Our blog highlights Canadian Business Financing solutions via receivable finance , equipment finance, working capital financing, asset based lending, business acquisition financing,franchise finance, and tax credit monetization via SRED and Film Tax Credits. Our goal is to educate and assist Canadian businesses with their financing needs. You Are Looking For Canadian Business Financing! Welcome to 7 Park Avenue Financial Call Now ! - Direct Line - 416 319 5769
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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.
Sunday, October 6, 2013
A Factoring Program Via An Account Receivable Financing Strategy Is A Great Reason To Reverse A Tsunami Cash Outflow
Unlocking The Curse Of Carrying Receivables
OVERVIEW – Information on account receivable financing in Canada. How does a factoring program and A/R finance solution offset the risk and cost of carrying customer accounts
Account receivable financing in Canada is sort of the Canadian business owner/financial manager’s way of reversing the curse. The curse? It's of course carrying your accounts receivable. And a receivables factoring program is one solid method of eliminating that curse. Let's dig in.
For Canadian business the level and importance of carrying A/R is dependent on several key elements. They include the quality of your customers, the size of individual transaction/invoices, and whether your product is a product... or a service.
A/R financing addresses all of those issues. If your firm cannot qualify for traditional bank financing, but can generate clean invoices that demonstrate your clients have received the products and services they have bought or contracted for you in effect have unlimited access to business credit . That's a surprise to many clients who often feel challenged in their ability to obtain business cash flow/capital.
The other key point around a successful invoice factoring program is the ability of your firm to take on an unlimited amount of business. Again, that's a surprise to the Canadian business owner / manager who feels constrained in their ability to grow their business.
There is an interesting analogy we can make about the pricing around A/R finance. Many Canadian businesses offer a discount to their clients for prompt payment, that discount typically is in the 2% range. While the majority of your clients can't take that discount (they have their own cash flow problems!) the pricing around a factoring program is quite similar. By that we mean that financing receivables works in essentially the same manner - you forgive that 2% to get all your A/R, or as much as you want, financed immediately the day you bill for your products and services. Talk about co-incidence!
One of the key ' power issues' around a receivables factoring program revolves around the issue of ' turnover'. While many view the financing more expensive than bank financing (we’re assuming they think they qualify for unlimited bank financing!) the reality is that if your sell, finance your A/R, generates profits, and keep selling more and repeating that process your firm is an instant winner in the profit/growth game. So yes you should always weigh the cost of account receivable financing against all your alternatives more often than not you will find it's always there, and always available.
By the way, owners, investors in your firm, and any lenders you have, term or otherwise will always look at the way you manage you cash flow, predominant via current asset mgmt.
Why are you always going to need some level of AR financing? If you're growing the amount of receivables you have will grow commensurately with your level of sales. (That situation will worsen when if you manage your accounts poorly).
By the way your gross profit margin is always a factor in considering how you finance your A/R effectively. In a perfect world you will have high margins and high turnover and good clients. (It’s not a perfect world by the way!) A great way to track your effectiveness in A/R mgmt and financing needs is simply to chart sales levels and A/R levels together.
So yes, carrying A/R is a curse of some manner. But don’t forget it allows you to grow sales, generate profits, and take your company to the next level. An effect factoring program via account receivable financing is a great way to address the issue. Our recommended solution is by the way is CONFIDENTIAL A/R FINANCING, allowing you to circumvent the traditional factoring program and bill and collect your own accounts. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business financing solutions.
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 = Accounts Receivable Financing Expertise
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CONTACT:
7 Park Avenue FinancialSouth 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
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