Corporate Line Of Credit Needs? Be Your Own Swat Team When It Comes To Capturing A Solid Business Banking Facility .

Want To Be A Business Insider When It Comes To Corporate Credit Lines?

OVERVIEW – Information on business banking alternatives in Canada. A corporate line of credit can be achieved in a number of manners.. Here's how!


Corporate line of credit needs? When it comes to business banking no tool is more valuable than a revolving credit line. It's an on going source of cash flow and working capital when it comes to business survival.

Most Canadian business owners and financial managers we meet find that solution though, difficult to achieve. So how can you be your own Swat Team in effect?

We're told that type of team uses 'specialized tactics in high risk operations 'for success, and that's definitely what we're talking about here! Let's dig in.








Many business owners confuse the term ' line of credit ‘relative to what we’re talking about today. They can be forgiven for that because in various circles it’s called a demand loan, overdraft protection, revolver, etc. We suppose that ' revolver' term ties in nicely with our Swat Team analogy!

Canadian business needs lines of credit if only because it's an ongoing source of funding that is utilized when needed. The key concept here is that you are only paying interest on what you use ... it's not a term loan with a fixed rate and monthly fixed installments.

The concept of security and collateral around the corporate line of credit is important to understand. In the SME sector in Canada that first source of collateral is the current asses that the line of credit finances. These are primarily accounts receivable and inventory. Typically though personal guarantees of owners are required for any significant amount, and one the providers of business credit facilities, Canada's chartered banks also register collateral financing statements against your firm to protect their lending to your business.

So why does business banking become so difficult to access when the business owner/financial manager is sourcing working capital? Top experts in fact tell us that almost 2/3 of business can't obtain any or all the financing it needs to grow and survive. Larger corporations and private companies seem to have their own SWAT TEAMS, and generally find it much easier to achieve credit facilities.

As far as banks are concerned we surmise that it's fairly costly and expensive to both approve and monitor these credit lines. Also, higher incidence of business failure in the SME sector makes it more risky to lend in this area - although that's certainly not what the bank TV commercial says.

In defense of our great Canadian banks remember also that many industries have nuances and challenges that not every business banker can be expected to fully know and understand. They deal with hundreds of clients.

One alternative to traditional bank lines is the non bank ASSET BASED LINE OF CREDIT. This facility operates in the same manner as bank facilities, and an even bigger plus is the fact that it monetizes more assets of your business more generously. Typical advance rates are 90% on A/R (Versus bank 75%), anywhere from 30-70% on inventory (depends on quality and salability of your product), and also includes borrowing power against your fixed assets/equipt.

The asset based lender typically has focused experienced and the overall monitoring of your account is more strenuous than the bank environment. Simply speaking you'' be required to provide more monthly reporting in the form of aged receivables, payables, inventory lists, etc. We've always thought though that if you can’t provide that info regularly your business is probably at risk, so it’s hardly an onerous requirement.

The Canadian owner , armed ( there's that SWAT reference again!) with some basic knowledge of alternatives and the workings of the corporate line of credit can in fact access the cash flow they need. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your business banking 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 :

7 Park Avenue Financial = Business Banking And Corporate Credit line Expertise




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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