ABL Business Credit Line ? Why This Financing Facility Is The New Normal For Operating Lines

Is Your Operating Line Of Credit Search In Meltdown Mode? ABL Is The Solution

OVERVIEW – .Information on the ABL business credit line . Why does this financing facility solve operating facilities challenges for every size and type of firm




An ABL Business Credit Line.Is this type of financing facility the ' new normal ' when it comes to operating lines of credit in Canada. Well perhaps not for everyone, but it sure bears checking out when hundreds, probably thousands of other businesses are utilizing this type of borrowing already... and successfully.

The ABL (A = Asset B=Based L= Lending) facility is almost always compared to Canadian chartered bank lines of credit. And quite frankly, that’s ok! In actuality this type of comparison quickly brings out the major difference between these two types of operating credit solutions.

Why is that? Simply because the nature of chartered bank borrowing is rarely all ' asset based ', while that’s what the ABL is all about. Simple as that.

We suppose you can call it a philosophy of sorts, but the fact of the matter is our strong, great Canadian banks have industry regulations that forces them to focus on an all encompassing type of lending when it comes to business loans and credit facilities. Those other areas we're referring to include heavy emphasis on personal guarantees and credit history of business owners, cash flow coverage, external collateral, key operating ratio metrics, and covenants that some might view as restrictive. We're tired even just going through that list!

The majority of ABL lenders in Canada are in fact non banks. They are commercial finance companies focusing on 1 thing: Assets! They therefore have the ability to finance your business when a bank cannot.

Two key points need to be made here. One is that banks also offer ABL facilities - it’s just that they seem to be a bit poorly advertised in our humble opinion. Secondly all of a sudden the thousands of companies that weren’t eligible for Cdn. chartered bank financing all of a sudden are welcome applicants for an ABL financing facility! We suppose that we could add a third point that there is a cost differential in ABL facilities (typically higher, but not always, and sometimes lower!).

So if you company has the assets and sales growth, but not the equity or some of the other bank requirements we have touched on and identified then you are clearly a candidate for the ABL business credit line .

Although its often referred to , or thought of as a ' loan ' by the business owner or finance manger its actually simply a monetization of your current and fixed assets " a/r , inventory , equipment , real estate' if applicable .

We quickly point out that the ABL also has some other super powers! You can use it to acquire a company, stage a turnaround, or even come out of a restructuring, formal or otherwise. The higher borrowing base and ' margining power ' of such a financing allows you to bridge the gap between additional equity and simply waiting for your money from your client base.

So our bottom line today? Simply that you may strongly wish to consider maximizing borrowing power of your assets to facilitate your specific needs: growth, restructuring, inability to borrow at bank, etc. While the lower limit of such a facility is often 250k there are quite frankly no upper limits to ABL facilities in Canada. Oh yes, and some of our largest and most successful corporations utilize the method of financing - it’s just as we said, somewhat poorly advertised.

If your firm is in ‘ MELTDOWN MODE ‘ on business borrowing seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your operating facility needs , bank , or … ABL!



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 :



7 PARK AVENUE FINANCIAL = ABL BUSINESS CREDIT LINE FINANCING

CONTACT:
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