Confidential Cash Flow Factoring - Turn Accounts Receivable Into Your Best AR Finance Strategy

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We are going to demonstrate how a little known, and in our opinion almost a secret strategy can called confidential cash flow factoring can turn your accounts receivable into a virtual cash flow machine, turning past AR finance obstacles into cash flow solutions!

Search engine analysis will show you that thousands of Canadian businesses search everyday for what they hopefully believe will be valuable information around the most popular method of business financing today. Those businesses, of all types and sizes by the way (even the largest corporations in Canada) want to know why cash flow factoring offers unlimited unlocking of cash flow based on your sales and receivables.

Initial explanations and overviews to clients sometimes become bogged down in key issues such as the cost of this method of AR finance, and, equally important, is the unwillingness of some clients to accept how invoice discounting (that's another name for this type of financing) works.

Canadian business owners and financial managers want to like a good thing, at the same time they want to know how it works and how they avoid any pitfalls. Lets discuss the ' how it works ' portion first and then share with you the method we believe eliminates the major pitfall perceptions viewed by many firms considering this type of financing.

We'll focus on small and mediums sized business - the larger corporations have access to all sorts of financing and external finance strategies - while the small and medium sized businesses in Canada tend to rely on their own cash flow to fund their ongoing growth and working capital. In fact many firms realize they have potential to grow sales and profits, but cant because of that lack of working capital.

Back to the 'how it works'! Cash flow factoring of accounts receivable is the ongoing sale, in whole or in part of your sales invoices as you generate them and deliver products and services to your customer. The invoices are purchased at 1- 3% discount from yourself, and you receive cash, 99% of the time the same day, for those sales. So, in effect all your sales now fuel that cash flow machine you have turned your company into.

So far, so good, right? Where complications arise, especially in Canada, is the fact that this type of financing requires your client to be notified of the process, directly, or indirectly, and payments are required to be forwarded to your factoring finance firm. Canadian business, in our eyes, has a reluctance to involve their customers in their internal financing policies, and challenges. As a result, many firms are skeptical of entering into AR finance of this manner.

Is there a solution? We told you there was - it's a breakthrough called confidential invoice discounting. This type of financing comes at the same cost, allows you to bill and collect your own receivables, and gains all the benefits of that cash flow factoring machine we turned your company into.

Speak to a trusted, credible, and experienced Canadian business financing advisor who can put you into a proper AR finance facility, allowing you to reap the benefits of cash flow invoice financing, while at the same time allowing competitors, customers, and vendors to remain exactly where you want them to be, outside your financing strategies and challenges! Let's let your competitors try and figure our how you're doing so well in both growth and profits.





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


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.
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






Article Source: http://EzineArticles.com/expert/Stan_Prokop/432698


Article Source: http://EzineArticles.com/6072401

Understanding Cash Flow For Business : Why Receivable Factoring Just Might Be The Solution

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You’re at the Crossroads for a Business Financing Decision

Information on receivable financing and business cash flow strategies in Canada - Factoring and Confidential Receivable finance solutions might be the right solution to your working capital challenges

Choices. Alternatives. Robert Johnson, an old blues legend wrote of being at the ' crossroads ' and had choices.
That’s what Canadian business is looking for more than ever when it comes to the Canadian business financing marketplace for small and medium size businesses. (We suspect the big guys want the same thing!).

If your business can't obtain any (or enough) cash flow for business growth then receivable factoring just might be an option. Naturally you're the client, so we'll let you decide.

Clients always ask ' why can my firm obtain working capital financing via receivable factoring when we can via the bank. The answer is really not that mysterious - it’s a case of your new financing partner looking solely at the asset and not the big picture, which our friends at the bank tend to be focused on.

And don’t get us wrong, if you firm can obtain ' all ' the financing it needs from a Canadian chartered bank you clearly have the ultimate cash flow security in place... however the reality is that we havent really met many of those firms in the tumultuous environmENT post 2008-2009 global business financial meltdown.

So yes, the cost of factoring in general is more expensive (in some cases it actually might be cheaper!) but with receivable factoring your are operating your business in an entirely different manner.

As a Canadian business owner and financial manager you should not feel embarrassed that you haven’t heard a lot about receivable financing via a factoring working capital facility. It’s been around as a financing tool for quite some time, but it’s been a little under the radar, and oft considered an alternative tool for Canadian business financing.

Essentially it is the sale, on a one of, or ongoing basis (it’s your choice) of your receivables to a third party. You receive funds instantly, and we mean basically same day! And the total focus is very simple and straightforward - the transaction is only about the value of your receivable, its not additional debt for your balance sheet, and it monetizes your receivables to the extent that you choose.

Control is the key word here, as you control what you need to borrow, when, and what those funds will be used for. Traditionally all our clients use the funds for just one purpose - financing their business for more growth and profits.

Perception is often confused with reality, and the perception is that a receivable factoring strategy to generate cash flow for business is expensive. Yes, no... Maybe! The cost of this type of financing tends to be in the 1-3% per month range. What many of our clients miss is that putting yourself in this type of facility assures you unlimited sales and profit growth. Your investment in receivables (and inventory) has essentially been monetized on a long term basis. Also, the funds you obtain from this type of financing allow you to take supplier discounts, enhance supplier relationships, purchase smarter and in larger quantities, and increase your A/R and inventory turns, which technically play a huge role in your return on equity.

So, is receivable financing and factoring your working capital solution for business cash flow - only you can decide, but you do have choices and alternative you previously might not have been aware of. Speak to a trusted, credible, an experienced Canadian business financing advisor to ensure you choose the right method of financing when you're at the crossroads!







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


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.
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

Pick The Best Canadian Receivables Factoring and Financing! Cost and Rates Of Invoice Finance

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We encountered a great term the other day when it comes to business financing - the term was ' expansionary finance '. Is it just us or does this term seem to perfectly cover off factoring and receivables financing.

Often though three key issues come up when Canadian business owners and financial managers consider this type of financing. What are those 3 issues? They are the total cost of this type of financing, the rates associated with this facility, and probably most importantly what type of firm offers the best facility to match your company's own specific needs.

Let's learn and cover off those issues, which will allow you to get more comfortable we think with this type of Canadian business financing.

So, why should you even be considering receivables factoring? Simply because it has become a common way for Canadian business to cash flow their accounts receivable and generate working capital based on your own policy of extending credit terms to your customers.

And, as most business owners know, sales does not equal cash flow and when business financing of your A/R is not available from your bank a logical place to turn to is to an independent finance firm that offers invoice financing.

But, what does this type of financing cost, and who offers it, and an even better question... 'How do you pick the best factoring partner?

In Canada the financing and factoring of A/R varies widely. As a general rule we can say the cost is between 1-3% per month based on the size of the facility, your overall financial condition, and most importantly, whether you have sought out and picked the finance firm that best suits your needs.

Let's clarify our comment on your overall financial condition. Receivable financing places much less emphasis on your firms overall financial health - in fact a huge amount of Canadian firms that utilize this type of financing are in stages of turn around, high growth, experiencing temporary financial losses, etc. So don't despair that your firm isn't eligible. But, as we said, your client base, the size of your A/R portfolio on a monthly basis and some other factors will dictate your overall pricing.

Frankly the best costs in factoring finance in Canada start to be achieved when your monthly financing capability for A/R is greater than 250k. Is there a ceiling on the amount of facility? Absolutely not, and facilities that go into the several millions of dollars on a monthly basis happen everyday in Canada.

Clients often ask our favorite most recommended type of facility. That's a simple one - its called C I D - which stands for confidential invoice discounting, allowing you to be in total control of billing and collecting your own a/r without any notification to clients that comes with the U.S. and U.K.versions of a/r finance.

Remember also that when you are addressing the always top of the list issue with firms such as yourself, ' Cost ' that you need to factor in things you might never have thought about. They include your ability to grow your business and generate more profits simply because you now have the capital to do so, albeit at a higher cost. And couldn't you offset some of the cost of factoring by taking discounts with your own suppliers (and improving relations with them along the way!), as well as purchasing more effectively with your new found working capital?

So, in summary, if you need a financing partner when you are considering a receivable management and financing solution seek out and speak to a trusted, credible and experienced Canadian business financing advisor who will ensure your cost and partnership with your factoring firm is focused on a mutually beneficial relationship for financing 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


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.
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















Article Source: http://EzineArticles.com/expert/Stan_Prokop/432698


Article Source: http://EzineArticles.com/6210381

You Have Factoring Questions :Tips on Best Factoring Program and Factoring Explained !

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Receivable Financing - Your Final Cash Flow Solution

Information on receivable financing and factoring solutions to enhance cash flow

We forgive you, and we are sure everyone else does also... for what...? Simply because you keep asking about the best factoring program out there and quite frankly you have factoring questions on this ‘relatively’ newer form of business financing.
So, factoring explained. Let's cover off some key basics and arm you with data to make an informed decision as to whether his type of Canadian business finance works for you.


Steps 1 - understanding what we are talking about. It couldn’t be more simple. As you generate sales and receivables you enter into a ' program' to sell those receivables to a third party. As can be imagined, you receive a discounted price for your receivables , because you are getting cash today for something that would normally be collected 1, 2, and three months out .


The cost of factoring is always a key discussion point with our clients. The industry refers to this as a ' discount fee', and in Canada that fee is quite frankly all over the place. We can make a general statement thought that typically the fee is in the 1- 3% range. We can hear our clients already. ‘We’ll take the 1% please!". The reality is that you do have some control over the pricing in your factoring program, because the key drivers of the pricing are quite simple - the size of you A/R portfolio, the number of customers, where they are located, and their overall credit quality.


While customers tend to always focus on price in this discussion we frankly tell clients that the factoring questions they should be focusing on are more important - how does the program work on a day to day basis and how does it affect my clients and my business processes.
On a day to day basis you are advanced, as you generate invoices, approximately 90% of the invoice value - generally the same day you cut the invoice. Why only 90%. Simply because the finance firm holds back that 10 % as a reserve or buffer and it also covers off the financing cost. Let’s demonstrate a clear example. If you generated an invoice today for $100.00 you would receive via wire transfer 90$ into your bank account today. If you customer paid in 30 days ( you wish!) and the factor firm priced your program at 2% then when your customer paid the invoice you would receive your other 8 dollars back, the 2$ being the finance charge . It's as simple as that.


Its not hard for our clients to see some of the immediate benefits - all of a sudden ' factoring explained ' requests become quite clear - it frees up cash flow instantly for general working capital purposes, suppliers can be paid on time, and you can purchase additional products and services that you need to grow your business on a daily basis .


Factoring , aka ' receivable discounting' is different from banking - it comes at a higher cost , and works on a day to day basis significantly differently than if you were able to facilitate a bank line of operating credit . The harsh reality is that while many banks are pushing back on receivable and inventory facilities for small and medium business the factoring industry has kicked into hyper growth mode, seizing the opportunity to finance the liquidity gap in Canadian business.


Speak to a trusted, credible and experienced Canadian business financing advisor who will guide you through the process for success in Canada's newest mainstream business financing strategy.






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


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.
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

Unclear On Accounts Receivable Finance Solutions ?

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A/R Finance Companies Can Turn Your Business Around



Information on financing companies in Canada offering accounts receivable finance . Does a factoring / invoice discounting program work for your business?

The proverbial ' turnaround '. Typically we think of if as a reversal in fortune, whether in sports, life, or in our case today, ' Business'! More and more Canadian business owners that are looking for a turnaround in their cash flow and working capital are considering accounts receivable finance from financing companies in Canada to effect that turnaround.

But is that a sensible solution? It certainly is with the right circumstances and the right information. Otherwise consider it somewhat of a deadly minefield of misinformation and dealing with the wrong parties. And at a time when the Canadian business financing environment is at (or close to!) it's tightest it makes sense to have the right information at hand.

So it starts at the river, where the cash flows (or isn’t flowing!) That's lack of flow is absolutely the right time to contemplate an A/R receivable finance strategy. Simply speaking it's a tool that can be used by business of all size, from start up to major corporation. Financing companies in Canada sometimes do not do a great job of even explaining things properly, or even advertising them in a manner that makes it clear what the solution involves. So don't get confused when you hear terms like invoice discounting, confidential A/R financing, factoring, etc. Essentially they are all the same, simple as that.

Cash flow tends to slow down when your business or the economy, or both slow down. So it’s at that time when you're probably most creatively challenged to come up with working capital solutions.

Is bank financing for the start up or existing SME (small medium enterprise) extinct? We won't weigh into that debate, but safe to say that that if your firm is not a very solid citizen in good standing with the bank... well let's just leave it at that!

As we have intimated half the battle in accounts receivable finance is just understanding the solution, and knowing how to choose the right financing companies to implement that solution. First of all it comes down to understanding the benefits, and the mechanics of the A/R finance strategy.

There are essentially two key offerings in the Canadian marketplace, the traditional one that's been around before the Dead Sea was sick and a newer, and in our belief preferred solution to that same problem. The traditional solution has you receiving anywhere from 70-90% of your a/r via an immediate advance on the invoice, as soon as you generate it, or at anytime thereafter, as long as the invoice is less than 90 days old. When that invoice is collected by the finance companies that offer this traditional solution you get the remaining amount back immediately, less a financing charge which typically is in the 1-2 % per month range assuming a collection period of 30 days.

The alternative is a confidential invoice financing solution, allowing you to bill and collect your own receivables, while at the same time receiving the cash advances as you generate sales/invoices. It's the confidentiality of this type of offering, i.e. no notification to any of your clients or other creditors that we feel is appealing to the Canadian business owner or financial manager.

So the benefits of either of the above strategy now become immediately clear - you're in positive cash flow , suppliers can now be paid, payrolls and government remittances can be made, and , oh yes, you can grow your business again.

So depending on which solution you choose the bottom line is that your turnaround is in motion! Speak to a trusted, credible and experienced Canadian business financing advisor who can work with you to implement the solid cash flow solutions you need... today.








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


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.
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

Key Issues In Factoring And Receivable Financing . Bringing Clarity To Solutions For Funding Receivables In Canada

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Clearing The Air On Canada’s Most Misunderstood Business Financing Solution




Information on factoring in Canada . How receivable financing differs from a bank borrowing solution and why funding receivables is becoming more of a proven successful strategy for the Canadian business owner

Key differences in banking and receivable financing have the ability to get the Canadian business owner and financial manager confused. Let's try and UN - confuse some of that information to provide some clarity as to why thousands of firms are gravitating to receivable factoring in Canada.

The core differences are in fact quite clear... how they are interpreted and what sort of solution you ultimately choose is where things get exciting! And those key difference - they arent as complex as you might thing. Simply speaking they are that the ability to borrow in this method of Canadian business finance revolves solely around the size and quality and value of your sales. Point number two is that this is not, we repeat ' not debt ' financing - so you are in effect just monetizing assets for cash flow. And that’s a good thing.

And our third difference - simply that the type of facility that you undertake when choose the strategy of finance via funding receivables is critical. That’s because your firm is not a borrower per se, you are a party to a 3 way business transaction involving your firm, your factoring partner and your client.

Quite frankly though it’s our recommendation to leave your client out of it! Is that possible? It absolutely is if you choose a confidential receivable financing facility that allows you to bill and collect your own A/R without notice to any other party - i.e. your client! And this can be easily accomplished if you have the right assistance and guidance from receivables professional.

We always point out to clients that although our focus today is discussing the financing of a business A/R the reality is that this type of facility can be nicely combined into a comprehensive working capital solution that bundles up your receivables, inventory, and even unencumbered equipment into one borrowing facility. That's supercharging your borrowing ability, and often delivers additional financing anywhere from 50 -100%, or more of cash flow power.

The general consensus is that receivable financing is expensive. While some may argue strongly that it is it is important to understand that the way the industry delivers pricing is not in the form of an interest rate per se. It’s in actuality a discounted amount based on receivables covered under the financing arrangement.

What's more important than rate in actuality, we feel is your ability to now borrow as much as you need to based on sales revenue, new contracts, large orders, etc . And if you're on top of your receivables and inventory turns all we are saying is that you're turning over more assets... more often, and that equates to... you guessed it... more profits.

Speak to a trusted, credible and experienced Canadian business financing advisor on what makes sense for your firm when it comes to a receivable financing program that best suits your needs. Finally... clarity!

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


Click HERE for 7 PARK AVENUE FINANCIAL
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 '

ABOUT THE AUTHOR
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

Factoring & Receivables Financing ... Works !

How Well Is Your A/R Financing Really Working?





Information on factoring and receivable financing in Canada - What it costs.. why it works

Factoring in Canada is four things:



New and increasingly accepted

Misunderstood

Different than in the U.S.

Growing more popular every day as an alternative vehicle to business financing

Canadian business owners and financial managers keep hearing about factoring , and when we talk to clients who are pursuing this financing option it is increasingly clear there is a lot of mis information and ‘ noise ‘ about this unique type of financing that needs to be clarified .



So why is there so much mis information about factoring and how can business owners in Canada get the ‘real story ‘. Part of the problem is that factoring, in our opinion, means different things to different people, both within the industry itself, and also to the Canadian business owners. Similar to the terms ‘ cash flow ‘ and ‘working capital ‘ the use of the term is interchanged in a variety of ways . Also, factoring isn’t a home grown solution, and migrated to Canada from the U.S. and Europe, where it has been in place for hundreds of years.



Factoring, also know as receivables financing , or ‘ invoice discounting ‘ is best utilized when firms are growing rapidly, have sales and verifiable invoices, and require injections of working capital for that a/r investment that otherwise might not be available through traditional sources such as the bank . In 99% of cases that we deal with where a client is a ‘ start up ‘ the initial financing through a factoring facility is a critical and valuable tool in the early growth of the company .



Let’s get back to the confusion around factoring. Traditional factoring in Canada is in fact simply the sale of your receivables, and their purchase to a factor firm. The most immediate benefit is the immediate receipt of cash, which eliminates the need to wait for anywhere between 30-90 days for payment from your customer. Over the years it is inherently obvious that every firm out there recognizes that delaying payments to your suppliers is an instant form of cash flow. However, when you are on the receiving end of that, waiting for your money, that is poor consolation!



Does your business receive 100% of the invoice value when you sell your invoices either individually, or bundled in a larger amount of invoices? The answer is ‘no’ – You generally receive on the same day anywhere form 75-90% of the invoice value. The balance is held back as a hold back or buffer, and paid to your firm immediately on final receipt of payment from your customer. At that point factoring would be ‘free ‘, but it isn’t, there is a further deduction for the commission or financing cost by your factor firm. That cost is one of the greatest issues facing Canadian business owners, because it is anywhere in range from 9%/annum to 2-3% / month.



The costs associated with factoring in Canada have to be viewed in the context that although they are higher than traditional bank financing that point becomes moot because your firm probably cannot qualify at this point for a true Canadian chartered bank operating facility. So factoring simply allows you to grow your firm when you can’t obtain sufficient financing otherwise.



So now we have understood what factoring is, and why it has become a tool within the Canadian business financing tool kit. That’s the easy part. The challenge for Canadian business then becomes –



What type of firm is the best one for my company and industry

How does this financing work on a daily basis

Am I comfortable enough to let the factor firm notify my customers regarding invoice verification and payment

Is there an alternative to involving my suppliers and customers into this financing process

We advise clients that the best factoring facility in Canada is one in which your firm can bill and collect its own receivables. That type of facility is called non notification and is as close to traditional financing mechanics as one can get.



So whats our bottom lien summary – it’s simply as follows. Factoring in Canada is only mis understood because business owners don’t have access to solid unbiased information on how it works, what it costs, and how it benchmarks as an alternative to traditional financing. Certain factoring facilities in Canada exist that are very transparent to your firm and its customers. Factoring has higher costs, but those costs can grow your sales and profits considerably. Seek out the advice of a trusted, credible and experience advisor in this somewhat misunderstood area of Canadian business financing.

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

Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

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 '

ABOUT THE AUTHOR
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