Cash Flow Challenges ? Consider These Different Not What You Think Types Of Accounts Receivable Factoring Solutions

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Looking To Escape From Business Cash Flow Challenges – Here’s How!

OVERVIEW – Information on accounts receivable financing in Canada . Factoring and other asset based lending solutions provide the cash flow you need to run and grow your business and profits

Cash flow solutions , thankfully, are a lot more available and well used in today's often challenging business financing environment. Factoring, and other versions of the accounts receivable financing strategy could well be the ultimate solution to working capital needs. Let's dig in.

Almost all business owners / financial mgrs looking for SME Commercial Finance solutions are feeling the pain of slow payments from customers, including of course those large well known and powerful corporations that can wield accounts payable deferral power! Payments norms seem to be 60-120 days in many cases!


The irony is of course that many customers still post 30 day terms on their invoices and purchase order acknowledgements from their client base. No secret that slow payables = better cash flow.

We should not fail to mention of course that there is one very obvious 'non - financial 'solution for your company, and it does not even involve additional financing effort. It is simply to enforce collections more strongly and reduce what is known as your 'days sales outstanding 'to a more manageable level. Any major dent you can put in your 'D S O 'will improve working capital and cash flow.


So we have discussed why you want to factor receivables and to some extent what your non - financial solutions are. But let's just make sure we understand what we are talking about. When you are working under a bank facility your receivables are collateralized or pledged as a security for an overdraft

. That's the best simple way we have of explaining to clients what factoring is not! What it is, though, is the sale of your invoices, on a daily, weekly, or monthly basis (the flexibility is your choice), thereby increasing your advance rates on those receivables to the 80-90% range depending on the type of facility you have structured.
More cash flow and more immediate cash flow is the most obvious solution to factoring and accounts receivable financing.


We spoke of the price you have to pay in factoring receivables. When we sit down with clients we advise them there is a real price, i.e. the financing or invoice discounting cost, but, more apparently, the major change in the way day to day business changes from a paper flow and customer interaction basis.

If you negotiate the wrong type of facility you might find yourself in the same situation that many of our clients have found when they come to us with financing woes, which is simply that they feel that in spite of the significant cash improvement they in fact feel that their factor firm partner is running their business.


Many business owners who know little about factoring seem to know one thing, that it can be viewed as intrusive by their customers. You can eliminate that 'intrusiveness 'by ensuring you have the right type of facility, one that is priced right, has straightforward terms, and works on a day to day basis for you and your customers.

Have you investigated non bank asset based lines of credit and Confidential Receivable Financing? The best factor funding facility in fact, we feel, is the one that allows you to bill and collect your own receivables, while at the same time reaping all the benefits of accounts receivable discounting as factoring funding is also known.

So what's our bottom line in our cash flow information interchange - it simply:

Determine if you can achieve self financing status via the more prompt collection of receivables

Plan B?! If financing is in fact needed consider factoring financing as a working capital strategy.

If you're committed to ' escaping ' from cash flow challenge hell seek out and speak to a trusted, credible and experienced Canadian Business Financing Advisor who can assist you with your 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 :

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