Cash Flow Finance Solutions In Canada : Are You Part Of The Factoring & AR Financing Boom ?

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Inside the Business Of ‘ Factoring’ In Canada

OVERVIEW – Information on factoring and cash flow finance solutions in Canada. The proper role and use of of AR Financing determines the ultimate success of working capital solutions your firm undertakes. Here is how and why

Cash flow finance solutions in Canada are somewhat misunderstood as well as growing in popularity. To ensure you are a strong candidate for the AR Financing boom it's of course necessary to understand what this finance took, aka ' factoring' is all about. We're going to clarify some issues and debunk some of the misconceptions around how your firm can and should be financing its most liquid asset - accounts receivable! (Next to cash that is!) Let's dig in.

When a company can't leverage bank financing through traditional sources, and if they are unwilling to take on debt via working capital loans then factoring is in fact one solid solution to leverage cash flow and working capital. When financed properly your a/r can also help address other issues that might be on your balance sheet such as accounts payable and government super priority payments. Key point - when financed properly!

As we have hinted, factoring via A/R finance is not the only or be all and end all solution. You can add new owner equity to your business, or take on debt via a cash flow loan or some other kind of term debt (Bridge loans or sales leasebacks come to mind). Those of course are fixed options and must be met, come ' hell or high water' as your lender will note. So working capital solutions such as non bank A/R financing add no debt to the balance sheet - yet they do supply the cash you need.

Sales revenues via your receivables investment generates profits for your firm. The goal is to ensure that key asset - your sales & receivables are financed properly - keeping your balance sheet stable. Additional term debt can of course render your firm ' unstable’

No firm has to secure and access business credit lines such as bank facilities or commercial factoring solutions. However when you don't you'll often limit growth prospects. Companies that are self financing are often viewed as stable and successful - it's just that without external financing they don't often grow.

So the solution to growth finance. It's financing your A/R as you generate sales. That helps to meet business goals, increase additional profits and grow the total value of your business.

When business owners / financial mgrs address the cost of external financing several scenarios become very obvious:


- Continue to self finance and limit growth and competitiveness - including the obvious working capital and daily cash flow challenges
- Borrow on a term debt or subordinated debt basis
- Sell receivables as you generate them - increase sales and profits and capture all the opportunity costs of additional working capital

Somehow our third option remains more appealing!

So why are we not hearing more about Canadian business owners who have discovered a holy grail of financing? When we talk to customers we know the answer - they have entered into the wrong type of factor facilities.
The fragmented and U.S. influence on factoring in Canada has many firms entering into the wrong type of facilities. We advocate CONFIDENTIAL RECEIVABLE FINANCING,also called ' non notification factoring ' with no locked in contracts, and fair competitive pricing.

Check out the benefit of factoring in Canada, and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your capital and cash flow needs.


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

Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '


ABOUT THE AUTHOR

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