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Asset Based Lending Canada
Asset based lenders have the ability to remove many of the challenges faced by business owners and financial mgrs. in Canada. We're examining the abl loan as a method to fund operations and growth.
Most top experts in Canadian business financing consider asset based lending a different form of funding your company - the other end of the spectrum being traditional chartered bank financing.
How is traditional bank financing different from an ABL Loan ? Simply because the entire focus is pretty well on specific assets that essentially give more borrowing power against 4 asset categories, either one of those or in combination.
Asset Categories
Accounts Receivable
Inventory
Fixed assets/equipment ( Must be assets that your firm owns outright )
Real estate - if applicable
Purchase Order financing can also be considered a subset of solutions offered via an ABL lending company in Canada.
Depending on what business and industry your firm is in you're either top heavy in one or more of those asset categories, or perhaps not at all. Service based companies traditionally utilize a/r and contract financing via the asset finance offering.
What then is the key benefit to asset based finance business loans and financing solutions? To put it simply:
FASTER ACCESS TO CASH!
Traditional financing forces you to address key issues such as what your balance sheet looks like, as well as focusing on historical, present, and future cash flow/projections. Your company may not necessarily have what it takes there, or in some cases, you're newer in business or even a start up. We point out that it always helps if you have a business plan and cash flow readily prepared.
A lot of companies that utilize asset based ' ABL ' lending solutions in Canada have a lot of seasonality or ' bulges' in their business cash flow needs. The ability to therefore rely on your ongoing asset base really helps smooth out those bulges!
While personal guarantees are almost always an issue for the business owner we can say that this type of guarantee, considered ' valuable ' or a ' must ' in banking circles has much smaller or no emphasis on asset based lending. Additionally, true asset based finance deals are pure asset monetization.
1. No debt on the balance sheet
2. There is no equity give up - Growing companies can maximize shareholder return without giving up equity when it is most valuable
We do need to mention though that while some consider ABL cash flow solutions as their ' holy grail ' in business cash flow financing you must be able to properly report on assets or be willing to go thru some form of appraisal process when it comes to adding inventories, fixed assets, or real estate.
ABL lenders, mostly commercial non bank lenders, rely heavily on the true marketability and value of your company asset base in the asset categories we have mentioned
ABL asset finance can also be used as an integral part of the financing to purchase a business when you or your company has targeted an acquisition that requires specific financing outside traditional norms
Seek out and speak to a trusted, credible, and experienced Canadian business financing advisor who can assist you with your cash flow and funding needs.
Click here for more info on 7 Park Avenue Financial Business Financing Success
7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
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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