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Inside the Growing A/R Finance Market - Factoring & Alternative Business Credit Lines
Information on factoring finance in Canada. Receivables financing is a solid alternative to a full business line of credit - Here's why
How does factoring work in Canada, and how your firm benefit does from this type of financing. Also what are the costs of factoring? Let’s discuss those issues.
Canadian firms are challenged in the current environment to deliver the financial performance they need to operate and survive. The global financial woes of 2008-2009, out of which we are now emerging didn’t to anything to help those challenges in a positive manner!
While most business owners rely on banks to get their financing, many firms either are new, don’t qualify, or qualified previously but had financial challenge and are unable to get the financing they need for their working capital accounts, which are of course mainly receivables and inventory.
Canadian business owners want alternatives, and factoring provides one of many alternatives as a working capital source. If anything relying on just one source of financing, such as a bank or other outside lender has proven to be dangerous for many smaller to medium sized firms.
Factoring is the monetization, or in simply layman’s terms, the immediate cash flowing of your accounts receivable. The factoring process allows you to immediately overcome the biggest working capital challenge most businesses have, namely providing payment terms to customers, and seeing those customers even taking longer to pay than your terms!
Factoring puts you back in control of this timeless business challenge. Many of our clients use this type of financing as a bridge to get back to traditional financing, because your bank sees the cash flow coming into your firm on a regular basis.
Also, by providing extended payment terms that you are comfortable with to new or existing customers allows you to maintain a competitive advantage with your customs.
Factoring is the sale of your accounts receivable to a finance factor firm. We encourage all clients to understand the different types of this financing – which are:
recourse factoring
non recourse factoring
insured receivables factoring
non notification factoring
We strongly recommend non notification factoring to clients who qualify because it allows you to bill and collect your own receivables with no notification to your customer based.
Factoring is perceived as expensive, but a true analysis will show you that in many cases you can make money by using factoring. The financing costs associated with this type of cash flow financing can be offset by collecting your receivables faster and allowing you to buy smarter and take supplier discounts. Not to mention improving relations with your supplies.
In summary, factoring is a new great alternative financing vehicle. It works because you receive immediate cash for accounts receivable, allowing you to kick start your business cycle all over again. There are a number of different types of this financing offered in Canada – speak to a trusted, credible, and experienced advisor in this area to maximize the advantages of this cash flow financing .
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Office = 905 829 2653
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 '
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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