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.



Thursday, January 12, 2012

6 Ways To Compare And Analyze Asset Based Lending Revolving Credit Facilities . ABL Financing Works








Are You In a Position To Properly Compare Business Lines Of Credit ? You are now!

Information on abl revolving credit facilities . Why financing via asset based lending is increasing as an option in Canadian business .




Clients who listen to us tout the positive aspects of business revolving credit via abl asset based lending and financing sometimes have a great question for us ; namely ' How can we compare this type of Canadian business financing to other forms of lending, i.e. the traditional chartered bank line of credit ?'

Good question! Right? So a good way to do that is to set up 6 common benchmarks that allow you as a Canadian business owner or financial manager to do a proper analysis or comparison. Let's cover off the basics of those 6 comparison points.

First of all, we can start with borrowing capability. In general terms we can make the following statement - under a bank facility you have a pre -set credit limit that typically is reviewed annually. However with an ABL facility your borrowing is always tied to the asset base of your firm, which typically is a total sum or receivables, inventory, unencumbered equipment, and even real estate. While bank A/R facilities are more often than note capped at 75% of A/R the asset based revolver will typically come in at 90%. On top of that you will also receive more generous inventory margining 99% of the time, in our opinion.

Let’s move on to overall structure, our 2nd comparable. Larger more high quality asset based facilities typically have a multi year length, while your bank facility is renewed (hopefully!) annually based on historical financial performance.

Point # 3, which we will call follow up or monitoring via your lender. Here is where a dramatic difference occurs. Your bank will assess and provide and renew the credit facility based on operating ratios, loan covenants, external collateral perhaps, and quality of owner guarantees.

Asset based lending takes a different approach; it counts your assets, both at the start of the facility, and periodically during the facility. So in the same manner that you provide what bankers call ' borrowing certificates ‘the ABL lender actually only focuses on those same assets within those certificates. Are we making ourselves clear, it’s always about the assets!

Point # 4. Bank lines of credit are available from... you guessed it... Canadian chartered banks. The ABL revolving credit universe in Canada, while not huge, is non bank in nature.

It is made up of ' unregulated " (banks are regulated) independent finance firms, small and large that offer revolving credit financing to Canadian business. Faculties are available from 250k to hundreds of millions of dollars in size. As such all types of firms that might not qualify for traditional bank financing are immediately eligible for ABL finance, even if they have financial challenges, up to and including considering a bankruptcy filing!

Let’s move on to point # 5 - pricing. While bank pricing is generally perceived as the best financial cost on Canadian business borrowing clients of the same credit quality can achieve the same or better pricing via an asset based line of credit. Firms who can't obtain bank lines of credit still qualify, but of course pay more for these facilities.

Last, but not least, covenants. While banks focus on cash flow coverage (typically 1.25:1) balance sheet ratios, and leverage ABL lending draws on appraisals of assets, reporting, and operational type audits.

What’s better for your firm a traditional bank business line of credit or an ABL financing. You're now in a position to better decide. Speak to a trusted, credible and experienced Canadian business financing advisor today on moving forth with the selection of your choice.





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 . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :


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

Wednesday, January 11, 2012

Working Capital Management Is A Numbers Game When Cash Flow Financing Needs Are Now





Empower Your Company With Working Capital And Cash Flow Solutions. Financing The Gap!


Information on working capital management techniques when you need cash flow financing . Plan now for financing needs tomorrow .






Your company’s working capital is the amount of funds which is working to solve your short term operating needs. A good way to look at this is to think of all your current assets as your gross cash flow, and if you subtract your current payables and loan payments due, etc you then have a net working capital amount.


How your firm manages those current assets, and the amounts you have invested in that part of the balance sheet will ultimately determine what cash flow financing options are available to your firm, traditional or otherwise. Your ability to turn over those current assets, i.e. A/R, inventory, etc is what impresses a lender, as they view that turnover as ultimately repaying working capital loans, operating facilities, asset based loans, etc.

Most business owners don’t see it this way, but your cheapest form of borrowing is actually your short term liabilities such as payables. The challenge though, is that those payables have short timelines with respect to being due, and your firm needs the working capital management solutions to address that need.

The irony that we have always found in working capital discussions is that the often used ‘current ratio’ is somewhat meaningless. It doesn’t do a lot to reflect what is happening now or in the future. Very simply speaking, most accountants or analysts look for a current ratio of 2:1, or more. So is a 4:1 ratio fabulous then?? Not really if your inventory is in work in process and your receivables are slow or uncollectible!


Accounts receivable and inventory are the two main asset classes in your working capital. No surprise there. Your ability to monetize (borrow against) them is ultimately your cash flow financing savior.
So, as we are constantly preaching, it’s all about the timing of your working capital and cash flow needs. It’s that constant pattern of inventory turning to receivables turning to cash that dictates your success or failure in working capital management. A few very basic calculations that every business owner should know are your days sales outstanding in a/r, as well as your inventory turnover. They are simply arithmetic calculations.


Because of those two great assets, A/R and inventory you not only want, but are often forced to consider borrowing against these assets. In Canada this is accomplished in a variety of manners. They include bank lines of credit, non bank asset based lending facilities, receivable financing on its own, and occasionally inventory finance on its own merit. Even your SRED tax credits or purchase orders can be financed if applicable . You make a smart decision when you utilize one of the above solutions with a focus on borrowing what you need and using and managing daily to that need.


The problem we run into all the time is when clients approach us when they need funds urgently, typically when the overall risk is greater because of their current solvency situation. The bottom line is to determine the minimum amount of cash you need, include a buffer or bulge type scenario, and plan your working capital management and cash flow financing in a proactive manner. Some early warning signs of cash flow issues include declining cash balances ( obviously ) , extreme bulges in new orders , supplier payment issues , over 90 day receivables, etc.

In summary, don’t over borrow, and don’t under finance at the wrong time. Speak to a trusted, credible and experienced Canadian business financing advisor on solutions available today in cash flow finance for your company’s needs.




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 . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :



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





Tuesday, January 10, 2012

Business Equipment Leasing And Financing In Canada . When And With Whom To Lease





Carefully pick your partner and pick your solution in Canadian business lease financing .


Information on equipment leasing in Canada . When business lease financing makes sense, and what companies you should be dealing with .




As always, it's a question of the right time and right place. We're discussing business equipment leasing in Canada. When should Canadian business owners and financial managers consider lease financing for asset acquisition and use. We've got some basic checklists on what works when, and, as importantly, with whom!

We're forgiving you if you feel that the many advantages of equipment finance in Canada are sometimes overdone, or overstated. There is of course things such as ' pride of ownership ‘. Furthermore, some, certainly not all assets appreciate over time, or at least hold their value, so there are certain times when 100% purchase for cash / outright ownership seems to make sense.

Additionally, if you enter into an operating lease scenario you have certain obligations to purchase or give back the equipment at the end of the lease. What then, especially if a suitable alternative or upgrade isn't available?

It's just that we think we can count on one hand the amount of assets that appreciate over time these days, and items such as computers certainly aren’t one of them.

So when exactly should the business owner or financial management of a firm consider leasing? One of those cases might be when it's simply cost prohibitive to purchase an asset outright, or if the rates to finance that purchase via a loan seem too high.

Most businesses in Canada don't fully investigate the accounting and tax implications of a lease vs. buy scenario. If they did they might find that those benefits, coupled with a reasonable and affordable monthly payment make business equipment leasing an obvious choice.

Additional guidelines that might make you consider lease financing are areas such as equipment obsolescence, usage that is only temporary in nature, etc.

So now that you've determined when to lease the question becomes ' with whom ‘?! As you consider a lease firm you should, at the same time have a reasonable working knowledge of what type of lease you want. That translates into 3 basic choices in Canada, the lease to own, the lease to use, and the leasing back of your assets. Respectively these choices are known as capital leases, operating leases, and a sale leaseback.

We can imagine the inexperienced business owners or financials manager’s quandary, or indecision on who to deal with. In Canada you have 4 choices, and it makes sense to know the benefits and basics of each of these.

Your four choices are commercial finance leasing companies that are most often private firms specializing in leased assets. Choice # 2 bank leasing companies in Canada; these are closely tied to their parent companies, Canadian chartered banks. Choice 3 is often a fabulous choice, these are the prisoners! Prisoners? Well actually we mean captives, they are finance firms related directly to the manufacturer of the business equipment you wish to lease.

Choice # 4 is often the safest bet. It's a Canadian business financing advisor who has knowledge and relationships with all of the above firms .These players, with the right credentials and reputation can bring true value and save you thousands of dollars on any single transaction. Look for past experience, credentials, etc.

Knowing when and with whom to finance your assets can put your firm on the track business financing 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 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :


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

Monday, January 9, 2012

Receivables Funding In Canada . The Good , The Bad And The Ugly ! Sales Of Receivables Factoring Works If …..





Winning Financially With A/R Finance in Canada


Information on sales of receivables funding for Canadian business owners . Factoring works best under these conditions .




It's probably just us, but when it comes to business financing in Canada no other method of financing your business is as controversial or misunderstood as sales of receivables financing, aka factoring funding.

Let's examine some key points that will clarify the ' Good, Bad and Ugly ' of receivable financing in Canada.

Let's start off with the ' good ' as we think you will soon might find that the ' bad' and the ' ugly ' are simply misunderstandings , but we'll let you decide.

So whey do Canadian business owners and financial managers embrace this newer form of financing in Canada. Simply because it supercharges your cash flow - by selling your A/R you in effect maintain cash flow for operations, and eliminate the need for additional debt or taking on or putting in new equity. We constantly remind clients that the dilution of your equity is in fact the costliest method of financing, everyone pretty well agrees on that.

Another point in our ' Good ' column is that if structured properly your sale of receivables financing sets you up for unlimited capital and cash flow - simply speaking your working capital grows lock step with your sales. Not too many other methods of business financing can make that statement.

The Ugly. The following point is simply the most recognized complaint when we talk to clients. It involves the mechanisms under which A/R financing works. 99% of the structures used by factor companies involve the factor firm validating the credit worthiness of your clients, and getting involved in the billing and collecting of your receivables. Why. Their answer would be that you have sold them the receivable and it’s theirs to collect.

So that’s bad, right? Most Canadian business owners and financial managers that we speak to would say they would prefer to bill and collect their own receivables, and maintain those client relationships that are so important. Enter ' the good '! Here's the good news, most Canadian businesses contemplating sale of receivables funding / factoring are eligible for what we term ' Confidential receivables financing ‘. Utilizing that mechanism your firm bills and collects its own receivables, maintaining total control on the billing and collection function. You in term remit those funds to your finance firm, simply because you have been advanced those funds already.

The Bad. Here is where misunderstanding reigns supreme in A/R financing. It's the ' price ' or ' cost ' of this method of business financing. When you finance a receivables portfolio a factor firm buys your A/R at an ongoing discounted price. That price, on balance, in Canada is 2-3%. Business owners in Canada confuse that purchase discount fee as an interest rate, and that’s a large part of the problem. In reality its how you manage that 2-3% that ultimately reflects your total cost of financing. You can manage that cost by adjusting part of the cost into your cost of sales - we remind you that you’re already absorbing a large cost by carrying receivables and inventory already.

And by the way, with that new found sale of receivables funding cash flow you can now take supplier discounts if they are offered, which by the way, are generally in the 2% range. Want more good, rather than bad or ugly?! You can now enhance your purchasing power with suppliers, and if you choose (not always recommended by us) you can offer extended terms to your clients that your competitors might not be able to.


The bottom line today. Thousands of Canadian businesses embrace sale of receivables funding / factoring everyday. Consider speaking to a trusted credible and experienced Canadian business financing advisor to wade through the good of this method of business finance, and you might just find that bad and ugly are either misunderstood or don't exist . That’s a working capital solution!





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 . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :


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


Sunday, January 8, 2012

Equipment Loans And Leases In Canada ! Which One Of Three Options in Business Leasing And Financing Works For Your Firm?



Leasing Business Assets Makes Sense - 80% Of Canadian Firms Utilize This Financing Strategy



Information on equipment loans and leases in Canadian business asset financing . Which leasing options works for your firm?




The need is often there, but the solution might not be always as obvious as it seems. We're talking about equipment loans and leases in Canada - those unique structures that allow business leasing strategies used by your firm to acquire financing for the assets it needs... to operate, survive, and grow!




When Canadian business owners and financial managers are faced with the challenge of fixed asset finance their oft immediate option is the traditional business loan. This might be a bank term loan for example. The criteria, we in the industry call it ' the credit bar ' might often be fairly high to achieve the types of term financing you need on structures that make sense for your firm.




So, if that was Plan A, and Plan A doesn’t work, whats left? The answer, quite simply is equipment leases for business financing. Rates and terms are quite competitive to the bank, and Canadian business, in general we feel, seems to think that lease financing proceeds with less of a ' hassle '.




Your equipment needs might be from several aspects of your business, computing, machinery, office equipment, etc. All of those assets of course run your company; they're important.




We spoke of the bank term loan as an option, the other more obvious one might have been a cash purchase , using the funds ( if they are there !) to acquire the equipment outright . However, using that capital in this manner if often a classic ' mismatch ' of funds; your firm, incorrectly so, is using short term cash for long term asset acquisition. Bottom line, not a good thing. The reality is you want to use those funds for operating and revenue growth.

That then brings us to what we feel what might be the optimal solution in business financing for assets, ' leasing '. Your new found ability to acquire assets with little or no down payment, bundle in other costs such as shipping, installation, warranty, etc becomes a solid new strategy for asset finance for Canadian business owners.

When utilizing lease finance you are in effect leveraging your cash flow, getting the most out of it, all the same time matching outflows of cash with future inflows of sales and profits arising out of the use of those operating fixed assets you are financing. Our strategy clearly works best for companies who find they need to constantly refresh assets such as computing, or shop floor equipment.



Oh, and by the way, thousands of businesses that don't qualify for bank term loans for assets do in fact always qualify for lease financing. Transactions are structured on a combination focus on the value and use of the asset, your current and future cash flows, etc .Oh, and by the way, your lease payments can generally be expenses and set off against tax obligations.



We spoke of three options in Canada under equipment loans and leases financing scenarios. Those three options are capital leases, operating leases and sale leaseback of assets you own already. Each of these options has different benefits, and gives your firm different rights and obligations. Speak to a trusted, credible and experienced Canadian business financing advisor to identify which of these 3 options make sense for your firm.




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 . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.

Info re: Canadian business financing & contact details:


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



Saturday, January 7, 2012

SBL Loans! Is The Canadian Government Business Loan Help From Where You Least Expect It? Gov Programs For Business Finance

Government Assistance In Financing ? Yes! Information on the Canada government business loan . SBL loans are the leading example of gov programs that work for Canadian business financing . Help from where we least expect it. We can't speak for you but we've always appreciated assistance in business, especially when it comes from sources you least expect. We're talking about the Canadian government business loan, in our opinion it’s the best or 2nd best of gov programs that work. We've always loved the line ' Hi, we're from the government and we're here to help ‘... which is why SBL Loans in our opinion are the real world example of a phrase that is often associated with negavity. ‘Government ' ... ‘Banking’ ... many small and medium sized business owners cringe when they contemplate those words. Not today, though. The government business loan in Canada is a primary offering via INDUSTRY CANADA in Ottawa. It offers SBL loans up to $ 500,000.00 for the purpose of financing equipment assets, leaseholds, real estate, software, etc. In actuality the 500k limit is specifically related to real estate, while other asset categories are capped at $ 350,000.00. The program provides a long term fixed or variable rate financing to businesses looking to start, expand, and grow! Misinformation abounds around the program; we're always surprised at the amount or lack of solid understanding and facts around gov programs such as this. One of those main misconceptions revolves around who the lender is. We can at least forgive our clients who misunderstand the fact that while this is a government sponsored and guaranteed loan, in actuality the actual day to day dealings are in the private sector. One of the greatest benefits of the program is something we have alluded to already, its that SBL loans fit perfectly for a number of company categories, including start ups, growing firms, and also franchises which make up a huge portion of the borrowing segment of this program. As we have hinted, the program is run at the local level, local meaning wherever your firm is, because the program is underwritten and funded by your local Canadian chartered bank. By the way, one of the challenges of the program, as ironic as it may seem, is to find a banker that understands and supports the program in a positive manner. That means of course facilitating your application and recommending you for approval! A common complaint we hear from clients on anything to do with ' gov programs' or banks in general is that ' forms and documents' are a challenge. Let's be realistic. All business financing requires a forms and app's, and we don’t necessarily subscribe to the fact that SBL loans are any different. Some key basic requirements are a reasonable personal credit history for the busines owner/owners, a business plan and cash flow, and some historical financial statements if you're already in business. Very basic things such as your articles of incorporation are also required. Oh, and by the way, we strongly encourage clients to pay their taxes as you can expect to get a government loan when you owe them for back personal taxes already, right?! The Canadian government business loan funds billions of dollars of small business loans in Canada. It's a working example of Gov. Programs that work. Speak to a trusted, credible and experienced Canadian business financing advisor today on achieving solid finance rates and terms you otherwise could not achieve. Bottom line? Get with the 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 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing. Info re: Canadian business financing & contact details : http://www.7parkavenuefinancial.com/bank_financing_commercial_business_banking.html

Friday, January 6, 2012

Is Canadian Franchise Financing A Do It Yourself Project? Franchising In Canada With Success

Canada Franchising Opportunities Can Be Your DYI Success Story If Financed Properly ! Information on Canadian franchise financing . Canada franchising opportunities can be financed on your own , with the right strategy and advice. There seems to be a lot of ' DYI ' out there today, that being the acronym for Do It Yourself of course. So we were thinking, is it possible that Canadian franchise financing for the purchase of your chose franchising endeavor in Canada is a ' DYI ' project? Let's talk about a lot you can do on your own, (as part of that ' dyi ‘) and we'll also focus in on some key areas where expert assistance is highly recommended! Our focus is of course on financing that franchise; we're assuming you have already picked your business of choice. A solid first start is to have a realistic discussion with your franchisor around their knowledge and assistance in the area of helping your franchising project in Canada. It's the policy of some franchisors, certainly not all by the way, to develop financing guidelines for their units. This might be in conjunction with a preferred program via a financial institution, or, as importantly, their own experience in levels of investment, capital, and working capital to acquire, run, and of course grow the business. If there is one caveat here we simply say to clients that you should not infer any sort of guarantees that your financing loan or package will be approved simply because a program exists that you might potentially fit into. Our own experience though is that certain financial institutions target many successfully larger franchise chains and will go out of their way in ways we can't mention to get a transaction completed on your behalf. (Think hockey/donuts as an example! enough said!) Getting back to DYI though, a business plan, either prepared by yourself or with input from you is critical. This can easily be accomplished with help from the franchisor, your accountant, or an experienced Canadian business financing expert in the area of franchising in Canada. We forgive clients for thinking they are out of their league in prepared a business plan and cash flow, but it's not as hard as you think. The reality is that if you can help prepare and understand and present a plan your chances of financing approval increase significantly. DYI also can be taken in the context of looking at your own personal investment in the business. Your choices are of course 100% outright cash purchase (not recommended by us), 100% borrowed funds (not recommended, and oh by the way, impossible!), and the real world solution, an investment by yourself with some real world franchise financing for the balance of your purchase. DYI with respect to your owner equity is anywhere from 10- 50% per cent in Canada. Franchisees should spend part of their DYI time in assessing their personal net worth, their liquidity, and how they will raise and contribute their portion to the franchise investment. We've shown that a good part of your Canadian franchise financing journey can in fact be a DYI process. Where you win big time is by using, where necessary the services of a good accountant, franchising lawyer, and an experienced credible and expert Canadian business financing advisor to complete your purchase successfully, under terms that make sense for your situation. 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 . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing. Info re: Canadian business financing & contact details : http://www.7parkavenuefinancial.com/canadian_franchise_financing_canada_franchising.html