> </span>The Specialization of Asset Based Lenders</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span></span></h3>
<p> </p>
<p><span style="font-size: 16px;">So here’s the difference - asset-based lenders are highly specialized. Unlike many bankers who are generalists, they are highly focused on the actual true underlying value of your assets on an ongoing basis. </span></p>
<p> </p>
<p><span style="font-size: 16px;">By ongoing we mean daily, weekly, monthly, not long-term. In the old days (and boy, do we wish the old days were here in business financing), you met with your banker quarterly or yearly, reviewed your financials, reset the credit line, and went on to grow, prosper and succeed.</span></p>
<p> </p>
<p><span style="font-size: 16px;">However, business banking has changed in Canada, and accessing the cash flow and working capital you need daily has become more challenging. Banks are regulated by provincial and federal governments around their capital bases and what they can lend on and are subject to concentration issues. By that, we mean that a bank could not choose to lend all its capital to one industry, such as autos, etc.</span></p>
<p> </p>
<h3><span style="font-size: 18px;"><span _fck_bookmark="1" id="cke_bm_153S" style="display: none;"> </span>ABL is The Key Differentiator</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span></span></h3>
<p> </p>
<p><span style="font-size: 16px;">So the key differentiator in <a href="https://www.7parkavenuefinancial.com/asset-based-lines-of-credit-canadian-financing.html">asset based lines of credit</a> is simply that you are working with a company that is often not regulated and is staffed by a specialist with a firm handle on your asset base. </span></p>
<p> </p>
<p><span style="font-size: 16px;">That's where the good news kicks in because you can sometimes access up to 50 -100% more in revolving credit facilities. After all, the advances against receivables, inventory (yes inventory!) and other assets are maximized to the hilt.</span></p>
<p> </p>
<p><span style="font-size: 16px;">In essence, you are working with an asset-based finance lender that can provide you with maximum cash flow and work with you to give you vital insights into asset turnover and help you through special situations. Remember, this is not debt financing via term loans or additional debt on your balance sheet; you are monetizing your liquid assets to the maximum.</span></p>
<p> </p>
<h4><span style="font-size: 18px;">Key Takeaways</span></h4>
<br />
<p><span style="font-size: 16px;">Asset-Based Financing Basics: Understanding the fundamental concept that asset-based financing leverages your company's assets, such as receivables and inventory, to secure a line of credit is crucial. This concept is the cornerstone of asset-based lines of credit.</span></p>
<p><br />
<br />
<br />
<span style="font-size: 16px;">Differences from Traditional Banking: Recognizing that asset-based lines of credit differ from traditional bank financing is essential. Highlight the key distinctions, including the specialization of asset-based lenders, their focus on asset values, and the flexibility they offer.</span></p>
<p><br />
<br />
<span style="font-size: 16px;">Asset Monetization: The concept of monetizing your liquid assets, like equipment and land, without adding long-term debt to your balance sheet is critical. This illustrates how asset-based financing provides cash flow without traditional loans.</span></p>
<p><br />
<br />
<span style="font-size: 16px;">Benefits of Asset-Based Financing: Understand the advantages, such as higher credit limits via a higher loan to value ratio on the borrowing certificate, more significant cash flow potential, and tailored financing solutions. These benefits make asset-based financing an attractive alternative to conventional banking.</span></p>
<p> </p>
<h2><span style="font-size: 18px;">Conclusion</span></h2>
<p> </p>
<p><span style="font-size: 16px;">So there’s the main difference, and if this type of financing for your business seems to make sense for your company's cash flow needs, Call <a href="http:// https://www.7parkavenuefinancial.com/financing-services.htm">7 Park Avenue Financial</a> to a<a href="http:// https://www.7parkavenuefinancial.com/Management-Credentials"> trusted, credible and experienced business financing advisor</a> to guide you through the next evolution in Canadian business financing when you choose asset based lending and when you need to secure funding.</span></p>
<p> </p>
<p><b><span style="font-size: 16px;">FAQ</span></b></p>
<p> </p>
<p><b><span style="font-size: 16px;">What exactly is an asset based line of credit, and how does it differ from traditional bank financing?</span></b></p>
<p><br />
<br />
<span style="font-size: 16px;">An asset based line of credit is a type of business financing that leverages your company's valuable assets, such as receivables, inventory, and even fixed assets, to provide a revolving line of credit. Unlike traditional bank financing, asset based lenders are highly specialized and focus on the actual value of your assets on a daily, weekly, and monthly basis, allowing for more flexibility and potentially higher credit limits.<br />
<br />
<br />
<br />
<b> How can I access cash flow from assets like equipment and land using asset based lines of credit?</b></span></p>
<p><br />
<br />
<span style="font-size: 16px;">Asset based lines of credit enable you to access cash flow from assets like equipment and land if they are unencumbered. This means you can monetize these assets to their maximum potential without adding additional debt to your balance sheet.<br />
<br />
<br />
<b> Why should I consider asset based financing over traditional bank loans?</b></span></p>
<p><br />
<br />
<span style="font-size: 16px;">Asset based financing offers several advantages, including the ability to access more substantial credit facilities, increased flexibility, and a focus on maximizing your asset's value. Unlike traditional banks, asset based lenders are not as heavily regulated, allowing for more tailored financing solutions.</span></p>
<p><br />
<br />
<b><span style="font-size: 16px;">Are asset based lines of credit suitable for businesses of all sizes?</span></b></p>
<p><br />
<br />
<span style="font-size: 16px;">Asset based lines of credit can benefit businesses of various sizes, but they are particularly advantageous for businesses with significant assets, such as receivables and inventory. Small, medium, and large businesses can leverage these credit facilities to optimize their cash flow.</span></p>
<p><br />
<br />
<span style="font-size: 16px;"><b>How can I get started with asset based financing, and whom should I consult for guidance?</b><br />
<br />
To explore asset-based financing for your business, it's advisable to consult with a trusted and experienced business financing advisor such as 7 Park Avenue Financial. They can help you navigate the nuances of these credit facilities and guide you through the process of securing asset based lines of credit tailored to your specific needs and goals.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>What are the typical eligibility criteria for businesses seeking asset-based lines of credit?</b><br />
<br />
Eligibility criteria often include having a solid asset base, sales revenues, and a history of general creditworthiness, and the ability to demonstrate consistent asset turnover. The specific requirements may vary among lenders.</span></p>
<p><br />
<br />
<b><span style="font-size: 16px;">Are startups eligible for asset-based lines of credit, or is this financing </span></b><span style="font-size: 16px;"><b>option primarily for established businesses?</b><br />
<br />
Asset-based lines of credit are typically more accessible to established businesses with a track record of assets and operations. Due to their limited asset base, startups may find it more challenging to qualify.</span></p>
<p><br />
<br />
<span style="font-size: 16px;"><b>What potential risks are associated with using asset-based lines of credit for business financing?</b><br />
<br />
Risks can include the potential for higher interest rates compared to traditional loans, the risk of asset devaluation affecting credit limits, and the need to regularly monitor and report asset values.</span></p>
<p><br />
<br />
<span style="font-size: 16px;"><b>How can businesses mitigate asset-based financing risks to ensure financial stability?</b><br />
<br />
Mitigation strategies include prudent management of balance sheet and physical assets, careful selection of asset-based lenders, and maintaining strong financial discipline to prevent over-leveraging for this type of cash flow financing.<br />
<br />
<br />
<b> What does the application process for asset-based lines of credit typically involve, and how long does it take?</b></span></p>
<p><br />
<br />
<span style="font-size: 16px;">The application process may include a detailed review of your assets, financial statements, and credit history. The timeline can vary but may take several weeks to complete, depending on the complexity of your financial situation. Some companies may simply choose accounts receivable financing facilities.<br />
<br />
<br />
<b> Are there any specific documents or information businesses should prepare when applying for asset-based lines of credit?</b><br />
<br />
Businesses should be ready to provide documents for asset based loans, such as financial statements, accounts receivable and inventory reports, and details about their assets. Being well-prepared can expedite the application process.</span><br />
<br />
<br />
<br />
<br />
</p>
<p><b><span style="font-size: 14px;">Click <a href="https://www.7parkavenuefinancial.com/FINANCING-TRACK-RECORD.html">here</a> for the business finance track record of 7 Park Avenue Financial</span></b></p>
<div class="blogger-post-footer">7 Park Avenue Financial
Canadian Business Financing </div>Stan Prokophttp://www.blogger.com/profile/03768625989302489257noreply@blogger.com0tag:blogger.com,1999:blog-3319278949078654457.post-53613040451535470062023-10-04T10:47:00.007-04:002023-10-04T10:48:26.026-04:00Rise of ABL Finance : A New Era in Canadian Business Funding<script src="//platform.linkedin.com/in.js" type="text/javascript"> lang: en_US</script><script data-counter="top" data-url="https://www.7parkavenuefinancial.com/home-page.html" type="IN/Share"></script><br />
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<p align="center"><b><span style="font-size: 18px;">YOU ARE LOOKING FOR ABL ASSET BASED FINANCING! </span></b></p>
<h2 style="text-align: center;"><span style="font-size: 18px;">The Challenges of Traditional Bank Financing in the Modern Canadian Landscape</span></h2>
<p align="center"><span style="font-size: 18px;">You've arrived at the right address! Welcome to 7 Park Avenue Financial </span></p>
<p align="center"><span style="font-size: 18px;"> Financing & Cash flow are the biggest issues facing businesses today</span></p>
<p align="center"><span style="font-size: 18px;"> Unaware / Dissatisfied with your financing options?</span></p>
<p align="center"><span style="font-size: 18px;">Call Now! - Direct Line - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs</span></p>
<p align="center"><span style="font-size: 18px;">Email - <a href="mailto:INFO@7parkavenuefinancial.com">sprokop@7parkavenuefinancial.com</a> </span></p>
<h1 align="center"><span style="font-size: medium;"> </span></h1>
<h1 align="center"><span style="font-size: medium;">Unlocking the Power of ABL Financing Loan Revolver in Canada </span><br /></h1>
<p align="center"><br /></p>
<h2 style="text-align: center;"><span style="font-size: 18px;">Exploring Asset Based Lending in Canada</span></h2>
<p> </p>
<h2><span style="font-size: 18px;">Introduction</span></h2>
<p> </p>
<p><span style="font-size: 16px;">A recent article by <a href="https://www.airdberlis.com/people/bio/michael-a.-cappabianca">Michael A Cappabianca / Aird & Berlis</a> was an excellent summary of Asset-based lending post-Covid -</span></p>
<p> </p>
<p><span style="font-size: 16px;">In the article, the author maintains that the COVID-19 pandemic deeply affected the global economy, with Canada's asset-based lending (ABL) market experiencing significant changes in demand, credit availability, and overall dynamics.</span></p>
<p> </p>
<p><span style="font-size: 16px;">The pandemic led to a notable shift in ABL demand as companies across sectors like manufacturing, retail, and hospitality utilized it to manage liquidity, fund operations, and harness growth opportunities. Pandemic-induced disruptions saw many businesses unable to fulfill financial obligations, leading them to turn to ABL, especially with the lure of record-low interest rates.</span></p>
<p> </p>
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<p><span style="font-size: 16px;">Cappabianca further maintains the future of the ABL market in Canada holds several considerations. Interest rates play a crucial role, with ABL loans typically having higher rates than traditional cash flow loans; a rise in rates could make ABL less appealing to borrowers. </span></p>
<p> </p>
<p><span style="font-size: 16px;">The market is also influenced by volatile asset values due to changes in demand, interest rates, pandemic-related supply chain challenges, and global unrest. Lenders for an asset based loan must assess risks in sectors like travel while identifying growth in health care and e-commerce areas. Other factors include rethinking supply chain management, adhering to a potentially changing regulatory landscape, and the vital role of ABL in post-pandemic business recovery.</span></p>
<p> </p>
<p><span style="font-size: 16px;">As summary, the author maintains that despite the challenges brought about by the pandemic, ABL's versatility has proven to be a critical tool for businesses in Canada. Its adaptability has been essential in helping companies navigate the tumultuous economic environment. As the nation's economy begins its recovery phase, ABL will be pivotal in fostering growth and supporting enterprises in their rebound efforts.</span></p>
</div>
</div>
</div>
<h2><span _fck_bookmark="1" style="display: none;"> </span></h2>
<h2> </h2>
<h2><span style="font-size: 18px;">Understanding ABL Versus The Challenges of Traditional Bank Financing</span></h2>
<h2> </h2>
<p><span style="font-size: 16px;">Are you totally on top of the newest trend in Canadian business financing? Then, of course, you're fully aware and knowledgeable on <a href="http://www.7parkavenuefinancial.com/abl-lending-asset-based-loan-rates.html">ABL asset based loans</a> for a <a href="http://www.7parkavenuefinancial.com/abl_lines_of_revolving_credit_asset_based_lending.html">business credit revolver loan </a>versus the alternative... a bank line of operating credit.</span></p>
<p> </p>
<p><span style="font-size: 16px;">What's that? You're not? No problem... read on!</span></p>
<p> </p>
<p><span style="font-size: 16px;">Nowadays, no Canadian business owner or financial manager disputes with us the challenges of obtaining what everyone seems to call 'traditional' bank financing. For all the right reasons (probably... hopefully?!) Canadian banks hunkered down and tightened the lending strings after the 2008-2009 financial debacle. Current higher rates in 2023 and generally poor economic and market conditions inhibit bank financing for many firms.</span></p>
<h3> </h3>
<h3><span style="font-size: 18px;">The Rise of ABL Financing</span></h3>
<p> </p>
<p> </p>
<p><span style="font-size: 16px;">Therefore, it’s not hard to determine how various specialized funds and independent finance firms became prominent by offering <a href="http://www.7parkavenuefinancial.com/asset-based-business-line-of-credit-abl.html">ABL funding</a> . A = Asset B = Based L = Loan... It’s as simple as that.</span></p>
<p> </p>
<p> </p>
<h3><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_153S" style="display: none;"> </span></h3>
<h3><span style="font-size: 18px;">Finding a Solution to Business Financing Challenges</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h3>
<p> </p>
<p><span style="font-size: 16px;">Do you recognize any parts of the following story... we think you will. You feel as if you have hit an impasse in expanding your firm. Personal funds have been depleted, and your efforts to find that elusive 'traditional' financing have failed. Additionally, your firm might have some real challenges in returning to profit after your industry has been out of favour with those in the glass towers who seem to know everything...</span></p>
<p> </p>
<h3><span style="font-size: 18px;">Asset Based Financing: An Alternative to Bank Lines</span></h3>
<p> </p>
<p><span style="font-size: 16px;">Is there really a viable solution to that business financing challenge, i.e. a real-world alternative to a bank line/cash flow financing and credit revolver loan? Enter asset based financing and asset-based lines of credit!</span></p>
<p> </p>
<h3><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_153S" style="display: none;"> </span></h3>
<h3><span style="font-size: 18px;">Assessing the Cost of Asset Based Loans</span></h3>
<p> </p>
<p><span style="font-size: 16px;">Interest rates for ABL Funding can vary depending on factors like the borrower's creditworthiness and the assessed risk of the collateral. In some cases, ABL Financing rates may be higher than traditional bank loans, but they offer <b>unique benefits</b>, such as greater flexibility and access to liquidity based on assets.</span></p>
<p> </p>
<p><span style="font-size: 16px;">Depending on the size of your facility and the overall financial condition of your firm, the cost of ABL financing will either be lower, competitive, or higher than your current finance arrangements. ‘Thanks a lot' we can hear you say, as that sure wasn’t very informative! </span></p>
<p><span style="font-size: 16px;">But we stand by that comment because of the complexity involved in assessing the size of your financing requirements, the overall creditworthiness of your company, and the mix of financing you need when it comes to ABL . The bottom line is simply that every situation is unique and needs to be addressed in that manner.</span></p>
<p> </p>
<h3><span style="font-size: 18px;">Unlocking High Liquidity Ratios</span></h3>
<p> </p>
<p><span style="font-size: 16px;">The essence of our message is hopefully clear - you do have a Canadian business financing alternative. It's a non-bank revolving credit revolver via an independent firm that provides very high liquidity ratios on a loan to value ratio on key balance sheet assets such as credit and loan terms on receivables, inventory, and in many cases, fixed assets and commercial real estate.</span></p>
<p> </p>
<h4><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_153S" style="display: none;"> </span></h4>
<h4><span style="font-size: 18px;">Qualifying for Asset Based Lending ABL Financing</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h4>
<p> </p>
<p><span style="font-size: 16px;">Do we qualify? is question number 1 or 2 more often and not from clients. The answer in the ABL world is that everyone qualifies with only one required criterion - you have sufficient assets and sales and a need for working capital via that borrowing base of sales and assets. </span></p>
<p> </p>
<p><span style="font-size: 16px;">Because that’s what an asset based line of credit revolver is all about. And, as we said, it might be more expensive, and due diligence on your operations and assets might be a bit more rigorous (in fact, it will be for sure - ABL lending focuses on assets, not ratios!).</span></p>
<p> </p>
<h4><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_153S" style="display: none;"> </span></h4>
<h4><span style="font-size: 18px;">The Canadian ABL Loan Marketplace</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h4>
<p> </p>
<p><span style="font-size: 16px;">What's happening in the Canadian ABL loan marketplace? Lots. Billions of dollars of financing are being accessed every day by your competitors who are knowledgeable about this new type of Canadian business financing. And it’s sure cheaper than bringing in additional equity if in fact, that could be arranged.</span></p>
<p> </p>
<p> </p>
<h4><span style="font-size: 18px;">Key Takeaways</span></h4>
<p> </p>
<p> </p>
<ol>
<li>
<p><span style="font-size: 16px;"><b>Definition of ABL - </b> Understand that ABL stands for Asset-Based Lending, a financing method where a business uses its tangible assets, such as accounts receivable, inventory, and equipment, as collateral to secure a line of credit or loan.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Benefits of ABL Financing:</b> Recognize that ABL loans offer advantages like increased liquidity, flexibility in funding use, and access to capital even when traditional bank financing is challenging to obtain.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Differences from Traditional Bank Loans:</b> Differentiate asset-based loans from traditional bank loans, noting that it relies on assets rather than creditworthiness, making it accessible to businesses with valuable collateral but potentially weaker credit profiles.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Qualification Criteria:</b> Understand that the primary qualification for ABL Financing is the presence of business assets, making it more inclusive compared to traditional loans.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Cost and Risk Considerations:</b> Acknowledge that the cost of ABL can vary, and due diligence on assets and operations is more rigorous. Balancing the benefits against potential higher costs and risks is essential.</span></p>
</li>
</ol>
<p> </p>
<h4><span style="font-size: 18px;"><span _fck_bookmark="1" id="cke_bm_153S" style="display: none;"> </span>Conclusion</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span></span></h4>
<p> </p>
<p><span style="font-size: 16px;">Interested? Intrigued? Want to know more? Call <a href="http:// https://www.7parkavenuefinancial.com/financing-services.html">7 Park Avenue Financial</a>, an <a href="http:// https://www.7parkavenuefinancial.com/Management-Credentials">experienced, trusted, and credible Canadian business financing advisor</a>, for the scoop on an ABL loan versus bank line. We guarantee you will be glad you did.</span></p>
<h6> </h6>
<h6><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_153S" style="display: none;"> </span></h6>
<h6><span style="font-size: 18px;">FAQ / FREQUENTLY ASKED QUESTIONS / PEOPLE ALSO ASK / MORE INFORMATION</span></h6>
<p><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></p>
<p> </p>
<p> </p>
<p> </p>
<p><b><span style="font-size: 16px;">What is ABL Finance, and how does it differ from traditional bank financing?</span></b></p>
<p><br />
<span style="font-size: 16px;">ABL Financing, short for Asset Based Lending, is an alternative to traditional bank financing in Canada. It revolves around using your business assets, such as receivables, inventory, and fixed assets, as collateral for a line of credit.</span></p>
<p><br />
<br />
<b><span style="font-size: 16px;">Why have asset based business credit lines gained prominence in Canada?</span></b></p>
<p><br />
<span style="font-size: 16px;">Canadian banks became more cautious with lending after the 2008-2009 financial crisis, leading to challenges in obtaining traditional bank financing. ABL Financing became prominent as an alternative solution for businesses.</span></p>
<p><br />
<br />
<b><span style="font-size: 16px;">How does ABL Financing address the challenges faced by businesses needing funding?</span></b></p>
<p><br />
<span style="font-size: 16px;">ABL Financing offers a real-world alternative for businesses that have struggled to secure traditional financing. It provides liquidity based on tangible assets rather than solely on financial ratios.</span></p>
<p><br />
<br />
<b><span style="font-size: 16px;">Who qualifies for ABL Financing, and what are the criteria?</span></b></p>
<p><br />
<span style="font-size: 16px;">The primary qualification for ABL Financing is the presence of business assets. As long as your company has assets, you can potentially qualify. However, the due diligence process on your operations and assets may be more rigorous than traditional financing.</span></p>
<p> </p>
<p><b><span style="font-size: 16px;">What types of businesses in Canada are best suited for ABL Financing?</span></b></p>
<p><br />
<span style="font-size: 16px;">ABL Financing is suitable for a wide range of businesses, including manufacturing, distribution, retail, and services. It is especially beneficial for companies with substantial tangible assets, such as inventory and accounts receivable, that can be used as collateral.<br />
<br />
<br />
<b>Are there any limitations on how businesses can use funds obtained through ABL Financing?</b></span></p>
<p><br />
<span style="font-size: 16px;">Generally, businesses have flexibility in using funds obtained through ABL Financing. They can use the capital for various purposes, such as expanding operations, managing cash flow, purchasing inventory, or financing acquisitions. The borrower and the lender often negotiate the specific use of funds.</span></p>
<p><br />
<br />
<b><span style="font-size: 16px;">What are the key differences between ABL Financing and equity financing in Canada?</span></b></p>
<p><br />
<span style="font-size: 16px;">ABL Financing involves securing a line of credit using a company's assets as collateral, while equity financing typically involves selling ownership shares of the company to investors. ABL Financing allows businesses to maintain ownership and control while leveraging their assets for funding, whereas equity financing dilutes ownership.</span></p>
<p><br />
<br />
<b><span style="font-size: 16px;">Are there any risks associated with ABL Financing that businesses should be aware of?</span></b></p>
<p><br />
<span style="font-size: 16px;">While <a href="https://www.7parkavenuefinancial.com/asset-based-line-of-credit.html">ABL Financing </a>offers valuable benefits, it also carries risks. Businesses need to be cautious about overleveraging their physical assets, as failure to meet repayment obligations could lead to the loss of valuable collateral. Additionally, the due diligence process for ABL Financing can be rigorous, and<a href="http://www.7parkavenuefinancial.com/asset-based-lending-lenders.html"> lenders </a>may closely monitor a company's financial health throughout the financing term. Businesses must understand these risks and manage them effectively.</span><br />
<br />
</p>
<div class="blogger-post-footer">7 Park Avenue Financial
Canadian Business Financing </div>Stan Prokophttp://www.blogger.com/profile/03768625989302489257noreply@blogger.com0tag:blogger.com,1999:blog-3319278949078654457.post-53242095576259802832023-09-24T11:07:00.012-04:002023-09-24T11:08:59.080-04:00Inventory Financing In Canada: Solving The Working Capital & Cash Flow <script src="//platform.linkedin.com/in.js" type="text/javascript"> lang: en_US</script><script data-counter="top" data-url="https://www.7parkavenuefinancial.com/home-page.html" type="IN/Share"></script><br />
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<p align="center"><b><span style="font-size: 18px;">YOUR COMPANY IS LOOKING FOR CANADIAN INVENTORY FINANCING! </span></b></p>
<h2 style="text-align: center;"><span style="font-size: 18px;">INVENTORY FINANCING LOAN SOLUTIONS</span></h2>
<p align="center"><span style="font-size: 18px;">You've arrived at the right address! Welcome to 7 Park Avenue Financial </span></p>
<p align="center"><span style="font-size: 18px;"> Financing & Cash flow are the biggest issues facing businesses today</span></p>
<p align="center"><span style="font-size: 18px;"> ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?</span></p>
<p align="center"><span style="font-size: 18px;">CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs</span></p>
<p><span style="font-size: 18px;"> EMAIL - <a href="mailto:INFO@7parkavenuefinancial.com">sprokop@7parkavenuefinancial.com</a></span></p><p><span style="font-size: 18px;"> </span></p><h1 style="margin-left: 80px; text-align: left;"><span style="font-size: medium;"> Inventory Financing and Working Capital Loan Solutions In Canada | 7 Park Avenue Financial</span></h1><div style="margin-left: 40px; text-align: left;"><h1>
</h1></div><h1 style="margin-left: 40px; text-align: left;"><span style="font-size: medium;"> </span></h1>
<p style="text-align: center;"><br /></p>
<p> </p>
<h2 style="text-align: center;"><br />
<span style="font-size: 18px;"> Inventory Financing Working Capitals Loan Solutions</span></h2>
<p><br />
</p>
<h2><span style="font-size: 18px;">Introduction</span></h2>
<p><br />
<span style="font-size: 16px;">Canadian business owners and financial managers focus on the term ‘<a href="http://www.7parkavenuefinancial.com/inventory-financing-finance-inventories.html">inventory loan</a>' when addressing this balance sheet component for additional working capital and cash flow.</span></p>
<p> </p>
<p><span style="font-size: 16px;">While it is possible to get an <a href="http://www.7parkavenuefinancial.com/business_inventory_financing_purchase_order.html">inventory loan to finance and purchase inventory</a>, the reality is that, more often than not, <b>inventory financing</b> is a critical component of additional <b>working capital facilities</b> or a business line of credit or <a href="https://www.7parkavenuefinancial.com/asset-based-lending-business-credit-line.html"><b>non-bank asset-based loan</b></a> in conjunction with <a href="http://www.7parkavenuefinancial.com/ar-financing-confidential-invoice-finance.html">receivable financing</a>.</span></p>
<p> </p>
<h2><br />
<span style="font-size: 18px;"><span _fck_bookmark="1" style="display: none;"> </span><br />
The Significance of the Cash Conversion Cycle & Asset Turnover In Inventory Loans</span><span style="font-size: 16px;"><span _fck_bookmark="1" style="display: none;"> </span></span></h2>
<p> </p>
<p><br />
<span style="font-size: 16px;">Let’s examine some key aspects and types of inventory financing for the business owner and determine how to access this and how the inventory financing loan solution is often used as additional funding for business expenses. </span></p>
<p> </p>
<p><span style="font-size: 16px;">For starters, when you are successful in financing inventory, you are in essence freeing up the cash that is tied up in that critical part of your balance sheet. </span></p>
<p> </p>
<p><span style="font-size: 16px;">When we talk to clients about working capital and cash flow financing in general, the term ‘cash conversion cycle’ is one on which we place critical importance. It may sound like a textbook finance definition, but the reality is that it’s simply the formula for determining how one dollar of capital flows through your business. And that dollar of capital usually in fact comes from the initial purchase of inventory. This is in turn, converted into accounts receivable, which are (hopefully!) collected and turned into cash. The time that dollar stays on your inventory line is a key part of the cash conversion cycle.</span></p>
<h2><br />
<br />
<span style="font-size: 18px;">The Importance of Inventory in the Balance Sheet</span></h2>
<p> </p>
<p><br />
<span style="font-size: 16px;">It would help if you focused on inventory financing when in fact, your investment in this balance sheet category is significant, often only rivalled by accounts receivable. We have worked with many firms that have to carry more inventory than A/R. That becomes a financing challenge.</span></p>
<p> </p>
<h3><br />
<br />
<span style="font-size: 18px;">The Challenge of Traditional Inventory Financing</span></h3>
<p> </p>
<p><br />
<span style="font-size: 16px;">Naturally, traditional financing institutions such as chartered banks don’t place a lot of reliance on their lending or their ability to secure and dispose of this type of asset. </span></p>
<p> </p>
<p><span style="font-size: 16px;">The reality is that your inventory might be in the form of raw materials, work in process, or finished goods. Depending on the lender's knowledge of inventory, the ability to margin or finance that inventory becomes limited. In order to get a bank loan to secure inventory financing firms must demonstrate clean balance sheets, profitability, and cash flow. These facilities from banks are often accompanied by accounts receivable financing facilities for firms with good business credit history.</span></p>
<p> </p>
<p><span style="font-size: 16px;">Small firms not qualifying for conventional/traditional bank loan financing often consider a<a href="http://www.7parkavenuefinancial.com/merchant_advance_business_funding_cash_flow.html"> <b>merchant cash advance</b></a> to generate cash for inventory, as well as other purposes.</span></p>
<h3><br />
<br />
<span style="font-size: 18px;">Optimal Inventory Financing</span></h3>
<p> </p>
<p><br />
<span style="font-size: 16px;">Inventory financing on its own tends to be challenging – it is not impossible in some circumstances. The reality is though, that inventory financing works best when it is tied to a full working capital or asset-based financing facility that covers the inventory itself, your receivables, and in some cases, supplemental assets such as equipment or real estate.</span></p>
<h4><br />
<br />
<span style="font-size: 18px;">Key Considerations for Financing Inventory</span></h4>
<p> </p>
<p><br />
<span style="font-size: 16px;">As a cautionary note, we must add that for your inventory to be financed, you should be able to demonstrate that it ‘turns' and that there is only a small percentage of obsolescence attached to this asset category. </span></p>
<p> </p>
<p><span style="font-size: 16px;">You can quickly determine how fast inventory turns by going to your income statement, taking your ‘cost of sales' line, and dividing it by ‘inventory on hand'. So, what is a good turnover number? The answer is that it depends on overall industry benchmarks for your type of business. A grocery store might turn over its inventory many times more often than a manufacturing company with a complex build process.</span></p>
<h4><br />
<br />
<span style="font-size: 18px;">Importance of Efficient Inventory Management</span></h4>
<p> </p>
<p><br />
<span style="font-size: 16px;">We should also add that inventory becomes more financeable when you are running a perpetual inventory system and you can demonstrate you have a solid handle on what is on hand and provide reporting in that regard.</span></p>
<p> </p>
<h4><span style="font-size: 18px;">Key Takeaways</span></h4>
<p> </p>
<ol>
<li>
<p><span style="font-size: 16px;"><b>Inventory Financing:</b> At its essence, inventory financing is a loan or line of credit that business owners get using their inventory as collateral. The main aim is to provide working capital to businesses to continue their operations smoothly, even if funds are tied up in inventory.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Cash Conversion Cycle:</b> This is how capital flows through a business. It begins with the purchase of inventory, which is then sold, turned into accounts receivable, and eventually collected and converted back into cash. The quicker this cycle moves, the better it is for the business's cash flow. Inventory financing aims to optimize this cycle by providing funds when cash is tied up in inventory.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Traditional Financing Challenges:</b> Traditional financial institutions, such as banks, often see inventory financing as riskier compared to other forms of lending often requiring personal assets and personal guarantees. This is because the inventory value can fluctuate, and in the event of a default, selling off merchandise might not recover the total loan value. Understanding this challenge is crucial to knowing why alternative inventory financing solutions are sought.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Working Capital & Asset-Based Financing:</b> Beyond just existing inventory financing, a holistic solution often ties in the inventory, receivables, and other assets like equipment or real estate. This combined approach can often offer better terms and greater flexibility for businesses.</span></p>
</li>
</ol>
<p> </p>
<h5><br />
<br />
<span style="font-size: 18px;">Conclusion</span></h5>
<p> </p>
<p><br />
<span style="font-size: 16px;">Speak to <a href="https://www.7parkavenuefinancial.com/financing-services.html">7 Park Avenue Financial</a>, a <a href="http:// https://www.7parkavenuefinancial.com/Management-Credentials">trusted, credible, and experienced financing advisor</a> in this very specialized area of business financing for SME's and small businesses – that will allow you to determine if your inventory is properly financed and, if not, what financing options are available. Working capital loans and business financing that make sense for your business needs.</span></p>
<p> </p>
<p><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_153S" style="display: none;"> </span></p>
<h6><span style="font-size: 18px;"><span _fck_bookmark="1" id="cke_bm_135S" style="display: none;"> </span>FAQ<span _fck_bookmark="1" id="cke_bm_135E" style="display: none;"> </span></span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h6>
<p> </p>
<p><span style="font-size: 16px;"><b>What are the 4 components of inventory? </b></span></p>
<p><span style="font-size: 16px;">Inventory can be broadly categorized into four primary components based on the stages of production and the purpose they serve:</span></p>
<ol>
<li>
<p><span style="font-size: 16px;"><b>Raw Materials:</b> These are the essential components or ingredients companies purchase to produce finished goods. Raw materials are not yet processed and are used in the manufacturing process. For instance, a furniture manufacturer might purchase timber as a raw material to produce wooden chairs.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Work-in-Progress (WIP):</b> These are goods that are in the process of being manufactured but are not yet complete. They represent a middle stage in production, between raw materials and finished goods. For the furniture manufacturer, chairs that have been assembled but not yet stained or varnished would be considered work-in-progress.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Finished Goods:</b> These are completed products that are ready for sale. They have undergone the entire manufacturing process, from raw materials to final product, and are waiting to be sold to the end customer. Using the previous example, a fully assembled, stained, and varnished chair ready for sale would be a finished good.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>MRO (Maintenance, Repair, and Operations) Inventory:</b> These items aren't directly used in production but are essential for the production process. They support operations and help maintain the production equipment and facilities. Examples include lubricants, tools, spare parts, gloves, etc.</span></p>
</li>
</ol>
<p> </p>
<p><br />
<span style="font-size: 16px;"><b>Why is the ‘cash conversion cycle’ mentioned to be of critical importance?</b></span></p>
<p><br />
<span style="font-size: 16px;">The 'cash conversion cycle' is critical because it is the formula for determining how one dollar of capital flows through a business. It starts from the initial purchase of inventory, which then gets converted into accounts receivable and eventually collected and turned into cash. The time this dollar stays within the inventory is a pivotal part of the cycle.<br />
<br />
<b> How do traditional financing institutions typically view inventory financing?</b></span></p>
<p><br />
<span style="font-size: 16px;">Traditional financing institutions, such as chartered banks, often don't rely much on their lending or their ability to secure and dispose of inventory as an asset versus non bank inventory financing lenders.</span></p>
<p><span style="font-size: 16px;">Their capacity to finance the inventory often becomes limited, depending on their knowledge and understanding of the nature and type of the inventory (raw materials, work in process, or finished goods).<br />
<br />
<b> What are the conditions that make inventory more financeable?</b></span></p>
<p><span style="font-size: 16px;">When business owners ask how inventory financing works it is important to realize that for inventory to be more financeable, a business should be able to demonstrate that the inventory 'turns' or gets sold and replenished via purchasing inventory regularly. Moreover, only a minimal percentage of obsolescence should be attached to this asset category. Another factor that aids in financing inventory is if the business runs a perpetual inventory system and can show that they have a firm grasp of what is on hand and can provide regular reporting.<br />
<br />
<b>Who should businesses consult to determine if their inventory is properly financed?</b></span></p>
<p><br />
<span style="font-size: 16px;">Businesses should consult a trusted, credible, and experienced financing advisor, especially one specializing in this specific area of business financing. Such an advisor will help them ascertain whether their inventory is currently adequately financed and inform them about the available financing options if it's not.</span></p>
<p><br />
<span style="font-size: 16px;"><b>What is the Just-in-Time inventory system, and what benefits does it offer to businesses?</b></span></p>
<p><br />
<span style="font-size: 16px;">The Just-in-Time (JIT) inventory system is a management strategy that aligns raw material orders from suppliers directly with production schedules, aiming to reduce inventory holding costs by receiving goods only when they are needed in the production process. The benefits of JIT include reduced storage costs, minimized waste due to perishable or obsolete stock, improved cash flow, and the potential for quicker response to market changes. However, it requires precise forecasting and is vulnerable to supply chain disruptions.<br />
<br />
<br />
<b>How does RFID technology enhance inventory management processes?</b></span></p>
<p><br />
<span style="font-size: 16px;">RFID (Radio-Frequency Identification) technology uses electromagnetic fields to automatically identify and track tags attached to objects. When integrated into inventory management, RFID offers real-time visibility into inventory levels, allowing for accurate tracking, reduced human errors, and streamlined warehouse operations. This leads to efficient stock replenishment, reduced shrinkage, and the ability to seamlessly manage inventory across multiple locations. It also provides insights into product movement and behaviour, helping businesses make more informed decisions about stock rotation and sales strategies.</span></p>
<p> </p>
<p><b><span style="font-size: 14px;">Click <a href="https://www.7parkavenuefinancial.com/FINANCING-TRACK-RECORD.html">here</a> for the business finance track record of 7 Park Avenue Financial</span></b></p>
<div class="blogger-post-footer">7 Park Avenue Financial
Canadian Business Financing </div>Stan Prokophttp://www.blogger.com/profile/03768625989302489257noreply@blogger.com0tag:blogger.com,1999:blog-3319278949078654457.post-7867080117433907082023-09-21T10:50:00.002-04:002023-09-21T10:50:11.496-04:00Financing A Business Purchase Ownership Transfer In Canada <script src="//platform.linkedin.com/in.js" type="text/javascript"> lang: en_US</script><script data-counter="top" data-url="http://http://businessfinancingcanada.blogspot.ca" type="IN/Share"></script><br />
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<p align="center"><b><span style="font-size: 18px;">YOU ARE LOOKING FOR FINANCING TO BUY AN EXISTING BUSINESS!</span></b></p>
<p align="center"><span style="font-size: 18px;">You've arrived at the right address! Welcome to 7 Park Avenue Financial </span></p>
<p align="center"><span style="font-size: 18px;"> Financing & Cash flow are the biggest issues facing business today</span></p>
<p align="center"><span style="font-size: 18px;"> ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?</span></p>
<p align="center"><span style="font-size: 18px;">CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs</span></p>
<div>
<p align="center"><span style="font-size: 18px;">EMAIL - <a href="mailto:INFO@7parkavenuefinancial.com">sprokop@7parkavenuefinancial.com</a></span></p>
<p align="center"> <span style="font-size: small;"> <br /></span></p>
<h1 align="center"><span style="font-size: small;">Understanding Business Acquisition Loans : How to Buy a Business | 7 Park Avenue Financial </span><br /></h1>
<h2 style="text-align: center;"> </h2><h2 style="text-align: center;"> </h2><h2 style="text-align: center;">BUSINESS ACQUISITION LOANS</h2>
<p> </p>
<p style="text-align: center;"><span style="font-size: 16px;"><b>TABLE OF CONTENTS</b><br />
<br />
<span style="font-size: 18px;"> Introduction to Business Acquisition in Canada<br />
What is a Business Acquisition Loan?<br />
The Right Capital Structure is Key<br />
What Type of Financing Do You Need?<br />
Understanding What Lenders are Looking For<br />
Putting the Valuation on the Business You are Purchasing<br />
Buyer Commitment / Down Payment: Your Equity Contribution<br />
Senior Debt - The Most Critical Aspect of Your Financing<br />
Choosing the Best Business Acquisition Loan for Your Needs<br />
Vendor Financing: The Seller Note Solution via the Current Business Owner<br />
Closing the Gap - The Mezzanine Financing Solution<br />
Government Loans for a Business Purchase<br />
Check Your Eligibility<br />
Asset-Based Lending / Leveraging the Assets!<br />
Do...Your Due Diligence!<br />
Post-Acquisition Financing Needs?<br />
Conclusion - Business Acquisition Financing: Talk to the Experts<br />
FAQ</span></span></p>
<p> </p>
<p> </p>
<h2><span style="font-size: 18px;">INTRODUCTION</span></h2>
<p><br />
<span style="font-size: 16px;">Buying a business in Canada is the perfect way to quickly a client base, increase the existing capacity of an established business or company, or gain access to new markets. Some entrepreneurs even focus on acquiring a competitor or supplier!</span></p>
<p> </p>
<p> </p>
<h2><span _fck_bookmark="1" style="display: none;"> </span></h2>
<h2><span style="font-size: 18px;">WHAT IS A BUSINESS ACQUISITION LOAN?</span><span style="font-size: 16px;"><span _fck_bookmark="1" style="display: none;"> </span></span></h2>
<p> </p>
<p class="western" style="line-height: 108%; margin-bottom: 0.28cm;"> </p>
<p><span style="font-size: 16px;">A <a href="http://www.7parkavenuefinancial.com/financing-a-business-purchase-acquisition-loans.html">business acquisition loan</a> is a specialized form of financing explicitly designed to purchase an existing business or franchise. These loans can be sourced from traditional bank loan solutions, credit unions online lenders, or specialty finance institutions. They can be secured or unsecured, and the structure, terms, and rates can vary widely depending on the lender, the financial health of the business being acquired, and the buyer's financial situation.<br />
<br />
<br />
Acquisitions are a part of business life, but <a href="http://www.7parkavenuefinancial.com/business-acquisition-financing-canada.html">how does financing the business purchase work</a>? Sometimes, a company is too small for some lenders to consider an acquisition deal, but that doesn’t mean a business financing solution exists.<br />
<br />
Combining an existing company with another to expand is also a great way of increasing your current business’s success. However, if you want the acquisition to be successful, ensure you are working with a business financing expert.<br />
<br />
Numerous critical issues around your financing need to be addressed, including appropriate funding for fixed assets and, in some cases, company-owned commercial real estate. Long-term financing of certain assets will be very beneficial in the long run - at the opposite end of the spectrum, if the business has intangible assets that can sometimes, but not always, be a challenge.</span></p>
<h2><br />
<br />
<br />
<span style="font-size: 18px;">THE RIGHT CAPITAL STRUCTURE IS KEY</span></h2>
<p><br />
<br />
<br />
<span style="font-size: 16px;">The right capital structure will position your business for continued growth and make the transition around the business purchase smoother while presenting more opportunities for success.<br />
<br />
<br />
The proper financing structure can make all the difference. When <a href="http://www.7parkavenuefinancial.com/business-acquisition-financing.html">buying a company</a>, it's essential to understand how each type of loan works and find the perfect mix for your needs to help guarantee future success.</span></p>
<h2><br />
<br />
<span style="font-size: 18px;"><span _fck_bookmark="1" style="display: none;"> </span><br />
WHAT TYPE OF FINANCING DO YOU NEED?</span></h2>
<p><br />
<span style="font-size: 16px;"><span _fck_bookmark="1" style="display: none;"> </span><br />
<br />
Financing will often come down to either term financing of some sort, or cash flow financing.</span></p>
<p> </p>
<h2><br />
<br />
<br />
<span style="font-size: 18px;">UNDERSTANDING WHAT LENDERS ARE LOOKING FOR</span></h2>
<p><br />
<br />
<br />
<span style="font-size: 16px;">Cash flow financing allows businesses without sufficient tangible or significant intangible assets to finance an acquisition. This type of debt is based on the company's capacity for debt service and interest coverage, which is essentially judged by its performance in past years as well as through projected future results.<br />
<br />
A reasonable acquisition price based on the valuation method is vital to any business purchase. The company must also have proven capacity to generate enough profit to cover debt service obligations and the need for future capital expenditures as deemed by competent management!</span></p>
<h3><br />
<br />
<br />
<span style="font-size: 18px;">PUTTING THE VALUATION ON THE BUSINESS YOU ARE PURCHASING</span></h3>
<p><br />
<br />
<br />
<span style="font-size: 16px;">One of the first tasks when trying to buy a company is determining its value. This can be not easy because many factors determine how profitable a company has been or can be. To represent future cash flow and earning potential accurately, a buyer needs to carefully ' normalize ' the financials to reflect new ownership - </span></p>
<p> </p>
<p><span style="font-size: 16px;">Here is where detailed 'micro analytics ' around your due diligence pays off! Often, averaging several years of cash flow generation is an excellent tool.<br />
<br />
<br />
In many cases, particularly in larger transactions, sellers or buyers may enlist the help of a professional business valuator, commonly known as a chartered business valuator. Anyone with proper experience will look at performance around operating cash flows, rates of return, and return on investment, all of which can be tied to the business's growth potential.<br />
<br />
<br />
Every industry or economic sector in Canada has issues around competitiveness, profits, and the need for additional assets or technology. Sometimes, a business may have recurring revenue, which is almost always considered a plus.<br />
<br />
<br />
As a buyer, you want a recent return on your business at an acceptable purchase price/valuation.<br />
<br />
<br />
There is no perfect way to determine the value of your target company, but you can often use cash flow as a starting point. Other areas to focus on are depreciation policies, taxes, and the timing of expenses. In some cases, significant investments made recently will have long-term benefits seen later on down the road.</span></p>
<h3><br />
<br />
<br />
<span style="font-size: 18px;">BUYER COMMITMENT / DOWN PAYMENT: YOUR EQUITY CONTRIBUTION</span></h3>
<p><br />
<br />
<br />
<br />
<span style="font-size: 16px;">The equity portion you put into the business, of course, decreases the amount needed to be borrowed, demonstrates your commitment to your deal, as well as helping to lead to a successful acquisition.</span></p>
<h3><br />
<br />
<br />
<span style="font-size: 16px;"><span _fck_bookmark="1" style="display: none;"> </span><br />
<span style="font-size: 18px;"> SENIOR DEBT - THE MOST CRITICAL ASPECT OF YOUR FINANCING</span><span _fck_bookmark="1" style="display: none;"> </span></span></h3>
<p><br />
<br />
<br />
<br />
<span style="font-size: 16px;">The senior lender in any acquisition deal provides a loan secured on your company's assets. While specific items may not fully guarantee this amount, it's called senior debt because there is a first charge on all assets. In Canada, lenders typically register a ' GSA ' ( general security agreement ), giving them a first charge/priority on present and future assets via the loan agreement and its stringent loan requirements from traditional financial institutions.</span></p>
<h3><br />
<br />
<br />
<span style="font-size: 18px;">CHOOSING THE BEST BUSINESS ACQUISITION LOAN FOR YOUR NEEDS</span></h3>
<p><br />
<br />
<br />
<span style="font-size: 16px;">Senior lenders have priority over other creditors when liquidating a business. They will most often have in place specific restrictive terms and conditions of repayment - these are called covenants and often involve specific ratios in the financial statements.</span></p>
<h4><br />
<br />
<br />
<span style="font-size: 18px;">VENDOR FINANCING: THE SELLER NOTE SOLUTION </span></h4>
<p><br />
<br />
<br />
<span style="font-size: 16px;">It's not uncommon for sellers to help finance their purchase with a note, sometimes referred to as a seller note or ' VTV ' - Vendor take back from the seller.</span></p>
<p><br />
<span style="font-size: 16px;">The seller agrees that they will be paid back over time, and in many cases, this is done through an incentivized deal where bonuses or other incentives are offered.<br />
<br />
<br />
This financing, also called an ' earn-out ', is a popular way for buyers to compensate sellers of a business; it is sometimes based on how much profit or loss a company produces during the repayment period.<br />
<br />
<br />
Vendor notes offer many benefits for buyers because they don't come with many conditions similar to senior lender conditions, and the interest cost is usually low. Plus, if purchasers face trouble repaying, the vendor will often cooperate.</span></p>
<h4><br />
<br />
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<br />
<span style="font-size: 18px;">CLOSING THE GAP - THE MEZZANINE FINANCING SOLUTION</span></h4>
<p><br />
<br />
<br />
<span style="font-size: 16px;">Mezzanine financing, also called cash flow finance, can be a flexible option for those looking to fill any gaps in their finances of business purchase to achieve the optimal financing structure.<br />
<br />
<br />
Mezzanine funding can be an excellent solution for bridging the gap between buyer investment and any available financing from bank loans, for example. The interest rates can be lower than those on traditional loans, which makes this deal more attractive in some instances. Typical structures are 3-5-year term amortizations.<br />
<br />
<br />
Mezzanine financing is sometimes called 'patient financing, 'as the company needs to have its cash flow available for repayment to senior lenders while it executes a growth strategy.</span></p>
<h4><br />
<br />
<br />
<span style="font-size: 18px;">GOVERNMENT LOANS FOR A BUSINESS PURCHASE</span></h4>
<p><br />
<br />
<br />
<span style="font-size: 16px;">Borrowers will find that not all banks or lenders they might deal with for traditional bank loans will be keen on providing loans for business acquisitions - this will include a business-oriented credit union. - Personal finances should be in order with a good credit history and credit score.</span></p>
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<span style="font-size: 18px;"> CHECK YOUR ELIGIBILITY</span></span></h4>
<p><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><br />
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For smaller transactions, the <a href="http://www.7parkavenuefinancial.com/startup-loans-government-business-loan-canada.html">Canada Small Business Financing Program</a> 'CSBFP ' will finance existing business purchases, including franchise financing. Talk to the <a href="http:// https://www.7parkavenuefinancial.com">7 Park Avenue Financial </a>team about how this program works, including eligibility criteria and info on loan payments tailored to your transaction size. This term loan is based on your historical and forecasted cash flow and your ability to make debt payments. A limited personal guarantee is required on the transaction - not for the full loan.</span></p>
<p><br />
<br />
<span style="font-size: 16px;">No personal assets are taken in government small business loan financing.</span></p>
<p><br />
<br />
<span style="font-size: 16px;">Financing options for government loans can include long-term loans based on the value of fixed assets such as land or buildings. Now, SBL Loans can finance working capital, intellectual property, or leverage existing resources, etc. Talk to the <b>7 Park Avenue Financial</b> team about the Business Development Bank solutions in this area. Many prospective small business owners will find government loans a suitable solution.</span></p>
<h4><br />
<br />
<br />
<span style="font-size: 18px;">ASSET-BASED LENDING / LEVERAGING THE ASSETS!</span></h4>
<p><br />
<br />
<br />
<span style="font-size: 16px;">Leveraged buyouts and asset-based financing solutions are quite common as<a href="http://www.7parkavenuefinancial.com/business-purchase-financing-takeover-finance.html"> business acquisitions </a>for firms with substantial assets relative to financing needs. In this financing structure, you leverage assets (equipment or property, accounts receivable / inventory ) to finance the acquisition with a commercial loan, typically via a non-bank lender.<br />
<br />
Seller financing can also be utilized in these types of ' ABL ' deals.</span></p>
<h4><br />
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<span style="font-size: 18px;"><span _fck_bookmark="1" id="cke_bm_153S" style="display: none;"> </span><br />
DO...YOUR DUE DILIGENCE!<span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span></span></h4>
<p><br />
<br />
<br />
<span style="font-size: 16px;">Due diligence means carefully examining a company's financial statements, income tax returns, and additional information to make an informed decision about your business purchase.<br />
<br />
<br />
The value of tangible assets (equipment, inventory, buildings, etc.) should be properly adjudicated. As a buyer, you should request everything that has a material impact on the business before making an offer. Focus on profits, the ability to forecast reasonable growth potential, and areas for potential improvement. Incorporate such ideas into a detailed <a href="http:// https://www.7parkavenuefinancial.com/business-plans.html">business plan</a> with proper financial projections that can be defended and are conservative and realistic.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><a href="https://www.7parkavenuefinancial.com/business-plan-expert-business-plan-services-canada.html"><b> 7 Park Avenue Financial prepares business plans</b> </a>that meet and exceed the requirements of banks, non-bank commercial lenders, and finance companies.<br />
<br />
<br />
A proper level of due diligence will make your purchase offer more sound and appealing to a lender / lenders.</span></p>
<h4><br />
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<span style="font-size: 18px;"><span _fck_bookmark="1" id="cke_bm_135S" style="display: none;"> </span><br />
POST-ACQUISITION FINANCING NEEDS?</span></h4>
<p><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_135E" style="display: none;"> </span></span><br />
</p>
<p><br />
<br />
<span style="font-size: 16px;">Financing Operations upon the Purchase: The purchase of a business always comes with some level of future financial needs and consideration to obtain financing. You will have multiple options for financing operations after purchasing your new company: cash reserves or self-funding, business lines of credit, sales leasebacks, etc. Business credit cards or a business line of credit are helpful for businesses with immediate access to funds at a set limit, and you only pay interest on funds you draw.<br />
<br />
<br />
Invoice financing is an arrangement that allows a business to finance its business sales via the financing of invoice receivables. Small companies mostly use it to improve working capital and cash flow without a term business loan. There are two leading solutions - traditional factoring and <a href="https://www.7parkavenuefinancial.com/confidential-receivable-financing-ar-factoring.html">Confidential Receivable Financing</a>.</span></p>
<h5><br />
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<span style="font-size: 16px;"><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_153S" style="display: none;"> </span><br />
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<span style="font-size: 18px;"> CONCLUSION - BUSINESS ACQUISITION FINANCING<br />
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TALK TO THE EXPERTS</span><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h5>
<p> </p>
<p><br />
<br />
<span style="font-size: 16px;">Let the <a href="http:// https://www.7parkavenuefinancial.com/financing-services.html"><b>7 Park Avenue Financial team</b></a>, a t<a href="https://www.7parkavenuefinancial.com/Management-Credentials">rusted, credible, and experienced Canadian business financing firm</a>, want to be your partner in financing your loan application.</span></p>
<p> </p>
<p><span style="font-size: 16px;">We will demonstrate customized solutions tailored uniquely to your <a href="http:// http://www.7parkavenuefinancial.com/financing-a-business-purchase.html">business purchase needs</a> and requirements around the target business credit score so that you can know that your investment and optimal loan structure will lead to business success without surprises. Guaranteed the ability to secure financing for the business acquisition you are contemplating. </span></p>
<p> </p>
<p class="western"> </p>
<p class="western"><span style="font-size: 18px;"><b>FAQ</b></span></p>
<p class="western"> </p>
<p class="western"> </p>
<p class="western"> </p>
<p class="western"><b><span style="font-size: 16px;">What criteria do lenders look at when considering a business acquisition loan?</span></b></p>
<p class="western"><br />
<span style="font-size: 16px;">Lenders evaluate several factors before approving a business acquisition loan:<br />
• Buyer's credit history and financial stability: A good personal credit score and solid financial background can increase the likelihood of approval.<br />
• Business's financial performance: Lenders will want to review the business's financial statements, including profit and loss statements, balance sheets, and cash flow statements, to evaluate its profitability and stability.<br />
• Down payment: Generally, lenders expect buyers to put down a percentage of the purchase price. The required down payment can vary, but it's often between 10% and 25%.<br />
• Experience: Lenders may favour applicants with experience in the industry or in managing a business.<br />
• Collateral: For secured loans, lenders will require some form of collateral, which could be assets of the business or other personal assets.</span></p>
<p class="western"><br />
<br />
<b><span style="font-size: 16px;">How do business acquisition loans differ from traditional business loans?</span></b></p>
<p class="western"> </p>
<p class="western"><br />
<span style="font-size: 16px;"> While both types of loans provide financing for business-related expenses, business acquisition loans are intended explicitly for purchasing an existing business or franchise. As such, the approval process for an acquisition loan may involve deeper scrutiny of the target business's financials, history, industry trends, and associated risks. In contrast, traditional business loans are generally used for various purposes, such as expansion, purchasing equipment, or funding day-to-day operations.<br />
<br />
<br />
<b> How can a potential buyer determine the right price for a business?</b></span></p>
<p class="western"><br />
<span style="font-size: 16px;">Determining the right price involves research, financial analysis, and sometimes professional assistance. Key steps include:<br />
• Financial analysis: Reviewing the business's financial statements to evaluate profitability, debt, assets, and liabilities.<br />
• Market analysis: Comparing the business's asking price with similar businesses in the market.<br />
• Projected earnings: Estimating the business's potential and growth prospects.<br />
• Intangible factors: Considering non-tangible elements like brand reputation, customer loyalty, and intellectual property.<br />
• Professional valuation: Hiring a business valuation expert can provide an unbiased assessment of the business's worth.</span></p>
<p class="western"><br />
<br />
<span style="font-size: 16px;"><b>Are there any potential pitfalls to watch out for when using a loan to buy a business?</b><br />
<br />
<br />
Yes, here are a few pitfalls:</span></p>
<p class="western"><br />
<span style="font-size: 16px;"> • Over-leveraging: Borrowing more than you can afford to repay can put both the business and your assets at risk.<br />
• Not conducting due diligence: Failing to thoroughly investigate the business's finances, operations, and market position can lead to overpaying or inheriting undisclosed liabilities.<br />
• Restrictive loan terms: Some loans come with stringent terms or covenants that limit business flexibility.<br />
• Focusing only on interest rates: While rates are essential, consider loan terms, fees, and the lender's reputation and customer service.<br />
<br />
</span></p>
<p class="western"> </p>
<p class="western"><b><span style="font-size: 16px;">What's the difference between secured and unsecured business acquisition loans?</span></b></p>
<p class="western"> </p>
<p class="western"><br />
<span style="font-size: 16px;">Secured business acquisition loans require collateral, such as real estate, equipment, or other tangible assets, to guarantee the loan. If the borrower defaults on the loan, the lender has the right to seize and liquidate the collateral to recoup their funds. On the other hand, unsecured loans don't require collateral but typically have higher interest rates due to the increased risk to the lender. Approval for unsecured loans is often based on the borrower's creditworthiness and the financial health of the business being acquired.</span></p>
<p class="western"><br />
<br />
<b><span style="font-size: 16px;">Are there any potential tax implications to be aware of when financing a business acquisition?</span></b></p>
<p class="western"><br />
<span style="font-size: 16px;">Answer: How an acquisition is structured can have tax implications for both the buyer and seller. For instance, buying the assets of a business as opposed to its stock might have different tax consequences. It's crucial to consult with a tax advisor or accountant to understand the potential tax liabilities and benefits before finalizing the acquisition.</span></p>
<p class="western"><br />
<br />
<b><span style="font-size: 16px;">How does due diligence for a business acquisition loan differ from the due diligence for other business loan types?</span></b></p>
<p class="western"><br />
<span style="font-size: 16px;">Due diligence for a business acquisition loan focuses extensively on the target business's financial health, operations, and potential risks. It involves deeply reviewing financial statements, asset valuations, legal matters, operational processes, and industry trends. For other types of business loans, the emphasis might be more on the borrowing company's creditworthiness, repayment capability, and intended use of the funds.</span></p>
<p class="western"><br />
<br />
<b><span style="font-size: 16px;">Can the terms of a business acquisition loan be renegotiated after the purchase?</span></b></p>
<p class="western"><br />
<span style="font-size: 16px;">Answer: It's generally challenging to renegotiate loan terms after the purchase has been finalized, as the initial terms were based on risk assessments and valuations at the time of approval. However, some lenders might be open to discussions if there are significant changes in circumstances or if the business performs exceptionally well. Maintaining transparent communication with the lender and providing valid reasons for any renegotiation is essential.</span><br />
</p>
<p class="western"><br />
<b><span style="font-size: 16px;">What happens if the acquired business underperforms after the purchase?</span></b></p>
<p class="western"><br />
<span style="font-size: 16px;">If the acquired business underperforms, it could jeopardize the buyer's ability to repay loan debts</span><span style="font-size: 16px;">. The buyer should communicate any challenges with the lender promptly. Lenders might offer solutions such as restructuring the loan, adjusting payment terms, or providing additional advisory support. However, in the worst-case scenario, if the borrower defaults and the loan is secured, the lender might seize the collateral to recover the funds.</span><br />
<br />
<br />
<br />
<br />
</p>
</div>
<p><b><span style="font-size: 14px;">Click <a href="https://www.7parkavenuefinancial.com/FINANCING-TRACK-RECORD.html">here</a> for the business finance track record of 7 Park Avenue Financial</span></b></p>
<div class="blogger-post-footer">7 Park Avenue Financial
Canadian Business Financing </div>Stan Prokophttp://www.blogger.com/profile/03768625989302489257noreply@blogger.com0tag:blogger.com,1999:blog-3319278949078654457.post-4226380779969258702023-09-20T11:29:00.002-04:002023-09-20T11:29:05.977-04:00Asset Based Lending Canada - Reboot Your Business Credit Needs<script src="//platform.linkedin.com/in.js" type="text/javascript"> lang: en_US</script><script data-counter="top" data-url="http://http://7parkavenuefinancial.com" type="IN/Share"></script><span style="font-size: medium;"><strong><div style="color: black; font: bold 34px arial;">Asset Based Lending Canada - Reboot Your Business Credit Needs</div></strong></span>
<span style="font-family: arial; font-size: small;"><strong><div style="color: black; font: bold 30px arial;">Do Not Pass Go... Do Not Collect $ 200.00 Until You Have Looked At Asset Based Lending</div></strong></span>
<br />
<br />
<br />
<p></p>
<p> </p>
<p align="center"><strong><span style="font-size: 18px;">YOUR COMPANY IS LOOKING FOR FINANCING COMPANIES FOR ASSET BASED </span></strong></p>
<p align="center"><strong><span style="font-size: 18px;">LENDING IN CANADA!</span></strong></p>
<h2 style="text-align: center;"><span style="font-size: 18px;">THE ASSET BASED FINANCING SOLUTIONS</span></h2>
<p align="center"><span style="font-size: 18px;">You've arrived at the right address! Welcome to 7 Park Avenue Financial</span></p>
<p align="center"><span style="font-size: 18px;">Financing & Cash flow are the biggest issues facing businesses today</span></p>
<p align="center"><span style="font-size: 18px;">ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?</span></p>
<p align="center"><span style="font-size: 18px;"><a href="https://www.7parkavenuefinancial.com/Contact-Us.html">CALL NOW - DIRECT LINE - 416 319 5769 </a>- Let's talk or arrange a meeting to discuss your needs</span></p>
<p align="center"><span style="font-size: 18px;">EMAIL - <a href="mailto:INFO@7parkavenuefinancial.com">sprokop@7parkavenuefinancial.com</a></span></p>
<p align="center"><span style="font-size: 18px;">7 Park Avenue Financial<br />
South Sheridan Executive Centre<br />
2910 South Sheridan Way<br />
Oakville, Ontario<br />
L6J 7J8</span></p><p align="center"><span style="font-size: 18px;"> </span></p><h1 align="center"><span style="font-size: 18px;">Unlocking Capital: Asset-Based Lending Financing Companies in Canada | 7 Park Avenue Financial <br /></span></h1>
<p style="text-align: center;"><span _fck_bookmark="1" style="display: none;"> </span></p>
<p style="text-align: center;"><span style="font-size: 16px;"><span _fck_bookmark="1" style="display: none;"> </span></span> <br /></p>
<h2 style="text-align: center;"><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_78S" style="display: none;"> </span></h2>
<h2 style="text-align: center;"><span style="font-size: 18px;">ASSET BASED LENDING / LINES OF CREDIT - CANADA<span _fck_bookmark="1" id="cke_bm_78E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h2>
<p> </p>
<p style="text-align: center;"><span style="font-size: 16px;"><b> Table of Contents</b><br />
<br />
Introduction<br />
<br />
Understanding Asset-Based Lending (ABL)<br />
<br />
Comparing ABL with Traditional Bank Loans<br />
<br />
Asset-Based Lending in Canada: Meeting Diverse Funding Needs<br />
<br />
Assets Used in Asset-Based Financing<br />
<br />
Who Benefits from ABL Solutions?<br />
<br />
Understanding the Costs of Asset-Based Lending<br />
<br />
Lending Criteria and Transitioning Back to Traditional Financing<br />
<br />
Summary of the Benefits of Asset-Based Lending<br />
<br />
Conclusion</span><br />
<br />
<span style="font-size: 16px;"> FAQ</span></p>
<h6> </h6>
<h6><span style="font-size: 18px;">INTRODUCTION</span></h6>
<p> </p>
<p><span style="font-size: 16px;"><a href="http:// https://www.7parkavenuefinancial.com">Asset-based lending in Canada</a> offers a wide range of options <b>because </b>when it comes to exploring alternative finance strategies for your business, it's time to 'REBOOT' your thinking.</span></p>
<h2> </h2>
<h2><span style="font-size: 18px;">What is asset-based lending (<a href="http://www.7parkavenuefinancial.com/asset-based-lending-business-bank-abl.html">ABL</a>), and how does it work in Canada?</span></h2>
<p> </p>
<p><span style="font-size: 16px;">Asset-based lending is a financial strategy where a business secures a loan using the company's assets, such as accounts receivable, inventory, or equipment and commercial real estate as collateral. In Canada, ABL companies provide loans to businesses based on the value of these assets.</span></p>
<p> </p>
<p><span style="font-size: 16px;">Unlike traditional bank loans offering an unsecured loan that heavily relies on credit history, an asset-based loan solution primarily focuses on the quality and value of the assets used as collateral. While credit history may still be considered, it is generally not the sole determining factor for asset based lines of credit, making more flexible funding solutions from <a href="http://www.7parkavenuefinancial.com/asset-based-lending-lenders.html">asset-based lenders </a>more accessible to businesses with limited credit histories.</span></p>
<p> </p>
<p><span style="font-size: 16px;">Consider asset-based lending for the business finance solution you're seeking. Let's dig deeper!</span></p>
<p> </p>
<h2><span style="font-size: 18px;">DO CANADIAN BANKS MEET YOUR FINANCING NEEDS?</span></h2>
<p> </p>
<p><span style="font-size: 16px;">Many business owners and financial managers, particularly in the <a href="https://www.7parkavenuefinancial.com/sme-finance-commercial-financing-options-loans.html">SME sector</a> in Canada,, find that all their financial needs can not always be met by traditional Chartered bank / Credit Union sources. While Canadian banks continue to have virtually unlimited capital to serve business needs in many cases, the borrower can't meet the requirements needed to attain those solutions.</span></p>
<p> </p>
<p><span style="font-size: 16px;">So, while public companies and large, well-heeled corporations are borrowing at will, the challenge is much more difficult if you're not in one of those two categories.</span></p>
<p> </p>
<h2><span style="font-size: 18px;">COMPARING ASSET BASED FINANCING WITH UNSECURED BANK LOANS</span></h2>
<p> </p>
<p><span style="font-size: 16px;">Asset-based lending (ABL) and unsecured bank loans are two distinct financing options with different characteristics. Here's a comparison between the two when evaluating business growth opportunities:</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>1. Collateral vs. No Collateral:</b><br />
<br />
Asset-Based Lending (ABL): An <a href="http://www.7parkavenuefinancial.com/abl_lines_of_revolving_credit_asset_based_lending.html">ABL revolving line of credit </a>requires businesses to pledge specific assets, such as accounts receivable, inventory, equipment, or real estate, as collateral to secure the loan. The loan amount is typically based on these assets' value and requires fewer covenants. Unsecured Bank Loans: Unsecured bank loans do not require collateral. These loans are granted based on the borrower's creditworthiness and financial stability and are not tied to specific assets.<br />
<br />
<b>2. Access to Capital:</b><br />
<br />
ABL: ABL provides quicker access to capital since the focus is on the value of assets, making it a suitable option for businesses that need funds promptly.<br />
Unsecured Bank Loans: Unsecured bank loans may take longer to obtain due to the rigorous credit evaluation process, making them less suitable for businesses in urgent need of funds.<br />
<br />
<b>3. Credit Requirements:</b><br />
<br />
ABL: ABL is often accessible to businesses with limited credit histories or lower credit scores because the primary consideration is the value of assets used as collateral in the due diligence process<br />
Unsecured Bank Loans: Unsecured bank loans typically require a strong credit history and a good credit score since they rely heavily on the borrower's creditworthiness.<br />
<br />
<b>4. Loan Amounts:</b><br />
<br />
ABL: The loan amount in ABL is determined by the appraised value of the collateral assets. It can be a percentage of the asset's value.<br />
Unsecured Bank Loans: Unsecured bank loans may offer higher loan amounts than ABL, but the actual amount depends on the borrower's creditworthiness and financial stability.<br />
<br />
<b>5. Interest Rates:</b><br />
<br />
ABL:<a href="http://www.7parkavenuefinancial.com/abl-lending-asset-based-loan-rates.html"> Interest rates for ABL</a> can be higher than those for unsecured bank loans due to the perceived risk associated with the collateralized assets.<br />
Unsecured Bank Loans: Typically, unsecured bank loans offer lower interest rates to borrowers with strong credit profiles.<br />
<br />
<b>6. Risk to Assets:</b><br />
<br />
ABL: Businesses risk losing their collateral assets if they fail to repay an ABL loan, which can impact their operations.<br />
Unsecured Bank Loans: Unsecured bank loans do not put specific assets at risk; however, defaulting can negatively impact the borrower's credit rating.<br />
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<b> 7. Use of Funds:</b><br />
<br />
ABL: ABL funds are often used for specific purposes such as <a href="http://www.7parkavenuefinancial.com/asset-based-credit-line-working-capital-lines.html">working capital</a>, expansion, or acquisitions, which are related to the assets used as collateral.<br />
Unsecured Bank Loans: Unsecured bank loans offer more flexibility in using funds, allowing businesses to allocate the capital as needed.</span><br />
<br />
</p>
<h3><span style="font-size: 18px;">ASSET BASED LOANS MEET MANY FUNDING NEEDS</span></h3>
<p> </p>
<p><span style="font-size: 16px;">Enter... stage right... Asset-based lending in Canada. Through a variety of, shall we call them ' subsets' of Asset financing your company can achieve the financing structure it needs to either grow your business or in certain cases even acquire a business?</span></p>
<p> </p>
<h4><span style="font-size: 18px;">WHAT ASSETS ARE PART OF AN ASSET BASED FINANCING</span></h4>
<p> </p>
<p><span style="font-size: 16px;">Financing companies providing these solutions don't make it complicated either. They take all or certain of your assets (depending on the amount and type of capital you are looking for) and put them into a collateral pool you can borrow against. They can combine working capital/<a href="https://www.7parkavenuefinancial.com/asset-based-lending-business-credit-line.html">line of credit</a> solutions or even term loans if that makes sense.</span></p>
<p> </p>
<p><span style="font-size: 16px;">The assets in question? They include:</span></p>
<p> </p>
<p><span style="font-size: 16px;">Accounts Receivable</span></p>
<p><span style="font-size: 16px;">Inventory</span></p>
<p><span style="font-size: 16px;">Equipment</span></p>
<p><span style="font-size: 16px;">Tax credits</span></p>
<p><span style="font-size: 16px;">Real estate</span></p>
<p><span style="font-size: 16px;">Large contracts/orders</span></p>
<p> </p>
<p><span style="font-size: 16px;">And here's the good news. You can mix and match - Classic flexible financing!</span></p>
<p> </p>
<h5><span style="font-size: 18px;">WHO USES ABL ASSET BASED LENDING SOLUTIONS</span></h5>
<p> </p>
<p><span style="font-size: 16px;">So who is this type of financing well suited for? Typical clients we meet tend to be:</span></p>
<p> </p>
<p><span style="font-size: 16px;">High growth</span></p>
<p><span style="font-size: 16px;">Start-Ups</span></p>
<p><span style="font-size: 16px;">Restructuring</span></p>
<p><span style="font-size: 16px;">Acquisition oriented</span></p>
<p><a href="https://www.7parkavenuefinancial.com/management-buyout-mgmt-buy-out.html"><span style="font-size: 16px;">Management buyouts</span></a></p>
<p> </p>
<p><span style="font-size: 16px;">A key attraction in Asset-based lending in Canada is that it requires less equity as the focus is all about those assets.</span></p>
<p> </p>
<h5><span style="font-size: 18px;">WHAT DOES ASSET BASED LENDING COST</span></h5>
<p> </p>
<p><span style="font-size: 16px;">In business financing, it's not always a perfect world, so funding typical/interest rate costs offered by financing companies that are in effect, non-bank lenders are going to be higher, one reason being those finance firms borrow the funds they need for you from the banks! </span></p>
<p> </p>
<h5><span style="font-size: 18px;">LENDING CRITERIA AND THE BRIDGE BACK TO TRADITIONAL FINANCING </span></h5>
<p><span style="font-size: 16px;">We point out to our clients that if they can meet typical bank borrowing criteria, an asset-based line of credit will often be both competitive with the banks and, most importantly, give you a lot more borrowing power. The simple reason is that assets are more aggressively 'margined' or ' loaned against'. In many cases, companies that temporarily use Asset financing often migrate back to a traditional bank solution.</span></p>
<p> </p>
<p><b><span style="font-size: 18px;">SUMMARY OF THE BENEFITS OF ASSET BASED LENDING </span></b></p>
<p> </p>
<ul>
<li>
<p><span style="font-size: 16px;"><b>Improved Liquidity:</b> Asset-based lending provides immediate access to cash, helping businesses address short-term financial needs and improve their cash flow.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Flexibility:</b> It offers flexible financing solutions tailored to a company's specific requirements, allowing it to use the funds for various purposes, such as expansion, working capital, or debt consolidation.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Accessibility:</b> Asset-based lending is often more accessible to businesses with limited credit histories or lower credit scores since the focus is on the value of assets used as collateral.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Quick Approval:</b> The approval process for asset-based lending is typically faster than traditional bank loans, enabling businesses to secure funding promptly.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Enhanced Borrowing Capacity:</b> It allows businesses to borrow against a wide range of assets, potentially increasing their borrowing capacity compared to conventional financing.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Asset Preservation:</b> Businesses can retain ownership and use of their assets while using them as collateral, ensuring that operations continue uninterrupted.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Tailored Financing:</b> Asset-based lending can be customized to match a company's financial needs, providing a financing structure that aligns with its growth and operational goals.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Potential Cost Savings:</b> In some cases, asset-based lending may offer cost savings compared to other high-interest financing options, such as credit cards or unsecured loans.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Debt Management:</b> It can help businesses consolidate existing debts, simplifying their debt management and reducing the overall cost of borrowing.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Seasonal Support:</b> Asset-based lending is well-suited for businesses with seasonal fluctuations, allowing them to access capital during peak demand.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Collateral Diversification:</b> Businesses can use a mix of different assets as collateral, spreading risk across various asset types.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Credit Improvement:</b> Successful repayment of asset-based loans can positively impact a company's credit profile and potentially lead to better credit terms in the future.</span></p>
</li>
</ul>
<p> </p>
<p> </p>
<p> </p>
<h6><span style="font-size: 18px;">CONCLUSION</span></h6>
<p> </p>
<p><span style="font-size: 16px;">Asset-based lending is suitable for businesses with valuable assets but limited credit histories needing quick capital access. On the other hand, unsecured bank loans are better for companies with strong credit profiles that can afford a longer application process and seek more flexible use of funds without collateral requirements. The choice between the two depends on a business's financial situation and its specific financing needs.</span></p>
<p> </p>
<p><span style="font-size: 16px;">If your business is looking for innovative solutions for your firm's business assets and sales growth, </span><span style="font-size: 16px;">then call <a href="http:// https://www.7parkavenuefinancial.com/financing-services.html"><b>7 Park Avenue Financial</b></a>, a trusted, credible, experienced<a href="http://www.7parkavenuefinancial.com/Management-Credentials.html"> Canadian business financing advisor </a>who can assist you with your needs. It's time to ' reboot ' your thinking on the financing solution you require and work with a financial services provider with your interests in mind!</span></p>
<p> </p>
<h6><span style="font-size: 18px;">FAQ</span></h6>
<p> </p>
<p><span style="font-size: 16px;"><b>What types of assets can be used as collateral for asset-based loans in Canada?</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">In Canada, businesses can use various assets as collateral for ABL, including accounts receivable, inventory, machinery, equipment, real estate, and even intellectual property. The eligibility of assets may vary depending on the lending company's policies.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>How do Canadian businesses benefit from asset-based lending compared to traditional bank loans?</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">Asset-based lending in Canada offers more flexibility and quicker capital access than traditional bank loans. It allows businesses with strong asset bases but limited credit histories to secure financing, making it an attractive option for growth and working capital needs.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>What is the typical eligibility criteria for businesses seeking asset-based lending in Canada?</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">Eligibility criteria can vary among ABL financing companies, but businesses generally need valuable assets for collateral. Lenders may also consider the business's financial stability, industry, and repayment ability.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>What risks should Canadian businesses be aware of when using asset-based lending?</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">While asset-based lending can provide financing solutions, businesses should be cautious about losing their assets if they cannot repay the loan. Having a clear repayment plan and understanding the ABL agreement's terms and conditions is essential.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>What are the common industries or sectors that benefit the most from asset-based lending in Canada?</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">Asset-based lending can benefit manufacturing, wholesale distribution, retail, and service-based businesses. It's not limited to specific sectors and can adapt to the unique needs of different companies.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>Are there any restrictions on how businesses can use the funds obtained through asset-based lending in Canada?</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">Generally, asset-based lending allows businesses flexibility in how they use the funds. Whether it's for working capital, growth initiatives, debt consolidation, or acquisitions, the utilization of the funds is often determined by the business's specific needs.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>How does evaluating the value of assets for collateral work in asset-based lending in Canada?</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">The process involves a thorough assessment of the assets being offered as collateral. A qualified appraiser or valuation expert may be used to determine the value of assets like equipment, real estate, or accounts receivable. This valuation is crucial in determining the loan amount a business can secure.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>What is the typical duration of an asset-based lending agreement in Canada, and can it be renewed or extended?</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">The duration of asset-based lending agreements can vary but often ranges from one to three years. These agreements can be renewed or extended based on the lender's policies and the borrower's financial performance. Renewal terms are typically negotiated before the agreement's expiration.</span></p>
<p> </p>
<p><b><span style="font-size: 14px;">Click <a href="https://www.7parkavenuefinancial.com/FINANCING-TRACK-RECORD.html">here</a> for the business finance track record of 7 Park Avenue Financial</span></b></p>
<div class="blogger-post-footer">7 Park Avenue Financial
Canadian Business Financing </div>Stan Prokophttp://www.blogger.com/profile/03768625989302489257noreply@blogger.com0tag:blogger.com,1999:blog-3319278949078654457.post-17157364430458128092023-09-19T12:43:00.007-04:002023-09-19T12:44:42.872-04:00Getting The Most Out Of Canadian Lease Pricing and Best Lease Rates? <script src="//platform.linkedin.com/in.js" type="text/javascript"> lang: en_US</script><script data-counter="top" data-url="http://http://businessfinancingcanada.blogspot.ca" type="IN/Share"></script>
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<p> </p>
<p align="center"><b><span style="font-size: 18px;">YOUR COMPANY IS LOOKING FOR CAPITAL EQUIPMENT LEASING AND THE BEST LEASE RATES AND PRICING!</span></b></p>
<h2 style="text-align: center;"><span style="font-size: 18px;">Secrets of Lease Pricing for Smart Business Financing</span></h2>
<p align="center"><span style="font-size: 18px;">You've arrived at the right address! Welcome to 7 Park Avenue Financial</span></p>
<p align="center"><span style="font-size: 18px;">Financing & Cash flow are the biggest issues facing businesses today</span></p>
<p align="center"><span style="font-size: 18px;">ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?</span></p>
<p align="center"><span style="font-size: 18px;">CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs</span></p>
<p align="center"><span style="font-size: 18px;">EMAIL - <a href="mailto:INFO@7parkavenuefinancial.com">sprokop@7parkavenuefinancial.com</a></span></p>
<h1 align="center"><span style="font-size: x-small;"> </span></h1>
<h1 align="center"><span style="font-size: x-small;">Lease Pricing Best Rates Capital Equipment Finance | 7 Park Avenue Financial</span></h1><h1 align="center"><span style="font-size: x-small;"> </span><br /></h1><div class="flex flex-grow flex-col gap-3 max-w-full">
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<h2 style="text-align: center;"><span style="font-size: 18px;">Understanding Lease Financing: Unlocking the Best Lease Rates in Canada</span></h2>
<p> </p>
<h2><span style="font-size: 18px;">Exploring the Importance of Lease Rates and Terms</span></h2>
<p> </p>
<p><span style="font-size: 16px;">Leasing equipment and equipment loans are standard in Canada, but do you truly understand its intricacies when you purchase equipment or new <b>technology</b>?</span></p>
<p> </p>
<p><span style="font-size: 16px;">Many business owners seek ways to secure the best lease rates for their business equipment and technology needs in Canada while effectively managing capital equipment financing. This article will delve into the significance of comprehending business loan lease pricing and terms, offering valuable insights, tips, and strategies for making informed decisions.</span></p>
<p> </p>
<h2><span _fck_bookmark="1" style="display: none;"> </span></h2>
<h2><span style="font-size: 18px;">The Pitfall of Ignorance: End-of-Term Obligations</span><span style="font-size: 16px;"><span _fck_bookmark="1" style="display: none;"> </span></span></h2>
<p> </p>
<p><span style="font-size: 16px;">One of the most significant threats to equipment financing in Canada is the lack of awareness regarding factors that can impact the advantages of a lease, particularly the often-overlooked 'end of term' option. </span></p>
<p> </p>
<p><span style="font-size: 16px;">Astonishingly, numerous small and large businesses fail to grasp the importance of understanding and invoking their equipment financing options when their leases expire. Paradoxically, larger corporations often fare worse in this regard, as the complexities of managing numerous equipment leases can lead their systems to 'forget' critical details.</span></p>
<p> </p>
<p><span style="font-size: 16px;">But how can an end-of-term option prove costly? Surprisingly, many leases are structured to obligate your firm to continue paying the monthly lease payment if the notice or obligation is not handled correctly. Failure to return, buy, or formally extend a transaction can leave you in a perpetual payment cycle, which is far from ideal. </span></p>
<p> </p>
<p><span style="font-size: 16px;">Imagine leasing a $25,000 document copier, paying it off over five years with interest, only to find yourself paying for it again. To compound matters, the asset has depreciated and become outdated due to technological advancements. This situation is far from optimal.</span></p>
<p> </p>
<h2><span style="font-size: 18px;">Navigating Lease Pricing Options in Canada</span></h2>
<p> </p>
<p><span style="font-size: 16px;">In the Canadian capital equipment finance industry, lessors offer many pricing options, which can bewilder business owners and financial managers. To simplify the lease pricing process and secure the best rates, it is essential to perform fundamental research into the two primary types of leases: capital (also known as lease to own) and operating (also known as lease to use).</span></p>
<p> </p>
<p><span _fck_bookmark="1" style="display: none;"> </span></p>
<h3><span style="font-size: 18px;">Choosing the Right Lease Strategy</span><span style="font-size: 16px;"><span _fck_bookmark="1" style="display: none;"> </span></span></h3>
<p> </p>
<p><span style="font-size: 16px;">An operating lease strategy is prudent if your assets depreciate rapidly or require frequent upgrades to stay competitive. This approach, exemplified by computers and computer systems, presents benefits such as lower monthly payments, flexibility in returning and upgrading equipment, and the ability to effortlessly replace outdated technology at the end of the lease term. Operating leases often offer the most favourable lease rates compared to lease-to-own strategies. via a financial institution</span></p>
<p> </p>
<h3><span style="font-size: 18px;">Streamlining Lease Financing</span></h3>
<p> </p>
<p><span style="font-size: 16px;">Simple lease finance strategies can further reduce your monthly payment, with options like a bargain purchase at the end of the lease, effectively lowering your ongoing costs. Moreover, your interest rate on lease financing in Canada depends on factors such as your firm's credit quality, the type of asset you lease, and your choice of lessor. Given the segmented nature of the industry, partnering with the right lessor can translate into substantial cost savings throughout your financing relationship.</span></p>
<p> </p>
<h5><span style="font-size: 18px;"><span _fck_bookmark="1" id="cke_bm_96S" style="display: none;"> </span>Conclusion: Harnessing the Power of Lease Financing</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_96E" style="display: none;"> </span></span></h5>
<p> </p>
<p><span style="font-size: 16px;">In pursuit of the best lease pricing and terms? Call 7 Park Avenue Financial, a trusted, credible, experienced Canadian business financing advisor. </span></p>
<p><span style="font-size: 16px;">Their expertise can help you leverage the advantages of this potent capital equipment finance strategy, embraced by countless business owners daily. By mastering the nuances of lease financing, you can unlock the key to securing favourable lease rates and ensuring the long-term financial health of your enterprise. Don't leave your leasing fate to chance—make informed decisions and reap the rewards of right lease financing.</span></p>
<p> </p>
</div>
</div>
</div>
<p><span style="font-size: 16px;">To achieve the best lease pricing and terms, speak to <a href="https://www.7parkavenuefinancial.com/financing-services.html">7 Park Avenue Financial</a>, a <a href="https://www.7parkavenuefinancial.com/Management_Credentials.html">trusted, credible and experienced Canadian business financing advisor w</a>ho can help you, the business owner, maximize the benefits of this powerful capital equipment finance strategy used by thousands of business owners every day.</span></p>
<p> </p>
<h6><span style="font-size: 18px;"><span _fck_bookmark="1" id="cke_bm_96S" style="display: none;"> </span>FAQ</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_96E" style="display: none;"> </span></span></h6>
<p> </p>
<p><span style="font-size: 16px;"><b>Why is understanding lease financing crucial for my business?</b> </span></p>
<p> </p>
<p><span style="font-size: 16px;">Understanding leasing equipment financing companies and lease financing helps you secure the best interest rates and terms for equipment purchases, potentially saving thousands of dollars. It empowers you to make informed decisions and effectively manage your needs around new or used equipment financing.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>What are the risks of neglecting end-of-term obligations in leases?</b> </span></p>
<p> </p>
<p><span style="font-size: 16px;">Neglecting end-of-term obligations on a capital lease or fair market value lease can lead to continuous payments even after the lease ends. This costly oversight can leave you paying for outdated equipment, hindering your business's growth.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>How can I choose the right lease strategy for my business?</b> </span></p>
<p> </p>
<p><span style="font-size: 16px;">The choice between capital and operating leases depends on your asset's depreciation and upgrade needs. Capital leases from financial institutions such as a commercial leasing company offer ownership while operating leases provide flexibility and lower monthly payments.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>What factors affect my interest rate on lease financing in Canada?</b> </span></p>
<p> </p>
<p><span style="font-size: 16px;">Your interest rate is influenced by your firm's credit quality, down payment, the owner's and the business's credit score, the type of leased asset, and your lessor. Finding the right partner can result in substantial cost savings over the financing term.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>Why should I consult a Canadian business financing advisor for equipment leasing programs?</b> </span></p>
<p> </p>
<p><span style="font-size: 16px;">A reputable advisor can guide you through the complexities of lease financing, helping you maximize its benefits. Their expertise ensures you make the best financial decisions for your business around the best equipment purchases and financing possible.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>Are there tax benefits associated with lease financing in Canada?</b> </span></p>
<p> </p>
<p><span style="font-size: 16px;">Lease financing can offer tax advantages, such as deducting lease payments as business expenses. However, specific tax benefits may vary based on your business and the type of lease.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>What is residual value, and how does it affect lease terms?</b> </span></p>
<p> </p>
<p><span style="font-size: 16px;">Residual value is the leased asset's estimated worth at the lease term's end. It can impact lease payments and terms. A higher residual value typically leads to lower monthly payments.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>Can I terminate a lease early if my business circumstances change?</b> </span></p>
<p> </p>
<p><span style="font-size: 16px;">Early lease termination can be possible, but it often incurs penalties. Review your lease agreement to understand the terms and costs of early termination for leases and business loans when purchasing equipment to finance the asset.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>Are there industry-specific considerations for lease financing in Canada?</b> </span></p>
<p> </p>
<p><span style="font-size: 16px;">Different industries may have unique requirements and considerations for lease financing and loan terms. Tailoring your lease strategy to your specific business needs to finance equipment is essential. Almost any type of asset, from trucks to specialized medical equipment, can be financed.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>How does lease financing compare to traditional bank loans for acquiring equipment?</b> </span></p>
<p> </p>
<p><span style="font-size: 16px;">Lease financing via equipment financing lenders typically requires less upfront capital on the purchase price than an equipment loan and offers flexibility. Bank loans and unsecured business loans involve ownership from the outset and may require substantial down payments. Choosing between the two depends on your financial goals and circumstances. Business owners' personal credit scores and overall financial health are key to bank loan approvals. In contrast, commercial financing companies and online lenders have less stringent approval criteria to purchase the equipment required.</span></p>
<p><span style="font-size: 16px;">Companies using lease finance can conserve existing lines of credit. No minimum annual revenue is required when using an asset finance strategy.</span></p>
<p> </p>
<p><b><span style="font-size: 14px;">Click <a href="https://www.7parkavenuefinancial.com/FINANCING-TRACK-RECORD.html">here</a> for the business finance track record of 7 Park Avenue Financial</span></b></p>
<div class="blogger-post-footer">7 Park Avenue Financial
Canadian Business Financing </div>Stan Prokophttp://www.blogger.com/profile/03768625989302489257noreply@blogger.com0tag:blogger.com,1999:blog-3319278949078654457.post-21771311227709571012023-09-17T11:33:00.016-04:002023-09-17T11:35:44.733-04:00Construction Invoice Financing & Contractor Loans Funding <script src="//platform.linkedin.com/in.js" type="text/javascript"> lang: en_US</script><script data-counter="top" data-url="http://http://businessfinancingcanada.blogspot.ca" type="IN/Share"></script>
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<p> </p>
<p align="center"><b><span style="font-size: 18px;">YOUR COMPANY IS LOOKING FOR CONSTRUCTION INVOICE FINANCE!</span></b></p>
<h3 style="text-align: center;"><span style="font-size: 18px;">CONSTRUCTION FACTORING COMPANIES FOR SUB-CONTRACTORS</span></h3>
<p align="center"><span style="font-size: 18px;">You've arrived at the right address! Welcome to 7 Park Avenue Financial</span></p>
<p align="center"><span style="font-size: 18px;">Financing & Cash flow are the biggest issues facing business today</span></p>
<p align="center"><span style="font-size: 18px;">ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?</span></p>
<p align="center"><span style="font-size: 18px;">CALL NOW - Let's talk or arrange a meeting to discuss your needs</span></p>
<p align="center"><span style="font-size: 18px;">7 Park Avenue Financial<br />
South Sheridan Executive Centre<br />
2910 South Sheridan Way<br />
Oakville, Ontario<br />
L6J 7J8</span></p>
<p align="center"><span style="font-size: 18px;">Direct Line = 416 319 5769</span></p>
<p align="center"><br />
<span style="font-size: 18px;">Email = <a href="mailto:sprokop@7parkavenuefinancial.com">sprokop@7parkavenuefinancial.com</a></span></p>
<h3><br /></h3><p align="center"> </p>
<p align="center"><br /></p><h3><span style="font-size: 20px;">What Is Construction Invoice Factoring </span>- <span style="font-size: 20px;">Your Guide To Contractor Loan And Construction Invoice Financing</span></h3>
<p> </p>
<p><span style="font-size: 16px;"><a href="https://www.7parkavenuefinancial.com/home_page.html">Construction invoice factoring contractor loans</a> is all about the cash flow of your receivables outstanding from clients. This allows your business to fund payroll and operations successfully and consider working capital for growth projects and new clients while avoiding cash flow problems.</span></p>
<p> </p>
<h2><span style="font-size: 18px;">THE NEED FOR FUNDING IN CONSTRUCTION CREDIT</span></h2>
<p> </p>
<p><span style="font-size: 16px;">The construction industry presents unique challenges that can significantly impact a company's cash flow and financial stability.</span></p>
<p> </p>
<p><span style="font-size: 16px;">One of these challenges is the complexity of managing subcontractor payments to improve cash flow, which often involves intricate billing structures and timing around invoice value. Additionally, construction firms must contend with the potential threat of mechanics liens. </span></p>
<p> </p>
<p><span style="font-size: 16px;">These legal claims can be placed against a property when contractors or subcontractors are not paid promptly, causing disruptions in project timelines and financial setbacks. Furthermore, the industry is subject to various government regulations and compliance requirements that can further complicate financial operations.</span></p>
<p> </p>
<p><span style="font-size: 16px;">Construction invoice factoring can be a valuable tool for addressing these challenges by providing immediate cash flow to navigate the intricacies of the construction business while allowing companies to focus on delivering projects efficiently and profitably.</span></p>
<p> </p>
<p><span style="font-size: 16px;">Contractions and extraction companies, for example, need steady funds. The challenge is that traditional financing can rarely satisfy the needs of small construction companies due to their size and risk perception around their industry. An excellent example of that is <a href="https://www.attorneygeneral.jus.gov.on.ca/english/construction_law_in_ontario.php#:~:text=A%20construction%20lien%20is%20a%20charge%20or%20security,services%20or%20materials%20they%20supply%20on%20a%20project.">contractor holdbacks</a> and progress billings typically associated with the industry, with those holdbacks, of course, being government law! Naturally, the world done by your firm is also subject to mechanics liens, further complicating the matter.</span></p>
<p> </p>
<p><span style="font-size: 16px;">The challenge for a sub-contractor and factoring for construction subcontractors is to ensure you have an experienced Canadian business financing advisor and a construction factoring company who can help you fund construction receivables.</span></p>
<p> </p>
<p><span style="font-size: 16px;">Construction companies, large and small, play a key role in the Canadian economy. The industry's ability to secure cash flow and business financing to complete current jobs is key to its long-term success.</span></p>
<p> </p>
<h3><span style="font-size: 18px;">HOW THE RIGHT FACTORING COMPANY FINANCES CONSTRUCTION RECEIVABLES</span></h3>
<p> </p>
<p><span style="font-size: 16px;">The effective use of a factor/receivable type construction invoice finance allows a company to eliminate the wait time that otherwise might delay work if cash flow is not secure. Proper invoicing and financing assistance via a factoring agreement from a financing company allow the company to project cash flow needs for current and future projects. The ups and downs of cash inflows' timing is a key challenge to any firm in construction - cash flow might be plentiful today and less so tomorrow.</span></p>
<p> </p>
<p> </p>
<p> </p>
<h4><span style="font-size: 18px;">WHY CONSTRUCTION RECEIVABLE FINANCING WORKS</span></h4>
<p> </p>
<p><span style="font-size: 16px;">Those cash flow fluctuations, significant in nature, are why construction factoring and factoring construction receivables via construction invoice factoring companies work well for both startups and established firms. It's safe to say the clients of construction companies big and small would prefer to work with companies such as yours, knowing your firm can meet its obligations. </span></p>
<p> </p>
<h5><span style="font-size: 18px;">TRADITIONAL FINANCING IS NOT ALWAYS AVAILABLE.</span></h5>
<p> </p>
<p><span style="font-size: 16px;">The whole issue of subcontractor factoring / factoring construction invoices, and the type and nature of construction invoices vis a vis work completed, progress billing draws, application for payment, etc., make traditional financing challenging and seemingly inaccessible for many firms trying to get paid promptly while avoiding negative cash flow via a conventional bank loan.</span></p>
<p> </p>
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<h5><span style="font-size: 18px;">BANK REQUIREMENTS FOR A/R CONSTRUCTION FUNDING</span><span _fck_bookmark="1" id="cke_bm_78E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></h5>
<p> </p>
<p><span style="font-size: 16px;">That perceived risk, real or otherwise, forces many finance firms, banks, etc., to ask for additional collateral and the proverbial ' personal guarantee around a construction company's financing. Sometimes, ' credit insurance ' is one answer to the contractor finance challenge. Different types of firms within the construction industry have needs that vary as they assess the construction funding needed for larger jobs in their construction industry. </span></p>
<p> </p>
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<h6><span style="font-size: 18px;">CONSTRUCTION COMPANIES TYPICALLY ELIGIBLE FOR SALES FINANCING </span></h6>
<p> </p>
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<p><span style="font-size: 16px;">Typical contractors eligible for invoice and receivable financing include electrical, floor, roofing, scaffolding, drywall, drainage, flooring, tiling, brick, and carpentry firms.</span></p>
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<h4><span style="font-size: 20px;">HOW INVOICE FACTORING WORKS?</span></h4>
<p> </p>
<p><span style="font-size: 16px;">Putting an a/r factoring facility in place for a new project for your business allows your firm to be paid promptly, and for a construction company, that cash advance is critical cash flow. Knowing you have guaranteed cash flow will enable you to complete current projects and consider the next job. Due to the seasonality and timing of cash inflows in the construction business, knowing you have predictable cash flow is the key to success. With good profit margins, businesses can lower their financing costs around factoring company charges.</span></p>
<p> </p>
<p><b><span style="font-size: 16px;">EXAMPLE:</span></b></p>
<p> </p>
<p><span style="font-size: 16px;">Let's consider a factoring cost analysis with an invoice value of $50,000 and an advance of 80%:</span></p>
<p><span style="font-size: 16px;">You choose a factoring company that provides an advance of 80% of the invoice value, totalling $40,000.</span></p>
<p><span style="font-size: 16px;">You will receive the $40,000 immediately -The agreement clearly states a factoring rate of 2% over 30 days as an example</span></p>
<p><span style="font-size: 16px;">As your client makes the payment within the 30-day timeframe, the factoring company charges a 2% factoring fee of $1,000.</span></p>
<p><span style="font-size: 16px;">The balance of the invoice, i.e. the 20% holdback, is paid when the client pays the invoice.</span></p>
<p> </p>
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<p><span style="font-size: 16px;">A construction factoring company typically offers two types of construction invoice factoring:</span></p>
<p> </p>
<ol>
<li>
<p><span style="font-size: 16px;"><b>Spot Factoring:</b> This option comes into play when a company requires immediate cash and wishes to factor in a single invoice. Spot factoring is suitable for businesses facing a specific cash flow need due to an isolated invoice issue. It's worth noting that spot factoring can be pricier compared to contract factoring.</span></p>
</li>
<li>
<p><span style="font-size: 16px;"><b>Contract Factoring:</b> Similar to spot factoring, contract factoring involves a more extensive range of invoices. In this arrangement, the factoring company provides cash for each progress payment. Due to the higher volume of invoices involved, contract factoring often comes with more favorable rates.</span></p>
</li>
</ol>
</div>
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<p> </p>
<p> </p>
<br />
<h4><span style="font-size: 20px;">IS CONSTRUCTION INVOICE FINANCING A GOOD IDEA?</span></h4>
<p> </p>
<p><span style="font-size: 16px;">Suppose your firm is in constant need of cash. In that case, you typically invest in accounts receivable that force you to wait for client payment - that's why construction invoice factoring works. By generating immediate cash as soon as you invoice a client, you have eliminated the challenge of cash inflows. Therefore, this type of financing allows you to complete jobs and, importantly, consider positions that might be out of reach from a size perspective. Your firm can't wait for 90 days to collect payment.</span></p>
<p> </p>
<h5><span style="font-size: 18px;">IS PURCHASE ORDER FINANCING A SOLUTION?</span></h5>
<p> </p>
<p><span style="font-size: 16px;">At <a href="#">7 Park Avenue Financial, </a>we always meet clients who require financing to take on larger contracts but need the financing to do so. Sometimes, a <b>PURCHASE ORDER FINANCING</b> facility makes sense, allowing your suppliers to be paid directly for your materials. Any contractor or construction firm's general needs are typically general corporate functions such as payroll, supplier purchases, and ensuring your fixed costs and loan payments are current.</span></p>
<p> </p>
<h5><span style="font-size: 18px;">WHAT STAGE IS YOUR BUSINESS IN?</span></h5>
<p><span style="font-size: 16px;">The construction industry is varied - your firm might be in its early stages or, as we have discussed, lacking financing to grow and take on larger clients. The Canadian chartered banks have typically 'underserved ' these firms, leaving them ' debunked. The financial term ' concentration risk ' must also be considered, as some companies tend to have only one client or have most of their work at any time in one client. Commercial lenders view this as 'a concentration risk. '</span></p>
<p> </p>
<p><span _fck_bookmark="1" style="display: none;"> </span></p>
<p><span style="font-size: 20px;"><b>HOW DOES CONSTRUCTION FACTORING WORK?</b></span><span style="font-size: 16px;"><span _fck_bookmark="1" style="display: none;"> </span></span></p>
<p> </p>
<p><span style="font-size: 16px;">Certain vital issues must be addressed to make construction invoice factoring and financing for construction subcontracts work. Typically, your invoice will have an advance made to your firm in the 75-80% range. The excellent news with construction finance factoring is that you are not obligated to finance all your receivables, although certainly, you can if you choose. </span></p>
<p> </p>
<p><span style="font-size: 16px;">Your clients must pay the lender the full invoice amount, and your business still gets that additional balance owing to lower financing costs.</span></p>
<p> </p>
<p><span style="font-size: 16px;">Contractors, sub-contractors, and small construction companies should demonstrate decent gross margins on their pricing to clients to absorb the financing costs.</span></p>
<p> </p>
<p><span style="font-size: 16px;">Many firms are under the mistaken impression that this type of financing is a loan, thereby bringing debt to their balance sheet. That is not the case! These are not contractor loans. You are ' cash flowing ' an asset on your balance sheet already.</span></p>
<p> </p>
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<p><span style="font-size: 16px;">When considering financing options for their construction business, companies often weigh the advantages of construction invoice factoring against various alternatives. </span></p>
<p> </p>
<p><span style="font-size: 16px;">While construction invoice factoring offers quick access to cash based on outstanding invoices, comparing it to traditional financing sources like bank loans, lines of credit, and equity financing is essential. Bank loans and credit lines typically involve a lengthy approval process and stringent credit requirements, making them less accessible, especially for smaller construction firms.</span></p>
<p> </p>
<p><span style="font-size: 16px;">Equity financing may require giving up ownership stakes in the company. Factoring, on the other hand, emphasizes the creditworthiness of clients rather than the company itself, making it a viable option for those with less-than-stellar credit or those seeking a faster and more flexible funding solution. </span></p>
<p> </p>
<p><span style="font-size: 16px;">Choosing the right financing option depends on a construction company's specific needs and financial situation, making a thorough comparison crucial in making an informed decision.</span></p>
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<h6><span style="font-size: 18px;"><b><span _fck_bookmark="1" id="cke_bm_78S" style="display: none;"> </span>CONCLUSION <span _fck_bookmark="1" id="cke_bm_78E" style="display: none;"> </span></b></span></h6>
<p> </p>
<p><span style="font-size: 16px;">At 7 Park Avenue Financial, we are focused on ensuring construction businesses like yours can release cash flow from their construction projects. We focus on providing you with the capital injections you need on a short and long-term basis. That might also be in acquiring assets to run your construction business. Regarding your unpaid invoices, the right factoring company is job #1 at 7 Park Avenue Financial.</span></p>
<p> </p>
<p><span style="font-size: 16px;">The ability to have a partner that understands your business and can react quickly to your invoice discounting. We will consider how you do your work and bill clients, where your clients are located, your specific needs, and what type of sales growth you are currently experiencing and projecting. If necessary, we'll prepare your company's business plan and cash flow projections.</span></p>
<p><span style="font-size: 16px;">Knowing your estimated funding needs around the seasonality of your work and understanding when you might need additional ' bulge financing ' is the type of financing partner you should be focused on. Sometimes, your work might involve government contracts with unusual terms around completion, etc.</span></p>
<p> </p>
<p><span style="font-size: 16px;">At<a href="http:// https://www.7parkavenuefinancial.com"><b> 7 Park Avenue Financial</b></a>, we will ensure you get the maximum available advance on all your invoicing - in any business, knowing who to work with on business financing is key to your larger jobs. Successful financing needs /Seek out and speak to a <a href="https://www.7parkavenuefinancial.com/Management-Credentials">trusted, credible and experienced Canadian business financing advisor</a> who will assist you with your contractor invoice financing and other funding needs.</span></p>
<h6> </h6>
<h6><span style="font-size: 18px;">FAQ</span></h6>
<p> </p>
<p><span style="font-size: 16px;"><b>What is construction invoice factoring?</b><br />
<br />
Construction invoice factoring is a financial service where construction companies sell their outstanding invoices or receivables to a factoring company at a discount. In return, the construction company receives immediate cash, which can be used to cover expenses and finance ongoing operations. The factoring company then assumes responsibility for collecting the full invoice amount from the client.</span></p>
<p><br />
<br />
<span style="font-size: 16px;"><b>Why would a construction company consider invoice factoring instead of taking a traditional loan?</b><br />
<br />
There are several reasons:<br />
<br />
Speed: Factoring invoices can provide immediate liquidity, often within 24-48 hours, while traditional bank loans might take days or weeks to get approved.</span></p>
<p><br />
<span style="font-size: 16px;"> Credit Requirements: Factoring companies are typically more interested in the creditworthiness of the construction company’s clients than the company itself. This makes factoring a viable option for companies with less-than-stellar credit or relatively new ones.</span></p>
<p><br />
<span style="font-size: 16px;"> Flexibility: Invoice factoring doesn’t create debt on the construction company's balance sheet. The company is simply receiving an advance on money it's already earned.</span></p>
<p><br />
<span style="font-size: 16px;"> Cash Flow Management: Invoice factoring can bridge the gap between completing a project and receiving payment, ensuring uninterrupted operations for businesses with long payment cycles.</span></p>
<p><br />
<br />
<b><span style="font-size: 16px;">Are there any potential downsides or risks associated with construction company factoring?</span></b></p>
<p><br />
<br />
<span style="font-size: 16px;">Yes, there are potential drawbacks to consider:<br />
<br />
Cost: Factoring usually comes at a higher cost than traditional financing. The fees charged by the factoring company might erode profit margins.<br />
Dependency: Over-reliance on factoring can lead to a cycle where the company always needs advances to cover expenses rather than improving its cash flow management.<br />
Customer Relations: If the factoring company uses aggressive collection tactics, it might strain the construction company’s relationships with its clients.</span></p>
<p><br />
<br />
<b><span style="font-size: 18px;">How does the factoring company make money in this process?</span></b></p>
<p><br />
<br />
<span style="font-size: 16px;">Factoring companies earn money by charging fees or a percentage of the invoice. When a construction company sells its invoice to a factoring company, it typically receives a significant portion (e.g., 80-90%) of the invoice amount upfront. The remainder, minus the factoring fee, is paid to the construction company once the factoring company fully collects the invoice. The difference between the advanced and collected amounts, minus the reserved amount, is the profit for the factoring company.</span></p>
<p><br />
<br />
<span style="font-size: 16px;"><b>Is construction invoice factoring suitable for all types of construction companies?</b><br />
<br />
While invoice factoring can benefit many construction companies, especially those experiencing cash flow issues or rapid growth, it's not a one-size-fits-all solution. Factors to consider include the company's profit margins, the creditworthiness of its clients, its typical payment terms, and its overall financial health. Before diving into factoring, a company should evaluate all financing options, consult with financial advisors, and carefully review any agreement with a factoring company.</span></p><p><span style="font-size: 16px;"> </span></p><p><span style="font-size: 16px;"> </span></p><p><span style="font-size: 16px;"> </span></p><p><span style="font-size: 16px;"> </span></p><h3><br /></h3><p><span style="font-size: 16px;"> </span></p>
</div>
<div class="blogger-post-footer">7 Park Avenue Financial
Canadian Business Financing </div>Stan Prokophttp://www.blogger.com/profile/03768625989302489257noreply@blogger.com0tag:blogger.com,1999:blog-3319278949078654457.post-8589740401372844502023-09-15T12:49:00.011-04:002023-09-15T12:50:14.464-04:00How To Finance A Franchise In Canada <script src="//platform.linkedin.com/in.js" type="text/javascript"> lang: en_US</script><script data-counter="top" data-url="http://http://7parkavenuefinancial.com" type="IN/Share"></script><br />
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<p align="center"><b><span style="font-size: 18px;">YOU’RE LOOKING FOR FRANCHISE FINANCE ADVICE AND SOLUTIONS!</span></b></p>
<p align="center"><b><span style="font-size: 18px;">FUNDING YOUR NEW FRANCHISE BUSINESS LOAN </span></b></p>
<p align="center"><span style="font-size: 18px;">You've arrived at the right address! Welcome to 7 Park Avenue Financial</span></p>
<p align="center"><span style="font-size: 18px;">Financing & Cash flow are the biggest issues facing business today</span></p>
<p align="center"><span style="font-size: 18px;">ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?</span></p>
<p align="center"><span style="font-size: 18px;"><a href="https://www.7parkavenuefinancial.com/Contact-Us.html">CONTACT US</a> /CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs</span></p>
<p align="center"><span style="font-size: 18px;">EMAIL - <a href="mailto:INFO@7parkavenuefinancial.com">sprokop@7parkavenuefinancial.com</a></span></p>
<p align="center"><span style="font-size: 18px;">7 Park Avenue Financial<br />
South Sheridan Executive Centre<br />
2910 South Sheridan Way<br />
Oakville, Ontario<br />
L6J 7J8</span></p>
<p align="center"> <br /></p>
<p style="text-align: center;"><span _fck_bookmark="1" style="display: none;"> </span></p>
<h2 style="text-align: center;"><span style="font-size: 18px;">Financing Your Franchise in Canada: A Comprehensive Guide</span><span style="font-size: 16px;"><span _fck_bookmark="1" style="display: none;"> </span></span></h2>
<h2><br />
<br />
<span style="font-size: 18px;">Introduction </span></h2>
<p> </p>
<p><span style="font-size: 16px;">Embarking on a franchise venture in Canada? Worried about financing hurdles? It's a common concern for budding entrepreneurs. However, understanding the nuances of <a href="http://www.7parkavenuefinancial.com/financing-franchises-canada-franchising-loans.html">financing franchises</a> can turn this daunting task into a manageable one. Here's your essential guide to obtaining a franchise loan in Canada.</span></p>
<h2><br />
<br />
<span style="font-size: 18px;">Decoding Franchise Financing Options</span></h2>
<p><br />
<br />
<span style="font-size: 16px;">What’s Available to You?</span></p>
<p> </p>
<p><span style="font-size: 16px;">Determining the right kind of <a href="http://www.7parkavenuefinancial.com/loans-for-franchises-franchise-loan.html">franchise finance solution</a> is the first step. Whether you're launching a service-based venture or stepping into the hospitality sector, you need to blend term loans with working capital. Understanding your franchise's cost and associated risks is paramount.</span></p>
<p><br />
<br />
<span style="font-size: 16px;">The Importance of Creditworthiness A strong personal credit score not only smoothens your <a href="http://www.7parkavenuefinancial.com/franchise_finance_funding_business_loan.html">franchise loan approval </a>process but also fetches competitive interest rates. A solid financial plan further elevates your chances of acquiring optimal loan terms.</span></p>
<h2><br />
<br />
<span style="font-size: 18px;">Franchise Popularity in Canada </span></h2>
<p> </p>
<p><span style="font-size: 16px;">An interesting insight by Franchise 101 reveals the growing popularity of franchises. With approximately 76,000 outlets and a new one opening every 2 hours, franchises are becoming a mainstream business model in Canada.</span></p>
<h3><br />
<br />
<span style="font-size: 18px;">Personal Investments: The Equity Component </span></h3>
<p><br />
<br />
<span style="font-size: 16px;">Your own financial Stake: It's imperative for franchisees to inject personal funds into their venture to demonstrate their own equity position. This showcases commitment to both lenders and franchisors.</span></p>
<p><span style="font-size: 16px;">For those questioning, "Can I finance a franchise without any money?" the answer is clear: No. A harmonious blend of debt and equity is essential for success. In many cases, financing via multiple lenders might be needed to cobble together a full financing.</span></p>
<h3><br />
<br />
<span style="font-size: 18px;"> Importance of Business Plans and Cash Flow</span></h3>
<p><br />
<br />
<span style="font-size: 16px;">Crafting a Viable Repayment Strategy Incorporate your equity investment into your cash flow projections. A comprehensive balance sheet, reflecting both equity and financing, offers a clear snapshot to financial institutions. <a href="http:// https://www.7parkavenuefinancial.com/business-plans.html">7 Park Avenue Financial specializes in creating robust business plans</a>, ensuring they align with lender requirements.</span></p>
<h3><br />
<br />
<span style="font-size: 16px;"><span style="font-size: 18px;">Navigating Franchise Loan Structures</span></span></h3>
<p> </p>
<p><br />
<br />
<span style="font-size: 16px;">Understanding Loan Terms - Common franchise loans span between 5 to 7 years, enabling you to offset your debt within that timeframe. While considering future needs like asset replacement or working capital, remember that government-guaranteed loans, such as the Canada Small Business Financing Program, offer reliable franchise financing solutions. A notable 2021 amendment even allows financing the franchise fee as a loan component.</span></p>
<h3><br />
<br />
<span style="font-size: 18px;"> Maintaining Realistic Financial Assumptions</span></h3>
<p><br />
<br />
<span style="font-size: 16px;">Grounding Your Projections: While optimistic forecasts can be tempting, it's crucial to ground them in reality. This includes factoring in revenue timing, asset costs, growth rates, franchise fees via the franchise agreement, and the need for business lines of credit around day-to-day operations.</span></p>
<h4><br />
<br />
<span style="font-size: 18px;">Embracing Financial Fundamentals / Beyond Just Sales</span></h4>
<p> </p>
<p> </p>
<p><span style="font-size: 16px;">While sales are essential, a deep understanding of repayment structures, profits, cash flow, and fixed costs is equally crucial. Grasping these elements can significantly impact your franchise's success.</span></p>
<p> </p>
<h5><span style="font-size: 18px;"><span _fck_bookmark="1" id="cke_bm_96S" style="display: none;"> </span></span></h5>
<h5><span style="font-size: 16px;"><span style="font-size: 18px;">Conclusion<span _fck_bookmark="1" id="cke_bm_96E" style="display: none;"> </span></span></span></h5>
<p><br />
<br />
<span style="font-size: 16px;">Conclusion Navigating the franchise financing landscape in Canada might seem overwhelming, but it doesn’t have to be. While external collateral might not always be required, ensuring that your financial projections are sound is vital. Leveraging expertise, especially from<a href="http://www.7parkavenuefinancial.com/Management-Credentials.html"> trusted Canadian business financing advisors </a>like <a href="https://www.7parkavenuefinancial.com/financing-services.html">7 Park Avenue Financial</a>, can steer you toward your franchising goals with confidence.</span><br />
<br />
<br />
<br />
<span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_96S" style="display: none;"> </span><span style="font-size: 18px;"><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_99S" style="display: none;"> </span></span></p>
<h6><span style="font-size: 18px;">FAQ: FREQUENTLY ASKED QUESTIONS<span _fck_bookmark="1" id="cke_bm_99E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_96E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h6>
<h6> </h6>
<p> </p>
<h6><span style="font-size: 16px;"><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_78S" style="display: none;"> </span></span></h6>
<h6><span style="font-size: 16px;">What Is Franchise Financing?</span></h6>
<p> </p>
<h6><span style="font-size: 18px;"><span _fck_bookmark="1" id="cke_bm_78E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h6>
<p><span style="font-size: 16px;">The franchise business model will typically require a combination of owner down payment, aka personal equity, and external financing. The capital provided to <a href="http://www.7parkavenuefinancial.com/franchise_financing_franchisee_loan_buying.html">finance a franchise</a> will be a combination of an acquisition term loan and potential combinations of lines of credit and equipment financing. In certain franchise models, real estate might be a component of financing required. </span></p>
<p> </p>
<p><span style="font-size: 16px;">Franchise financing is the funding you need to start or expand a franchise business. In Canada, it's essential because it provides the capital necessary to enter the competitive franchise market and realize your entrepreneurial dreams via small business loans suited to the financing you require.</span></p>
<p><span style="font-size: 16px;">Generally speaking <a href="http://www.7parkavenuefinancial.com/financing_a_franchise_business_franchise_finance.html">franchisor financing</a>, i.e. funding from the franchisor, is not available- Franchisors sell franchises, they don't finance them! The franchise disclosure document provided by franchisors is a key read for prospective franchisees.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>Do banks give business loans for franchises?</b></span></p>
<p> </p>
<p><span style="font-size: 16px;"><span class="ILfuVd NA6bn"><span class="hgKElc">Canadian chartered banks and some credit unions provide franchise loans at a good interest rate. Still, the process to complete a <a href="http://www.7parkavenuefinancial.com/bank-franchise-loan-franchising-loans.html"> franchise bank loan </a>might be considered time-consuming because of the need for business financial statements around business credit, and buyer information, - as well as the requirement to provide personal collateral in the form of mortgages, and home equity loans and lines of credit by the franchise owner/business owner backed by a good credit report and personal credit history and minimum credit score in the 600+ range</span></span></span></p>
<h6> </h6>
<h6><span style="font-size: 16px;"><span _fck_bookmark="1" style="display: none;"> </span><span class="ILfuVd NA6bn"><span class="hgKElc"><span _fck_bookmark="1" id="cke_bm_96E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></span></span></h6>
<p><span style="font-size: 16px;"><b>What type of down payment do you have to put down to acquire a franchise? </b></span></p>
<p> </p>
<p><span style="font-size: 16px;">Franchisees looking to fund a franchise will normally be required to put between 20-50% down. The down payment varies based on a number of factors, including the type of financing, loan amount, and creditworthiness of the borrower.</span></p>
<p> </p>
<p> </p>
<p><span style="font-size: 16px;"><b>What types of franchise loans are available in Canada, and how do I choose the right one for my business?</b></span><br />
</p>
<p><span style="font-size: 16px;">Funding for franchise owners via Canadian franchise loans for a franchise purchase comes in various forms, including traditional commercial bank loan funding, <a href="http://www.7parkavenuefinancial.com/government_small_business_loan_sbl_financing.html">Government Small Business loans</a>, and franchise-specific financing options from non-bank alternative lenders who compete with traditional lenders such as chartered banks and credit unions. Choosing the right one depends on your financial situation and business needs when it comes to franchise businesses.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>Are there any unique benefits to franchise financing in Canada compared to other countries?</b></span><br />
</p>
<p><span style="font-size: 16px;">Yes, Canada offers stability, a strong franchising ecosystem, and government support programs for small businesses, making it an attractive destination for franchisees. These factors enhance your chances of success.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>What challenges might I face when seeking franchise financing in Canada, and how can I overcome them?</b></span><br />
</p>
<p><span style="font-size: 16px;">Challenges may include stringent lending requirements and competition for loans. Overcoming them involves thorough business planning, financial preparation, and seeking advice from experts in franchise financing and the franchise brand you have selected. The International Franchise Association is a good source of franchise information.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>How can franchise financing empower me to achieve long-term success in the Canadian market?</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">Franchise financing provides the necessary capital to launch or grow your franchise, giving you the resources to build a strong brand presence, attract customers, and secure a profitable future in Canada's dynamic business landscape.</span></p>
<p> </p>
<p><b><span style="font-size: 14px;">Click <a href="https://www.7parkavenuefinancial.com/FINANCING-TRACK-RECORD.html">here</a> for the business finance track record of 7 Park Avenue Financial</span></b></p>
<div class="blogger-post-footer">7 Park Avenue Financial
Canadian Business Financing </div>Stan Prokophttp://www.blogger.com/profile/03768625989302489257noreply@blogger.com0tag:blogger.com,1999:blog-3319278949078654457.post-16389467946707798402023-09-14T14:44:00.007-04:002023-09-14T14:44:40.830-04:00Turning Receivables into Cash: Exploring Debt Factoring<script src="//platform.linkedin.com/in.js" type="text/javascript"> lang: en_US</script><script data-counter="top" data-url="https://www.7parkavenuefinancial.com/home_page.html" type="IN/Share"></script><br />
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<h4 style="text-align: center;"><span style="font-size: 18px;">YOUR COMPANY IS LOOKING FOR RECEIVABLE DEBT FACTORING!</span></h4>
<h2 style="text-align: center;"><span style="font-size: 18px;">Boost Your Business Cash Flow with Accounts Receivable Financing</span></h2>
<p align="center"><span style="font-size: 18px;">You've arrived at the right address! Welcome to 7 Park Avenue Financial</span></p>
<p align="center"><span style="font-size: 18px;">Financing & Cash flow are the biggest issues facing business today</span></p>
<p align="center"><span style="font-size: 18px;">ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?</span></p>
<p align="center"><span style="font-size: 18px;"><b>CALL NOW - DIRECT LINE </b>- 416 319 5769 - Let's talk or arrange a meeting to discuss your needs</span></p>
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<p style="text-align: center;"><span style="font-size: 18px;">7 Park Avenue Financial<br />
South Sheridan Executive Centre<br />
2910 South Sheridan Way<br />
Oakville, Ontario<br />
<span style="font-size: 16px;">L6J 7J8</span></span></p><p style="text-align: center;"><span style="font-size: 18px;"><span style="font-size: 16px;"> </span></span></p>
<h1 style="text-align: center;"><span style="font-size: medium;">Debt Factoring Financing Via Business Factor Companies | 7 Park Avenue Financial</span><br /></h1>
<p> </p>
<h2 style="text-align: center;"><span style="font-size: 18px;">Boost Your Business Cash Flow with Debt Factoring</span></h2>
<p style="text-align: center;"> </p>
<h2><span _fck_bookmark="1" style="display: none;"> </span><br />
<br />
<span style="font-size: 18px;"> Understanding Debt Factoring and Business Factor Companies in Canada</span></h2>
<h2><span style="font-size: 18px;"><span _fck_bookmark="1" style="display: none;"> </span><br />
<br />
Introduction</span></h2>
<p><br />
<br />
<span style="font-size: 16px;">For Canadian business borrowers looking for financing, understanding the intricacies of debt factoring becomes essential. </span></p>
<p> </p>
<p><span style="font-size: 16px;">Often misinterpreted, this financial mechanism provides firms with a seamless way to generate cash flow without accumulating additional debt. Let's dig into the landscape of<a href="http://www.7parkavenuefinancial.com/finance-factoring-receivable-financing-canada.html"> debt factoring/invoice factoring and financing</a> in Canada and its relevance to businesses.</span></p>
<p> </p>
<h2><span style="font-size: 18px;">What Is Debt Factoring </span></h2>
<p> </p>
<p><span style="font-size: 16px;"><a href="http://www.7parkavenuefinancial.com/finance-factoring-receivable-financing-canada.html">Debt factoring</a> is a financial tool that empowers businesses to access the cash in their unpaid invoices without waiting for extended credit terms.</span></p>
<p> </p>
<p><span style="font-size: 16px;">Here's how it works: Businesses sell their accounts receivable to a third-party entity, known as a factor, at a discounted rate. In return, they receive immediate payment. The traditional a/r financing way this happens is that the finance firm takes responsibility for collecting the invoice when it matures, ultimately paying the seller the remaining balance after deducting fees. NOTE - Under non-notification a/r financing clients and bill and collect their own invoices, while still receiving all the benefits of financing receivables.</span></p>
<p> </p>
<p><span style="font-size: 16px;">Debt factoring offers valuable benefits, especially for small and emerging businesses. It helps stabilize cash flow, ensuring they meet their regular financial obligations. This, in turn, enables businesses to maintain their operations smoothly while also establishing and preserving their credibility and reputation in the market.</span></p>
<p> </p>
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<p><b><span style="font-size: 16px;">Debt factoring provides businesses with the means to:</span></b></p>
<p> </p>
<ul>
<li><span style="font-size: 16px;">Accelerate cash conversion cycles, leading to faster business cycles.</span></li>
<li><span style="font-size: 16px;">Streamline receivables management and credit control tasks, reducing time and effort.</span></li>
<li><span style="font-size: 16px;">Enhance business planning and forecasting accuracy thanks to consistent and predictable cash flows.</span></li>
</ul>
</div>
</div>
</div>
<p> </p>
<h2><br />
<br />
<span style="font-size: 18px;">Does Factoring Serve as a Cash Flow Lifeline?</span></h2>
<p><br />
<br />
<span style="font-size: 16px;">Business factor companies in Canada present their services as a cash flow lifeline. But the question remains: Does debt factoring, often called "receivable financing," truly serve its purpose? </span></p>
<h3><br />
<br />
<span style="font-size: 18px;">Unveiling Debt Factoring</span></h3>
<p><br />
<br />
<span style="font-size: 16px;">In finance, factoring is a transaction wherein companies receive cash in exchange for their sales invoices. Canadian businesses can expedite cash flow by "selling" these receivables to a factoring company. Whether a one-time transaction or a recurring one, factoring allows firms the flexibility to choose when and what they want to finance, ensuring strict obligations do not bind them.</span></p>
<h3><br />
<br />
<span style="font-size: 18px;">Debunking the Misconception: Debt Factoring Isn't Debt!</span></h3>
<p><br />
<br />
<span style="font-size: 16px;">Contrary to its name, factoring isn't a loan. Businesses aren't piling on debt; they're monetizing sales. Most Canadian factoring services operate on a recourse basis, which means that while companies can generate immediate cash, they're still responsible for collecting the owed amount from their customers. Time plays a pivotal role in this, with prompt collection benefiting the business significantly.</span></p>
<h4><br />
<br />
<span style="font-size: 18px;">Decoding the Cost of Factoring</span></h4>
<p><br />
<br />
<span style="font-size: 16px;">Understanding the cost structure of factoring is crucial and is often viewed as one of the disadvantages of debt factoring in Canada compared to bank financing - It is important to understand basic terms such as :</span></p>
<p><br />
<br />
<span style="font-size: 16px;"> The Advance Rate - The percentage of the invoice amount financed.<br />
The Fee - A percentage deducted as the finance company's profit.<br />
Time - Duration for which the invoice remains outstanding until customers pay</span></p>
<p><br />
<br />
<span style="font-size: 16px;">Factoring becomes a formidable financing option for a business with reputable clients and undisputed invoices. Firms typically receive up to 90% of their invoice's value upfront, with the remaining balance (minus the factoring fee) being remitted upon the client's payment.</span></p>
<p><br />
<br />
<span style="font-size: 16px;">But remember, the finance company's profit is directly linked to the invoice's outstanding duration. This is why efficient accounts receivable management becomes paramount in invoice management and the focus on improved cash flow - The key is a focus on asset turnover!!</span></p>
<h4><br />
<br />
<span style="font-size: 18px;">Choosing the Right Facility</span></h4>
<p><br />
<br />
<span style="font-size: 16px;">For many businesses, a<a href="https://www.7parkavenuefinancial.com/factoring-confidential-ar-finance.html"> <b>confidential A/R finance</b></a> facility strikes the right balance. It allows firms to finance their sales while retaining control over billing and collection processes.</span></p>
<p> </p>
<h4><span style="font-size: 18px;">Confidential Receivable Financing - Disclosed and non-disclosed A/R Financing</span></h4>
<p> </p>
<p><span style="font-size: 16px;">Disclosed factoring is commonly known as notified factoring. As the name implies, the seller will notify the buyers about the engagement of the factoring firm and instruct them to pay the invoice directly to the factor on the due date.</span></p>
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<p><span style="font-size: 16px;">The seller does not disclose the factor's involvement in non-disclosed factoring arrangements. As a result, it is also known as a <a href="http://www.7parkavenuefinancial.com/factoring-confidential-ar-finance.html">confidential factoring </a>deal.</span></p>
<h5><br />
<br />
<span style="font-size: 18px;">Conclusion</span></h5>
<p><br />
<br />
<span style="font-size: 16px;">The unparalleled advantage of debt factoring lies in its ability to consistently churn out cash flow as businesses roll out their products and services. Meeting everyday obligations becomes easier, propelling growth without the burden of carrying the investment of heavy accounts receivable.<br />
<br />
However, it's imperative to understand the associated costs. With financing fees ranging between .75 -1.5% from invoice factoring companies, businesses need solid gross margins to bear these factoring fees comfortably. Contrary to popular belief, these are fees, not interest rates.<br />
<br />
At <a href="http:// https://www.7parkavenuefinancial.com">7 Park Avenue Financial</a>, we know numerous business owners grapple with cash flow and working capital management. </span></p>
<p><span style="font-size: 16px;">Debt factoring provides a respite, ensuring day-to-day operations run smoothly. Talk to the </span><span style="font-size: 16px;"><a href="https://www.7parkavenuefinancial.com/Management-Credentials">7 Park Avenue Financial team</a>, seasoned Canadian business financing advisors ready to bring you the right financial solution. We guide businesses towards effective debt factoring strategies, a bridge to more traditional financing avenues.</span></p>
<p> </p>
<h6><span style="font-size: 18px;"><span _fck_bookmark="1" id="cke_bm_78S" style="display: none;"> </span>FAQ<span _fck_bookmark="1" id="cke_bm_78E" style="display: none;"> </span></span></h6>
<p> </p>
<p><b><span style="font-size: 16px;">What is cash flow debt factoring, and how does debt factoring work?</span></b></p>
<p><span style="font-size: 16px;">Debt factoring, or accounts receivable factoring, is a financial strategy where a business sells its outstanding invoices to a third-party invoice factoring company (factor) at a discount. This provides immediate cash flow, allowing the business to meet its financial needs via funding from the third party factoring company.</span></p>
<p> </p>
<p><b><span style="font-size: 16px;">What are the benefits of invoice factoring services/invoice discounting for businesses?</span></b></p>
<p><span style="font-size: 16px;">Debt factoring offers benefits such as improved cash flow, reduced credit risk, faster access to funds, and the ability to focus on core business operations instead of chasing unpaid invoices.</span></p>
<p> </p>
<p><b><span style="font-size: 16px;">How do business factor companies help with working capital management?</span></b></p>
<p><span style="font-size: 16px;">Business factor companies purchase a business's accounts receivables, injecting cash into the company. This cash can be used to pay suppliers, cover operating expenses, and invest in growth opportunities, optimizing working capital.</span></p>
<p> </p>
<p><b><span style="font-size: 16px;">Are there different types of debt factoring?</span></b></p>
<p><span style="font-size: 16px;">Yes, there are two primary types of debt factoring: recourse and non-recourse factoring. Recourse factoring requires the business to buy back uncollectible invoices, while non-recourse factoring protects against bad debt.</span></p>
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<p><span style="font-size: 16px;">Recourse Factoring:</span></p>
<ul>
<li><span style="font-size: 16px;">The factor doesn't assume credit risk or customer default risk.</span></li>
<li><span style="font-size: 16px;">Customer defaults, factor seeks recourse from the client.</span></li>
<li><span style="font-size: 16px;">Factor manages the sales ledger, but the client bears credit risk.</span></li>
</ul>
<p><span style="font-size: 16px;">Non-Recourse Factoring:</span></p>
<ul>
<li><span style="font-size: 16px;">The factor takes on credit risk and offers additional services.</span></li>
<li><span style="font-size: 16px;">Even if the customer defaults, the factor can't be recovered from the client.</span></li>
<li><span style="font-size: 16px;">Higher fees due to bearing the risk of non-payment.</span></li>
</ul>
<p> </p>
<ul>
<li><span style="font-size: 16px;">Non-recourse factoring typically has higher pricing when the factoring company assumes the risk</span></li>
</ul>
</div>
</div>
</div>
<p> </p>
<p><b><span style="font-size: 16px;">How can a business choose the right factor company?</span></b></p>
<p><span style="font-size: 16px;">Choosing the right factor company involves evaluating factors like fees, terms, reputation, and industry expertise. Finding a partner that aligns with your business's specific needs and goals is crucial.</span></p>
<p> </p>
<p> </p>
<p><b><span style="font-size: 16px;">What is the typical cost structure of a factor company's services?</span></b></p>
<p><span style="font-size: 16px;">A debt factoring company will charge a fee based on the invoice value and the time it takes to collect payment. These fees can vary, so it's essential to understand the terms before partnering with a commercial factor company.</span></p>
<p> </p>
<p><b><span style="font-size: 16px;">Can factor companies work with businesses in all industries?</span></b></p>
<p><span style="font-size: 16px;">While many factor companies serve various industries, some specialize in specific sectors. Finding a factor company familiar with your industry's unique needs is essential. Trucking companies and personnel agencies are two industries that utilize a/r financing solutions.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>What alternatives are there to debt factoring for business financing</b>?</span></p>
<p><span style="font-size: 16px;">Alternatives to debt factoring companies include traditional bank loans, lines of credit, venture capital, and angel investors or small business loans that are working capital oriented, such as <a href="https://www.7parkavenuefinancial.com/merchant_cash_advance_business_credit_card_loan.html"><b>merchant cash advances</b></a>. Each option has advantages and disadvantages, depending on the business's circumstances.</span></p>
<p> </p>
<p> </p>
<p><span style="font-size: 16px;"><b>Do factor companies handle debt collection and customer interactions</b>?</span></p>
<p><span style="font-size: 16px;">Yes, factoring companies often take on the responsibility of collecting customer payments. This can benefit businesses that want to offload the burden of chasing unpaid invoices as the debt factoring company takes control of collection practices</span></p>
<p> </p>
<p><b><span style="font-size: 16px;">Can businesses use debt factoring service as a long-term financing solution?</span></b></p>
<p> </p>
<p><span style="font-size: 16px;">Invoice financing is typically used as a short-term solution to address immediate cash flow needs. Businesses looking for long-term financing may explore options like equity or traditional loans.</span></p>
<p> </p>
<p><b><span style="font-size: 16px;">What Is Supplier Guarantee Factoring?</span></b></p>
<ul>
<li><span style="font-size: 16px;">Also known as 'drop shipment factoring,' 'vendor guarantee factoring,' or 'supply chain factoring.'</span></li>
<li><span style="font-size: 16px;">Involves three parties: the borrower, the factoring company, and the borrower's supplier.</span></li>
<li><span style="font-size: 16px;">Factor guarantees payment to the supplier when the borrower's buyer accepts goods.</span></li>
<li><span style="font-size: 16px;">Funds from factored invoices go directly to the supplier from the client's future receivables.</span></li>
<li><span style="font-size: 16px;">Factor deducts fees, remitting the profit to the client.</span></li>
<li><span style="font-size: 16px;">Factor plays a dual role: supplier payment guarantee and factoring service provider.</span></li>
<li><span style="font-size: 16px;">Enables businesses to pursue new opportunities by securing credit from suppliers, previously unavailable</span></li>
</ul>
<div class="blogger-post-footer">7 Park Avenue Financial
Canadian Business Financing </div>Stan Prokophttp://www.blogger.com/profile/03768625989302489257noreply@blogger.com0tag:blogger.com,1999:blog-3319278949078654457.post-20331509765572381842023-09-12T16:10:00.003-04:002023-09-12T16:10:23.939-04:00Unlocking the Power of Short Term Working Capital Loans for Canadian Businesses<script src="//platform.linkedin.com/in.js" type="text/javascript"> lang: en_US</script><script data-counter="top" data-url="https://www.7parkavenuefinancial.com/home-page.html" type="IN/Share"></script><br />
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<p align="center"><b><span style="font-size: 18px;">You Are Looking For Merchant Cash Advance Loan Financing!</span></b></p>
<h2 style="text-align: center;"><span style="font-size: 18px;">The New Wave of Financing: How Merchant Cash Advance Companies are Transforming Canadian Business</span></h2>
<p align="center"><span style="font-size: 18px;">You've arrived at the right address! Welcome to 7 Park Avenue Financial</span></p>
<p align="center"><span style="font-size: 18px;"> Financing & Cash flow are the biggest issues facing business today</span></p>
<p align="center"><span style="font-size: 18px;"> Unaware / Dissatisfied with your financing options?</span></p>
<p align="center"><span style="font-size: 18px;">Call Now! - Direct Line - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs</span></p>
<p align="center"><span style="font-size: 18px;">Email - <a href="mailto:INFO@7parkavenuefinancial.com">sprokop@7parkavenuefinancial.com</a> </span></p>
<p align="center"> </p>
<h1 align="center"><span style="font-size: small;">Understanding Merchant Cash Advances Financing | 7 Park Avenue Financial</span><br /></h1>
<p align="center"> </p>
<p align="center"> </p>
<h2><span style="font-size: 18px;">Understanding Merchant Cash Advances / Short-Term Working Capital Loans</span></h2>
<p> </p>
<p><span style="font-size: 16px;">For small businesses, retailers, restaurants, and similar entities in Canada, the options for achieving working capital and business financing can sometimes be limited. Enter a new solution, creatively named but referring to the same financing mechanism - <a href="http://www.7parkavenuefinancial.com/business_to_business_merchant_cash_advance_loans.html">The business cash advance</a>.</span></p>
<p> </p>
<h2><span _fck_bookmark="1" style="display: none;"> </span><span _fck_bookmark="1" id="cke_bm_135S" style="display: none;"> </span></h2>
<h2><span style="font-size: 18px;">What Are Merchant Cash Advances and How Does The Merchant Cash Advance Work?</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_135E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h2>
<p> </p>
<p> </p>
<p><span style="font-size: 16px;">Often going by names like "<a href="http://www.7parkavenuefinancial.com/merchant_advance_business_funding_cash_flow.html">merchant cash advance</a>," "small business loan," or "c<a href="http://www.7parkavenuefinancial.com/business-credit-canada-loans-finance.html">redit card advance </a>sales loan," these facilities cater to the short and intermediate-term cash flow and working capital needs of businesses.</span></p>
<p><span style="font-size: 16px;">The merchant cash advance rose to prominence as businesses, often retail-oriented, noticed the diminishing or non-existent traditional financing sources. Although this financing method is generally pricier than the conventional one, it serves its purpose, offering working capital based on future sales.</span></p>
<p><span style="font-size: 16px;">It's crucial to understand that this isn't a typical loan that burdens your balance sheet with heavy debt. Instead, it's an 'advance' against upcoming sales. Think of it as an immediate finance against the sales you make, which you repay via a percentage of your future sales.</span></p>
<p> </p>
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<h3><span style="font-size: 18px;">A Practical Example</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_135E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h3>
<p> </p>
<p><span style="font-size: 16px;">To illustrate, if you're advanced, for instance, $10,000 for your working capital needs, a percentage (usually between 10-30%) of your future sales will go towards repaying that advance. </span></p>
<p> </p>
<p><span style="font-size: 16px;">This method is most effective when you have a strong sales revenue model coupled with robust gross margins on your offerings.</span></p>
<p> </p>
<h3><span _fck_bookmark="1" style="display: none;"> </span></h3>
<h3><span style="font-size: 18px;">Is It Suitable for Your Business?</span><span style="font-size: 16px;"><span _fck_bookmark="1" style="display: none;"> </span></span></h3>
<p> </p>
<p> </p>
<p><span style="font-size: 16px;">While it's a relatively new alternative financing form, it often becomes the go-to option when traditional bank financing avenues are no longer viable. Thousands of firms sell and finance their receivables. Essentially, with this method, you're selling and financing a portion of your anticipated sales, which, for many businesses, is a logical step.</span></p>
<p> </p>
<p><span style="font-size: 16px;">It's worth noting that this financing is unsecured. The "collateral" here is the future sales, which, while expected, aren't guaranteed. The average monthly sales is reviewed in the context of repayment ability.</span></p>
<p> </p>
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<h3><span style="font-size: 18px;">How Long Should You Rely on This Method Of Financing?<span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h3>
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<p><span style="font-size: 16px;">As a rule of thumb, merchant cash advances are excellent for short and intermediate-term financial strategies. For the long haul, it would be wise to devise a longer-term financing strategy for your business.</span></p>
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<h4><span style="font-size: 18px;">Acquiring a Merchant Cash Advance</span></h4>
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<p><span style="font-size: 16px;">Securing a merchant cash advance or business credit card loan is generally straightforward and based on a short review of your business credit profile. The central requirement is to showcase your sales revenue through bank and/or credit card statements. However, it's common for small business owners to act as guarantors for this kind of unsecured loan financing.</span></p>
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<h5><span style="font-size: 18px;">Conclusion</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h5>
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<p><span style="font-size: 16px;">If you're in a small business and find yourself juggling financial needs daily, call <a href="https://www.7parkavenuefinancial.com/financing-services.html">7 Park Avenue Financial</a>, a <a href="https://www.7parkavenuefinancial.com/Management-Credentials">trusted and experienced Canadian business financing advisor</a>, about merchant cash flow advance / working capital financing. </span></p>
<p> </p>
<h2><span style="font-size: 18px;">FAQ</span></h2>
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<p><span style="font-size: 16px;"><b>What is a Merchant Cash Advance?</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">A Merchant Cash Advance (MCA) is a form of financing where businesses receive an upfront sum of cash in exchange for a percentage of their future credit card sales. It's essentially an advance against your future revenues, deposited into your business bank account, designed to provide immediate working capital.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>How is a Merchant Cash Advance different from a traditional loan?</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">Unlike traditional loans, an MCA is not repaid in fixed installments or over a set period. Instead, repayment is based on a percentage of the daily credit card sales. Furthermore, short-term working Capital Loans often don't require collateral in the traditional sense, as future credit card sales serve as the "collateral." They typically have a faster approval process than conventional loans/bank loan-type financing.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>How do businesses repay a Merchant Cash Advance?</b></span></p>
<p> </p>
<p> </p>
<p><span style="font-size: 16px;">Businesses repay the MCA through a predetermined percentage of their daily sales, including debit and credit card sales transactions. This percentage is automatically deducted daily or weekly (depending on the agreement) until the advance is fully repaid. This means that during higher sales, more is paid back, and during slower periods, less is paid back.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>Who can benefit most from a Merchant Cash Advance?</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">Short Term Working Capital Loans are particularly beneficial for businesses with strong credit card sales, such as retailers and restaurants. They're ideal for those needing quick access to capital, especially if traditional banks have turned them down or have exhausted other financing options. It's also suitable for businesses with fluctuating revenues as the repayment aligns with their sales patterns.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>Are there any downsides to consider with Merchant Cash Advances?</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">While Short Term Working Capital Loans offer quick access to funds, they often come with higher costs than traditional loans. Since repayments are based on a percentage of sales, businesses must maintain healthy sales to manage repayments effectively. It's also crucial to understand the terms thoroughly, as some Short Term Working Capital Loans can have steep fees or less favourable terms than other financing methods. Businesses using business advance loans typically cant qualify for bank loans.</span></p>
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<p><span style="font-size: 16px;"><b>How are the interest rates or fees determined for a Merchant Cash Advance?</b></span></p>
<p> </p>
<p><span style="font-size: 16px;"> Interest rates or fees for Short Term Working Capital Loans are often not presented as a traditional annual percentage rate (APR) but rather as a factor rate ranging from 1.1 to 1.5 or higher. This rate is multiplied by the advance amount to determine the total amount the business owes. The factor rate is determined based on the business's sales history, the amount of advance, the anticipated repayment time, and the perceived risk associated with the advance.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>Can a business obtain a Merchant Cash Advance if it doesn't accept credit card payments?</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">While Short Term Working Capital Loans are traditionally designed for businesses that accept credit card payments, some providers offer advances based on overall sales through Automated Clearing House (ACH) withdrawals. In this model, the lender would look at the business's bank account transactions and sales volume to determine eligibility and repayment terms.</span></p>
<p> </p>
<p> </p>
<p><span style="font-size: 16px;"><b>Are there any industries for which a Merchant Cash Advance may not be suitable?</b></span></p>
<p><span style="font-size: 16px;">Yes, industries with low credit card transaction volumes or high ticket but low-frequency sales might not be the best fit for an MCA. Examples include B2B companies, manufacturers, or wholesalers. Businesses with slim profit margins must also be careful, as the advance repayment could significantly impact their bottom line.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>What happens if a business is unable to repay the Merchant Cash Advance?</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">If a business struggles with repayments, the MCA provider might offer to adjust the withholding percentage, extending the repayment term. However, unlike traditional loans, Short Term Working Capital Loans don't have a set maturity date, so there can be additional fees or consequences for prolonged repayment. </span></p>
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<p> </p>
<p><span style="font-size: 16px;"><b>How quickly can a business access funds through a Merchant Cash Advance?</b></span></p>
<p><span style="font-size: 16px;"> One of the significant advantages of Short Term Working Capital Loans via a merchant cash advance company is the speed at which businesses can access funds. Once approved, businesses can receive the advance within 24-48 hours, making it an attractive option for those needing capital. However, the exact time can vary based on the merchant cash advance provider, the specifics of the application and the final formula around merchant cash advance payments.</span></p>
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<p><b><span style="font-size: 14px;">Click <a href="https://www.7parkavenuefinancial.com/FINANCING-TRACK-RECORD.html">here</a> for the business finance track record of 7 Park Avenue Financial</span></b></p>
<div class="blogger-post-footer">7 Park Avenue Financial
Canadian Business Financing </div>Stan Prokophttp://www.blogger.com/profile/03768625989302489257noreply@blogger.com0tag:blogger.com,1999:blog-3319278949078654457.post-26743963422535162662023-09-11T13:17:00.004-04:002023-09-11T13:17:56.135-04:00DIY Equipment Finance & Leasing Canada? Best Companies for Asset & Lease Equipment Needs<script src="//platform.linkedin.com/in.js" type="text/javascript"> lang: en_US</script><script data-counter="top" data-url="https://www.7parkavenuefinancial.com/home-page.html" type="IN/Share"></script><br />
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<p align="center"><b><span style="font-size: 18px;">You Are Looking for Equipment Finance Companies for Asset Leasing! </span></b></p>
<h2 style="text-align: center;"><span style="font-size: 18px;">Equipment Finance Companies: A Comprehensive Guide for Canadian Business Owners</span></h2>
<p align="center"><span style="font-size: 18px;">You've arrived at the right address! Welcome to 7 Park Avenue Financial </span></p>
<p align="center"><span style="font-size: 18px;"> Financing & Cash flow are the biggest issues facing businesses today</span></p>
<p align="center"><span style="font-size: 18px;"> Unaware / Dissatisfied with your financing options?</span></p>
<p align="center"><span style="font-size: 18px;">Call Now! - Direct Line - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs</span></p>
<p align="center"><span style="font-size: 18px;"> Email: <a href="mailto:INFO@7parkavenuefinancial.com">sprokop@7parkavenuefinancial.com</a></span></p>
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<h1 align="center">Equipment Finance Companies Lease Solutions |7 Park Avenue Financial<br /></h1>
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<h2><span style="font-size: 16px;">INTRODUCTION</span></h2>
<p><span style="font-size: 16px;"> In the vibrant economy of Canada, business owners often face a pivotal question: to purchase an asset outright or to delve into the arena of equipment leasing?</span></p>
<p> </p>
<p><span style="font-size: 16px;">This seemingly straightforward choice is riddled with layers of complexity, especially given the country's evolving landscape of equipment finance. This guide aims to unravel these complexities, offer insights into equipment leasing, and highlight the importance of making informed decisions or seeking expert advice.</span></p>
<p><span style="font-size: 16px;">When the Canadian business owner or financial manager looks to lease an asset instead of a purchase, it’s a great time to invest in some knowledge about which companies to approach for equipment finance needs.</span></p>
<p> </p>
<p><span style="font-size: 16px;">But can you be expected to be a 'DIY' expert in this broad area of Canadian business financing? We are saying that it will pay you handsomely to either invest some time in understanding some critical fundamentals of equipment finance or work with an expert who can assist you.</span></p>
<p> </p>
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<h3><span style="font-size: 18px;">Equipment Finance Companies: A Comprehensive Guide for Canadian Business Owners</span><span style="font-size: 16px;"><span _fck_bookmark="1" style="display: none;"> </span></span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_78E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h3>
<p> </p>
<p><span style="font-size: 16px;">Why invest some time in this type of business acquisition? The Canadian lease landscape has evolved significantly over the last couple of years. A combination of the economy in Canada, the lease industry players, new accounting rules and a myriad of product offerings can make it seem daunting.</span></p>
<p> </p>
<p><span style="font-size: 16px;">By the way, we're quite sure any business owner can work with lease companies and enter somewhat quickly into a lease for an asset, but is it the right lease, and what are the financial implications and benefits or lack of benefits around that transaction? That’s the $50,000 question!</span></p>
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<h3><span style="font-size: 18px;">The Significance of Equipment Finance in Canada </span><span style="font-size: 16px;"><span _fck_bookmark="1" style="display: none;"> </span></span></h3>
<p> </p>
<p><span style="font-size: 16px;">Because almost 80% of all businesses utilize leasing in Canada - that’s why it sometimes is both easy and misunderstood. Many business owners don't understand the lease product/service offering or fail to recognize the benefits. Yes, it's only one method of financing an asset (you can consider a term loan)... but when a lessor/lease company recognizes that you know what you're talking about, you have increased your chances for success.</span></p>
<p> </p>
<h3><span style="font-size: 18px;">The Changing Landscape of Equipment Leasing</span></h3>
<p> </p>
<p><span style="font-size: 16px;">Lease and equipment finance doesn’t bring cash flow and working capital into your company, but it reduces the funds that go out of your firm! The ownership of the equipment by the lessor for the lease term allows you to structure payments, write off payments as an operating expense, and, more importantly, keep you 'nimble' when it comes to assets and technologies that you finance over short or long terms. (Typical lease terms in Canada range from 3-5 years).</span></p>
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<h4><span style="font-size: 18px;">The Risks and Rewards: Making the Right Lease Choice</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_96E" style="display: none;"> </span></span></h4>
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<p><span style="font-size: 16px;">Business owners might want to do the math, but we're pretty sure that if you work the numbers, it makes sense to enter into a couple of short-term equipment finance transactions rather than purchase/buy outright the same assets over several years.</span></p>
<p> </p>
<h4><span style="font-size: 18px;"><span _fck_bookmark="1" id="cke_bm_96S" style="display: none;"> </span>Understanding the Benefits of Lease Over Outright Purchase</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_96E" style="display: none;"> </span></span></h4>
<p> </p>
<p><span style="font-size: 16px;">If you invest time in understanding some lease finance basics or work with an expert, you'll see that you can determine when it makes sense to upgrade, return, or renew any lease finance transaction.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>Deciphering Lease Finance Basics: When to Upgrade, Return, or Renew</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">Can our DIY lease financing business owner affect the final credit and structure approval of his or her transaction? The reality is that stricter credit standards have existed since the 2008-2009 global recession and the recent COVID-19 pandemic. Therefore, the industry focuses on creditworthy lessees- but the good news is that some basic structuring around any transaction can still make your deal happen. Issues such as terms, pricing and down payment can be negotiated to the point where it makes sense for the lessor and your firm.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>The Tax Implications of Equipment Leasing in Canada</b>:</span></p>
<p> </p>
<p><span style="font-size: 16px;">Companies considering leasing should consider the tax benefits and considerations when opting for equipment leasing. Explore how leasing can offer tax deductions, the difference between capital and operating leases from a tax perspective, and the impact of taxes on the overall cost of leasing.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>The Value of Expertise: Working 7 Park Avenue Financial</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">Working with an experienced Canadian business lease financing advisor can ensure you get the best pricing and structure and achieve the benefits you're looking for.</span></p>
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<h5><span style="font-size: 18px;">CONCLUSION</span><span style="font-size: 16px;"><span _fck_bookmark="1" id="cke_bm_96E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h5>
<p> </p>
<p><span style="font-size: 16px;">So, everyone’s talking about 'DIY' these days. Why not invest some time in developing a solid relationship with a lease advisor? Success in asset leasing allows you to grow your company with the assets you require... today!</span></p>
<p> </p>
<p><span style="font-size: 16px;">In a world where 'DIY' has become the mantra, understanding equipment financing holds a unique place for Canadian business owners. While leasing can offer numerous benefits regarding flexibility, cash flow, and staying updated with technology, making well-informed choices is imperative. Whether you invest time in mastering the basics or collaborate with a seasoned lease advisor, what's paramount is ensuring that your options align with your business objectives.</span></p>
<p><span style="font-size: 16px;">Remember, success in asset leasing isn't just about acquiring assets; it's about acquiring them smartly and strategically to fuel your business growth today and tomorrow. Call <a href="https://www.7parkavenuefinancial.com/financing-services.h"><b>7 Park Avenue Financial</b></a>, a<a href="https://www.7parkavenuefinancial.com/financing-services.html"> </a><a href="https://www.7parkavenuefinancial.com/Management-Credentials">trusted, credible, experienced business financing advisor</a><a href="https://www.7parkavenuefinancial.com/financing-services.html">.</a></span></p>
<p> </p>
<h6><span style="font-size: 18px;">FAQ</span></h6>
<p> </p>
<p><span style="font-size: 16px;"><b>What exactly is equipment finance?</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">Equipment finance refers to securing assets or equipment for business operations through leasing or loans instead of purchasing them outright. It's a financial solution that allows businesses to access essential equipment while preserving cash flow and potentially taking advantage of certain tax benefits.</span></p>
<p> </p>
<p> </p>
<p><span style="font-size: 16px;"><b>Why would a business lease equipment from leasing companies rather than buy it outright? </b></span></p>
<p> </p>
<p><span style="font-size: 16px;">There are several reasons:</span></p>
<ul>
<li><span style="font-size: 16px;"><b>Cash Flow Conservation</b>: Leasing can allow businesses to conserve cash, as it often requires a smaller initial outlay than purchasing, as well as tailored monthly lease payments for capital lease or fair market value leases that make good business sense</span></li>
<li><span style="font-size: 16px;"><b>Tax Benefits</b>: Lease payments can sometimes be written off as operating expenses and business expense under equipment lease financing rules offering tax advantages. Companies should talk to a tax advisor on larger transactions to maximize benefits.</span></li>
<li><span style="font-size: 16px;"><b>Flexibility</b>: Leasing can provide businesses the opportunity to upgrade to new equipment and newer <b>technologies </b>quickly once their lease term ends via customized solutions</span></li>
<li><span style="font-size: 16px;"><b>Preserve Credit Lines</b>: Leasing doesn't tie up credit lines, preserving them for other business needs where traditional financing from banks might be more suited to grow your business - New or used equipment can be financed. A <b>sale leaseback</b> solution can be considered when refinance existing assets to improve cash flow.</span></li>
</ul>
<p> </p>
<p> </p>
<p><span style="font-size: 16px;"><b>How has the Canadian lease landscape evolved in recent years? </b></span></p>
<p> </p>
<p><span style="font-size: 16px;">Over the past few years, the Canadian lease landscape has witnessed significant changes due to economic shifts in Canada, entrance and exit of lease industry players, changes in accounting rules, and a plethora of product offerings. Moreover, after the 2008-2009 global recession, credit standards became tougher, placing more emphasis on creditworthiness.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b>What's the typical term for equipment leases in Canada?</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">Typical equipment lease terms in Canada range from 3 to 5 years. However, the exact duration can vary based on the type of asset, the leasing company, and the specific needs of the lessee.</span></p>
<p> </p>
<p><span style="font-size: 16px;"><b> How can a business ensure it's getting the best deal when leasing equipment?</b></span></p>
<p> </p>
<p><span style="font-size: 16px;">Businesses can increase their chances of securing the best leasing deal by investing time in understanding lease finance basics. It's also beneficial to work with an experienced lease financing advisor such as 7 Park Avenue Financial , who can provide insights, assist in negotiations, and ensure the lease terms align with the business's objectives.</span></p>
<p> </p>
<p><b><span style="font-size: 14px;">Click <a href="https://www.7parkavenuefinancial.com/FINANCING-TRACK-RECORD.html">here</a> for the business finance track record of 7 Park Avenue Financial</span></b></p>
<div class="blogger-post-footer">7 Park Avenue Financial
Canadian Business Financing </div>Stan Prokophttp://www.blogger.com/profile/03768625989302489257noreply@blogger.com0tag:blogger.com,1999:blog-3319278949078654457.post-24368756569337764192023-09-08T15:21:00.002-04:002023-09-08T15:21:11.968-04:00Construction Manufacturing Equipment Financing – Options for New and Used Equipment <script src="//platform.linkedin.com/in.js" type="text/javascript"> lang: en_US</script><script data-counter="top" data-url="https://www.7parkavenuefinancial.com/home-page.html" type="IN/Share"></script><br />
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<p align="center"><b><span style="font-size: 18px;">YOUR COMPANY IS LOOKING FOR CONSTRUCTION MANUFACTURING EQUIPMENT FINANCING </span></b></p>
<h2 style="text-align: center;"><span style="font-size: 18px;">OPTIONS FOR NEW AND USED EQUIPMENT HEAVY EQUIPMENT FINANCING</span></h2>
<p align="center"><span style="font-size: 18px;">You’ve arrived at the right address! Welcome to 7 Park Avenue Financial </span></p>
<p align="center"><span style="font-size: 18px;"> Financing & Cash flow are the biggest issues facing businesses today</span></p>
<p align="center"><span style="font-size: 18px;"> ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?</span></p>
<p align="center"><span style="font-size: 18px;">CALL NOW – DIRECT LINE – 416 319 5769 – Let’s talk or arrange a meeting to discuss your needs</span></p>
<p align="center"><span style="font-size: 18px;">EMAIL – <a href="mailto:INFO@7parkavenuefinancial.com">sprokop@7parkavenuefinancial.com</a></span></p>
<p align="center"> </p><h1 align="center">Construction Equipment Financing | 7 Park Avenue Financial<br /></h1>
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<h2><span style="font-size: 18px;">The Role of Construction Equipment Financing in Canada</span></h2>
<p><span style="font-size: 18px;">Construction Manufacturing Equipment Financing plays a considerable role in the Canadian economy. Business owners and financial managers such as you want to ensure they have the best leasing and financing options available to them – It has been proven that financing equipment via leasing is very cost-effective.</span></p>
<p> </p>
<h2><span style="font-size: 18px;">Benefits of Matching Lease Terms with Equipment Use</span></h2>
<p><span style="font-size: 18px;">One of the many essential features of such financing is the ability to match the lease term with your expected use and the residual value of the equipment. Generally, lease financing for used and new manufacturing equipment can be arranged for terms varying from 3 to 5 years.</span></p>
<p> </p>
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<h3><span style="font-size: 18px;">Understanding the Economic Life of Assets</span><span _fck_bookmark="1" style="display: none;"> </span></h3>
<p> </p>
<p><span style="font-size: 18px;">No one knows better than the business owner what the useful expected equipment life of the asset will be, and we encourage clients to match the lease financing transaction term with the asset's economic life. The reality is of course, that trucks/rolling stock and construction manufacturing assets / heavy duty equipment have significantly longer useful expected values – (as compared to assets such as technology and computers!)</span></p>
<p> </p>
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<h4><span style="font-size: 18px;">The Importance of Consulting a Lease Financing Advisor</span><span _fck_bookmark="1" style="display: none;"> </span></h4>
<p> </p>
<p><span style="font-size: 18px;">We encourage clients to work with a trusted, credible, experienced lease financing advisor. The benefit of such knowledge can save you many thousands of dollars based on the overall rate, term and structure of your lease transaction.</span></p>
<h4> </h4>
<h4><span style="font-size: 18px;">Comparing Financing Options: Leasing vs. Loans</span></h4>
<p><span style="font-size: 18px;">There are other financing options when it comes to acquiring such assets – those options could include a government small business loan or a term loan from banks. While these might have a lower rate to the overall transaction, they come with much more stringent credit criteria – heavy emphasis is placed on your firm's balance sheet and income statement. Leasing, in general, places a larger emphasis on the expected value of the asset during the term and at the end of the lease.</span></p>
<p> </p>
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<h4><span style="font-size: 18px;">Financing Additional Costs and Leveraging Existing Assets</span><span _fck_bookmark="1" style="display: none;"> </span></h4>
<p><span style="font-size: 18px;">Many customers don’t realize that some of the additional costs related to the acquisition of used and/or new construction manufacturing equipment can also be financed via leasing companies – these include maintenance, installation, shipment, etc. That’s a massive cash flow and working capital benefit.</span></p>
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<h4><span style="font-size: 18px;"><b>Sale Leasebacks </b></span><b><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></b></h4>
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<p><span style="font-size: 18px;">In some instances, your firm might already own such assets, and you might want to consider leveraging them through a sale-leaseback for additional cash flow and working capital. That is an excellent financing strategy that many firms have taken advantage of over the last year, as cash flow and working capital availability tightened significantly during the global credit crisis of 2008 and 2009 during the COVID-19 pandemic of 2019. Owners adopted a strategy of leveraging their asset equity to stay liquid and competitive.</span></p>
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<h4><span style="font-size: 18px;"><span _fck_bookmark="1" id="cke_bm_153S" style="display: none;"> </span>Lease Financing as a Cash Flow Strategy</span><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span></h4>
<p><span style="font-size: 18px;">Many financial managers view lease financing of such assets as a solid cash flow strategy; you minimize payments and match them to the overall benefits of the equipment you are acquiring.</span></p>
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<h5><span style="font-size: 18px;"><span _fck_bookmark="1" id="cke_bm_153S" style="display: none;"> </span>Conclusion: The Importance of Strategic Lease Financing Planning</span><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span></h5>
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<p><span style="font-size: 16px;">Both loans and leases offer distinct advantages and financial flexibility when it comes to financing equipment.</span></p>
<p><span style="font-size: 16px;">With loans, you're actively building equity with each payment, and by the end of the repayment period, you own the equipment outright. This mode of financing also allows for the depreciation of the asset for tax purposes, and the equipment stands as an asset on your balance sheet, enhancing the financial standing of your business. Generally speaking, a high credit score is required for bank loans and term loans for financing assets.</span></p>
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<p><span style="font-size: 16px;">Another advantage is that there are no constraints on how much you can use the equipment in terms of hours and wear. Essentially, installment payments mean you're not just paying for usage, but also accumulating ownership.</span></p>
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<p><span style="font-size: 16px;">On the other hand, leasing is particularly beneficial for businesses looking to reduce initial costs. Typically, lease payments under a lease contract are lower than loan installments, making it a cost-effective short-term option. </span></p>
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<p><span style="font-size: 16px;">Instead of tying up equity in machinery, businesses can allocate their funds to other operational areas. The essence of leasing is that you're paying for the use of the equipment, and once the lease term concludes, you have the flexibility to either return the equipment or buy it. This flexibility extends to replacing machinery, as you can easily return and upgrade to newer models at the end of a lease, ensuring your business always has access to the latest equipment without the hassles of ownership.</span></p>
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<h5><span _fck_bookmark="1" id="cke_bm_153S" style="display: none;"> </span><span style="font-size: 18px;">Heavy Machinery Financing And Leasing - Loans Canada</span><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span></h5>
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<p><span style="font-size: 18px;">Call <a href="http:// https://www.7parkavenuefinancial.com/financing-services.html"><b>7 Park Avenue Financial</b></a>, a <a href="https://www.7parkavenuefinancial.com/Management-Credentials"><b>trusted credible and experienced business financing adviso</b>r</a>. Focus on which benefits of lease financing are most important to your firm. Structure and acquisition that makes sense from a cash flow, rate, and term structure based on the asset's value and your current financial condition. That is solid business planning for growth.</span></p>
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<h6><span style="font-size: 18px;">FAQ:</span><span style="font-size: 18px;"><span _fck_bookmark="1" id="cke_bm_153E" style="display: none;"> </span><span _fck_bookmark="1" style="display: none;"> </span></span></h6>
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<p><br />
<span style="font-size: 16px;"><b>What is construction equipment financing?</b><br />
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Construction equipment financing refers to the various financial products and services that allow businesses to acquire construction machinery and equipment loan options for their job site without paying the full amount upfront. Instead, they can lease or finance the equipment, paying for it over a set period, often with interest. Often 100% financing is available on most equipment and heavy machinery, so no large down payment is required for the right equipment selected by the borrower.</span></p>
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<span style="font-size: 16px;"><b>How does leasing construction equipment differ from purchasing it outright?</b><br />
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Leasing construction equipment allows businesses to use the machinery for a specified period without owning it. At the end of the lease term, they can choose to return the equipment, purchase it, or renew the lease. Purchasing equipment outright means the business owns the asset immediately, bearing all the ownership responsibilities. Leasing for construction companies can offer more flexibility and might be more cost-effective in the short term, especially for equipment that quickly depreciates or becomes obsolete via tailored loan payments/lease payments. </span></p>
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<span style="font-size: 16px;"><b>What factors should businesses consider when leasing and buying construction equipment?</b></span><br />
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<p><span style="font-size: 16px;">Businesses should consider several factors, including the equipment's expected lifespan and technological relevance, their current cash flow, the tax implications of leasing versus buying, the total cost of ownership (including maintenance and potential resale value), and their long-term equipment needs. Additionally, the flexibility of updating equipment and the potential impact on their balance sheet might influence the decision.</span></p>
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<span style="font-size: 16px;"><b>Are there any additional costs besides the equipment's price in construction equipment financing?</b><br />
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Yes, depending on the financing or leasing agreement terms, there can be additional costs in heavy equipment leasing - Along with interest rates on financed amounts, service and maintenance fees, insurance costs, and potential penalties for early lease termination or missed payments. Some agreements might also include provisions for additional expenses related to equipment delivery, installation, and training.<br />
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<b> Can businesses finance used construction equipment, or is it limited to new equipment?</b><br />
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Businesses can typically finance both new and used construction equipment via a heavy equipment loan or lease in the construction and manufacturing industries. Private sales are not allowed, so financing is limited to dealers . The terms, interest rates, and duration might vary based on the age and condition of the used equipment. Financing used equipment can be a cost-effective solution for businesses that do not require the latest models or for those looking to maximize their budget. However, ensuring that any used equipment is in good working condition and meets the business's needs is essential to borrow money for used equipment.</span></p>
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<p><b><span style="font-size: 14px;">Click <a href="https://www.7parkavenuefinancial.com/FINANCING-TRACK-RECORD.html">here</a> for the business finance track record of 7 Park Avenue Financial</span></b></p>
<div class="blogger-post-footer">7 Park Avenue Financial
Canadian Business Financing </div>Stan Prokophttp://www.blogger.com/profile/03768625989302489257noreply@blogger.com0