Fascinated About How Factoring and Asset Based Lending Solutions Might Work For Your Firm When It Comes To Business Cash Flow & Working Capital Needs?
Information on factoring financing in Canada. Invoice cash solutions, utilized properly , allow a business to grow when access to traditional credit sources might not be available
Invoice cash - can a factoring or working capital facility actually reduce your finance expenses and allow your business to grow at any rate profitably. We think we can show you how!
Canadian business owners and financial managers keep hearing about firms that ' factor ' their accounts receivables, their ' invoices ‘. This is a growing trend in Canada that has caught on to a financing strategy that has been successful in the U.S. for a number of years.
Is there a ' perfect ' financing solution for your firm that provides you with unlimited working capital and is actually cheaper than bank financing when you realize that you are carrying receivables 30, 60, and 90 days on your balance sheet ? While we might agree there is no ' perfect ' financing solution for all Canadian firms everywhere we strongly feel that we can very EASILY demonstrate who invoice cash, know as factoring, or receivable discounting will take your firm to the next level of sales and profits.
Let’s get back to our statement of how you can reduce your finance expenses, and grow your sales at any growth rate. We will even add that you can ' profit ' from this financing strategy.
We have to get a little technical here, but bear with us! --
OUR EXAMPLE:
Let’s say your firm has sales of 1 Million dollars, you have 40% gross margins, and you have operating costs of 38%, leaving you a 2% net income on your sales. Included in those costs are your bank financing costs from, for example, a Canadian chartered bank. We would point out that your bank credit line has a limit, and at a certain point, because your customers are paying you in 30, 60, and 90 days you are full utilizing your line of credit. Are you able to take new orders and contracts without new external financing - we don’t think so!
So whats the solution?! We have one for Canadian business owners or their financial managers. Let us set up a working capital factoring facility for you. The kind that we prefer is 100% non intrusive - that is to say you will continue to bill and collect your own accounts receivable. We call it non-notification. Ask any other firm if they like how their factoring facility works - if they don’t have a non notification facility they will tell you they don’t necessarily like it for a number of reasons , mainly customer intrusion , etc .
So we have our facility set up. You take on new orders and contracts and double your sales to 2 Million dollars.
Your competitors start talking about you!
Using the factoring, or invoice cash facility you get paid the same day you invoice. At the end of the year your sales are 2 million, they have doubled! Your net profit would be 130k, not 20k; you would have paid 70k in factoring and financing costs and still have made a lot more profit - in our example 110k more profit.
Again , we realize we're getting a little technical and accounting oriented in our example and explanation - so what is the laypersons button line explanation of what just happened - It is as follows -
You doubled your sales, you had no concerns about external financing or taking on new debt, and your profits went up, a lot!
Technically what happened is what KPMG calls on their website the ' Cash conversion cycle ' - you have turned over assets much more quicker, therefore you have greatly improved return on asset, return on equity, and net profit .
In summary. Invoice cash, factoring, receivable discounting, whatever you want to call it (at our firm we call it a working capital facility) works. It can work for you.
Sit down with a trusted, credible and expert business financing advisor and run the numbers. You will find you just got off the cash flow merry go round, and that’s a good thing.
7 Park Avenue Financial :
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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