A Business Nightmare Come True ?
OVERVIEW – Information on inventory financing lenders in Canada. Solutions such as P O Factoring and other asset based sales financing techniques help grow your business
How can Canadian business survive financing adversity when your firm is unable to traditionally finance large new orders and ongoing growth? We've got some answers. Let's dig in.
Let's look at real world examples of how our clients achieve business financing success, getting the type of financing need to acquire new orders and the products to fulfill them.
Here's your best solution - call your banker and let him know you need immediate bulge financing that quadruples your current financing requirements, because you have to satisfy new large orders .
Ok... we'll give you time to pick yourself up off the chair and stop laughing.
Seriously though...we all know that the majority of small and medium sized corporations in Canada can't access the business credit they need to solve the dilemma of acquiring and financing inventory to fulfill customer demand. For companies with strong financials, a long history, and profits and cash flow now and in the past there's no questions Canadian chartered banks fit the bill. But what about the thousands of companies in Canada that can't access all (or any?) of the traditional financing and great interest rates provided by the banks?
Large new orders challenge your ability to satisfy them based on how your company is financed. That's why P O factoring is a probably solution. It's a transaction solution that can be one time or ongoing, allowing you to finance purchase orders for large or sudden sales opportunities. Funds are used to finance the cost of buying or manufacturing inventory until you can generate product and invoice your clients.
Are inventory financing lenders the perfect solution for every firm. No financing ever is, but more often than not it will get you the cash flow and working capital you need.
P O factoring is a very stand alone and defined process. Let's examine how it works and how you can take advantage of it.
The key aspects of such a financing are a clean defined purchase order from your customer who must be a credit worthy type customer. P O Factoring can be done with your Canadian customers, U.S. customers, or foreign customers.
PO financing has your supplier being paid in advance for the product you need. The inventory and receivable that comes out of that transaction are collateralized by the finance firm. When your invoice is generated the invoice is financed, thereby clearing the transaction. So you have essentially had your inventory paid for, billed your product, and when your customer pays, the transaction is closed. Mission accomplished.
P O factoring and inventory financing in Canada is a more expensive form of financing. You need to demonstrate that you have solid gross margins that will absorb an additional 2-3% per month of financing costs. If your cost structure allows you to do that and you have good marketable product and good orders you're a perfect candidate for p o factoring from inventory financing lenders in Canada.
We point out to our clients that Purchase Order / Contract financing can also be combined with a fully operational asset based line of credit - this will often substantially lower the overall cost of your borrowing - it’s based on 2 key things which you probably already have - sales... and assets!
Don't want to navigate that maze by yourself? Speak to a trusted, credible and experienced Canadian business financing advisor who can ensure you maximize the benefits of this growing and more popular business credit financing model.
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
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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