Why Is ABL Asset Based Financing The Rising Star For A Business Credit Facility In Canada?

A New Strategy For Business Credit Lines

Information on the business credit facility known as ‘ abl ‘. Why the asset based financing revolving line is the new choice for businesses looking for more liquidity .




An ABL asset financing business credit facility. Is it really the ' rising star’in Canadian business financing? We let clients be the judge, but let's look at some key facts around Canada's newest business credit revolver.

As a general rule we can say that ABL facilities compete with Canada's chartered banks when it comes to business credit. (There's more than a bit of irony there, because many of the Canadian banks have recognized that and set up small boutique divisions within their bank to offer the same service that ' regular ‘ banking does !) But we digress...

Canadian business owners and financial managers are famous for criticizing the Canadian banking system when it comes to access to capital. We're reminded of a U.S. comedians line ' before you criticize someone, walk a mile in their shoes, that way you're a mile away and at least you have their shoes ' ! From our part no one admires the Canadian banking system more than us... one simply has to accept the limitations that have made them the strongest banks in the world.

So why then does a non bank asset based line of credit work when a Canadian firm can't access the amount and type of financing it needs. The answer to that is quite powerful. It’s that asset based lenders provide receivable financing, high risk financing, debtor in possession/bankruptcy financing, acquisition financing, turnaround finance, and, dare we say it, growth finance. Wow and double wow!

The benefit to consider such financing is that it pretty well covers all Canadian industries, and, as importantly, no matter what stage they are in, i.e. start up, growth, or dire straits! By the way, out of those three growth is our favorite!!

There are a number of different, can we call them ' flavors’ of ABL asset financing business credit lines. We could call these facilities a 'hybrid ' in effect.

There are some other ' not ' so obvious benefits to this type of business credit facility. Financing costs under an ABL are of course covered by pre tax dollars. This is not an equity play! Different rate structures are available to the Canadian business owner. In some cases ABL rates are ' lower ' thank banks - we've seen that often. In general rates are higher though, and based on the overall credit profile. Facilities are generally open, although some asset based lenders might insist, or request a minimum term of 1 year or more. Finally, asset based business credit lines simply monetize your assets for more liquidity than a Canadian chartered bank would. This is not term financing - its business liquidity based on your current assets on the balance sheet.

Intrigued? Want to investigate the new ' rising star ' in Canadian business finance? Speak to a trusted, credible and experienced Canadian business financing advisor on why this unique mechanism might just be the solution you're looking for.

7 PARK AVENUE FINANCIAL
CANADIAN ASSET BASED LINE OF CREDIT EXPERTISE



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/abl_asset_financing_business_credit_facility.html