Business Receivable Factoring – Rethinking AR Finance Solutions

Turning Cash Flow Scarcity Into Working Capital Prosperity Via A/R Financing



OVERVIEW – .Information on business receivable factoring . How does the AR finance solution compliment and improve cash flow and working capital challenges?




Business receivable factoring in Canada . We suppose you can over think anything in business today, but top experts in Canada say that more and more companies are choosing financing with receivables as their stated cash flow and working capital strategy. Let's examine why that might be the case with AR finance.

There are of course a number of ways in which the Canadian business owner and financial manager can finance their cash flow. Next to ' cash on hand' of course receivables are your most liquid asset. Therefore their ability to turn customer commitments, i.e. your receivables, into that 'cash on hand' is an attractive option - if you're doing it for the right reasons, and also ' doing it right!’

When we say doing it right we mean of course that there are a number of different approaches and options available to the business owner/ financial manager. All of those options revolve around the risk your finance partner is willing to take, and how your facility operates on a daily basis.

Chartered banks of course finance receivables - they do this under their ability to provide Canadian business with an operating line of credit. Their approach differs from factoring, aka ' invoice discounting, aka invoice financing. Your firm holds the risk on collecting your accounts while the bank holds the security to your A/R, typically via a GSA, a general security agreement on all your company.

AR finance differs in that the mechanism under which your receivables are financed in a manner where the paperwork has you selling your A/R as you generate those sales. Ultimately under both scenarios, the bank and the finance factor firm, you have the ability to borrow and draw down on your receivables as you generate revenue. Naturally it’s your call as to how much you borrow and when, according to your needs.

We also point out to clients that financing your A/R is essentially a subset of asset based lending and bank borrowing in Canada. Depending on whether you are dealing with a bank or an asset based lender you also have the ability to margin your inventory and equipment assets in to a business line of credit. We don't want to get overly complex today, but there is also a business financing mechanism called ' Securitization' which is a more sophisticated form of moving your receivables from your balance sheet while generate cash . This is used by larger corporations and finance firms, but not today's subject matter - but worth mentioning.

In business receivable factoring you simply pay a fee, called the ' discount fee' every time you finance your a/r, In Canada on a typical $ 10,000.00 invoice that fee would typically be $ 200.00 for a 30 day period.

It's important to spend a lot of time, and get some solid advice around a business receivable factoring facility that you are paying for only what you use. You would be surprised at some of the tricks of the trade when it comes to the fine print from certain finance firms. In fact our own chosen and recommended method of financing is the CONFIDENTIAL RECEIVABLE FINANCE SOLUTION , allowing you to bill and collect your own receivables and only pay for what you use, when you want. Bottom line, you’re in charge.

Don't get caught in the ' illusion ' of thinking you understand all the technical aspects of AR finance. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your cash flow financing 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 10 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 :


BUSINESS RECEIVABLE FACTORING AND AR FINANCE


7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653
Email = sprokop@7parkavenuefinancial.com












Stan Prokop