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Asset based Lines of Credit –
OVERVIEW – Information on asset based lines of credit in Canada. This relatively newer business finance options allows companies to achieve revolving credit lines that are non bank in nature – they are suitable for fast growing companies and firms that have challenges in accessing traditional bank capital
Similar to other forms of business financing that are newer and not yet in fullest use in Canada asset based financing, also called ' ABL ' financing evolves from the U.S. and the U.K. . . . The industry originally started as a simply 'factoring 'or receivable finance arrangement.
What asset based lending does is to take that basic concept of factoring and include all your other ' assets ', which traditionally are inventory, equipment, and in some cases the actual purchase orders and contracts that your firm receives and wishes to fulfill.
When we sit down with our customers and they ask us for information on asset based lending we find ourselves often explaining right out of the gate that asset based lending is not a ' lending of last resort '. Most of our customers are surprised to hear that some of the largest corporations in Canada and the U.S. finance their business through asset based lending.
The fact that you as a Canadian business owner can leverage not only your receivables for liquidity, but your inventory, contracts, and equipment and real estate naturally brings true liquidity to the table.
Many customers we work with immediately see asset based financing as a major competitive advantage, enabling them to improve relations with suppliers and grow sales with new or existing customers.
In some instances we have pointed out to clients that our best financing solution for a merger or acquisition scenario is an asset based lending arrangement as it maximizes the true asset and capital power of both firms.
In 2008 and 2009 Canada, like many other countries, or in fact all the world experienced a major liquidity crisis. As banks and independent finance companies pulled back on business line of credit, not always because they wanted to, but because they had to, asset based lending continue to offer more liquidity to customers who were working capital and cash flow challenged.
Naturally as many Canadian firms had balance sheet and income statement erosion, (I.E. financial losses) the challenge of what one could call ' traditional ' financing became even greater.
Many of our customers scrambled to get their balance sheets in order, as for the first time in May years loan covenants were in breach, etc.
We don't want to say that the banks and other large finance firms in Canada let Canadian business owners down, but certainly many times it felt like that, and the welcome comfort of an asset based lending arrangement saved the day for many a firm of all sizes .
Bottom line? Asset based lending has risen to the top of the pile with respect to a robust full financing options for Canadian firms looking for financing for a combo of one or all of receivables, inventory, equipment, real estate, and contracts .
Speak with a credible, experienced and trusted advisor in asset based lending to determine if it's your firms 'holy grail 'of Canadian financing!
7 Park Avenue Financial :
Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Office = 905 829 2653
Email = sprokop@7parkavenuefinancial.com
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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