Business Line Of Credit Solutions In Canada: Does Asset Finance Deliver on Cash Flow?

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2 Reasons Why Working Capital Financing via a Business Line of Credit is the Best Asset Finance Solution for your Business

OVERVIEW – Information on asset finance as a viable business line of credit solution in Canada. Non bank credit lines deliver on .. cash flow!

Business line of credit needs focus mainly on one issue - delivering on cash flow! Let's dig in!

Typically Canadian business owners/financial mgrs have only 2 choices in this area of their business -

1. Banks

2. Commercial Finance firms who deliver on credit lines via asset finance strategies

It's often the case that firms using Canadian chartered banks cannot fully access the total working capital solution they require thru their banks. So no surprise that one of the fastest growing trends in Canada revolves around a concept known as an 'asset based line of credit '. Ironically when we meet with many clients they are not even familiar with the term, let alone its benefits!

So is in fact this type of business financing better than a Canadian chartered bank line of credit? We'll let you be the judge of that.
Here are therefore the reasons why working capital cash flow funding via asset finance just might be the Holy Grail for your firm’s growth and success.


1. The facility will bring you higher levels of liquidity, cash flow and working capital based on your asset base


2. You qualify much more easily for a facility that is in fact even higher in line of credit requirements

In recent years the term asset based lending had somewhat of a negative effect or perception when it was discussed by business owners. But, guess what - time changes, and nothing changes faster than trends in business.

The 2008 and 2009 global economic meltdown forced thousands of businesses, small, medium and even large to re assess their financing. In some cases that was simply because their financier disappeared! This happened less so in Canada, but the ripples of global liquidity clearly touched Canada also! And those ripples are still rippling!


So let's get back to our premise #1 which is that utilizing an asset based line of credit brings you greater liquidity. Why is this so?

It is simply because the asset based facility focuses solely on the assets. Traditional financing, as you may have so painfully discovered, focuses on balance sheet ratio, profitability, external collateral, and personal guarantees. The reality is that if your firm is selling shoes to WALMART (as an example) then historically your bank or lender had no sense of what those shoes were worth or what to do with them in a worst case scenario.
Enter asset based lending! Working with a credible, trusted and experienced asset based lending advisor will allow you to truly leverage assets to borrow for more liquidity, working capital and profit growth.

So what are those assets you can leverage - they are as follows:

Receivables

Inventory

Equipment (that is unencumbered)

Real estate (If applicable)

Look at your current working capital and credit facilities - you may have these through a bank, or even more challenging, you might be self financing. If you could leverage tomorrow 90% of your receivables, 50-70% of your inventory, and borrow on a monthly basis against fixed assets would that work for your firm? We have a feeling that in many cases we just doubled and tripled your borrowing power.

Let's look at our premise # 2- you qualify for more capital with less stringent qualification requirements. This point somewhat dovetails on our point #1 - that is to say that the total focus of an asset based line of credit revolves mostly around one work - the ' Asset ‘! The values of your assets in fact determine your total operating facility - it is not pre determined by balance sheet ratios, covenants, etc.

Most business owners and financial managers use the facility for the primary purpose of providing day to day working capital and liquidity to their firm. Asset based lending has less stringent overall requirements, but we should mention of course that it generally is more expensive than bank financing.

You can use asset based credit lines to complement many parts of your business, including:

Acquisition of a Competitor

Growth

Turnarounds


Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in your business credit line 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