Finance Factors In Canada / Decided If You’re For Or Against Receivable Factoring Cash Flow Solutions?

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 The Dreaded ‘ F ‘ Words - It’s Factoring, Funding and Financing Your Sales Hit A Cash Flow Home Run With Receivable Factoring Finance Factors In Canada 

 

RECEIVABLE FACTORING FINANCE FACTORS 

Receivable Financing Finance factors in Canada. When the Canadian business owner  / financial manager considers the weight of evidence for a factoring receivables he or she wants to be in a position to have the facts on how this method of financing sales works, costs, and attracts benefits otherwise not obtained. Let's dig in!

 

  

IT'S CRITICAL TO GET A STRONG SENSE OF YOUR TRUE CASH FLOW POSITION  

 

Whether your business is mature, a start-up, or growing like crazy you need to be in a position to ' model ' your cash flow. That's something you need for your own management of your business, as well as being available for any term or operating lenders.  The advantage of having such data is that over time you get a strong sense of your cash flow and working capital needs, giving you comfort on what’s coming in. and going out!

 

  

PROFITS DON'T EQUAL CASH FLOW   

 

Feeling disconnected lately?  One reason for that is what we see in talking to clients all the time - actual cash flow and profits are vastly different things. Are you really comfortable with the way your A/R tracks sales, or vice versa, and do you understand the implications of growth and working capital needs? Most firms are keenly aware it is more and more difficult to get paid on 30 day terms which historically were a norm.

 

That’s where Finance factors/factoring company solutions come in. An accounts receivable factoring solution reduces the time gap that it takes you to generate cash out of your products and services.

 

  

BANK FINANCING VERSUS FACTOR FINANCE - THE ONLY DIFFERENCE IS THE PAPERWORK!  

 

Unlike bank financing where you assign or collateralize your accounts receivable via a line of credit, the Factoring solutions is a straightforward immediate ' sale ' of your revenues as you generate sales. It gives you ' immediate funding ' and by that we mean basically the same day. So if you hopefully generating invoices for clients in the morning you receive the cash for that sale the same day. That’s cash flow optimization! Factoring differs significantly from a ' bank loan '.

 

  

FACTORING A/R IS A LONG-STANDING SOLUTION THAT CAN BE ACCESSED QUICKLY  

 

Although the function and the formula for accounts receivable financing seem either strange or exotic or unheard of to some in reality this form of financing has been around for hundreds of years. It is widely popular in the U.S. and gains more traction in Canada every day. Quite frankly it’s the alternative to having to put more equity in your company or arrange debt financing that you may or may not be eligible for. (And business owners can, unfortunately, spend a lot of time these days on financing solutions that are either wrong for them or unattainable)

 

Where confusion reigns supreme sometimes is when some of the terms, pricing and players in the Canadian accounts receivable financing industry seem a bit confusing to the factoring ' newbie '.

 

5  KEY POINTS IN UNDERSTANDING RECEIVABLE FINANCE

 

A short overview of some key issues, points to consider is as follows:

 

1.A/R factoring documentation is between your firm and the finance factors - the factoring agreement will spell out clearly the factoring fee and final advance rate  ( managing your a/r well and focusing on dso reduction will lower costs associated with carrying slow paying customers - funds are typically advanced within 24 hours of your invoice being generated.

 

2.Our absolute recommended solution is a confidential invoice financing facility whereby you bill, collect and finance your sales to the amount you require and need.

 

3.Generally, receivables under 90 days can be financed at any time. Your receivable might be 1 day old or 60 days old. It's your call on when you want to cash flow them relative to the invoice amount/amounts and what your cash needs are. The faster an invoice is paid will lead directly to lower financing costs.

 

4.The terms advance rate and discount fee are absolutely critical in understanding A/R receivable factoring in Canada. Typically 10% of the financing is held back as a buffer or hold back, and the charge to discount or finance that sale is in the 2% range for a 30 day period. So using a $100,000.00 invoice as an example you would receive 98,000.00 of immediate cash for that item. Proceeds from factoring companies could be used to generate more sales and service and profits from your goods and services  - and in fact, your payables could be offset by taking discounts for prompt payment with your own suppliers.

5. Your company has the option to choose non-recourse factoring or traditional recourse factoring,w whereby in the latter your firm continues to carry the credit risk. Companies may also opt to consider receivable insurance which is available from a handful of specialized finance firms, allowing your firm to lower bad debt risk.

 

CONCLUSION

 

If you wish to smooth out and normalize small business cash flow, be less afraid of growing or taking on larger orders and contracts, and avoid ' cash crunches ' the weight of evidence might just suggest you should consider receivable factoring. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your cash flow needs.

 

7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com

Click Here For 7 PARK AVENUE FINANCIAL website !



7 Park Avenue Financial provides value-added financing consultation for small and medium-sized businesses in the areas of cash flow, working capital, and debt financing.



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. He is an experienced

business financing consultant

.

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 financing 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.


Click here for the business finance track record of 7 Park Avenue Financial







Stan Prokop
7 Park Avenue Financial/Copyright/2020

The Federal Small Business Loan In Canada. There’s No ‘ What If ‘ When It Comes To SBL Loans

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There’s No Shenanigans When It Comes To SBL Loans In Canada

The federal small business loan.  When we think of the term ' shenanigans ' it conjures up images of fooling around. There are no shenanigans when it comes to Canada ' SBL' loan. It's a straight forward program for small businesses, start-ups included, to get the financing they need to start/grow their business.

 

Is the program a great idea? We think so and here's why, so let's dig in.

 

  

THE SBL IS NOT A GRANT!

  

For starters, any connotation you have with grants or handouts need to be dispelled right away. You don't have a ' right ' to receive approval for such financing, so it’s a bad idea if you think you are on the ' auto qualifies ' path. You are not.

 

WHO RUNS THE SBL PROGRAM - WHO CAN APPLY

 

What SBL loans are about is the fact that it's a government-guaranteed financing program that is the cornerstone of at least 7000-8000 businesses every year – for Billions ( yes that’s with a  ‘ B’ ). The government, under ' INDUSTRY CANADA ' guarantees the majority of your loan to Canada's chartered banks.  The general theory around the federal small business loan is that the bank is making a loan under conditions they otherwise might not be able to make to Canadian businesses with revenues up to 10 Million $, which is the size cap for companies wishing to apply for a loan amount.

 

  

BENEFITS OF THE CANADA SMALL BUSINESS LOAN ARE SIGNIFICANT   

 

When you are approved for such an SBL loan financing it's safe to assume you have a good deal. Why?  Simply speaking rates, terms and structures are both attractive and competitive. Loan rates are 3% over prime, financing is repayable at any time without penalty, and the whole issue of personal guarantees is often allayed because of the need to provide only a 25% personal covenant for the loan.  Those sorts of terms, especially when it comes to startups, or franchises, are ultra attractive and simply not available with other more traditional loan financings. A small registration fee is required upon approval, and that amount can actually be bundled into the financing. The interest rate on the program is very competitive and terms and conditions are flexible regarding term and repayment.

 

THE BASICS AROUND CREDIT APPROVAL

 

So how does the bank, which administers the loan program for the government, assess credit criteria? As we said, there are no shenanigans here; it’s a very simple shortlist of criteria. Owners must have reasonable personal credit, they must be able to make a 10% permanent down payment (equity) contribution, and they must have a proper business location backed up by a premises lease.

 

  

WHAT CAN, AND CAN'T BE FINANCED UNDER AN SBL LOAN  

 

By the way, the SBL program in Canada is really one of the only vehicles that allow you to finance leasehold improvements which typically are difficult to finance under normal circumstances. Contrary to the belief of some this is not a working capital or term loan - it finances equipment, leaseholds, and real estate.

 

You also must ensure you supply a business plan and cash flow projection that demonstrates your ability to repay the loan, which has a maximum borrowing of $ 1,000,000.00. Remember that the SBL lender, aka our Chartered banks, are not equity players. They have no upside! They’re just happy that you can make the loan payments out of cash flow from profits.

  

  

CONCLUSION  

  

Most Canadian business owners and managers never seem to feel that business borrowing is straightforward. In reality, we agree its a bit of an art and science ... so seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your SBL small business loan needs.

7 Park Avenue Financial :
South Sheridan Executive Centre

2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com

Click Here For 7 PARK AVENUE FINANCIAL website !



7 Park Avenue Financial provides value-added financing consultation for small and medium-sized businesses in the areas of cash flow, working capital, and debt financing.



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. He is an experienced

business financing consultant

.

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 financing 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.


Click here for the business finance track record of 7 Park Avenue Financial



Stan Prokop
7 Park Avenue Financial/Copyright/2020

Working Capital Factoring. Your Persistence To Understand This Cash Flow Solution Has Finally Paid Off

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 Getting To Heart Of Working Capital Factoring In Canada

 

Dear John - Working Capital Factoring is not what you thought it was, so I have heard. When I heard that you were disappointed in your working capital factoring facility I wanted to try and provide you with proper information and insights into what will in fact get you the cash flow and working capital that you anticipated with your new Canadian working capital factoring facility.

So John, what went wrong after we initially talked. You wanted business financing that would allow your business to grow in order to be more competitive in your business and grow those profits and sales.  Factoring seemed like a great solution, and you indicated it is not up to expectations.

Let's backtrack a bit. I think at the end of all this you will see a viable way to achieve ALL of your business financing goals!

Here's where we think things went wrong for your firm. You need to understand that factoring came to Canada from the U.S. and Europe. Their method of doing business there is somewhat more ' abrupt ' if we can use that word. As a result you entered into a U.S. model type of factoring with a branch of a U.S.  Factoring firm. Under that facility you do receive immediate cash for your receivables but you found out only later the factor firm more or less bill, collects, and follows up with your customer directly.  Many Canadian business owners don’t like that method of doing business.

So, John, the solution, and I remind you it’s the one we proposed, is a non-notification factor facility. Guess what, under this facility you of course still get same-day cash, but you bill and collect your own receivables. Now we're talking, right!

You just achieved total financing control, you are getting all the cash flow you need, (i.e. not waiting 30-60, or 90 days) and you're able to reinvest in more inventory, sales, etc.

John - you said that you were considering going back to your bank - just remember that all the financing that you need is, in our opinion, not going to be achieved by either a bank term loan or a Canadian chartered bank line of credit. You will have a great interest rate, but your business will not have the cash flow and working capital that is required for your current sales and contracts.

So what's the bottom line John - it is as follows - work with a trusted, experienced, and knowledgeable business advisor - put a working capital factoring facility in place that runs the way you want it to, and then focus on your business growth and let the cash flow and working capital work for you to those goals. Investigate non-notification factoring - It’s a Canadian alternative to everything you didn’t like about factoring, with all the benefits!

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with cash flow financing needs.

7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com

Click Here For 7 PARK AVENUE FINANCIAL website !



7 Park Avenue Financial provides value-added financing consultation for small and medium-sized businesses in the areas of cash flow, working capital, and debt financing.



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. He is an experienced

business financing consultant

.

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 financing 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.


Click here for the business finance track record of 7 Park Avenue Financial







Stan Prokop
7 Park Avenue Financial/Copyright/2020

Franchise Business Loans In Canada. What You Can And Can’t Finance With A Franchising Loan

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Avoid Doing Something Wrong With A Franchising Loan 

 

 

Franchise business loans in Canada.  Can the prospective franchisee avoid doing something really wrong when arranging their franchising loan? We think we can help clarify, so let's dig in.

 

 

PICKING YOUR FRANCHISE / FINANCING YOUR FRANCHISE PURCHASE

 

While a lot of entrepreneurs focus on the particular business or industry segment they are looking to participate in they sometimes sorely miss looking at how the franchise financing industry operates. It's somewhat of a given that it’s up to you to pick the franchise that best suits your talent, expertise, and budget.  But when it comes to financing your business are you 100% sure of the expectations of your lender or lenders.

 

If there is any good news is that you do have some solid options available to yourself when financing your new business.

 

  

KEY ELEMENTS OF A  FRANCHISE LOAN FINANCING   

 

What exactly are some of the key elements of any franchise finance scenario? Well, they include the franchise fee, equipment, leaseholds, working capital, and ongoing capital and cash flow needs.

 

 THE NECESSITY TO FINANCE LEASEHOLD IMPROVEMENTS 

 

Leaseholds are one of the most misunderstood aspects of the franchise finance mystery or conundrum.  Typical leaseholds might include construction, HVAC, plumbing, lighting drywall, etc. If your franchise is not going to be fully financed by a specialty franchise lender then the best solution to financing leaseholds is under the auspices of the Govt small business loan program, In fact, this program was designed solely for two asset categories - equipment... and the leaseholds we have been talking about.

 

In certain cases, the franchise lender may wish the co-operation of your landlord when it comes to what is understood as collateral in the terms of your agreement with the landlord. The situation can sometimes become more complex if there is not clarity and understanding around certain assets that you as a franchisee may have thought was a leasehold improvement as opposed to assets that become attached to the building such as oven hoods, etc. (That’s in the case of restaurants, etc)

 

At the end of the day, it’s both the combined quality of the franchise you are buying as well as your own financial strength as determined by opening balance sheet and projected revenues and profits. Business plans and cash flow projections are a necessity in franchise loans - At 7 Park Avenue Financial we prepare a business plan for clients that meet and exceed the requirements of lenders.

 

If there is one continuous misunderstanding or misconception that we see in discussions with clients on franchise business loans it’s as follows: The franchisor rarely plays a key role in franchise finance. That’s your job or the job of you and your Canadian business financing advisor. At the end of the day, your goal is simple - you want to be in a position to raise the right amount of capital you need to open and develop your business for success. Only the smallest percentage of franchisors in Canada offer any real tangible financing assistance.

 

  

4 TYPES OF FRANCHISE LENDERS  

 

Who are in fact the lenders you should be working with when arranging your franchise loan? In broad categories they are:

 

SPECIALTY FRANCHISE LENDERS

THE GOVERNMENT SMALL BUSINESS LOAN (very well suited to franchise finance) These loans are somewhat similar to U.S. ' sba loans'

EQUIPMENT LESSORS - They finance equipment and in some cases leaseholds

CANADIAN CHARTERED BANKS - Ongoing working capital and cash management -

 

The reality is for many franchises the type of loan you need may in fact be a cobbling together of a number of different finance solutions. In some franchises, there may even be a real estate component that can be often addressed separately.

 

Important to note also that you can buy a new franchise or one being sold from a franchisee that is selling, with the approval of the franchisor of course.

 

DO BANKS REALLY FINANCE FRANCHISES? YOU DECIDE!

 

Since our theme is ' avoiding doing something wrong ' in franchisee finance it’s important for us to clarify bank loans in this industry segment. While a bank would consider financing your business directly it would place heavy reliance on your equity in the business, your personal credit, and collateral that you might have in savings, your home, etc.  In our opinion where the banks do a better job is in the underwriting of the BIL loan when it comes to direct franchisee finance. Franchisees should ensure they can demonstrate a good credit score in personal finances as well as a reasonable net worth , which will also affect the interest rate they can achieve. Interest rates are at an all-time low for every type of business financing and won't vary greatly in most franchise funding alternatives .

 

  

CONCLUSION  

 

To avoid making tragic, costly and time wasting mistakes in a franchising loan consider seeking and speaking to a trusted, credible and experienced Canadian business financing advisor who can asset you with franchise business loans that make sense for your future investment  and success.

 

 

7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com

Click Here For 7 PARK AVENUE FINANCIAL website !



7 Park Avenue Financial provides value-added financing consultation for small and medium-sized businesses in the areas of cash flow, working capital, and debt financing.



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. He is an experienced

business financing consultant

.

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 financing 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.

Click here for the business finance track record of 7 Park Avenue Financial







Stan Prokop
7 Park Avenue Financial/Copyright/2020

Canadian Business Financing - Capital Funding And Finance Solutions And Tips

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 Business Finance For Smart People

Canadian business financing solutions. Does it seem that the capital funding you need to finance your business is always ... elusive? Knowing how healthy your company is will allow you to select methods of financing your business.

 

 

MAKING THE RIGHT DECISIONS IN BUSINESS FINANCE 

 

Over the long term that adds value to your business and allows you to make the best decision possible around accessing capital, or even buying a competitor or synergistic partner. So consider us your mentor on one of the biggest challenges to business in the SME sector today - funding!

 

FINANCING NEW ASSETS  

 

Are you effectively financing your assets?   How you do that effectively allows you to manage your cash flow and working capital, budget for next year, and determine if you're as profitable as you can be. In cases where you are not generating profits now the ability to finance assets and growth can turn that around quite nicely.

 

Quick case in point? The other day we met with an established small business that had modest revenues in the 400k range. They had aggressive plans to grow to well over a million dollars this year. Only problem? No financing to get there, or eliminate the current operating losses due to a heavy investment in marketing their product to the ' BIG BOX ' stores.

 

 BUSINESS FUNDING TO ACCELERATE GROWTH  

 

Our recommended solution to the client?  A combination receivable / inventory working capital line of credit, combined with a supply chain/PO financing solution. If implemented the client would have a lot more confidence in reaching that new aggressive sales goal. Hey, maybe they could turn a profit also?!

 

BUSINESS FUNDING FROM THE GOVERNMENT?  YES YOU CAN !

 

The Canada Small Business Financing Program is an excellent capital funding solution for Canadian business financing needs. This small business loan funds leasehold improvements, equipment and even real estate. It is not a ' cash flow/working capital/line of credit  ' loan per se and only funds the three asset categories we have mentioned here. Interest rates are very competitive in this small business financing program. Small business loans for startups are difficult in the best of times - let's not even mention a pandemic !!! , so the ability to fund your company at an interest rate and term that suits your capital needs is a solid benefit to the entrepreneur.

 

Under the program, the government of Canada allows the financial institution, ie a chartered bank or business-oriented credit union to administer the program under the government auspices. While many business owners chase venture capital, angel investors, friends and family funding they eventually find these solutions for the smallest amount of eligible firms.

 

 

UNDERSTANDING YOUR FINANCIAL STATEMENTS IS CRITICAL

 

 

A lot of clients we meet shy away from the financing... or dare we say it ' accounting ' aspects of their business. In some cases, they entrust that role to a bookkeeper or other employee who is the farthest thing from a finance analyst, controller, CFO, etc.  Our point - you don't have to be any of those to have a strong handle on your business. It's simply about understanding some business relationships (others call them ratios) and getting some solid assistance from, let’s say, a Canadian business financing advisor to implement solutions around some of those balance sheet, profit, and cash flow parts of their business.

 

  

CAN YOU ANSWER THE FOLLOWING QUESTIONS?  

 

Investing some time and internal or external expertise allows you to finance the assets you have to their highest use.  Are you 100% comfortable in answering the following questions:

 

- Are we aware of all options to finance inventory and equipment needs

 

- Will it be necessary to put in more owner capital (sometimes it is, but never always!)

 

- What in fact are the basic sources of traditional and alternative capital?

 

- Should I lease business assets, or purchase them outright?

 

-  Can we generate more cash flow out of our accounts receivable?

 

CONCLUSION

 

Business Financing Canada style doesn't have to be the challenge and mystery that it seems to be for many business owners and financial managers, Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your finance and funding needs.

 

7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com

Click Here For 7 PARK AVENUE FINANCIAL website !



7 Park Avenue Financial provides value-added financing consultation for small and medium-sized businesses in the areas of cash flow, working capital, and debt financing.



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. He is an experienced

business financing consultant

.

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 financing 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.


Click here for the business finance track record of 7 Park Avenue Financial





Stan Prokop
7 Park Avenue Financial/Copyright/2020

How To Buy A Franchise : Franchising Financing Companies

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The Other Half Of The Battle – Financing Your Franchise

How To buy a franchise. We guess that's challenge # 1.  And # 2?  It's of course franchise financing companies and solutions that will allow you to realize on the franchisee dream in Canada. That's our job we guess. Let's dig in.

 

PROPER  FRANCHISING FINANCE SOLUTIONS HELP THE ENTREPRENEUR BE SUCCESSFUL

 

It goes without saying (but we will anyway) that the goal of every new entrepreneur in the franchise industry is to be successful. Putting a proper financing package together with solutions that match your needs, budget and cash flow is what that's all about.

 

FINANCING TO PURCHASE THE BUSINESS - AND FINANCING TO RUN THE BUSINESS

It's really a combination of financing you need to purchase and acquire the franchise and then funds required to run it. Although most franchises are run on a cash flow positive basis - ie cash sales, etc there still is a working component to your transaction. No matter how carefully you've prepared your budget and cash flows Murphy's Law always seems to kick in on occasion.

 

FRANCHISE LOANS ARE A COMBINATION OF YOUR EQUITY DOWN PAYMENT AND DEBT

 

In Canada the financing that you secure comes from yourself, that’s the equity component, and one or a combination of debt scenarios - your loan/loans. Financing from debt and equity typically covers franchise fees, equipment, leasehold improvements, and potentially a working capital component. Spending some careful time on the breakdown of those components will save you a lot of grief in the long run. Oh, and by the way your banker or commercial lender needs to see those also! Personal finances are also important, and you should be able to demonstrate a good credit score and reasonable net worth as well as business experience.

 

SBL LOANS TO THE RESCUE - THE CANADA SMALL BUSINESS FINANCING PROGRAM TO THE RESCUE

The goal of every business borrower in Canada is to minimize risk - to that extent you should try and avoid securing personal assets at all cost. One way to do buy a new franchise  is via an ' SBL '.

 

An ‘SBL’..? It's the trade name for the Government of Canada Small Business Loan, and hundreds, if not thousands (we’re not really on a first name basis with the govt) of franchisees utilize this program. It was certainly NOT created to specifically address the needs of franchisees in Canada, but boy has it turned out that way.

 

So why an SBL franchise loan? Some pretty basic reasons really - low competitive rates, limited personal guarantees, no personal collateral, and flexibility as to repayment without penalty etc. That's a powerful combo of benefits in case you haven’t figured it out already.

 

Franchisees can of course pay cash for their business purchase, and even contribute their own capital to financing the operations and growth of the franchise. However, we've always guided our clients not to collapse RRSP's, take out collateral

Home mortgages, borrow from friends and family. While those solutions work they quite frankly mix up your personal and business finances in an unhealthy way.

 

If you aren’t securing a Govt small business loan for your franchising you need the assistance of a specialized franchise finance firm. Alternatively, other Canadian lenders can assist you with solutions based on equipment finance scenarios that can help franchise owners.

 

A good credit score is required for all franchise loans, and it should be noted that typically the franchise fee itself is not financeable. The interest rate on a franchise business loan is very competitive and the government-guaranteed loan program has numerous other benefits that add the flexibility of the program. If the franchisors franchise agreement allows existing franchises can be purchased and financed.

 

One suggestion? Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your goal to buy a franchise and the solutions available to complete a successful acquisition of a new or existing business in Canada's fastest-growing business segment. A business plan is strongly recommended, if not required for any type of business financing and at 7 Park Avenue Financial we prepare business plans that meet and exceed the requirements of government loan programs and Canadian banks.

 

7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com

Click Here For 7 PARK AVENUE FINANCIAL website !



7 Park Avenue Financial provides value-added financing consultation for small and medium-sized businesses in the areas of cash flow, working capital, and debt financing.



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. He is an experienced

business financing consultant

.

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 financing 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.


Click here for the business finance track record of 7 Park Avenue Financial



Stan Prokop
7 Park Avenue Financial/Copyright/2020

Receivable Financing Factoring Companies Help Thousands Of Firms. Could They Help Your Firm?

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Here’s One Method Of Saving Your Company From Cash Flow Challenges! 

 

Receivable financing factoring is a fairly simple process of funding working capital needs. The process? It's as follows -   As you generate sales and invoice your clients for goods and services you have delivered ( Yes, service companies can also be financed in this manner!) your finance factor company buys those from you based on an agreement being in place to do so.

 

HOW DOES FACTORING WORK?  WHAT IS THE COST OF FINANCING ACCOUNTS RECEIVABLE FROM A FACTOR COMPANY?

 

You typically receive 90% of your funds the same day or within 24 hours, the balance is remitted to you as soon as your client pays, less finance costs. In Canada, these costs average  1.5 - 2% per month - that is a fee and not an interest rate! (Various criteria affect your rate, more about that later). The factoring fee is an oft-misunderstood issue in a/r finance.

 

WHAT IS THE BEST TYPE OF FACTORING FACILITY

 

In Canada, the majority (99.9% is pretty well a majority don't you think) require that payments by your clients go directly to the factoring company. We're not big fans of that scenario, so that's why our recommended and preferred solution to clients is a CONFIDENTIAL RECEIVABLE FINANCING facility, allowing your firm to bill and collect your own A/R. That is our opinion is the optimal solution.

 

A CLOSER LOOK AT FACTORING RATES

 

Back to those accounts receivable financing rates, which tend to be a point of major discussion when we're facilitating this type of solution? Your overall rates are generally based on the following criteria - the size of your receivables is one. However, make sure you understand that if you're dealing with the right firm you are not required to finance your entire A/R portfolio all the time. You choose when you want to fund and in what amount. And that of course means you only pay for what you use. That's a good solution, right? It's a solid alternative to the traditional line of credit and a great way to finance the balance sheet for business growth.

 

OTHER FACTORS AFFECTING  ACCOUNTS RECEIVABLE FINANCING  PRICING

 

Other factors that affect pricing include the general quality of your customer base, the number of clients you have, average invoice sizes over time, and the overall quality of both your own firm’s finances as well as your client’s general reputation.  That’s a lot of qualifiers but in almost all cases unless your company is in a death spiral you will get the financing you need. That's why accounts receivable finance is a clear alternative when traditional bank financing is not available.

 

The thing about accounts receivable finance is being educated on who to deal with, it's one form of business finance where a ' word to the wise ' is a valuable gift! Many Canadian business owners and financial managers are intrigued by f factoring; they simply don’t have enough quality information to digest why it might work for them.

 

KEY ISSUES TO CONSIDER IN A/R FINANCING / ACCOUNTS RECEIVABLE FACTORING

 

When we sit down with clients we talk about a number of key issues in the whole A/R financing process.

 

That includes the 9 key issues -

 

1.Benefits of  Factoring  /Accounts Receivable  Financing Accounts &  Factoring finance

2.The value of an advisor or consultant

3.Cost of Receivables Factoring & Understanding how factoring fees are applied

4.Due diligence required to set up a facility/importance of owner credit history

5.Tips and tricks to enhance maximum cash flow via invoice factoring

6.Your firms newfound ability to take on larger business

7.Why negative perceptions of this type of finance abound

8.Accounting/banking issues that come with this type of  short term business funding facility

9. The merits of non-recourse factoring versus recourse factoring

 

  

CONCLUSION  

 

If you're looking for the straight goods on dealing with an asset-based factor company seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your cash flow needs.

 

7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com

Click Here For 7 PARK AVENUE FINANCIAL website !



7 Park Avenue Financial provides value-added financing consultation for small and medium-sized businesses in the areas of cash flow, working capital, and debt financing.



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. He is an experienced

business financing consultant

.

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 financing 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.


Click here for the business finance track record of 7 Park Avenue Financial







Stan Prokop
7 Park Avenue Financial/Copyright/2020