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The Best Factoring Company Will Offer Confidential Receivable Financing - Here's Why
An effective accounts receivable finance solution has the ability to ' supersize' your overall working capital and cash flow. This can be even more enhanced with a business accounts receivable finance strategy known as C I D - Confidential Invoice Discounting; that is a type of ' factoring ' that has worked very well for our clients at 7 Park Avenue Financial.
How can this business finance solution be ' supersized' then? Simply that it is highly possible that on the utilization of this type of financing you will often double, and in some cases triple your access to immediate cash flow and working capital. Business owners and their financial mgrs will be surprised to know that in most cases even traditional bank financing won't provide the same cash flow access as this little known solution.
And safe to say that in some cases where you would have been self financing or had non-financing in place whatsoever, well, your firm has it now!
How Much Does A Factoring Company Charge ?
So what in fact is the cost of this unique and innovative AR Finance solution, how does it work, and what can your company compare it to when assessing your specific cash flow needs.
C I D is our terminology for Confidential Invoice Discounting. ' Factoring ' solutions are used by firms of all sizes (even major corporations, by the way) but in reality seems to be more common in the S M E (small and medium enterprise sector). It even accommodates start ups if you can believe it, as any type of financing for a start up is often a major challenge for the business owner. By the way, the big boys have a more fancier name for their AR financing solutions - Securitization .
Companies that sell on credit in Canada will always have an investment in their accounts receivable, often representing, along with inventories, a huge part of their overall business assets.
So how is that asset financed ? That becomes an even more challenging question when traditional bank financing is not available. In a large majority of client we talk to they don't qualify for some, or all, of the business capital they need via a bank.
That's exactly where business accounts receivable invoicing and discounting comes in. Your ability to ' sell ' those invoices as you generate them, using the A/R as collateral allows your company to turn into an instant cash flow machine. It's all done by a fairly seamless process when you are working with the right type of facility and the best firm/financing partner.
So that’s the essence of factoring, or invoice discounting, but where does our key benefit of confidentiality come in? Right about here!
The key difference of Confidential Receivable Finance facilities and business factoring is that you are in control of your sales ledger and customer base, not the factor finance firm. That gives you superiority over other firms who use this type of financing but are forced by their factoring agreement to make their customers aware of how they are financing their firm. In talking to clients here at 7 Park Avenue Financial that benefit is huge in their minds when it comes to how their competitors and suppliers might view them.
How Does AR Finance Work?
On a daily basis a/r financing works in the same manner as what we will call ' traditional ‘ accounts receivable finance and invoice discounting. It’s a simple process. You generate invoices for the products and services that your firm provides and you receive immediate same-day funds for 90% of the invoice value. ( That remaining 10% is held back until you client pays, you then receive the 10% less a finance fee of anywhere from 1-2% per month.
The way our clients look at it is that the 1-2% per month reduction in gross margin is more than offset by all the cash flow their sales generate - allowing them to run and grow the company on an ongoing basis.
Advantages Of Confidential Invoice Discounting
Clearly the advantages of this type of business financing couldn’t be more pronounced
- Financing is approved quickly
- Easy to administer
- Your company bills and collects it's own a/r !
- Cash flow generated is used to run and grow the business
So, does a solid AR Finance strategy seem like the proper cash flow solution for your firm? Ultimately you will decide that - we're simply letting you in on the secret and letting you be the decision maker around supersizing that cash flow.
Speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success . Get your company ahead of the pack and competitors.
7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
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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