Asset Based Lenders : A Paradigm Shift In Canadian Business Financing Via The ABL Lending Solution

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A Silver Bullet In Canadian Business Financing ?

Let ABL lending & Asset Based Lenders Show You How !

OVERVIEW – Information on ABL lending in Canada and how asset based lenders via specialized business lines of credit financing solve a myriad of Canadian commercial financing challenges

Business financing in Canada often has owners/financial mgrs searching for the ' Silver Bullet’. That's where asset based lenders and ABL lending in general come in. Those in search of that business silver bullet are looking for something that ' cuts complexity' and provides an immediate solution. We're examining exactly how and why asset based finance firms can provide you with the finance Silver Bullet you're looking for. Let's dig in.

It's no secret that most top experts today maintain that ABL lenders emerge as the true alternative to traditional bank financing. While we might think of asset finance as ' debt ' that is definitely not always the case - as they also monetize the left hand side of your balance sheet - you business assets. A true ABL deal provides a revolving line of credit that accelerates your business liquidity.

Many business folks aren't aware of asset based lenders only because they are, relatively speaking, new on the scene. They are typically commercial finance companies that, unlike the banks, are unregulated as it relates to commercial financing. These firms are a combo of Canadian firms, both public and private, as well as branches of larger U.S. firms who have chose to finance in Canada. Their focus on financing = flexibility.

That flexibility means higher loan to value margins, resulting in more cash flow and liquidity for your business. ABL lending does that because if places a greater focus on real world values as long as you are regularly able to report changes in your business assets - i.e. aged a/r, a/p, etc

Again, we're circling back to flexibility. It is rare that any industry is totally ' out of favor ' with an asset based lender. Why? Because based on their internal expertise and their ability to work with your firm in any stage of your existence (start up, high growth, turnaround, recapitalization, etc) almost every Canadian firm is eligible for an asset based line of credit facility. The greatest flexibility, if we had to name one, is that the facility grows as your firm grows - that certainly is not the case when it comes to more traditional forms of financing, or term debt.

Will asset based lenders always be able to provide the solution you need for funding and liquidity. The answer is a resounding ' YES ' if you follow the following guidelines we emphasize with clients:

Ensure you are looking for the right type of financing when it comes to short term, intermediate and long term solutions - 100% always use of a revolving credit line might suggest the need for term loans or new equity

1.Focus on financing that helps you generate sales and profit growth

2.Ensure you understand the cost and requirements of asset based lending

Financing isn't the only solution to every business challenge but if you want to learn more about the new ' SILVER BULLET ' in Canadian business financing consider speaking to a trusted, credible and experienced Canadian business financing advisor who will help you determine the right facility for your company.





Stan Prokop - founder of 7 Park Avenue Financial –

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 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 & Contact Details :

http://www.7parkavenuefinancial.com




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


' 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

ABL Lending And Current Asset Based Loan Rates Make Impossible Financing Possible

Impossible Financing Made Easy Via ABL Asset Finance Solutions

OVERVIEW – Information on ABL lending in Canada . Asset based loan rates are becoming more attractive to the Canadian business borrower when it comes to working capital and business credit facilities required to grow, operate, or acquire a business







ABL lending means different things to different business people. So asset based loan rates differ, but in our context we are talking about a working capital credit facility, in effect a ' business line of credit ' that is a strong alternative to traditional Canadian chartered bank facilities. And as thousands of business owners and managers have discovered - they can often make the impossible... possible! Let's dig in.

ABL (' asset based lending’) credit lines secure the assets of your business and turn them into a working capital and cash flow facility. The most common assets financed under ABL include inventories, receivables, and fixed assets - and may also often include real estate.

(When real estate come s into lay in a business credit line it's in effect the business version of a home owner line of credit - the infamous ' HELOC’ that millions of Canadians borrow under.) But we digress, because we're talking ' BUSINESS'!

While public companies seemingly have access to more credit the SME sector in Canada often struggles with raising capital or monetizing assets. Enter ABL lending, which is the strong alternative to bank financing. By the way, the banks offer ABL lending; they're just not that big on TV commercials for this specific business borrowing product. The reasons for that we won’t explore today.

Why do companies consider borrowing under asset based loan rates and facilities? While the predominant reason seems to be the bank credit alternative its also a strong way to increase borrowing power, or financing a merger and acquisition or management buy out via monetizing assets. In some cases it is used to pay down other debt when that makes sense.

We referenced more ' borrowing power '.

That's because 99% of all ABL lending provides stronger margining of receivables and inventory, typically 90% and anywhere form 30-80% respectively. And when the business owner of financial manager throws fixed assets into the borrowing mix increased cash flow ability happens.

While we reference ABL finance as predominantly used in the SME COMMERCIAL FINANCE sector it’s also used by some of the largest successful and well known public and private corporations in Canada. Typically large retail chains use the inventory finance component of ABL as their working capital facility, given they have no receivables as retailers are an ' all cash ' business.

While Asset based non bank financing rates are almost always (but not all the time) higher current rates are coming down and provide even more consideration to consider this type of financing. So while Canadian business financing needs tend to gravitate by instinct to ' the bank’ the business owner and financial manager should not forget that the bridging of assets into cash is also provide by ABL lending.

So if you want impossible financing made ' possible ' when it comes to business credit lines seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with a finance solution that makes sense.





Stan Prokop - 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 90 Million $ of financing for Canadian corporations . Info /Contact :

7 Park Avenue Financial = Canadian ABL Lending Expertise








Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:


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


' Canadian Business Financing with the intelligent use of experience '























Stan Prokop

Looking For The Silver Bullet In Canadian Business Financing ? Let ABL lending Via Asset Based Lenders Show You How

Why Asset Based Lines Of Credit Are the New Paradigm Shift in Canadian Business Finance Information on ABL lending in Canada and how asset based lenders via specialized business lines of credit financing solve a myriad of Canadian commercial financing challenges . The ‘Silver Bullet ‘. It's always been an interesting term to us, referring of course to something that ‘ cuts through complexity and provides an immediate solution to a problem '. (In the old days it was the actual use of a silver bullet that was the only way believed to kill a werewolf! ) So why do we maintain ABL lending and asset based lenders and the financing they provide are a silver bullet for Canadian business financing? Here's why. Asset based lenders have emerged in Canada as a true alternative to traditional Canadian chartered bank financing. While they are often categorized as a form of ' debt ' in reality these firms simply monetize the left side of your balance sheet - i.e. your assets. These assets, usually both current, but sometimes fixed, are monetized into a revolving business line of credit that accelerates liquidity for Canadian business. We feel that because asset based lenders emerged much later onto the Canadian business financing scene that that’s one of the main reasons there is a lack of understanding and standardization when Canadian business owners and financial managers attempt to understand the finance offering this type of financing provides.. ABL lending is typically ' unregulated' financing services. simply meaning that the majority of firms providing services in this area of Canadian business finance aren’t under the bank act . The irony is that a small handful of the larger ABL firms are in fact divisions of U.S. and even Canadian banks. So why should we care about unregulated financial services, if they are offered by large well capitalized companies who want to do business with your firm. Simply speaking - flexibility! That flexibility comes in the form of higher L T V (loan to value) lending that gives you only two things - more liquidity and cash flow. The simply reason behind that is that it leverages your assets to a much higher level than a typical bank offering. So how and why is ABL lending able to advance such higher amounts when it comes to your firm’s new business line of credit revolving facility? It simply because greater care, valuation, and control and reporting (that reporting is by yourself by the way!) Allows asset based lenders to margin your receivables, inventory, and in some cases fixed assets at rates that can be anywhere from 10-50 % higher on inventory, and as much as 20% more in receivables. Again, we're circling back to flexibility. It is rare that any industry is totally ' out of favor ' with an asset based lender. Why? Because based on their internal expertise and their ability to work with your firm in any stage of your existence (start up, high growth, turnaround, recapitalization, etc) almost every Canadian firm is eligible for an asset based line of credit facility. The greatest flexibility, if we had to name one, is that the facility grows as your firm grows - that certainly is not the case when it comes to more traditional forms of financing, or term debt. And again, the ABL facility is somewhat of a ' catch all' as it works for companies of all size (typical facilities range from 250k to tens of millions of dollars); firms that are both doing well and growing or those that have experienced significant business challenges. Your firm is no longer pressured to perform under ratios, covenants, and other issues that detract from your ability to grow or save your business. If you want to learn more about the new ' SILVER BULLET ' in Canadian business financing consider speaking to a trusted, credible and experienced Canadian business financing advisor who will help you determine the right facility for your company. 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/asset_based_lenders_financing_abl_lending.html

Heard About The Revolution? How ABL Lending Revolutionized Canadian Business Line Of Credit Financing

Canada’s Revolving Line Of Credit Evolution



Information on how ABL lending via an asset based line of credit has revolutionized business line of credit financing for Canadian businesses of all size.


We checked... a revolution is a ' complete or marked change in something'. So why do we maintain that ABL lending, i.e. asset based non bank lines of credit are, of all thing revolutionary? Here's why.

When Canadian business owners or financial managers are exploring new business lines of credit they are in one of small number of situations - those include ; financial distress, acquisition finance, growth, start up, etc.

Any one of the above situations has is a challenge - lets look at one that can be realistically position as a ' larger challenge ‘... aka THE TURNAROUND.

Is there anyone more challenging for a business to change the financial course and direction? We personally doubt it (although makings sales is sometimes as tough!). Many business owners and financial controllers associated credit risk with the pricing of their financing. That’s a reasonable assumption. So logically banks, who only offer great pricing, are... you guessed it... some risk averse to financing a turnaround. Even we agree with that... and by the way... did we mention we love Canadian banks.

But if that’s the case... how can a legitimate turnaround be financed? Good question? We've got an answer - an asset based line of credit, via ABL lending in Canada.

The reason an asset based business line of credit works when a traditional alternative doesn’t is two fold - you have business collateral and assets and the fact that a true asset based lender prices risk, quite somewhat unlike our chartered banks.

Typical situations in a turnaround are quite logical - financial losses, being put into ‘Special Loans’ or your firm is perhaps ' off covenant '. Off covenant is of course when certain ' number relationships' in your financials don’t make sense. In many cases we see clients are also in debt to CRA, those good folks at ' the government '.

The asset based lender is often the solution that both you, and your bank! are looking for. This financing attempts to fix the problem that you and the bank cannot. The good news is that often your firms reputation and expertise are of course worth saving.

Typically your ability to prove that you can still generate sales growth is a key element to an ABL lending turnaround situation. When that can be validated a finance offer typically includes high margining of receivables and inventory, with those funds often being used to restructure some debt, clear CRA arrears, all the while leaving some working capital for growth .

Often times an appraisal of any fixed assets is required... however this ultimately benefits the customer by adding in an additional borrowing base that now becomes a part of the overall credit facility.

And besides growing those sales and operating efficiently again, what are your responsibilities under this type of business line of credit financing. It all comes down to proper and timely reporting of sales, receivable collections, and inventory and fixed asset lists.

So, is a business financing turnaround achievable in Canada? It absolutely is, and one of the ways that can happen is via ABL lending, a revolutionary concept in Canadian Biz finance. Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in formulating a financing turnaround, with a business line of credit that makes sense to your current 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 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_lending_business_line_of_credit_financing.html

Power Your Business Financing with Canadian ABL Services – Why Asset Based Lending Works

It's always about the bank. Well ... not always... It seems that Canadian business financing continues to evolve and Canadian ABL services via asset based financing credit facilities are slowly getting to the top of the popularity pile.

Why does this type of financing work well and why is it becoming the accepted alternative to traditional Canadian chartered bank financing? We think we know why.

Although it might seem that the Canadian business and economic environment changes quickly these days we maintain that for the last two or 3 years the one thing that hasn’t changed is the ability for Canadian business owners and financial managers to get ' traditional ' financing from those great folks at the bank.

Skepticism and bank regulations in Canada seem to eliminate more and more qualified business borrower’s everyday. So it’s a struggle and if you are a small or medium sized firm in Canada the ability to grow or change your business is difficult.

Enter ABL lending in the Canadian marketplace. This type (we call it non-bank) of revolving credit facility is the new ' band aid ' for almost any size business, filling the void between traditional financing.

So why an asset is based lending facility able to work for your firm when a bank facility might not even is attainable. We guess it’s about risk and reward, in that for the same or higher cost almost any decent sized business has the ability to qualify for ABL services and financing.

The other side of the coin is also that the whole approval process is often quicker, in that there is only one key agenda item to review - your assets. Typically these assets are receivables; inventory and equipment, with real estate a borrowing possibility also, included right in your asset based lending facility.

We speak of the ' power ' of ABL. The true power lies simply in the fact that the assets we mentioned that are used as collateral are margined significantly higher than in the manner that a bank would margin those same assets. So it isn’t your financial statements strength that has the power - it’s those ' assets ' within the financials!

The broad appeal of asset based lending also lies in the fact that it’s flexible, that the other side of our ABL power equation. Your firm doesn’t necessarily have to be profitable (it helps ... but not required) and even if you face current financial challenges and setbacks you are still eligible. Even special loans clients can use ABL to escape from the restrictive claws of a special loans environment.

So whats our bottom line - it simply that if the Canadian banking environment continues to be unable to serve the demands of fast growing or challenged business... well... ABL financing services will step in and nicely fill that gap.

Ultimately it still might be your business goal to obtain a ' traditional ' facility. That’s ok of course. In the meantime thought consider the true power of asset based lines of credit as a funding option that will meet all your financing needs... today! Speak to a trusted, credible and experienced Canadian business financing advisor to eliminate that uphill financing battle you've been facing.



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 .Info re: Canadian business financing & contact details :

http://www.parkavenuefinancial.com/abl_lending_financing_canadian_services_asset.html

Finance Challenges ? Why An ABL Lender Has Your Canadian Financing Challenge Solved ! An Asset Lending Loan

Seems strange, don’t you think ? That the same type of financing that could be a solution for taking your company out of special loans might be the same one that can handle your growth financing needs ?

We are talking about ABL - the finance acronym for ' asset based lending ‘. ABL lending is a powerful financing loan (not really a loan per se) but we will get back to that) offered by a unique type of lender in the Canadian marketplace.

How unique are those lenders - we think very! And we're going to demonstrate why, right about now!

ABL lending and financing is a financing facility that is set up to monetize or cash flow your assets. The closest comparison we can offer you to this type of financing is that it is comparable to a Canadian chartered bank operating line of credit and financing facility. But boy are they different.

Your ABL lender sets up a monetization of all your business assets, but typically the key assets are receivables, inventory, and occasionally complimented by equipment and real estate if those latter two are applicable. We can hear you already, because we have heard it from clients a thousand times ' But why is that different from a bank line of credit?"

The answer is simply, the total focus and amount of the facility is actually based on your total assets, and their current values. Bank operating lines on the other hand are pre set limits that are significantly focused on financial ratio, loan covenants, tangible net worth, and outside guarantees and equity. What a difference, right?

So is ABL lending better? Ours is to inform, yours is to decide - but abl financing optimizes the amount of financing you can achieve to the max. It is set up as a base of all your assets, with yourself drawing against those assets on a daily basis. That of course matches perfectly the needs of your company, i.e. the daily inflows , outflows, special bulge needs, large new contracts, overcoming slow collection challenges, etc .

Because the abl solution is always focused on your total asset picture it in effect optimizes your total available working capital. We think you're getting the picture. And getting back to that always comparison against a chartered bank facility your borrowings on a daily basis are managed much in the same way - you use those same established ' borrowing base certificates ' that allow you to drawn down on cash flow and working capital on an ongoing basis.

The bottom line -as sales grow and you generate receivable sand inventory your abl loan financing fluctuates to turn your company into a true cash flow machine.

Some of the key issues you need to address in choosing the ' perfect ' ABL lender are as follows - the size of the facility, what information is required of your firm to set up the facility ( appraisals and operating audits are required ) , the timeline to set up the facility ( typically 2- 7 weeks depending on size and your reporting capability ) and issues such as cost and ongoing reporting and monitoring .

In the U.S. stats show that almost 30% of firms use some form of abl lending and loan financing to finance their firms. We are pretty sure the numbers in Canada are lower, but we sure do think you should determine if this type of financing is your total solution to business finance challenges. Speak to a trusted, credible and experienced Canadian business financing advisor about solving your cash flow challenges - today!




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_lending_loan_finance_financing_lender.html

Without an ABL Lending And Loan Facility Financing Where Will You Be Tomorrow ? A Canadian Non - Bank Alternative !

Concerned about your ability to achieve business operating financing over the long term - if that’s the case an ABL lending solution might be the alternative to a traditional bank financing facility.

We think the whole issue revolves around the term alternative - and we mean that in two ways. First of all from a pure technical reason ABL ( Asset Based Lending ) is in fact ' alternative financing ' , a term that has become very much in vogue since 2008 -2009 when the Canadian business financing landscape changed dramatically due to the global financial recession.
And secondly, it’s just basically another word for choice and we guarantee you that you need choices in your business financing decisions.
So, can you ignore asset financing and let other firms, including your competitors use ABL as their new choice of operating financing? Of course you can, but if this type of loan or facility (it’s not a loan per se) has the ability to virtually guarantee you access to financing for all future growth we think it’s remiss of you not to consider it. That’s just our humble opinion.

The bottom line is that this type of asset based line of credit financing facility is almost always tailored to your specific needs. It provides you with the flexibility to have a customized arrangement around the borrowing power you can generate via... guess what, Assets!

And what are those assets? Commonly they are receivables, inventories, and in some cases as an add on, fixed assets or real estate. It’s simply the monetization of those assets based on realistic values (often achieved by an appraisal)that gives you al alternative , and by the way, almost always larger ! operating facility .

If as a Canadian business owner or financial manager you're concerned about the future of financing for your firm and you have special needs or situations then ABL is probably the answer to your alternative, which is losing out on growth opportunities or having to look elsewhere for debt or outside equity.

We mention debt because you do have alternatives to ABL lending such as cash flow term loans, sub debt, etc but surely the ability to monetize assets to the maximum and not borrow relative to the balance sheet is appealing?

We've referenced the ability of your firm to secure the future of your financing and growth via an ABL lending and financing facility. Clients who want to make this drastic change to non bank financing always ask a question that could generally be summarized as ' whats in it for us '. The answer is pretty simple, increase cash flow for firms that have assets, both current and fixed, that aren’t being monetized now. Although you might end up reporting more on the monthly values of those assets most clients are happy to know that these reports are no longer tied to covenants and ratios, etc as required by traditional Canadian chartered bank financing. Issues of seasonality in your working capital, or being flexible to take advantage of new opportunities (including acquisitions by the way) make ABL lending a solid ' loan ' financing facility alternative choice.

So whats the bottom line in the future of your operating financing? And where will you be tomorrow in your business financing ? Its simply that you should investigate asset based lending facilities, non bank in nature, as a method of creating long term access to working capital and growth ability . Speak to a trusted, credible, and experienced Canadian business financing advisor for the lowdown on 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 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

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

Canadian ABL Lending - True Success In Banking and An Asset Financing Loan

Are you enjoying life as a commercial borrower in Canada - We can't even imagine some of the answers to that question, although we have certainly heard a lot of the stories! Let's examine why a new breath of fresh air, ABL lending has become a favorite and very unique banking and asset financing strategy in Canada.

One of our favorite expressions these days is that the old ways don’t work anymore. As it relates to today’s subject we're talking of course about commercial banking facilities in Canada, and focusing primarily on firms that have challenges to raise working capital and cash flow facilities that work.

It often comes down to a comparison of the two types of financing, traditional Canadian commercial banking, and our favorite new kid on the block, ABL lending and banking. We use the term new but quite honestly it’s simply a Canadian business financing facility that hasn’t been heard of by many Canadian business owners and financial managers for a variety of reasons. Maybe some people prefer to hide a good thing and keep it secret.

So whats better, a ' regular ' commercial banking facility via a Canadian chartered bank, or ABL lending and financing via a true asset based line of credit? Regular commercial facilities are extremely focused on criteria for mutual success - we say mutual because we hope everyone agrees your firm and the lender both have to win. (By the way, we are on our clients side! in that battle)

Got what it takes for a Canadian commercial banking facility - you know the drill - you need reasonable leverage, no significant events that are negative in nature, covenants that are a combo of income statement and balance sheet based, - example: fixed charge coverage, etc!

But hey, what about ABL banking and asset financing - whats required there. . Are you ready? Just assets!

That’s the appeal of asset based banking and financing - it focuses almost solely on current assets, key categories being of course receivables and inventory. Where our commercial banking friends focus in a dramatically different manner in analyzing and funding your business the ABL focus is simply n asset monitoring, and ensuring you can borrow on a daily basis at the highest of advance rates based on real world values of your assets. Oh, and by the way ' strange events ' are fully allowed - so you have a challenge, an acquisition, a special loan situation, a year of bad luck .. You will still be forgiven by abl lending and banking.

Want to ensure you have maximum availability on borrowing against your assets on a daily basis - speak to a trusted, credible and experienced Canadian business financing advisor about an asset based line of credit that makes perfect sense for your company.

-


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_lending_banking_loan_asset_financing.html

Is ABL lending And Banking the Fountain of Youth Of Business Financing ? Financing Via Asset Loan Lenders

We're all familiar with the story - searching the jungles to discover what may not exist - a secret or dream that might deliver on wealth or happiness.

What does this possibly have to do with ABL lending and banking in Canada?! Our point is simply that something you think may not have existed in terms of an all encompassing business loan financing arrangement in fact might exist - you just didn’t know where to find it.

Let's look at the hard facts - in 2008 and 2009 the Canadian business financing market went ' conservative ' and boy is that an understatement. Business financing reduced, companies such as yours hunkered down and just tried to exist, let alone expand and grow. Canadian banks emerged as the superstars of the Global financial marketplace - they didn’t go under... they remained profitable, they just did a lot less for many Canadian businesses, and in hindsight it’s hard not to understand why.

Could it have gotten any worse -actually yes, borrowing rates rose, many firms disappeared, and, at the core of our subject here, active lenders exited the Canadian market.

So was it all gloom and doom. You can make the call on that one, but the good news is that one form of business financing, ABL (Asset Based Lending) banking and lending become more valuable and more popular... in a way it become out business fountain of youth.

With the increased flexibility of abl financing in Canada came the financing that your business needed to grow. Essentially this type of financing margins assets at higher value, because abl lenders understand the true value of the asset - and if they don’t understand it they will take the time to understand the value those assets. (You might get a bill for that, but it will be worth it, we can assure you!).

We may have glossed over the true meaning and definition of abl loan financing in Canada. Simply speaking it’s a very clear formula based on the ongoing liquidation values of your receivables, inventory, and equipment, and you borrow everyday against those values. It’s a concept that is very easy to understand for most Canadian firms - especially when benchmarked against Canadian commercial banking facilities for small and medium sized companies in Canada.

So what have we got against banks? Absolutely nothing, in fact Canadian bank reputation is stellar globally. However, if you cant get prime based borrowing and if you are unable to meet covenants and ratios required , or if you are too ' small ' for such a facility then guess what - the fountain of youth, the secret to business wealth and happiness just might be abl lending and banking facilities .

True asset based facilities aren't ' loans' per say, you are just monetizing assets to create on going cash flow.

Interested? If your firm is growing rapidly, highly leveraged and unable to meet bank covenants, or is you just have curse of growing too quickly (?!) speak to a trusted, credible and experienced Canadian business financing advisor on ABL banking in Canada .
--

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_lending_banking_lenders_loan_financing.html

Canadian ABL Lending vs. Bank Loans - Which Offers The Best Financing Facility ?

Your mission, should you choose to accept it, is to determine the difference between abl lending in the Canadian marketplace vs. similar business financing loans offered by chartered banks .

A significant amount of confusion exists in the Canadian business financing arena around the definition and use of ABL lending. In the context that we are talking about we're focusing on a comprehensive business financing credit arrangement that provides you with a total borrowing facility based on primarily receivables and inventory, but also equipment and real estate when that comes into play .

There are many subsets of abl lending in Canada. The two dominant factors that play a role in theses subsets are size of facility, and single focus financing, such as receivables only. Additional the overall credit quality of your firm (i.e. good, bad and ugly) ultimately drives what type of facility you choose/obtain.

Can anyone raise their hand and answer why abl loans (by the way they are not loans per se) are deemed by many to be the savior of Canadian business financing. We sure can - its because they have the simply ability to offer financing when traditional bank financing is not available ,and, even to a stronger point, abl loans don’t discriminate when it comes to size of the facility . Generally these facilities range from 250k on the small end to tens of millions of dollars at the high end. Oh, and by the way, many of Canada's largest corporations use this type of financing, unbeknownst to the average follower of Canadian business financing.

So again, whats better for your firm ? We have got nothing against traditional bank operating loans, they have served Canada well for a hundred years, however , they can be restrictive when it comes to size of facility, renewals of your facility on different terms, and , most importantly limiting on what can be financed and for how much .

Quick example based on a real world scenario. Manufacturing company 'A' has a bank financing operating facility that margins their receivables to 75% of total value, and inventory to a cap of, let’s say 750k. However, manufacturing company 'A' is growing quickly, requires additional inventory, and has receivable growth commensurate with sales growth. The challenge in a traditional banking arrangement is that the company is restricted in ability to grow commensurate with their working capital needs .Would banks step in. Maybe, possibly, who knows ?

However, we can almost guarantee this same type of problem or challenge our company 'A' is facing would be met head on in an ABL lending scenario. Why , simply because abl financing is based on assets, so as the firms inventory and receivable investment grows so does the facility, pretty well automatically .

Many Canadian firms that are smaller and medium in size unfortunately don’t qualify for what we call a true pure play ABL, simply based on deal economics , size of facility, and asset categories. Does it end there?

Definitely not, as working capital facilities, mini ABL’’s we could call them, are available that finance a combo of A/R and inventory, accounts receivable only (typically called factoring financing), with potential to add on purchase order financing when that makes sense. Our mini ABL’’s, aka working capital facilities are priced significantly higher that true asset based lines of credit, but offer the same flexibility and access to capital .

So, is there a bottom line? The old saying ' the trend is your friend ' is applicable - more and more firms are investigating abl lending and benchmarking it against bank loans. Do not, we repeat, do not investigate this type of financing if you have all the business credit you need and have no challenges in working capital financing and business growth! If that’s not you, speak to a trusted, credible and experienced Canadian business financing advisor who can help you benchmark abl loans vs. bank financing facility.

Requirements for a Business Line Of Credit in Asset Finance and ABL Lending in Canada .

Let's cut rate to the chase, that’s often the best strategy in assessing a business decision. You are in the process of investigating ABL lending under and asset finance scenario as a replacement for your business line of credit.

More of than not you are either self financing currently (that’s not a perfect growth strategy by the way) or your ability to secure the business credit you need simply is not happening with your current banking or financing partner.

So lets look at whats required to bring you the full advantages of an ABL facility, that term being the acronym for ‘asset based lending' . The reason you are contemplating this type of business financing is simply, you want to maximize your borrowing power based on receivables, your inventory, and other potential assets which can actually be margined for temporarily liquidity. Think unencumbered equipment as an example.

Let's examine some of the key requirements for this type of facility. That will allow you to determine your overall success in securing a facility that meets all your needs, and comes at a cost that is commensurate with your situation. We mention cost briefly here in the context of our subject because many firms experience varying degrees of cost of financing in an ABL lending facility for their new business line of credit.

That is because asset finance pricing is based on criteria such as the overall financial health of your company. However, don’t despair because ABL lending actually works even if your company is in bankruptcy proceedings, because it always comes back to the same issue - if you have assets then an asset finance solution is possible!

So lets get back to those requirements - they include receivables that are under 90 days, which typically are margined at 90% of their value. Next comes inventory, and here is where it can get tricky. Although your new ABL facility and business line of credit margins your inventory you must be able to demonstrate that the goods are saleable in some form - whether that be work in process, raw materials, or finished goods . Most companies usually have a combo of all three types.

Asset finance often doubles your borrowing power under this type of business line of credit. That’s because the firms that offer it are experts in their business - typically, more often than not, they are not banks, but private boutique type firms that specialize in business asset financing. But, and here is the ' but ' you need to demonstrate proper accounting and regular financial statements - i.e. on a monthly basis, and you should be able to provide accurate reporting on things such as aged receivables, perpetual inventory reporting , and, in some cases, an appraisal on your other business assets - since these are temporarily margined for liquidity .

What we are simply saying of course is that in order to borrow in an ABL lending environment you have to have solid business records and demonstrate you are in control of your key assets. That quite frankly should be your goal whether or not you are borrowing at all, don’t you think?

Speak to a trusted, credible, and experienced Canadian business financing advisor who can help you maximize the benefits of asset finance and assist you in achieving full success in this non bank business line of credit facility that is becoming more common everyday.
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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.parkavenuefinancial.com/abl_lending_asset_finance_business_line_of_credit.html