WELCOME !

Thanks for dropping in for some hopefully great business info and on occasion some hopefully not too sarcastic comments on the state of Business Financing in Canada and what we are doing about it !

In 2004 I founded 7 PARK AVENUE FINANCIAL. At that time I had spent all my working life, at that time - Over 30 years in Commercial credit and lending and Canadian business financing. I believe the commercial lending landscape has drastically changed in Canada. I believe a void exists for business owners and finance managers for companies, large and small who want service, creativity, and alternatives.

Every day we strive to consistently deliver business financing that you feel meets the needs of your business. If you believe as we do that financing solutions and alternatives exist for your firm we want to talk to you. Our purpose is simple: we want to deliver the best business finance solutions for your company.



Showing posts with label abl facility. Show all posts
Showing posts with label abl facility. Show all posts

Thursday, March 28, 2013

The ABL Facility . Is It The Perfect Marriage of Assets And Cash flow When It Comes To Business Lines Of Credit?




Financing Nation! Business Credit Line Worries ?


OVERVIEW – .Information on availability of business lines of credit in Canada. How does the ABL facility compare with Canadian chartered bank lines when it comes to cash flow borrowing

Business lines of credit in Canada . Accessing this type of borrowing facility continues to remain both a goal and a challenge by many businesses of all types and revenue sizes. Let's examine the ABL facility as it compares to Canadian chartered bank credit facilities. They are similar... and they are different.

In many cases we maintain asset based lines of credit are the perfect marriage of assets and cash flow. The Canadian business owner and financial manager is always looking for facts and proper comparison when it comes to making a balanced decision on where the weight of evidence lies on access to working capital credit lines .

They want to know what the issues are, what key technical points must be considered. Additionally they want to know what key issues are and where to go to find the answers. Just common sense.

Let's employ somewhat of a rapid fire method of explaining what we mean. Let's dig in.


The ABL facility is (usually) a non bank way of financing your business line of credit. It allows you to borrow, under one credit line, against all your asses on an ongoing basis. Major assets financed under the credit line include A/R, inventories, fixed assets, and real estate, if that applies.

Asset based credit lines in Canada are getting more popular everyday. They are used by some of the largest corporations in Canada, and start up and emerging companies in all sectors of the economy. They are positioned as a borrowing alternative to the Canadian chartered bank credit line.

If there are two principal advantages of the asset based credit line it is that it substantially increases your borrowing power, and does not come with the ties that bind when it comes to qualifying for a bank credit line.

Public and private companies can access the ABL facility, the borrowing criteria, i.e. your assets, remains the same.

How is borrowing power increased by this method of financing? Easy to explain. Receivables are traditionally margined at 90%, and inventory can be margined anywhere from 25-75%. When you ‘throw in’ the other business assets under the same facility we have easily seen clients achieve 50-100% more borrowing almost immediately. In some cases more!

Monthly reporting is more stringent under the ABL. While a bank typically might request quarterly or annual financial statements the asset based borrower must be prepared to send in monthly receivables, payables, inventory lists, and a balance sheet and income statement. That's a minimum! Over time we have observed this makes the business owner/manager more financial astute, as he or she tends to understand their business better.

Does your firm have a challenge in accessing working capital via a proper line of credit that suits your needs? If it does consider busines lines of credit that come under an ABL facility solution. Why? It works, more companies are doing it every day, and you just might find your competitors are talking about ' the new you ' when it comes to sales and revenue growth, vendor reputation. etc. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your credit line needs.



Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :

BUSINESS LINES OF CREDIT – THE ABL FACILITY


7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653

Email = sprokop@7parkavenuefinancial.com











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Thursday, February 7, 2013

Is The ABL Facility The Type Of Lending You Are Looking For In A Business Credit Line?






You’ve Got Probable Cause To Check Out Asset Based lines of Credit !





OVERVIEW – Information on the benefits of an ABL ( asset based line of credit ) commercial revolving line of credit in Canada . How this business lending has revolutionized business credit lines.





An ABL Facility? We checked and its true, you've got ' probable cause ' to check out a unique form of lending that competes with Canadian banks when it comes to a lending facility that you need to facilitate a business credit line . Let's explain!

When we're watching our favorite crime shows on TV these days (CSI Brampton, etc) we’re always been enamored by that term probable cause.
Simply speaking it’s a ' reasonable grounds for belief '. And that’s our point today when it comes to our suggestion that you check out thoroughly the ABL facility, more commonly known as the asset based line of credit.

It's simply an alternative to bank financing. Whereas banks place a tremendous amount of focus on you cash flow and all the balance sheet and income statement ratios that come with that the asset based loan focuses 99.99% on your assets - typically receivables, inventory, equipment, and even your company owned real estate if that’s applicable .

Our Canadian banks are so strong and well known for growth, profits and conservatism simply because they are regulated, and enforce very strict rules around how much capital they can lend out , guarantees, and our previously mentioned ' cash flow coverage ' for any debt you have with them or anyone else .

The benefit to all that - it’s pretty obvious - unlimited capital with great rates, for those that qualify.

What if though? What if you don't qualify for a Canadian chartered bank line of credit? Typically you find yourself in one of the following situations - you have high or volatile growth, you’re just out of the start up stage, and on any given day you seem to be using cash, not generating a lot of it!

All the reasons and facts that we're provided for you above simply enforce why asset based lending via the ' ABL ' is getting more popular, It focuses on the underlying assets you have and monetizes them into one single borrowing facility .

The asset based lender is typically what us finance folks refer to as a ' non bank, non regulated lender '. The connotation is of course that they can do whatever they want within their firms own borrowing guidelines based on their management experience. They are also focused daily on managing the risk of the asset based loan and line of credit facilities they have provided to your term. Typically that means you're reporting on your financials and assets in a more regular fashion, monthly for sure. Some of our clients view that as a negative - we explain they should consider that in our experience many firms that report and understand their financial progress more regularly... guess what... DO BETTER!

The somewhat not so secret in ABL facilities is that many Canadian banks recognized that this is indeed a viable way to lend - so they have set up small divisions in their banks to also consider asset based lines of credit. Boy, talk about being two faced! Just kidding of course, because no one has more respect for our Canadian banks than us.



Asset based lines of credit work because they provide a lot more liquidity also. Receivables are financed at 90%, inventory is financed at more generous levels once your ABL lending firm understands your business, and they even throw your fixed assets into your daily borrowing mix. That’s liquidity 101!

Have we proven your PROBABLE CAUSE? We think so, hope so, so seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your business line of credit needs.


7 PARK AVENUE FINANCIAL
CANADIAN ASSET BASED 'ABL' LINES OF CREDIT EXPERTISE


Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/abl-facility-lending.html

































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Thursday, February 16, 2012

Naked Truth And Insights Into The ABL Asset Credit Line Facility . Canadian Business Financing Unexpected!






Information on the business asset credit line ABL facility . Why asset based financing gains more traction everyday.




Stripped down. An ABL facility asset credit line for your business financing needs just might be the most basic, yet perfect Canadian business financing vehicle your company needs. Oh, and by the way, that’s if you are a start up, in the SME sector, or one of Canada's largest corporations, because those three are already using this type of asset based business line of credit.

The ongoing debate of whether business credit financing in Canada is still tight rages on. One could make the case that the patient, i.e. the economy and business credit is still sick. So is there a patient cure?

Naturally it goes without saying that Canada, despite the complaints of the Canadian business owner and financial manager, is probably in better shape than many other countries.


The weaker economy h as one advantage, and that’s that many of your competitors are still struggling, downsizing, or just plain in trouble. We always never forget to mention that the asset based ABL facility is also a great strategy to purchase one of those competitors, as is makes optimum use of asset leverage.

So can you properly fund your company via the use of abl funding at a time when traditional access to funding is still perceived as having dried up? You can via asset based lines of credit, even if you don't qualify for the higher credit quality that is required by banks and insurance companies. So let's strip down and examine some of those naked truths

And by the way, why exactly have asset based lines of credit in fact grown so much in popularity in Canada. We would say the best answer to that is that in the past there was either the Canadian chartered bank solution, which had great rates, or no solution at all. The ABL facility was generally not heard of or not available in years gone by - and that has changed. That's a bit strange because over half, yes half of all asset credit line activity in the U.S. is via ABL.

So why the move to ABL ?It is simply that if your firm has fluctuating, or even negative profits you still have huge borrowing power via this method of financing .

Yes of course those same assets are being margined, just as your bank would have, but there are too major differences, we can call them the core of our ' naked truth ‘. First of all your borrowing levels are raised significantly because your assets are margined at a higher rate , and the inventory component of margining is very aggressive, where in some case a bank facility might not even address that asset at all, or at lease only nominally .

And your new business line of credit, via ABL in fact can include the appraised values of equipment and real estate, thereby increasing revolving credit borrowing power.

And what about that 2nd naked difference or truth? It's a key point, in that the focus on ABL approval is not cash flow coverage and covenants, its only assets, which has great appeal to Canadian borrowers, especially those that struggle to meet those cash flow covenants.

Quite often we see tremendous flexibility in the size of such a facility, because in many cases business has peaks and valleys and bulges in financing requirements.

Do you work harder to maintain or get such a facility? Our naked truth... yes. The one aspect of this method of financing is that you'll find yourself reporting on your assets more often than you would in a bank environment.

Thats some of the naked truth in this asset credit line .It's a part of the new reality of Canadian business financing that you should take a serious look at, especially if things are not working well now . Speak to a trusted, credible and experienced Canadian business financing advisor for the stripped down truth on the ABL advantage.







Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com


Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/abl_facility_asset_credit_line_financing.html




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Thursday, December 1, 2011

A Canadian Business Financing Epiphany ! ABL Asset Based lending Is The Quiet Revolution In A Business Line Of Credit Facility






Canadian asset based lending - Business Lines of Credit


Information on asset based lending and financing in Canada . Why an ABL facility is one of Canadian businesses best form of business lien of credit finance .




And that's when it hits you. We're talking about a Canadian business financing ' epiphany' - that being the term used for a ' sudden, intuitive perception or insight '. And what exactly is that ' insight'. It's simply that an ABL facility, which is the asset based lending term for business line of credit is different, and in many ways a lot better than traditional term loans or Canadian chartered bank facilities.

So, that’s a fairly dramatic statement, so let’s set out to provide some facts and valuable information on these business revolving credit facilities.

Canadian businesses use ABL financing to leverage their assets, typically receivables, inventory and equipment into liquidity for working capital and cash flow. The most common question we get around this type of business financing is ' Why is an ABL facility different than a bank line of credit? Fair question, right?

The answer is simply as follows - it’s your asset values that determine the amount of business credit line you are eligible for. Banks view business lines of credit in Canada in an entirely different manner. It’s just a different way of looking at things. Asset based lending looks at the assets themselves as the ' prime ' collateral. In the cases of banks they look at whats important to their criteria, which are typically historical cash flow, profitability, a balance sheet that has reasonable debt, outside collateral, etc.

It's this difference then that is what becomes almost shocking to a degree on Canadian borrowing for business. Just imagine, no ratios, covenants, reliance on personal guarantees, just a focus on the assets themselves. And the more verifiable assets you have the more you can borrow.

Therefore the key advantage to this type of borrowing and financing is that the ABL facility accelerates that cash flow and allows your company to access all its working capital needs as you grow. Naturally it goes without saying that your company now has an alternative to taking on additional debt or having to dilute some or a large part of your equity ownership. Remember, almost always equity is much more expensive than debt in the long run.

Is every one eligible for an asset based lending abl facility? The general answer is yes. Junior type asset based lending and financing facilities for inventory and A/R can start as low as 250k and quite frankly there is really no upper limit for facility size. Unbeknownst to many some of the largest corporations in Canada utilize this type of financing, having forsaken bank lines of credit in the traditional sense.

Eligibility always is a key question from clients. Whats required? is really their question. First of all you have to have proper financials and be able to maintain solid reporting records on key assets such as receivables, inventory, etc. We don’t necessarily consider it a downside, but it is safe to say there is a bit more monthly reporting in an ABL facility , if only for the reason that its all about the assets, not the ratios and covenants you might be used to now .

The advance rates (how much you can borrow!) are significant in asset based lending. A/R is typically margined at 90%, and inventory (yes, inventory!) is anywhere from 30-70% depending on the type of product you produce/sell.

So, that’s the epiphany! Just that sudden insight that threes a quiet revolution going on in business financing that you might want to check out. Speak to a trusted, credible and experienced Canadian business financing advisor on the merits of ABL financing.


Stan Prokop - founder of 7 Park Avenue Financial - http://www.7parkavenuefinancial.com
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing .Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/abl_facility_asset_based_lending_financing.html
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Thursday, September 22, 2011

If Things Are So Bad Why Is a Canadian ABL Facility Business Line Of Credit So Good ? How Asset based Lenders Work







The Worse Your Financing Challenges The More An Asset Based Line Of Credit Should Appeal To Your Company

Information on why and ABL facility from Canadian asset based lenders and why this type of business line of credit is extraordinary in terms of delivering more financing to Canadian business .



Does it every get easy? It's probably just us but doesn’t it seem like there’s never a time when there isn’t some major economic turmoil these days that simply add to the constant challenge of being able to be successful in business financing for your firm.

That’s why an ABL facility... a business line of credit from asset based lenders is very much a total breath of fresh air. With the Canadian economy see sawing back and forth between good news and bad news the likelihood of your company getting the business credit it needs is never 100%.So is there a way to improve those odds? We think there is, and it’s an asset based line of credit, the technical term being ABL.

It is somewhat ironic that the asset based lender actually tends to do better in more difficult times - that’s easy to understand because the unique facility it offers has a much higher chance of approval for firms such as yours. And, as always, it’s about the assets, not the ratios. Coupled with the fact that the industry in Canada, relatively speaking is still quite new and somewhat fragmented , well , bottom line, its just seems to get more traction everyday.

Stats in other countries , and we think they are reflective of Canada also , show that 80-90 % of the firms that utilize asset based lending for their business line of credit are in fact small to medium sized corporations . It is sometimes overlooked that some of the biggest corporations in Canada also use this type of financing, abandoning the traditional Canadian chartered bank line of credit.


When we meet with clients to discuss their needs for an ABL facility it's often necessary to spend a bit of time explaining some of the mis information that exists with this type of facility. That is partly because this type of lending has some subsets, they include receivable financing, and in some cases purchase order financing.

The key benefit of an ABL business line of credit always comes back to one word - ' margining '. Typically this type of revolving facility margins 90% of receivables and anywhere from 30-75% of inventory, depending on the type of inventory your firm carries/requires.

Additionally, the key difference in the facility is the fact that your business access to working capital and cash flow grows with your needs, pretty well automatically! Now that’s the type of borrowing facility that every business owner dreams about!

So, when the bank is not the solution, (those hoops keep getting more difficult to jump all the time!) and your company is either reluctant or unable to raise additional equity speak to a trusted, credible and experienced Canadian business financing advisor on the benefits and requirements for an ABL business line of credit.






Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com


Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing .Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/abl_facility_asset_based_lenders_line_of_credit.html
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Thursday, February 24, 2011

Looking For Asset Financing ? Does Your Firm Have What It Takes For A ABL Facility With An Asset Based Lender

You're on the hunt, and the prey is business financing under an asset financing scenario you have heard so much about. Let’s examine what an ABL facility is, who is the asset based lender that offers this financing, and, oh yes, do you qualify?

To say that business credit financing is top of mind these days with Canadian business owners and financial managers is clearly an understatement. With the economic clouds clearing on the horizon after the 2008-2009 business credit meltdown business owners are looking for growth financing.

And the reality is that the type of operating facilities that you are looking for are getting tougher to secure from Canada's major chartered banks. We are of course referring in general to firms that have some sort of challenge, because medium sized and large Canadian firms with great balance sheets, profits, and solid cash flows can access great credit terms from the banks.

Unfortunately that isn’t the client profile we're talking to everyday - as owners we meet have challenges such as inability to secure the operating cash they need, the requirement to acquire additional assets, or even a full acquisition of a competitor. And that economic turbulence we mentioned earlier usually means that many firms are coming out of a turnaround type environment and are slowly getting their financials back in order. Therefore the ability to secure an ABL facility (abl = asset based lending) for inventory and receivables becomes the goal in asset financing.

So what is the real difference in asset financing under and abl facility compared to a bank line of credit, commonly called a ' revolver ' in business finance. The best way we explain it to clients is that the bank focus is on cash flow, the asset based lender focuses on assets. Big difference!

So, does your firm qualify for abl financing? In general, as we stated, any firm with assets of receivables, inventory, equipment and real estate qualifies. Where the challenge comes in is deterring the overall quality of those assets as well as the size of the facility. An ABL facility is generally available for any firm with over 250k in a combination of receivables, inventory, and equipment. In certain cases even tax credit receivables can be financed.

Where you as a business owner have to focus is the choice of a partner in this type of financing. If your facility requirements are in the millions of dollars and you have high quality business assets (i.e. collectible receivables, inventory that turns) you can access significantly more credit than under a normal bank facility - at rates commensurate with bank financing.

Small firms pay a premium for this type of facility, but when you consider you can access almost all the business credit you need under such a line of credit, coupled with the ability to grow profits and revenues and take on additional orders... well , we'll let you decide if that’s worth a premium .

If you want to comfortably walk the business financing minefield in ABL and feel you aren't 100% conversant with the players, requirements, and pricing then consider seeking a trusted, credible and experienced Canadian business financing advisor in this area .

P.S. If you found your access to business credit has just doubled, don’t say we didn’t tell you!

--


Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/abl_facility_asset_based_lender_asset_financing.html
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