WELCOME !

Thanks for dropping in for some hopefully great business info and on occasion some hopefully not too sarcastic comments on the state of Business Financing in Canada and what we are doing about it !

In 2004 I founded 7 PARK AVENUE FINANCIAL. At that time I had spent all my working life, at that time - Over 30 years in Commercial credit and lending and Canadian business financing. I believe the commercial lending landscape has drastically changed in Canada. I believe a void exists for business owners and finance managers for companies, large and small who want service, creativity, and alternatives.

Every day we strive to consistently deliver business financing that you feel meets the needs of your business. If you believe as we do that financing solutions and alternatives exist for your firm we want to talk to you. Our purpose is simple: we want to deliver the best business finance solutions for your company.



Showing posts with label business to business financing. Show all posts
Showing posts with label business to business financing. Show all posts

Monday, February 18, 2019

Does Your Firm Need Bank Lines Of Credit ? Ready For Canadian Business To Business Financing ?


















Don’t You Need Bank Financing ? Here’s How it Works !



Information on bank lines of credit . Why business to business financing requires specialized finance knowledge



For every complaint you hear about Canadian business to business financing and our chartered banks (Trust us, we hear a few!) there are still some great things happening in commercial business banking in Canada . Let's examine bank lines of credit, and your need for such a facility to grow you sales and profits.

Canadian businesses use operating lines of credit to finance current assets. Typically those asset categories are predominantly accounts receivable and inventory.

So how do banks facilitate this borrowing arrangement? The typical manner in which this is done is to simply have a document executed that provides the bank with a conditional assignment of accounts receivable, your inventories, and any other current assets.

Canadian bank operating facilities are also called demand loans, because they are typically secured by another document called a GSA, which stands for Genera Security Agreement. This document, as you can imagine, allows the bank to ' call ' your firms loan at any time .It's just common sense that Canadian banks do never with to ' call ' those loans, its simply their protection if and when things go awry.

Clients are sometimes under the mistaken impression that bank lines of credit are good for an indefinite amount of time. Typically however they are renewed annually - which requires a review by your account manager.

If there is one other very common question asked by clients it revolves around how exactly the banks calculate lines of credit. The formula is not as complicated as you think! A typical business to business financing on a Canadian chartered bank line of credit margins your accounts receivable at 75% or their value. Its critical here to note that the bank uses 90 days as a measurement tool - no receivables over 90d days can be margined, or in effect ' borrowed against ‘. Why is that? Again, common sense prevails, in that the bank, (and us too by the way!) makes an assumption that the receivables over 90 days are uncollectible to a certain extent. Your firm might think differently, but that’s how it’s done.

Inventory. Wow! What a different kettle of fish this is! If we had to generalize, but be as specific as we can be for info purposes we can say that in general banks really wrestle with inventory financing. Margining and inventory percentages are very different based on your industry, as well as the composition of your inventory. (Inventory typically comes in three categories: raw materials, work in process, and finished goods)

Typical bank financing of inventory usually never exceeds 50% and at the same time usually has a cap on the facility, meaning that even if your inventory is growing it still might be subject to a maximum of financeability.

The take away here is that banks aren’t in the inventory business, these assets are much harder to liquidate than receivables, and rarely does a lender ' win ' in an inventory liquidation!

So let’s get back to the security the bank takes on bank lines of credit. Do your clients find out about this? In Canada they would normally never be notified unless there is a default by your firm on the line of credit facility. In that case you clients would receive a notification of assignment, in which the bank would direct your clients to pay them directly, reducing the loan of course.

Banks register their security with the appropriate provincial and federal authorities, further protecting their position.

There is a great tendency in Canada to ' blame ' our conservative banks for limiting lending possibilities for commercial business to business financing. (We love our banks by the way).

Consider the reality though, that we entrust them to protect our savings and deposits, and its Canadian business owners and financial mangers that run their businesses into problems.

Clients are encouraged to maintain solid relations and seek out great commercial business bankers. (Not all are great unfortunately). If you're looking for a banking facility that works, for both you and the bank seek to speak to a trusted, credible and experienced Canadian business financing advisor who will assist you in managing your bank as a partner, not an adversary, thereby maximizing your bank line of credit for your firms sales and profit growth.







7 Park Avenue Financial :

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769


Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .


' Canadian Business Financing With The Intelligent Use Of Experience '


ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.





Saturday, June 18, 2011

Does Your Firm Need Bank Lines Of Credit ? Ready For Canadian Business To Business Financing ?


For every complaint you hear about Canadian business to business financing and our chartered banks (Trust us, we hear a few!) there are still some great things happening in commercial business banking in Canada . Let's examine bank lines of credit, and your need for such a facility to grow your sales and profits.

Canadian businesses use operating lines of credit to finance current assets. Typically those asset categories are predominantly accounts receivable and inventory.

So how do banks facilitate this borrowing arrangement? The typical manner in which this is done is to simply have a document executed that provides the bank with a conditional assignment of accounts receivable, your inventories, and any other current assets.

Canadian bank operating facilities are also called demand loans, because they are typically secured by another document called a GSA, which stands for Genera Security Agreement. This document, as you can imagine, allows the bank to ' call ' your firms loan at any time .It's just common sense that Canadian banks do never with to ' call ' those loans, its simply their protection if and when things go awry.

Clients are sometimes under the mistaken impression that bank lines of credit are good for an indefinite amount of time. Typically however they are renewed annually - which requires a review by your account manager.

If there is one other very common question asked by clients it revolves around how exactly the banks calculate lines of credit. The formula is not as complicated as you think! A typical business to business financing on a Canadian chartered bank line of credit margins your accounts receivable at 75% or their value. Its critical here to note that the bank uses 90 days as a measurement tool - no receivables over 90d days can be margined, or in effect ' borrowed against ‘. Why is that? Again, common sense prevails, in that the bank, (and us too by the way!) makes an assumption that the receivables over 90 days are uncollectible to a certain extent. Your firm might think differently, but that’s how it’s done.

Inventory. Wow! What a different kettle of fish this is! If we had to generalize, but be as specific as we can be for info purposes we can say that in general banks really wrestle with inventory financing. Margining and inventory percentages are very different based on your industry, as well as the composition of your inventory. (Inventory typically comes in three categories: raw materials, work in process, and finished goods)

Typical bank financing of inventory usually never exceeds 50% and at the same time usually has a cap on the facility, meaning that even if your inventory is growing it still might be subject to a maximum of financeability.

The take away here is that banks aren’t in the inventory business, these assets are much harder to liquidate than receivables, and rarely does a lender ' win ' in an inventory liquidation!

So let’s get back to the security the bank takes on bank lines of credit. Do your clients find out about this? In Canada they would normally never be notified unless there is a default by your firm on the line of credit facility. In that case you clients would receive a notification of assignment, in which the bank would direct your clients to pay them directly, reducing the loan of course.

Banks register their security with the appropriate provincial and federal authorities, further protecting their position.

There is a great tendency in Canada to ' blame ' our conservative banks for limiting lending possibilities for commercial business to business financing. (We love our banks by the way).

Consider the reality though, that we entrust them to protect our savings and deposits, and its Canadian business owners and financial mangers that run their businesses into problems.

Clients are encouraged to maintain solid relations and seek out great commercial business bankers. (Not all are great unfortunately). If you're looking for a banking facility that works, for both you and the bank seek to speak to a trusted, credible and experienced Canadian business financing advisor who will assist you in managing your bank as a partner, not an adversary, thereby maximizing your bank line of credit for your firms sales and profit growth.




Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/bank_lines_of_credit_business_to_financing.html

Monday, April 4, 2011

Business To Business Financing And Financial Factoring – Whats In It For Me?


It's not an unreasonable question! If you as a Canadian business owner or financial manager are going to make the change to a business to business financing model such as financial factoring you want some great reasons why this is a positive move .

Let's examine some of the key reasons that you as a business person would, or perhaps should! consider financing your receivables .

From the outside it seems fairly simple, doesn’t it? Your company appears to become a cash flow machine just by utilizing this type of financing for Canadian business. And what could be better than a financing strategy that brings no debt to the balance sheet and doesn’t dilute your ownership either - that seems to be to powerful ' whats in it for me ' reasons right there!

But will this type of business financing benefit your firm. We'll say two things about that - it will, but, and it’s a big but, only if you manage the whole process properly. Very clearly speaking it’s a case of having a strong handle on your overall financial position at any point in time. Let's be honest also, any cash flow problems you have now did not happen overnight and your ability to both manage working capital and plan for cash flow needs is key to everything we are talking about here .

Clients are always asking about the benefits of financial factoring - those seem obvious - you can grow your sales revenues, purchase additional products such as key inventory requirements, and one other benefit that many Canadian business owners almost always forget. What is that key benefit?

Simply that you are now in a position to reduce the cost of this type of financing by utilizing cash to take supplier discounts as well as purchase your goods in a ' smarter and harder ' way . Imagine being able to say to your suppliers that you will pay them on delivery... if you can get a better price.

Canadian businesses that consider business to business financing comes in all shapes and sizes! The reality is that you can set up a facility to finance 15k a month or you can set up a facility for tens of millions of dollars. Larger facilities come with improved rates, as well as a day to day business model that you will find more accommodating.

So what about that cost of factoring - There isn’t a day when we aren’t debating that issue with customers. In Canada the cost of business to business financing and financial factoring ranges from 1-3% a month on balance - yet don’t forget we've shown you how to potentially cut that cost in half when you utilize the cash flow generated in a positive manner.

As a business owner, if we had asked you these questions yesterday “Where will your cash flow be 6 months from now? what would have been your answer . We're betting that you would say that you just don't know the answer to that one - however if with accounts receivable financing you can now say with surety that if you will have sales you will have cash flow ! Simple as that.

Speak to a trusted, credible and experienced Canadian business financing advisor on the merits of factoring and the business to business financing model in Canada. Whats in it for you? Peace of mind and cash flow predictability... that's all.
-

Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/business_to_business_financing_financial_factoring.html