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Does Your Cash Flow Need Have An Identity Crisis ? Here’s One Solution !
OVERVIEW – Information on factoring for cash flow in Canada . Working capital financing is a ' must understand ' for owners and financial mgrs seeking to grow and properly finance their businesses.
Cash flow is almost always the focus of business owners and financial managers. Most realize it turns about to be a full time job! It's relevant if only for the fact that working capital financing is all about growth in sales and hopefully profits. One solution, among several available, is 'factoring'.
The 2008-2009 world economic crisis drastically affected business liquidity. Every financial institution in Canada, i.e. Banks, trust companies, life insurance companies, third party independent finance companies, etc all had liquidity issues and concerns, and these were the lenders!
Larger companies can look at equity financing, long term permanent working capital, and other esoteric solutions the ' big boys ' use.
But what about SME COMMERCIAL FINANCE needs? Start up, smaller and yes even medium sized firms have to ' scramble ' to fill the void that top experts acknowledge exists in the Canadian business financing arena.
So why factoring as a cash flow financing vehicle. Yes, it will always have a higher cost, but... it's available, and it works. Certain solutions such as CONFIDENTIAL RECEIVABLE FACTORING even mirror traditional bank lines - i.e. you can bill and collect and manage your own A/R without notification to any other firm, i.e. your customers.
What then are any challenges around factoring receivables? Although it's historically been around for almost forever it's incredibly misunderstood. Many players aren’t Canadian, (which doesn't necessarily have to be a concern) but the real truth is the way these firms operate and deliver on your financing. Also, prices and fees vary
But whatever challenges come from factoring A/R it's safe to say that the ability to turn sales into ' immediate cash ' is the greatest selling point to clients we talk to.
Things to both understand and consider when looking a factoring working capital financing include:
The requirement to finance all your A/R & Sales - Spoiler alert - you don't have to!
Rates/cost/fees -
Security arrangements - in all cases the key collateral is of course your A/R
Size of facility and quality of your customer base
Amount of financing extended against invoices - typically it should be at least 85-90%
Factor firms have very levels of involvement in your business when you have such a facility. The factor financing can have a strong level of daily ' intrusion' into the Canadian firms business - the factor might insist on delivering invoices to your customer, notifying them of the financing arrangement, and yes, you guessed it, even calling the customer and collecting the receivable. Naturally in a perfect worked most firms would rather perform these functions themselves as part of the overall 'customer relationship '. That's why we don't recommend that solution to our clients, instead preferring CONFIDENTIAL A/R FINANCE.
If you're focused on winning the working capital financing game seek out and speak to a trusted, credible and experienced Canadian business financing advisor who is focused on the cash flow and factoring solution you need to grow and survive.
Stan Prokop - founder of 7 Park Avenue Financial –
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 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 & Contact Details :
http://www.7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Office = 905 829 2653
Email = sprokop@7parkavenuefinancial.com
' Canadian Business Financing with the intelligent use of experience '
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.
Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.
Stan Prokop
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