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Time For Some Fancy Footwork Around Your Business Financing & Line Of Credit Needs?
OVERVIEW – Information on how an asset based line of credit is a formula for higher receivables and inventory financing in Canada and how these lending facilities offer a true working capital alternative
An asset based line of credit is an emerging financial alternative in Canada for companies of all size who wish to maximize working capital in terms of their growth needs.
More often than not asset based lending is associated with companies who are unable to arrange or qualify for what most business owner’s term as a bank operating line of credit.
Traditional bank financing places a heavy emphasis on the overall financial position of your income statement and balance sheet. Therefore, if that is the focus then firms such as yours with either balance sheet issues, or experiencing temporary financial losses or one of negative circumstances do not quality for margined lines of credit with institutions such as Canadian chartered banks.
Asset based lines of credit take the reverse position, simply that you have the assets, so lets finance your firm on the strength of your assets, with minimal, if any in fact, focus on ratios, covenants, outside collateral , operating metrics, etc .
An asset based line of credit partner will tend to work through with you unique challenges in your industry or your business model. Some of those challenges might be the seasonality of your business or the special ‘one of ‘situations we referred to. Some of those circumstances might be making an acquisition, restructuring your firm, or being in the receipt of large new contacts or purchase orders that are out of line with your traditional financing arrangements.
Operating capital financing, or rather the lack thereof! can often be the reason your firm is unable to take advantage of strong market opportunities to maintain your competitiveness.
One of the largest parts of an asset based lending facility is receivables financing. In small firms this is often taken care of by a factoring facility – your invoices are sold to the lender, you receive immediate cash, and you can structure facilities around such issues as credit insurance, non recourse to your firm, etc.
The asset based line of credit, in a true sense, offers all of the advantages of factoring, but operates instead like a true bank facility – your receivables, and inventory, are highly margined to the maximum value, and your access to cash availability is directly commensurate to your sales growth – in other words you have no real cap on your operating facility – you receive cash for receivables and inventory as fast as you can sell and move our product and services!
Your firm will probably find that anyone in the asset based financed area has a stronger knowledge of your business model and assets.
We recommend that you seek out and talk to an experienced and credible advisor in Canadian business financing to determine if the advantages of an asset based line of credit work for your firm!
7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Office = 905 829 2653
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 .
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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