Asset Based Loan Financing For Business Credit Lines : The Perfect Solution !

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What’s Normal & What’s Important When It Comes To The Perfect Solution For Business Line Of Credit Financing ?






OVERVIEW – Information on asset based loan financing as a business solution for business credit lines in Canada - ' ABL' lines are the alternative to traditional bank financing for firms that can't access any, or all the cash flow and working capital they need

Asset based loan financing can often be the ' perfect solution ' for Canadian business line of credits in the SME sector in Canada. Those small to medium enterprises are often looking for info and guidance on business credit lines. Let's dig in.
Another term for asset financings of this type is ' cash flow factoring ' - in essence you're monetizing your current assets such as receivables and inventory - and turning them into ' CASH FLOW ‘... which we're told is ... king!


So how do the mechanics of this finance solution work? Is it really the solution for your working capital needs?


Let's cover off the basics and find out how you can benefit from this relatively speaking new form of asset financing in Canada. By the way, this method of financing your business is used by startups right up to the largest and most successful companies in Canada - so something must be working.


Simply speaking the facility is a loan arrangement that is drawn down and repaid regularly based on your receivables, inventory, and, if required, equipment and real estate should your firm possess those assets also.


By collateralizing your assets you in effect create an ongoing borrowing base for all your assets - this then fluctuates on a daily basis based on your sales and invoices you generate, inventory you move, and cash you collect from customers.
When you need more working capital you simply draw down on initial funds as covered under your asset base. Simple as that.
The advantage is clear - If you have sales and assets you can get immediate cash. Your receivables and inventory, as they grow, in effect provide you with unlimited financing. Now that's a concept!


The alternative facility for this type of working capital financing is of course a Canadian chartered bank line of credit - that facility always comes with a cap and stringent requirements re your balance sheet and income statement quality and ratios, as well as performance covenants and personal guarantees and outside collateral .

So there is a big difference in the non bank financing we have table for your consideration. But what about those friendly people at the bank - we see them all the time in TV commercials!

You might find the people in the commercials aren't the ones approving your loan needs!


Unlike a Canadian chartered bank financing your business asset based loan financing in effect has no cap. Asset based lenders work with you to manage the facility - and you are required to regularly report on your levels of A/R and inventory, which are the prime underpinnings of the financing.

Smaller firms use a particular subset of this financing, often called factoring or cash flow factoring. This specific type of financing is less transparent to your customers, as the cash flow factor might insist on verifying your invoices with customers, etc. A true asset based loan financing is usually transparent to your customers, which is the way you want it to be - You bill and collect our own invoices. We've called that Confidential Receivable Financing, and it works.


The Canadian asset based financing market is very fragmented and has a combo of U.S., international and Canadian asset finance lenders. They have varying appetites for deal size, how the facility works on a daily basis, and pricing, which can be competitive to banks or significantly higher.


Seek out and speak to a trusted, credible and experienced business financing advisor and determine if the advantages of business asset based loan financing work for your firm.


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 13 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

Working Capital Sources In Canada : Tracking Different Business Credit & Finance Solutions To Grow Your Business

Looking for Made To Measure Business Credit Cash Flow Finance & Loan Solutions ? For Your Consideration!

OVERVIEW – Information on sources of working capital and traditional and alternative business credit finance solutions in Canada

Working capital finance sources, believe it or not, can be a ' made to measure' solution for the majority of Canadian businesses.

That might come as quite a surprise to many business owners and financial mgrs who feel that might not have real ' choice ' in business credit solutions. So how do we gravitate to the right cash flow solution for our businesses? Let's dig in.

Understanding the type of business credit you require is all about living through a working capital ' crunch ‘. Most businesses at one time or another live that challenge every day.

Working capital is best understood as your operating capital, - That's the investments your firm has in areas of receivables and inventory, as well as the constant demand to replace and replenish assets. Your goal should be to ensure those current assets such as receivables and inventories are monetized in the best manner possible.

So who can help? The textbook definition doesn't really help us out - our accountants and analysts tell us to go to the balance sheet, subtract current liabilities from current assets, and , voila! That's working capital!

One of the biggest contradictions in working capital that you need to understand is the issues of assets, profit, liquidity and turnover. Once you have a handle of those the concept of working capital and, more importantly, the solutions start making more sense.

How you manage those short term assets of A/R and inventory is what working capital is about. Many business owners quickly realize that one of their liabilities, i.e. payables, is actually a large asset in measuring working capital and managing it. That is because if you can continue to convert inventory into A/R into cash, and slow down payables you are achieving working capital progress.

Is there a perfect way to measure your working capital needs and progress? One of those methods is to check into the 'cash conversion cycle '- It's a tool you can use to measure how low a dollar takes to flow through your company. It simply takes your inventory and receivable days outstanding, subtracts your payables days outstanding, and there is your final number.

In order to achieve solid working capital you need to increase turnover - that can be done by accelerating cash flow by borrowing against receivables, or selling receivables via a factoring process.

Other working capital finance sources include:

Asset based non bank lines of credit

Sale leaseback strategies of assets you already own

A/R factoring / Confidential Receivable Finance

Working capital term loans

SR&ED Tax Credit Financing

Merchant Advance/working capital short term loans

Your working capital solutions in Canada might seem limited, but in fact they are very focused and real. You can increase working capital today with no one’s assistance simply by accelerating turnover of your assets such as receivables and inventory. If you feel your challenge is more of a long term nature a working capital term loan (if larger these loans are called subordinated debt) is the solution.

Over the long haul monetizing your assets, not borrowing more - that's where asset based lines of credit work best.

So what’s working capital all about - it's a case of understanding what it is, looking at how your firm performs in key metric areas of turnover, etc, and then choosing a solution that works best for your firm, whether that is long term in nature, or a bulge type facility that augments your daily cash needs.

Seek out and speak to a trusted, credible and experience working capital business financing advisor to determine what choice is best for your firm.

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 13 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

Equipment Financing For Business Leasing Needs Is Your Most Powerful Asset Finance Tool

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Looking for an ace in the hole for all your business asset needs ? We’ve got one - And your competition is using it !

OVERVIEW – Information on business leasing and equipment financing in Canada. Here's why Canadian business owners and financial mgrs embrace this popular asset finance solution for acquisition of equipment, rolling stock, technology, software, and all other fixed asset needs

Equipment financing for you company’s asset needs is probably the biggest ' ace in the hole that business owners and financial mgrs have in their ' grow the company ' toolkit. Do you understand the power of business leasing? Let's dig in!

Your business is growing, and the good news is that equipment lease financing in Canada is growing even more. So it makes sense that you have a basic understanding of equipment financing and who to turn to when you want to utilize this great asset acquisition technique?

Top experts tell us that almost 80% of all companies in Canada utilize lease financing when acquiring assets, from computers to plant equipment to specialized equipment. The reality is that almost any business asset, even software to run your company, can be financed.

So what's the reason and advantage in choosing a lease solution? When you utilize this finance strategy you are sharing the risks of asset ownership with the lessor and depending on which type of lease you actually choose - there are two types - you can actually use the equipment for the agreed upon term and return the asset .


That latter type of financing, known as an operating lease, also lowers your overall financing expense. The other key advantage of course is simply lowering your cash outlays - allowing you to use your borrowing facilities for other purposes. Bottom line it's important to understand what type of lease makes sense for your firm.


When we meet with clients exploring the leasing option a large part of the discussion is on rate and credit - That's understandable because that is what drives leasing approvals! You need to be able to understand, in advance, the financial requirements of a lease approval, and ensure you have positioned your company in the best manner possible.

In Canada you can obtain lease financing via a couple of the chartered banks, independent finance firms, and captive lessors tied to manufacturers. Knowing which type of firm to access can save you money... and time.


We recommend to the majority of clients in pursuing and independent finance company lease partner - credit conditions are more lenient, they are specialized, and highly motivated to do the one thing they do best, approve and write leases!


Your most valuable partner in this industry is a trusted, credible , and experienced lease financing business advisor who can guide you very efficiently through the maze of firms in the industry . That relationship can be a very valuable one.

Business owners should never forget that when they adopt a long term leasing philosophy they are making their firm more competitive, because assets acquired to run the business can be easily upgraded and replaced, allowing that equipment to generate optimum revenues and cash flow .
Whether business owners/mgrs want to admit it or not the days of ' pride of ownership ' in assets is probably long gone. These days it's about outsourcing, lower cost, newest model, etc. Probably the best example of this is computing and software, all of which can and should be leased given the constant changes and cost.


Seek out and speak to a trusted, credible and experience business leasing advisor who can assist you in maximizing your knowledge of the Canadian asset finance industry, allowing you to use this valuable tool to grow sales and profits.

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 13 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 '



http://www.7parkavenuefinancial.com


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

SR ED Research Tax Credit Loan Financing - SR&ED Loans Eliminate Waiting Pain !

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Information on SRED Research Tax Credit Loan Financing In Canada

Without SR&ED tax credit financing you are often an ' unwilling participant ' in the SR ED refund waiting game. That's not a game you wish to be a contestant on! So what if your SR &ED Research Tax Credit Grant could be financed for funding today via a SRED Loan? Let's dig in!

Industry pundits in Canada's Sr&ed program are quick to point out that the combination of waiting time, client appeals, and even the whole audit process has put a certain amount of delay in the issuance of refunds.

Clients we talk to work hard to document their claim and address any questions and issues arising out of review of their claims. They're focused on spending r&d capital, and recouping as much of those funds as they can!

Naturally that additional burden around the waiting time significantly affects the cash flow and working capital positions of many firms, many of who are start up and early stage firms focused on growing their business.

If your company is filing what is known as Scientific Research and Experimental Development Tax Credits, (SR & ED) your firm has expended significant funds on developing or improving products, processes, etc. Receiving that cheque from Ottawa is of course always a great thing, but why wait?

One of the smartest things you can do is to consider the financing of your claim - that can be done via a short term sred loan - we could almost call it a bridge financing loan for your sred claim.

Why is that a good strategy? Well , one main reason might be that since the tax credit is in the form of a non repayable grant then receiving funding for it today , ( rather than several months or a year from now ) allow you to put that money back to work into your business . That valuable cash, which you have already spent, can be re directed to general working capital, further re investment in r&d, reduction of payables, investments in new equipment, well you get it, for an general worthwhile corporate purpose .


When financing a SR and ED claim the lender pays careful attention to who prepared the claim for your firm. This is typically via what the industry calls SRED consultants who typically has expertise in one or a variety of industries, including such areas as computer science, technology, physics, chemistry, manufacturing, etc.

SR ED claims can be financed whether your claim is a first time claim, but the process often goes quicker and easier if you have filed successfully in the past. Our point is simply that you should not be deterred if in fact you are filing for the first time - however as a cautionary note you should note that more focus will probably be paid to the overall quality of the claim and who prepared it for your firm. You can actually claim for a 2 year period, i.e. your current year and the previous fiscal year.

Clearly most business owners and financial managers who utilize the program recognize the tremendous benefit of increasing your overall return on R&D by filing a claim and recapturing your funds. And if you can utilize those funds sooner rather than later, why not consider financing, or in effect monetizing the claim.

Financing your SR and ED claim can of course assist in your overall cash flow and working capital position. Claims are generally financed at 70% of their filed value, that allows a 30% buffer in case adjustments are made to the claim , and , guess what, you make no payments on the sr ed loan . Funds you receive are netted out against the final cheque from Ottawa and your provincial jurisdiction when your claim is ultimately audited, approved, and funded.

Clients often ask how complex a sred loan is, and what the timing is to receive funds. With your full co operation funding can usually be done within a couple weeks of your application, and the reality is the sred funding is no different than any other business financing your might entertain. It's that simply, you complete a standard business application, and at the same time provide details of your sr Ed claim which in effect is the collateral for the financing.

Your firm takes on no debt when it comes to SR&ED tax credit financing - you're simply monetizing a receivable, i.e. your refund claim.
Speak to a trusted, credible, and experienced advisor in sred loans, and determine the advantages of monetizing your sred claim into valuable cash flow and working capital.


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 13 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

Commercial and Industrial Equipment Leasing Solutions

Information on commercial and industrial equipment leasing and financing in Canada. What are the benefits of this financing strategy and why is it an alternative to bank financing?

Canadian business benefits from commercial leasing and industrial equipment leasing when it comes to asset acquisitions for growth and profits.

As a small or medium sized business owner in Canada you do not want to deplete your cash resources. We would point out that larger, even public corporations in Canada have that same pressure, because when they report to shareholders the focus of their investors and shareholders is often cash flow growth and preservation.

Business owners and financial managers in Canada look to lease financing as an alternative to taking on bank term debt. Canadian chartered banks do not provide lease financing; they structure your asset acquisitions as loans which supplement your existing borrowing arrangements with the bank.

Quite often, as with any asset acquisition, its all about the monthly payment and more often than not you will find that the lease financing solution provides you with the lowest monthly payment, and in many cases you can arrange that payment to reflect your actual working capital situation - i.e. seasonal payments, skip payments, quarterly payments (if desired) etc. That is true flexibility.

Most lease financing solutions in Canada are at a fixed rate, but in some cases variable rates are also offered.

When clients ask us what are some of the major challenges or pitfalls of equipment leasing and financing we advise them that questions can be answered in a very simple manner - business owners need to focus on which benefits of lease equipment financing appeal to them and then work with a partner who can deliver optimal rates, terms and structures based on your firms overall credit quality.

The challenge for Canadian business is working through the plethora of hundreds of equipment finance firms, many of which may not be suited to your type of asset acquisition and your firms overall credit quality. In Canada rates on equipment leases depend on the size the of the asset, the financial strength of the leasing company (they borrow money too!) and the overall credit quality of your firm. Leasing when it comes to pure interest rate focuses on your ability to generate future cash flows to make the monthly payment.

Thousands of leases are written every year in Canada for commercial, industrial and construction equipment when the historical cash flow of a customer does not necessarily reflect the future ability to pay. In that case the lease becomes what is known as 'structured ', which simply means that a down payment might be required, the term of the lease might be shortened, and in some cases some additional collateral might be required Lease firms are in business to write leases, so usually every effort is made to complete a transaction that makes sense for all parties.

We advise customers to work with a credible, experience and trusted advisor in this area who can help your firm navigate the occasionally complex world of equipment financing in Canada. When you are successful you will have benefited from one of the great financing strategies of Canadian business - improved cash flow, prompt approvals, flexible payments and potential tax and accounting benefits. Those are great reasons to lease finance your assets.

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 13 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













Article Source: http://EzineArticles.com/expert/Stan_Prokop/432698

Article Source: http://EzineArticles.com/4440780

Why is Everyone Talking About Factoring & Accounts Receivable Financing in Canadian Business Circles

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There continues to be a fair amount of press about the alternative financing method known by a number of different names - These include Factoring, Working Capital Financing, Cash Flow Financing, Invoice Discounting, etc!! Let's keep it simple and we'll just call it factoring for our purposes.

The old cliché that the 'cheques is in the mail 'probably has never run more true for Canadian business owners and financial managers. Receivables, on balance, tend to be in most cases either the largest (or pretty close to it) liquid asset of the company, next to cash. And there is never enough cash.

As the economic challenges of 2008-2009 massively affected business credit liquidity all over the world, including here in Canada the other cliché of 'cash is king' became even more important. Many business owners we talk to continually say they are devoting too much time to collection of receivables and their working capital issues, rather than focusing on running and growing their business.

We should mention that as Canadian business owner's work on liquidating their receivables into that much needed cash that it is, many times, the larger corporations that are paying them as slowly as their smaller customers. Larger corporations by delaying payables can increase their own cash flow rations significantly, and the smaller customer or supplier, your firm, has little leverage with such large corporations. (We won't name any names to protect the innocent!)

Standard payment terms for most industries, more often than not, is 30 days, but it is of course not unusual for suppliers to stretch out to 60 and sometimes even 90 days.

So where does factoring come in. It certainly can be a consideration for Canadian business owners, as it alleviates the problems we have mentioned above - namely high investment in current assets of receivables and inventory, and prolonged delays of payment from even the largest customers.

The 'factor ' purchases the account receivable, withholds a fee for doing that, and advances cash immediately, almost the same day, against those invoices.

Factoring has been around over a hundred years or more, and has gained huge acceptance in Europe and the U.S. - It certainly never caught on in the past to the same degree in Canada as it has in other places. Some analysts estimate that in the U.S. it's a 100 Billion dollar business, and in Canada it's a 4 Billion dollar business.

So let's get back to our core theme - why is everyone talking about Factoring. Again, it's the instability of the financial markets and the difficulties that smaller and medium sized firms have in arranging 'adequate' business financing. We emphasize adequate because yes, it is great to get a line of credit at your bank of say $ 100,000 at current Canadian rates of 5 or 6 per cent per annum, but if you need 300,000.00 and all your collateral is tied up what good does that do - not a lot.

We believe factoring has done when primarily because of the tightening of chartered banks - Business owners go where the money goes, so alternative non traditional financing such as factoring will continue to do well when banks tighten credit facilities

As Canadian business optimism improves, but credit remarkets remain unstable to a certain degree factoring continues to be a solid viable solution. If your firm has assets such as receivables and in some cases inventory or purchase orders the Canadian business owner can obtain immediate cash for those assets. Most of these firms would not qualify for larger term oriented loans with various financial requirements such as other collateral, debt covenants, operating covenants, etc.

Depending on which type of factor facility the Canadian business owner chooses the facility can also reduce his collection and administrative work.

The best candidate for a factoring facility is a high growth firm with good gross margins. That profile is very important. Why is that? It's because factoring is more expensive than bank financing, so the firm gets all the cash it needs, but margins are eroded by a couple per cent age points. A low margin, commodity type business is not optimal for a factoring solution...

In Canada, as we have noted, factoring is still not widely accepted, in the U.S. it is dominated by a couple of huge players and probably a thousand smaller firms.

In summary, factoring continue to gain traction in the Canadian business financing marketplace. It is more expensive than bank financing, but provides a lot of liquidity that could otherwise not be found. Business owners need to thoroughly investigate this type of financing if they feel it's appropriate, or engage the services of a trusted financing advisor in this area with credibility and solid partner firms in this area.


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 13 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


















Article Source: http://EzineArticles.com/expert/Stan_Prokop/432698

Article Source: http://EzineArticles.com/3819920