As a new potential franchisee in the Canadian franchise industry you want, and need! … some basic info around how franchise funding works in Canada. Those financing options may be critical to your overall success as a new entrepreneur in your chosen industry.
Ironically experts tell us that one of the main reasons that people don’t go into the franchise arena as independent business owners and entrepreneurs is because they feel they either did not have or could not raise the funding for the business.
Naturally in the current tough ( but getting better!) economic environment start up capital for any business is a challenge - so having access to the best information and resources around franchise funding is clearly a major key to success .
It kind of all starts with a business plan , we meet with many clients who have initially been refused for franchisee financing for the very simply reason they weren’t prepared and the reality is you don’t get a lot of chances in financing a new business when you are unprepared .
If you aren’t able to prepare a proper plan yourself you can speak to a trusted advisor in Canadian business franchise financing and one can easily be prepared for you - it’s all about working with an expert. The key part of any business plan is that you can present your financials properly - which simply means what sales you feel you can achieve, what your expenses will be, and what projected profits will be . A key element of all that is your ability to generate cash flow to repay your franchise funding loans - which makes perfect sense - from the lenders perspective of course!
Your plan has to be presented properly and you should be able to anticipate any questions the lender will have about your experience, how you will run your business, what other resources you can bring to the table, etc.
It’s not always about size in life, but in this case we do advise clients that the larger your franchise financing requirement is - well you should be expected to have a more detailed proposal and plan.
Franchisees in Canada may not be aware that their biggest ally Vis a Vis a financing option for their new business is the Canadian government! That tends to floor our clients when we share that info with them - but the reality is that the majority of the financing in Canada for franchisees revolves around a government sponsored loan that is formally called the BIL or CSBF loan program. It is underwritten by he government, but administered by the banks in Canada
Rates for the above mentioned franchise funding and loan program are very competitive and there are some key requirements you should have ready when you submit your proposal for consideration. And by the way, OPM does not work in franchise financing in Canada - that being the acronym for other peoples money! We are always explaining to clients that the funding of their business comes from two sources, the loan or loans, and their own personal equity injection - so you must absolutely be prepared to make a personal equity investment in the business.
How much of your own equity is required - that can be calculated by simple formulas pertaining to the amount you have to borrow and your ability to meet debt to equity ratios and working capital solvency .
There are some great franchise opportunities in Canada. Investigate your financing options with a trusted, credible, and experienced Canadian business financing advisor who will work wit you as a potential franchisee to achieve business financing success.
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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/franchise_funding_financing_options_franchisees.html
Our 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. You Are Looking For Canadian Business Financing! Welcome to 7 Park Avenue Financial Call Now ! - Direct Line - 416 319 5769
Friday, January 7, 2011
Thursday, January 6, 2011
Keep Your Company Moving With An Asset Based Lending Operating Line Of Credit - Your Competitors Do !
You've been watching them and it’s quite disturbing. Every business keeps an eye on its competitors - that's what business is about. So why does the competition seem to enjoy what seems like unlimited cash flow for their sales and growth and expansion.
We think we know the reason why, and its called asset based lending. This type of business financing, relatively speaking is new to Canada and supercharges cash flow and liquidity.
Naturally our clients , being the conservative types they are wonder aloud about several key issues - what are the qualifications for this type of financing, what is the min and max deal size, and what are some of the costs of this type of financing .
Let’s cover those issues off in an effort to ensure you understand the power of asset based lending and why this type of operating line of credit could be your savior in business financing.
Qualifications? There is basically one! You need assets - otherwise asset based lending doesn’t work. The asset based line of credit competes with the operating line of credit offered by Canadian chartered banks . It is provided by non bank institutions that are specialized in asset based lending. Banks, on the other hand are specialized in financial statements we can add facetiously. What we mean by that of course is simply that charted bank business lines of credit in Canada focus on overall financial statement quality - the key underpinnings are solid financial statements reflecting profit, equity, liquidity, and overall solid cash flow.
On the other hand the asset based lender only wants to know one thing - well two actually, do you have assets and are they managed well. What are those assets - they tend to be receivables, inventory, and in some cases equipment and real estate.
These assets mentioned above secured an operating line of credit which is margined on a regular basis. What interests our clients is of course the margining of those assets, and asset based lending does that very well. Typical structures are 90% of receivables, 50-75% advances on inventory (yes you heard us correctly) and working capital financing provided on the appraised value of hard assets that are unencumbered - i.e. the real estate and equipment if you have them and need financing for them.
The ABL (that’s the acronym for this type of financing) gives you cash flow to meet payroll, build inventory, and basically grow your company.
Facility sizes for asset based lending tend to start at 250k and above - otherwise the facility , if under that amount, tends to be a receivable financing facility , which by the way works quite nicely also .
Circling back to our final client question - cost. We can make a general statement that if your deal size is significant, i.e. over 5m you can generally achieve rates that are comparable with the bank. Facilities under that amount are more expensive than bank financing - but , guess what ,you get all the liquidity you need, which has its benefits re growing your business, turning your assets faster, enhancing relationships with suppliers, and taking on more business than you ever could before .
Looking for an operating line of credit - ABL could be your solution - Speak to a trusted, credible and experienced Canadian business financing advisor today on this new form of financing your working capital.
--
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/asset_based_lending_operating_line_of_credit.html
We think we know the reason why, and its called asset based lending. This type of business financing, relatively speaking is new to Canada and supercharges cash flow and liquidity.
Naturally our clients , being the conservative types they are wonder aloud about several key issues - what are the qualifications for this type of financing, what is the min and max deal size, and what are some of the costs of this type of financing .
Let’s cover those issues off in an effort to ensure you understand the power of asset based lending and why this type of operating line of credit could be your savior in business financing.
Qualifications? There is basically one! You need assets - otherwise asset based lending doesn’t work. The asset based line of credit competes with the operating line of credit offered by Canadian chartered banks . It is provided by non bank institutions that are specialized in asset based lending. Banks, on the other hand are specialized in financial statements we can add facetiously. What we mean by that of course is simply that charted bank business lines of credit in Canada focus on overall financial statement quality - the key underpinnings are solid financial statements reflecting profit, equity, liquidity, and overall solid cash flow.
On the other hand the asset based lender only wants to know one thing - well two actually, do you have assets and are they managed well. What are those assets - they tend to be receivables, inventory, and in some cases equipment and real estate.
These assets mentioned above secured an operating line of credit which is margined on a regular basis. What interests our clients is of course the margining of those assets, and asset based lending does that very well. Typical structures are 90% of receivables, 50-75% advances on inventory (yes you heard us correctly) and working capital financing provided on the appraised value of hard assets that are unencumbered - i.e. the real estate and equipment if you have them and need financing for them.
The ABL (that’s the acronym for this type of financing) gives you cash flow to meet payroll, build inventory, and basically grow your company.
Facility sizes for asset based lending tend to start at 250k and above - otherwise the facility , if under that amount, tends to be a receivable financing facility , which by the way works quite nicely also .
Circling back to our final client question - cost. We can make a general statement that if your deal size is significant, i.e. over 5m you can generally achieve rates that are comparable with the bank. Facilities under that amount are more expensive than bank financing - but , guess what ,you get all the liquidity you need, which has its benefits re growing your business, turning your assets faster, enhancing relationships with suppliers, and taking on more business than you ever could before .
Looking for an operating line of credit - ABL could be your solution - Speak to a trusted, credible and experienced Canadian business financing advisor today on this new form of financing your working capital.
--
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/asset_based_lending_operating_line_of_credit.html
Wednesday, January 5, 2011
Your Executive Decision in 2011 - Working Capital Cash Flow! Working Capital Finance Is Easier Than You Think!
It’s resolved, all those in favor say aye! Doesn’t the timing to reassess your working capital cash flow needs heading into 2011 seem perfect? Working capital finance solutions are available, and they are not always what you thought they might be.
Let’s try and be realistic and positive here. The recession (we read this in the newspaper today, so it must be true) is over, your business is on the rebound, but, those same cash flow challenges still haunt your ownership and management on a daily basis.
Your ability to put together effective techniques and solutions around working capital financing always goes back o the management of your short term assets such as cash, receivables, and inventories. And yes, it’s always a balancing act that challenges you everyday, we know that. The cash requirements come out of the need to meet your day to day expenses, pay employees, and make payments on any debt obligations you have
In talking to clients inventory levels that allow you to run your business, minimize constant re ordering, and taking advantage of price and volume discounts continue to be a main challenge.
Can this challenge be addressed? It sure can, and in a number of ways. You can arrange a long term unsecured working capital loan to address product needs - alternatively you can blend the borrowing power of your receivables and inventory on a combo basis via a working capital facility that margins receivables and inventory. This facility, called an asset based line of credit when it’s for a larger amount will turn your company into a constant cash flow machine if you manage it properly. We point out to clients that this type of working capital cash flow facility we just described is offered by a non bank private finance firm, so we encourage clients to speak to a Canadian business financing advisor as to how these facilities work.
Working capital finance inevitably focuses on the management of your receivables. You can amend credit policies, shorter your payment terms, extend those terms, or simply collect your receivables more efficiently and aggressively. Those are all measures of how you identify your credit policy. The other side of that coin is how you finance that huge investment you more than likely have in a.r.
In Canada several clear options are available, for smaller firms you have the ability to generate an unsecured business merchant cash advance against your future sales and receivables, credit card sales included! Medium sized firms in Canada can access the aforementioned working capital facility, aka the asset based line of credit. Larger corporations can entertain the securitization of their receivables via an off balance sheet financing.
There is only one bottom line in working capital cash flow - its simply that you need to understand your cash flow challenge, and then investigate the proper options to remedy that challenge, allowing you to fuel long term growth and profits .
In some cases traditional bank financing, via the right bank and banker will work. When it doesn’t consult a credible, experienced and trusted Canadian business financing advisor who will help you identify real world solutions for cash flow success.
--
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/working_capital_cash_flow_working_capital_finance.html
Let’s try and be realistic and positive here. The recession (we read this in the newspaper today, so it must be true) is over, your business is on the rebound, but, those same cash flow challenges still haunt your ownership and management on a daily basis.
Your ability to put together effective techniques and solutions around working capital financing always goes back o the management of your short term assets such as cash, receivables, and inventories. And yes, it’s always a balancing act that challenges you everyday, we know that. The cash requirements come out of the need to meet your day to day expenses, pay employees, and make payments on any debt obligations you have
In talking to clients inventory levels that allow you to run your business, minimize constant re ordering, and taking advantage of price and volume discounts continue to be a main challenge.
Can this challenge be addressed? It sure can, and in a number of ways. You can arrange a long term unsecured working capital loan to address product needs - alternatively you can blend the borrowing power of your receivables and inventory on a combo basis via a working capital facility that margins receivables and inventory. This facility, called an asset based line of credit when it’s for a larger amount will turn your company into a constant cash flow machine if you manage it properly. We point out to clients that this type of working capital cash flow facility we just described is offered by a non bank private finance firm, so we encourage clients to speak to a Canadian business financing advisor as to how these facilities work.
Working capital finance inevitably focuses on the management of your receivables. You can amend credit policies, shorter your payment terms, extend those terms, or simply collect your receivables more efficiently and aggressively. Those are all measures of how you identify your credit policy. The other side of that coin is how you finance that huge investment you more than likely have in a.r.
In Canada several clear options are available, for smaller firms you have the ability to generate an unsecured business merchant cash advance against your future sales and receivables, credit card sales included! Medium sized firms in Canada can access the aforementioned working capital facility, aka the asset based line of credit. Larger corporations can entertain the securitization of their receivables via an off balance sheet financing.
There is only one bottom line in working capital cash flow - its simply that you need to understand your cash flow challenge, and then investigate the proper options to remedy that challenge, allowing you to fuel long term growth and profits .
In some cases traditional bank financing, via the right bank and banker will work. When it doesn’t consult a credible, experienced and trusted Canadian business financing advisor who will help you identify real world solutions for cash flow success.
--
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/working_capital_cash_flow_working_capital_finance.html
Tuesday, January 4, 2011
Avoid Missing Out On Finance For Lease Benefits When You Choose The Right Leasing Company
Is it possible to get all the right finance for lease benefits in place with one leasing company ? That might not necessarily be the case, but the reality is that if you know the right questions to ask and which partner firm to work with you should be in a great position to maximize on benefits that makes sense - for your firm!
Your business, when it comes to leasing equipment, is not a lot different than many of your competitors. It's actually quite simple - you want good service, a competitive rate... (Notice we say ' competitive ‘... more on that later ) and prompt approval. We are dismayed when clients tell us of previous experience in getting a lease approved - in our perspective this should takes days, not weeks and months as some clients have experienced in the past .
Let’s get back to that whole issue of pricing - we mentioned a ' competitive ' rate. Our problem is that our clients are always focusing on the absolute best rate and tend to miss out on some of the obviously other advantages that they should instead be focusing on. These other advantages might include lease documentation simplicity, end of lease renewal or buyout options. Ability to upgrade during the term of the lease, etc.
So, yes we agree that you don’t want to pay the highest lease rate in town, but the reality is that finance firms have to stay competitive in business - and guess what... want to know another secret? It’s simply what we have shared with clients for years, in that they get to pick their own rate when looking for a lease company and finance for lease benefits that makes sense.
What?! Asks the client. What could we possibly mean by that? Well it’s simple actually. Your pricing and approval are driven by credit quality in lease financing in Canada. So if you can demonstrate your credit quality, and you choose the right lease partner relative to deal size, type of asset you are financing, etc then, guess what, we can pretty much guarantee that you can have an important say in that final rate . Again, if it’s just 'rate ' that’s important, and it shouldn’t be!
We talked earlier about your company being in the same boat as your competitors when it comes to lease financing - we do acknowledge though that every firm is different in some manner or respect, so if you do have specialized needs on types of assets to finance, customized solutions, cash flow flexibility needs, etc .. Well then of course you need some extra help.
Speak to a trusted, credible and experienced Canadian business financing advisor who can make sure you are comfortably with the right partner leasing company and that the finance for lease benefits you are looking for is achievable.
-
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/leasing_company_finance_for_lease_benefits.html
Your business, when it comes to leasing equipment, is not a lot different than many of your competitors. It's actually quite simple - you want good service, a competitive rate... (Notice we say ' competitive ‘... more on that later ) and prompt approval. We are dismayed when clients tell us of previous experience in getting a lease approved - in our perspective this should takes days, not weeks and months as some clients have experienced in the past .
Let’s get back to that whole issue of pricing - we mentioned a ' competitive ' rate. Our problem is that our clients are always focusing on the absolute best rate and tend to miss out on some of the obviously other advantages that they should instead be focusing on. These other advantages might include lease documentation simplicity, end of lease renewal or buyout options. Ability to upgrade during the term of the lease, etc.
So, yes we agree that you don’t want to pay the highest lease rate in town, but the reality is that finance firms have to stay competitive in business - and guess what... want to know another secret? It’s simply what we have shared with clients for years, in that they get to pick their own rate when looking for a lease company and finance for lease benefits that makes sense.
What?! Asks the client. What could we possibly mean by that? Well it’s simple actually. Your pricing and approval are driven by credit quality in lease financing in Canada. So if you can demonstrate your credit quality, and you choose the right lease partner relative to deal size, type of asset you are financing, etc then, guess what, we can pretty much guarantee that you can have an important say in that final rate . Again, if it’s just 'rate ' that’s important, and it shouldn’t be!
We talked earlier about your company being in the same boat as your competitors when it comes to lease financing - we do acknowledge though that every firm is different in some manner or respect, so if you do have specialized needs on types of assets to finance, customized solutions, cash flow flexibility needs, etc .. Well then of course you need some extra help.
Speak to a trusted, credible and experienced Canadian business financing advisor who can make sure you are comfortably with the right partner leasing company and that the finance for lease benefits you are looking for is achievable.
-
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/leasing_company_finance_for_lease_benefits.html
Monday, January 3, 2011
Why A Merchant Cash Business Advance Makes Sense for Cash Flow
A merchant cash business advance is fast becoming a mainstream financing strategy for Canadian small business owners. However, in talking to clients they are concerned about two key issues around this innovative financing method.
Those two key issues are:
How does it work?
What are the Costs?
We firmly believe that if you understand those two critical points then your firm is in a position to benefit from a merchant advance and Canadian cash flow solutions.
And those benefits are significant and quite clear. They include your peace of mind as it relates to business financing, since these facilities grow with your business and are unlike pre-set bank credit lines, etc .
Time is money as the Canadian business owner well knows. A merchant cash advance in Canada works quickly and efficiently (When you have chosen the right partner and the right type of facility). Once the initial set up process is completed, usually in a week or two the facility runs itself at your discretion. You in effect have taken complete control of your cash flow.
Our final key benefit that we should focus on before getting back to our two critical points is simply that this financing tool, if used properly, allows you to generate more sales and increase profits via key turnover of sales and inventory, etc.
O.K. – You now know many of the key benefits of factoring. Is it right for your firm? Critical point #1 – How does it work?
A merchant cash business advance is simply best described as the short term sale, or ‘discounting ‘of your sales . You generate cash, at your option, on the same day that you generate an sale for a sale and delivery of product and services to your client base.
Critical Point # 2- What does this type of working capital cash flow financing cost? .We have actually demonstrated too many customers that the true cost of merchant advance type financing is actually zero or less than bank financing in many cases. Why is that?
We hate to do it, but let’s go to the text book finance formula known as the DuPont Model . If you discount your sales, i.e. , get cash the same day, buy more inventory with that cash, negotiate a better price with suppliers with that cash, and then repeat the process over and over we can almost guarantee you, depending on your industry and A/R turnover that a business advance can become a profit mechanism for your firm. That’s certainly clears up a lot of the ‘negative ‘things you have heard about this type of financing , its costs, etc.
Speak to a trusted, credible and experienced business financing advisor on the benefits of a merchant cash business advance , how it works, and how financing costs can be controlled and reduced. That’s true cash flow and working capital financing for Canadian business.
---
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/merchant_cash_business_advance_cash_flow.html
Those two key issues are:
How does it work?
What are the Costs?
We firmly believe that if you understand those two critical points then your firm is in a position to benefit from a merchant advance and Canadian cash flow solutions.
And those benefits are significant and quite clear. They include your peace of mind as it relates to business financing, since these facilities grow with your business and are unlike pre-set bank credit lines, etc .
Time is money as the Canadian business owner well knows. A merchant cash advance in Canada works quickly and efficiently (When you have chosen the right partner and the right type of facility). Once the initial set up process is completed, usually in a week or two the facility runs itself at your discretion. You in effect have taken complete control of your cash flow.
Our final key benefit that we should focus on before getting back to our two critical points is simply that this financing tool, if used properly, allows you to generate more sales and increase profits via key turnover of sales and inventory, etc.
O.K. – You now know many of the key benefits of factoring. Is it right for your firm? Critical point #1 – How does it work?
A merchant cash business advance is simply best described as the short term sale, or ‘discounting ‘of your sales . You generate cash, at your option, on the same day that you generate an sale for a sale and delivery of product and services to your client base.
Critical Point # 2- What does this type of working capital cash flow financing cost? .We have actually demonstrated too many customers that the true cost of merchant advance type financing is actually zero or less than bank financing in many cases. Why is that?
We hate to do it, but let’s go to the text book finance formula known as the DuPont Model . If you discount your sales, i.e. , get cash the same day, buy more inventory with that cash, negotiate a better price with suppliers with that cash, and then repeat the process over and over we can almost guarantee you, depending on your industry and A/R turnover that a business advance can become a profit mechanism for your firm. That’s certainly clears up a lot of the ‘negative ‘things you have heard about this type of financing , its costs, etc.
Speak to a trusted, credible and experienced business financing advisor on the benefits of a merchant cash business advance , how it works, and how financing costs can be controlled and reduced. That’s true cash flow and working capital financing for Canadian business.
---
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/merchant_cash_business_advance_cash_flow.html
Get A Fast Merchant Cash Advance And Business Cash Flow Loan in Canada
A merchant cash advance for business cash flow continues to grow and become more widely used in smaller sized firms in the Canadian business environment.
Smaller Canadian firms who do not have major investments in receivables and inventory do not have the financing alternatives enjoyed by their larger company counterparts. Larger corporations use the concept of securitization as a method of financing working capital and enhancing balance sheets. This type of sophisticated financing allows firms to improve liquidity and satisfy lender loan covenants.
Smaller firms, usually do to cost, lack of financial sophistication, and size are unable to utilize such alternative financing. Additionally, in the current 2009/2010 financial environment many firms are struggling with their ability to maintain bank credit facilities, let alone increase them!
The discounting of future sales, for cash today , allows firms to convert working capital into immediate cash. This comes with a cost which we will also discuss.
It is critical to note that when a firm sells, or factors, or discounts (they all mean the same thing) they retain no ownership or interest in the future sale .
Depending on how the merchant advance facility is structured they may or may not have responsibility for the ultimate non- collectibility of the account. Lenders address that issue in a variety of manners.
Smaller companies in Canada aren't able to enter to large multi year arrangements, with lower costs, that would allow them to achieve the benefits of a true securitization.
But ... ! .. you can sell sell future sales under a discounting agreement. This can be done with a minimum of cost and deals can be structured uniquely to the customers situation, and their is a lower cost and no reliance on lawyers, advisors, etc.
If used on a regular basis the merchant cash advance discounting process continually generates new working capital, allows the customer to generate better rates as time goes on, and, most importantly, relieves the financial stress of managing working capital.
It is very important to note that smaller companies have some distinct choices that on occasion the larger firms don't have. They can on a one time basis, or periodically choose to utilize this alternate financing method.
Ultimately the business owner does have to pay back the lender or generate sales that will allow the repayment .
Typically the costs in business cash flow financing vary greatly. Rates range from 1.5 - 3% on a monthly basis. Most customers view this as an ' interest rate ', while the lender tends to view it as discount rate.
Generally the facility can be set up in a couple of weeks! We have seen our clients set up a facility in a matter of days !
As we can imagine it takes the larger corporations many months (and many thousands of dollars) to set up their large dollar securitization facilities.
In summary, more and more firms are turning towards a merchant cash advance business cash flow loan to manage their working capital and liquidity challenges.
Firms are strongly advised to search out experts in this area who know the Canadian marketplace, as it differs substantially from the U.S. environment in this unique method of alternative financing.
--
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_cash_flow_merchant_cash_advance.html
Smaller Canadian firms who do not have major investments in receivables and inventory do not have the financing alternatives enjoyed by their larger company counterparts. Larger corporations use the concept of securitization as a method of financing working capital and enhancing balance sheets. This type of sophisticated financing allows firms to improve liquidity and satisfy lender loan covenants.
Smaller firms, usually do to cost, lack of financial sophistication, and size are unable to utilize such alternative financing. Additionally, in the current 2009/2010 financial environment many firms are struggling with their ability to maintain bank credit facilities, let alone increase them!
The discounting of future sales, for cash today , allows firms to convert working capital into immediate cash. This comes with a cost which we will also discuss.
It is critical to note that when a firm sells, or factors, or discounts (they all mean the same thing) they retain no ownership or interest in the future sale .
Depending on how the merchant advance facility is structured they may or may not have responsibility for the ultimate non- collectibility of the account. Lenders address that issue in a variety of manners.
Smaller companies in Canada aren't able to enter to large multi year arrangements, with lower costs, that would allow them to achieve the benefits of a true securitization.
But ... ! .. you can sell sell future sales under a discounting agreement. This can be done with a minimum of cost and deals can be structured uniquely to the customers situation, and their is a lower cost and no reliance on lawyers, advisors, etc.
If used on a regular basis the merchant cash advance discounting process continually generates new working capital, allows the customer to generate better rates as time goes on, and, most importantly, relieves the financial stress of managing working capital.
It is very important to note that smaller companies have some distinct choices that on occasion the larger firms don't have. They can on a one time basis, or periodically choose to utilize this alternate financing method.
Ultimately the business owner does have to pay back the lender or generate sales that will allow the repayment .
Typically the costs in business cash flow financing vary greatly. Rates range from 1.5 - 3% on a monthly basis. Most customers view this as an ' interest rate ', while the lender tends to view it as discount rate.
Generally the facility can be set up in a couple of weeks! We have seen our clients set up a facility in a matter of days !
As we can imagine it takes the larger corporations many months (and many thousands of dollars) to set up their large dollar securitization facilities.
In summary, more and more firms are turning towards a merchant cash advance business cash flow loan to manage their working capital and liquidity challenges.
Firms are strongly advised to search out experts in this area who know the Canadian marketplace, as it differs substantially from the U.S. environment in this unique method of alternative financing.
--
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_cash_flow_merchant_cash_advance.html
Why a Confidential Factoring Receivable And Invoice Finance Program Will Work For Your Firm
Are we right or wrong? We have always maintained that knowing something others don't in business gives you an advantage, and we think you’ll see that advantage when we tell you about a confidential factoring program that works and why this type of invoice finance puts you head and shoulders above your competition.
You probably have heard that thousands of Canadian firms have moved to invoice discounting as their primary finance vehicle. Unfortunately mis information about this type of financing is everywhere, and we'll show you how the advantages of receivable financing can be put to work immediately.
The real power of confidential invoice financing is the fact that you have the ability to bill and collect your own receivables. 99.9% of your competition won’t be able to do this, and it is that stigma along with their suppliers, employees, etc that your competitors cant overcome.
Invoice financing works because as you grow your company the collection of cash doesn’t, unfortunately, match the amount of sales you are generating. Those customers of yours continue to pay you in 30, 60, and 90 days... like it or not.
Naturally we tell our clients they have the option of restricting their customer’s credit, holding shipments, and enforcing a strict collection policy - as you can imagine that is not their preferred solution - which is more often than not to extend more credit and be patient with their customers.
If you have an operating line of credit from a bank you could generally fund this working capital at a pretty decent cost - unfortunately small and medium sized business in Canada can't always access this type of credit.
Enter a confidential factoring receivable and invoice finance program! When you utilize this type of financing you are generating all the short term borrowing you need, and, more importantly, you have the ability, unlike those competitors of yours to bill and collect your own receivables. Most receivable financing in Canada is actually done on a full notification basis - it works, but we don’t like it, because it involves notifying our clients, employees, etc as to how your firm is being financing. We prefer that to be our clients business, not the entire marketplace!
When you use confidential invoice financing you receive approx 90% of the invoice amount the day you generate the invoice. The balance is simply held back and remitted to you when your customer pays you - less the financing charges.
And hey, what about those financing charges - aren’t they high? We have some strong opinions on that, mainly due to mis information that abounds on the cost of factoring. Confidential invoice factoring costs the same as regular financing in this manner, and we point out to clients that the charge is not dissimilar to carrying those accounts receivable for 60-90 days on your books. And making using of that cash to generate further sales and profits, enhance relationships with suppliers, etc, is a key benefit of this financing.
Speak to a trusted, credible and experienced Canadian business financing advisor and learn how you can take a unique competitive lead via a confidential invoice finance program.
--
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 6 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/confidential_factoring_receivable_invoice_finance.html
You probably have heard that thousands of Canadian firms have moved to invoice discounting as their primary finance vehicle. Unfortunately mis information about this type of financing is everywhere, and we'll show you how the advantages of receivable financing can be put to work immediately.
The real power of confidential invoice financing is the fact that you have the ability to bill and collect your own receivables. 99.9% of your competition won’t be able to do this, and it is that stigma along with their suppliers, employees, etc that your competitors cant overcome.
Invoice financing works because as you grow your company the collection of cash doesn’t, unfortunately, match the amount of sales you are generating. Those customers of yours continue to pay you in 30, 60, and 90 days... like it or not.
Naturally we tell our clients they have the option of restricting their customer’s credit, holding shipments, and enforcing a strict collection policy - as you can imagine that is not their preferred solution - which is more often than not to extend more credit and be patient with their customers.
If you have an operating line of credit from a bank you could generally fund this working capital at a pretty decent cost - unfortunately small and medium sized business in Canada can't always access this type of credit.
Enter a confidential factoring receivable and invoice finance program! When you utilize this type of financing you are generating all the short term borrowing you need, and, more importantly, you have the ability, unlike those competitors of yours to bill and collect your own receivables. Most receivable financing in Canada is actually done on a full notification basis - it works, but we don’t like it, because it involves notifying our clients, employees, etc as to how your firm is being financing. We prefer that to be our clients business, not the entire marketplace!
When you use confidential invoice financing you receive approx 90% of the invoice amount the day you generate the invoice. The balance is simply held back and remitted to you when your customer pays you - less the financing charges.
And hey, what about those financing charges - aren’t they high? We have some strong opinions on that, mainly due to mis information that abounds on the cost of factoring. Confidential invoice factoring costs the same as regular financing in this manner, and we point out to clients that the charge is not dissimilar to carrying those accounts receivable for 60-90 days on your books. And making using of that cash to generate further sales and profits, enhance relationships with suppliers, etc, is a key benefit of this financing.
Speak to a trusted, credible and experienced Canadian business financing advisor and learn how you can take a unique competitive lead via a confidential invoice finance program.
--
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 6 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/confidential_factoring_receivable_invoice_finance.html
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