Asset based Lines of Credit – All the business financing you need!

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Asset Based Business Credit Is Your Go To Solution For Business Credit & Cash Flow

Information on how an asset based line of credit works - This non bank finance solutions cash flows your receivables, inventory and unencumbered equipment

Canadian business owners and financial managers place a great importance on their ability to achieve and maintain operating lines of credit.
Traditionally in Canada the bank line of credit is also called an ' operating loan ' . It is short term in nature, it actually revolves day to day, and so may finance people also call the operating facility a ‘revolver’

So what does that facility provide the Canadian firm with? It is simply a financing facility under which the bank agrees, in advance, to lend a maximum amount of money - typically against receivables and inventory

. The facility is short term in nature, not a term loan, so it does not include equipment or real estate, which is financed under other conditions.

In bank lines of credit certain conditions have to be met by your firm, and you are generally paying interest only o the amount outstanding on a daily basis. Revolving lines of credit or operating lines work best when they go up and down. Typically customers that are always at the top of their credit line are in fact candidate for other financing such as equity or cash flow term loans.
Most Canadian business owners know that the bank focuses more on receivables than inventory. Because inventory cannot easily be converted into cash by a bank, (if it had to) you will typically get a much lower advance rate or margin rate on inventory.
So, what happens when this traditional type of financing doesn’t work for your firm? You will know it is not working when some or all of the following seem to occur -

- You are consistently maxed out on the operating line

- Collections are slow, which further exacerbates the line revolving to your and the banks satisfaction

- You are worried that you do not consistently have enough cash flow and working capital to take on new orders or contracts.

Is there a solution. Absolutely - a new breed of line of credit financing is gradually taking hold in Canada - It is called ABL, or asset based lines of credit. The total focus of these facilities are to maximize the liquidity of your assets to a much greater extent - and when we say all assets we mean inventory, receivables, equipment , potentially real estate, and new contracts and purchase orders . That’s true asset based financing!

One of our customers had a 100,000.00 line of credit with a Canadian chartered bank that grew into a 2 Million dollar asset based financing arrangement.

The asset based lending industry is robust in Europe and the U.S. It is slowly taking traction in Canada. Although one or two of the banks offer these facilities, the majority of this type of financing is independent of the banks.

Due to the somewhat early and fragmented nature of this financing in Canada your firm is strongly encouraged to seek the experience, advice, and credibility that comes with talking to a business advisor in this area of Canadian financing.

Asset based lines of credit - they are newer to Canada, they work, and you should investigate the possibilities to maximize your cash flow and working capital needs.




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

http://www.7parkavenuefinancial.com


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 .

' 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