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Overcome Business Line Of Credit Finance Hurdles!
It’s Changing Times In Business Finance. Here’s One Reason Why!
Is ABL capital a solid or maybe your ‘best choice’ when it comes to untangling the challenges your business faces when it comes to a comprehensive business line of credit? We think it's a solid finance solution and many industry experts agree. Here is why!
WHAT IS ' ABL' IN BUSINESS FINANCING?
What is ABL? .... which of course stands for asset based lending. We ask that question only because it, and other terms such as ' cash flow ' mean different things to different people. In our terms, it is a total solution business line of credit that allows you to borrow against your accounts receivable, inventory, equipment, and even real estate, all within one revolving facility. It is as simple as that.
THE ABL BUSINESS FINANCE SOLUTION VERSUS BUSINESS BANKING CREDIT VIA A CHARTERED BANK
It's really a total solution that, in effect, is an ' evolution ' in the concept of the asset-based line of credit. For the asset based lending company, your new partner in business banking it's all about the balance sheet. That is of course compared to Canadian commercial business banking, where it’s all about the balance sheet... and your cash flow statement, and your income statement... and your personal guarantees. In ABL it's all about accounts receivable, inventory, fixed assets, and real estate. Purchase order finance solutions can also be combined into a total overall financing solution for those firms taking on larger orders and contracts that otherwise might not be financeable.
Those of course are what drive Canadian business banking rates to be so low and so great... if you can access them! The asset based loan solution comes with a higher cost of financing via interest rates but provides you with that much more liquidity.
IS YOUR FIRM CURRENTLY ' UNBANKABLE' FOR YOUR BUSINESS CREDIT NEEDS?
If we had to line up the different companies that access ABL capital via asset based lending it's a diverse group - its larger firms that are very bankable but can access more capital at better rates, all the way down to startups with a more limited financial history, at the same time having assets that can be financed.
We are pretty sure this doesn't exist in Canada, we certainly haven’t seen it yet, but in the U.S. there is a huge ABL capital market known as ' Second Lien '. Under these facilities, the asset based lender sits on top of the senior bank facility, in 2nd position, and advances even more against the total assets already being financed by the bank. Surely that is one reason why our banking and lending practices are much more conservative in the world marketplace - we don't lend twice against the same asset!!
FIXED ASSETS AND EVEN REAL ESTATE CAN BE INCLUDED IN YOUR CREDIT LINE!
When we sit down and talk with clients about what can be financed and how its often practical to finance current asset accounts such as a/r and inventory via an asset based lending ' ABL' line of credit, while at the same time financing the equipment and other fixed assets under a separate facility with a finance partner/lender who has an appetite for those type of assets. That total combination of two facilities gives our client a lower ' blended cost ' of funds and at the same time increases borrowing power - talk about a ' double whammy '! Asset-based lending rates are higher thank bank financing but it becomes a question of access to capital versus cost of capital for funding and growing your business.
WHY IS THE ABL CREDIT FACILITY SO POPULAR
What made asset-based finance popular in Canada when it comes to business owners and financial managers seeking solid biz credit facilities? A lot of it revolves around 2008/2009 when financial markets went awry and thousands of Canadian businesses started to investigate alternative methods of financing their business. And ABL sure was one of them. And let's not even talk about Pandemics.
And the irony in the above? Simply that companies that even theoretically qualified for more traditional financing could not get it... enter the ABL facility! It's a new kind of line of credit.
So is there a trend emerging in the Canadian business line of credit offerings? We think there is. In the U.S. experts confirmed that even back to 2011 and continuing in popularity to today asset-based credit lines almost doubled. We think it did, perhaps somewhat less so, but clearly the emergence of a new trend via asset-based lending banks and independent non-bank commercial finance companies
CONCLUSION
If your company is looking to grow (or just survive) investigate the benefits of ABL capital and asset loans for working capital, making you a more effective competitor. Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in making the right decision with the right type of facility.
7 Park Avenue Financial :South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
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.
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
