Asset Based Lending In Canada

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Asset based Lending - Canada is catching on quite quickly to a new breed of financing facility that has been in existence in the U.S. for a number of years. Whether your firm is relatively new, large or small, you have the option of looking at an asset based loan as an alternative financing facility in Canada, unlocking your assets for capital! Let's dig in.

The acronym for Asset Based Lending is ' ABL ' - ABL has grown popular for some very simple reasons :

1. ABL facilities will often resemble a bank credit line, providing the client with full-service banking needs

2. ABL lenders have a solid understanding of specialized asset values

3. Transactions are often very much ' customized ' to a particular firm or industry

4. There are limited or no ' financial covenants in asset-based lending; As an example banks are focused on ' leverage covenants ', thereby forcing firms to meet debt to equity ratios as an example that may be unachievable for many firms. Covenants in finance in banking scenarios become a real challenge as a firm tries to balance ratios versus growth opportunities.

5. There are no real ' upper limits' on the amount a firm can borrow in ABL, while the smaller transactions commence in the 250k range, which is considered a very small facility

6. An ABL loan line of revolving credit facility will almost always deliver more liquidity to a business because loan margins are much more generous; typical advance rates for a/r and inventory are significantly higher than bank credit lines. Stand-alone inventory loans can also be accessed as an inventory loan is a subset of asset based lending.

7. Many company's and certain industries, in general, are very ' seasonal ' when it comes to revenue recognition, need to build up inventory, etc. Asset-based credit address this issue head on. Additionally, certain industries become ' out of favour' in traditional financing circles, and ABL can often easily finance cyclical or industry specific challenges

8. Outside of general borrowing needs asset finance loans are very appropriate for acquisitions and or management buyouts.

9. Certain banks also offer ABL loans and pricing is extremely competitive KEY POINT: It should be noted that in general non-bank commercial asset based lenders have higher rates than Canadian chartered banks

10. Asset based non-bank revolving credit facilities are not really 'capped' with an upper credit limit - they can easily grow as your sales and asset base grows. This is a key differentiator vs a bank line of credit.

Asset Based Lending Versus Cash Flow Lenders

Part of the reason that asset-based lending - ' ABL ' has caught on in Canada is the current state of commercial business banking and in Canada and the access to liquidity challenges that many firms face in the post-2010 business environment. Suffice to say the 2020 pandemic has brought those same liquidity challenges to Canadian businesses

A BUSINESS LOAN WITH COLLATERAL

When your company has significant assets tied up in accounts receivable, inventory equipment, and sometimes real estate you want to ensure you are financing them at optimal levels for both survival and growth. Asset financing is the ultimate working capital finance option, as it comes with flexibility and can deliver urgent timely cash flow needs that many companies require when they are in a process of transition, or, alternatively, exploring significant growth options.

HISTORY OF ABL FINANCING IN CANADA

Although the basic financing concept is new ABL has been prospering in the U.S. for a number of years - Canadian firms compete with U.S. ABL lenders in our own business financing marketplace. Every industry in Canada has potential access to asset financing lending solutions - we note though that many industries are the perfect ' poster child' for ABl. Manufacturers, distributors, retailers are very typical users of the ABL solution.


As we noted some of the largest corporations in Canada utilize this type of financing, but the demand for ABL probably grew more out of the need for smaller and medium-sized firms in Canada - let’s say with revenues under 20 Million dollars - to get the operating financing they need.

BENEFITS OF ASSET BASED LENDING

The benefits of ABL financing seem very obvious to Canadian business owners and financial managers. The financing revolves totally around assets, and places only a very small reliance on debt to equity ratios, operating ratios, cash flow coverage, etc.



When Canadian businesses cannot satisfy their bankers on the above ratios and loan cash flow coverage they view ABL as an alternative financing solution. We would point out that ABL financing, similar to any other commercial financing, is not a solution to a firm who is in a death spiral - years ago ABL had the taint of a 'lender of last resort' - that is categorically not the case now and is utilized by firms who want to maximize operating and working capital financing but cant in many cases satisfy all Canadian chartered bank requirements.

WHEN YOU SHOULD CONSIDER AN ASSET BASED LENDING SOLUTION

ABL finance is a business loan that relies exclusively on the value of assets that become the collateral for a loan or revolving credit facility. Banks as an example place a huge emphasis on a firm's ability to generate positive cash flow from operations. Firms that are unable to demonstrate cash flow but still require financing utilize asset based lending arrangements to generate cash. There may be a number of reasons why a firm cannot temporarily satisfy banking covenants - the firms' financials may not be ready or updated as an example.


The typical scenarios under which a firm considers an asset-based lending arrangement are:



Growing very quickly - in high growth mode



Expanding into new markets



Merging with another firm



In 'Special Loans 'now and wishes alternate financing



We can't over emphasis the before mentioned point about financial statement characteristics - Asset based lines of credit focus solely on assets, that is where the liquidity and the operating facility works at its best. In many cases firms that have previous financing arrangements can significantly increase their credit availability by switching to an ABL line of credit.

EXAMPLE OF AN ASSET BASED WIN!

Our firm, 7 Park Avenue Financial, worked with a firm that was in Special loans with a chartered bank. They had an original line of credit of 750,000.00 - the bank cut it down to 500,000.00 and also put the customer into a Special loans category. We originated an asset based line of credit for 1,000,000.00 based on the firm's receivables, inventory, equipment and real estate. The customer utilized the ABL for about 18 months and then migrated back to commercial chartered banking arrangements with another bank. That story plays out over and over again in Canada.


We can say that the amount of funding a company can receive in an ABL arrangement is really based on a hierarchy of value of any given asset category. So as assets become more liquid on your balance sheet and work up to 'cash on hand; they have higher loan to value ratios. So while it is improbably and very unlikely your firm would receive 100% financing receivables as an example typically qualify for 85-90% funding. Many firms owner their own premises and there is significant equity in real estate, so that category also would receive a higher 'ltv' ( loan to value) possible in the 75% range as is common. Standalone inventory loans are also a subset of ABL financing.



CONCLUSION

Asset Based Lending In Canada can be one of the most effective business credit facilities for customers unable to achieve full traditional bank financing. Securing liquidity through company assets allows your borrowing to expand and contract when you need cash flow. Companies of any size or transitional stage can take advantage of working capital provided by asset based lenders.


Asset based lending will work for your business credit needs if your cash flow requirements are seasonal and revenues fluctuate. If your business plan includes acquisition financing, a turnaround or restructuring, or even a need for capital outside of equity considerations ABL will work for your company. ABL allows you to leverage company assets and is often a bridge back to traditional financing for many companies in Canada. The ability to finance a firm when it is in transition is a key part of ABL's success in Canada.



Asset based lines of credit? Your mission, should you choose to accept it? Investigate this unique financing option and work with a trusted, credible and experienced Canadian business financing advisor if the solutions meet your working capital needs.






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

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com

Click Here For 7 PARK AVENUE FINANCIAL website !



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



Business financing for Canadian firms, specializing in working capital, cash flow, asset based financing, Equipment Leasing, franchise finance and Cdn. Tax Credit Finance. Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations.

' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR

Stan has had a successful career with some of the world’s largest and most successful corporations. He is an experienced

business financing consultant

.

Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.


Stan has over 40 years of business and financing experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in-depth, hands-on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.


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







Stan Prokop
7 Park Avenue Financial/Copyright/2020

Asset based lending canada

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Eliminating The Tough Road In Accessing Business Credit Lines

Business line of credit needs may often require the business owner/financial mgr look beyond the ' norm' associated with revolving credit lines. That's where ABL asset based lending and revolving loans come in - they're the viable bank alternative. Let's not forget though that bank facilities of this type offer low cost and flexibility if they can be accessed. Let's dig in.

An ' ABL ' is the acronym for the non-bank business credit line via the asset based lending solution. With the focus on using your assets as collateral the true ' borrowing power' of the facility provides your firm with a flexible cash flow solution based solely on the balance sheet assets. The facility actually suits every type of company but is often most successful for firms that have uneven financial statement ratios, fluctuating profits, and cash flows that might not resemble true operating cash flow performance.

Many companies, but not all as we've mentioned, used the facility to facilitate a turnaround or restructuring around their overall capital structure when that is mandated by owners or lenders! Many firms that are financed by Canadian banks might find themselves on the wrong side of covenants and ratios that often can only be solved by a new third party solution.

Solutions around asset based revolving lines demand that your firm has a good handle on your overall cash conversion/business cycle. That knowledge, combined with the ability to borrow a higher amount on your overall collateral will deliver the proper turnaround in your business finances. In some cases true asset based lenders will also consider term debt if it is appropriate and feasible.

WHY CONSIDER AN ABL BUSINESS CREDIT LINE / REVOLVING CREDIT FACILITY?

Many new clients at 7 PARK AVENUE FINANCIAL aren't fully aware of the differences in ABL loans as compared to bank credit or other facilities. They have found via experience that bank credit is difficult to get given the personal guarantees, covenants, and other obligations Canadian chartered banks might impose. Accessing all the bank credit you require can easily become a full-time job! As one of our mentors used to say ' tuition is very expensive in the school of experience '!


There are a number of reasons why your firm might consider an ABL revolving line. Some of these reasons might include:

ABL Finance will provide significantly more, and immediate liquidity to the business

Firms that might be under a cash flow crunch or constantly facing bulge financing needs due to issues around seasonality, etc will find themselves fully financed

Asset based credit lines tend to almost automatically grow as your revenues rise Growing sales requires constant replenishment of working capital due to the build-up your investments in receivables and inventory consistent with any company with growing sales.

ABL financing is 'covenant friendly', with asset based lending companies place much less, or even no focus on debt to equity ratios, financial leverage, outside collateral, etc ( ABL Lenders can do this as they constantly update your overall all asset coverage around aged payables, receivables, fixed asset lists, etc - The software and reporting mechanisms ABL lenders use provides them with a total update on how your firm is doing


In summary, asset based lenders who feel comfortable with their asset security, as well as your firm's ability to provide regular updates on performance, provide a significant amount of liquidity into the Canadian business financing landscape.

Are There Disadvantages To The ABL Facility And A ABL Revolving Line Of Credit?

99% Of the time asset based lending will always cost more than traditional bank financing. The bottom line interest rate and the focus on continual reporting is the tradeoff your firm gets from it's access to maximum liquidity. However, similar to bank financing the ABL environment allows you to pay for only the credit you utilize. ABL lenders have a higher cost of financing as they are typically financed privately and have higher costs around the monitoring of collateral and reporting.


Fundamentally it's all about the cost of financing benchmarked against the ' risk ' associated with your firm or its industry. It's at these times that looking at alternatives make sense.


Revolving credit facilities are primarily used for growth; and in some cases they are a solid re-financing alternative.

HOW DOES THE ABL BUSINESS LINE OF CREDIT WORK? THE REVOLVING CREDIT AGREEMENT

The ability to constantly access and drawdown working capital/cash flow needs is the key attraction of securing the proper line of credit facility. The assets that make up and drive this type of business credit are:


Receivables

Inventory

Equipment / Real Estate (if applicable)


As these two ' current asset' levels rise and fall so does the line of credit accessibility. Technically speaking the bank, or the asset based line of credit provider determine your firms access by establishing what they call a ' borrowing base' - typically on a monthly basis


In the case of a bank facility, typical margins against these two assets are as follows -


A/R = 75%

Inventory - 50% (varies)


The asset based lenders who provide lines of credit typically offer higher margin borrowing:


A/R - 90%

Inventory - 50-75% - (varies)


We can with confidence and experience say that asset based non-bank credit lines, while more costly, almost 99% of the time offer more borrowing power.

True revolving facilities are the most typical credit line - your firm draws down on the facility and then pays the facility down as you collect receivables and generate cash. The facility ' revolves ' - hence the name 'revolver'. The key drives of that ' revolving ' tend to be the turnover over inventories and collection of receivables as the company completes its sales cycle.

Many industries find themselves perfectly suited to asset based credit; examples might be distribution companies, manufacturers, distributors, etc.

In current times many firm are service or software-based , and these firms focus on the collection of a/r or their ability to contract clients via recurring revenue streams. When you set up your facility with the asset based finance company you will mutually agree on a ' borrowing base ' which will identify the maximum you can draw down at any time. Revolving credit facilities make the most sense economically when they ' revolve ' allowing you to minimize borrowing costs which at the same time being able to access capital when you need it.

This is why good attention to your inventory turns and DSO ( the key measurement of receivable turnover ) are so critical for the ownership/management team.

Asset based lenders use bank lockbox agreements to allow them to control the overall facility and ensuring the funds you receive are used to constantly pay down the facility. Over time your ability to have the facility ' revolve ' properly will have a key place in determining facility size, rates, collateral monitoring, etc.

If your firm has a good relationship with your lender you can often negotiate an ' over adance ', allowing you to temporarily ' over-borrow ' above the approved facility size. In these cases we always recommend clients be prepared to put together a realistic cash flow projection based on the current situation and needs of the business. Those situations might arise out of the ' seasonality ' in your industry, or your ability to take advantage of special vendor pricing, etc.

One other possibility surrounding this type of facility is the potential for the asset based lender to include a ' term loan component ' in the overall structure of the facilities. Payments can be adjusted to be made separately on the loan or also utilizing the ' balloon repayment ' scenario, allowing for the loan to be collapsed when the facility is paid out by another lender.

 Suffice to say good asset coverage is required in these latter two scenarios. Although almost all Canadian banks have an ' ABL ' division Canadian borrowers will always struggle with the concept of trying to understand the difference between bank ABL and non bank ABL.

In the U.S. ' second liens' are popular, allowing lenders to be 2nd on charges of equipment already secured by another lender; this practice is very uncommon in Canada. When banks do provide ABL loans in Canada their rates are often considerably better than their non-bank counterparts - however minimum loan sizes are often in the 5-10 Million range and upward. Banks will take a more extensive look at a multitude of factors in these larger ABL loans such as overall credit quality, pricing, and the company's ability to comply with the operational aspects of loans.

It is safe to say though that on balance there is more lender risk in asset based loans given constantly changing assets of the borrowing firm, along with major fluctuations in cash flow and often struggling working capital ratios, which is why various conditions will be imposed by a Canadian bank or non-bank LOC provider. We can (again) say with confidence (and, again experience!) that conditions imposed by asset based lenders are less onerous and more flexible. To some extent the actual limit on the line of credit can almost automatically increase without further applications, etc


What then is the bottom line of your firm's search for revolving lines of credit? The key points include:


Consider the entire funding landscape currently available in Canada


Be open to looking at both bank and non-bank solutions - aka ' traditional' versus ' alternative’


Have a strong sense of your working capital and cash flow needs


Ensure you have the data to allow a bank or non-bank lender to consider the credit facility - typically that's financials, aged receivables, inventory, payables, etc

ALWAYS BE OPEN TO A PLAN B!

In certain cases your company either may not be eligible for an asset-based credit line. There are numerous other solutions that can provide a similar type of liquidity including accounts receivable credit lines, purchase order financing and inventory loans, sale-leaseback scenarios, factoring loans, etc. Each of these types of facilities has different pricing and benefits attached to them.

Certainly a sole accounts receivable line of credit is always more achievable and can meet the needs of many firms, particularly those with smaller facility size requirements. Although there is no hard and fast rule our experience at 7 Park Avenue Financial is that for firms requiring facilities less than 500k these secondary solutions we have highlighted will often do the job, particularly if your firm doesn't qualify for a true ABL through a commercial lender or the bank.

Solutions such as the factoring line of credit are easily put in place, so business owners and their financial mgr's should always investigate types of asset-based financing.

These secondary types of offerings, versus the operating line of credit, are generally easily accessed, and certainly, approvals are more quickly put in place.

In summary, if you’re focused on shortening the journey on the tough road to business cash flow and working capital financing consider all options, including speaking to a trusted, credible and experienced Canadian business financing advisor who can assist you with funding needs... that deliver.





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

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com

Click Here For 7 PARK AVENUE FINANCIAL website !



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



Business financing for Canadian firms, specializing in working capital, cash flow, asset based financing, Equipment Leasing, franchise finance and Cdn. Tax Credit Finance. Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations.

' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR

Stan has had a successful career with some of the world’s largest and most successful corporations. He is an experienced

business financing consultant

.

Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.


Stan has over 40 years of business and financing experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in-depth, hands-on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.


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





Stan Prokop


7 Park Avenue Financial/Copyright/2020

A Business Line Of Credit In Canada : It’s True That ABL Revolving Lines Deliver !

Asset Based Credit Line : A Working Capital Alternative

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Time For Some Fancy Footwork Around Your Business Financing  & Line Of Credit Needs?


An asset based line of credit is an emerging financial alternative in Canada for companies of all sizes that wish to maximize working capital in terms of their growth needs. This type of lending revolves around loans to your business where the collateral of your assets and your ability to generate sales provides all the liquidity you need to operate and grow.

More often than not asset based lending is associated with companies who are unable to arrange or qualify for what most business owner’s term as a bank operating line of credit.



Asset based lending is known as ' ABL financing ' and has risen to great popularity, first in the U.S. where it originated, and now to the Canadian marketplace. Although occasionally Canadian banks choose to participate in Asset Based Lending through separate units within the banks the vast majority of providers of asset finance are commercial finance companies that are independent of the banks.

Why Do Companies Consider ABL Finance And The Asset Based Loan

Asset based credit lines and loans are used for a variety of purposes - we can make the case they are an ' all-season ' Canadian business financing solution. They are used for:

Non-bank asset based revolving credit facilities

Companies that are growing quickly and can't access all the capital they need

Structuring a merger or acquisition or a management buyout

Seasonality in business financing needs - example - Xmas retailer, etc

Companies that have high debt/equity ratios who are ineligible for traditional finance solutions

Turnaround and restructuring facilities/refinancing of existing debt

Financing The Purchase Of A Business

How Is Asset Based Lending Different From Bank Borrowing?

New clients of 7 Park Avenue Financial want to know the difference in bank borrowing versus alternative lending solutions such as ABL. In banking it's all about traditional corporate credit quality and that boils down to profits and capital structure design around a solid balance sheet with solid owner equity. Those elements historically define a great company poised for continued success. Asset based lending on the other hand revolves around shorter-term focus around converting current assets in cash flow and an understanding around the true value of the collateral of the company.

That latter ABL focus doesn't require that a company be doing as well as a bank financed company. So sales turnover and the liquidation value of assets are essentially what the ABL loan is about when it comes to corporate finance.

In accessing asset financing via an asset based credit line for working capital and cash flow your focus should be on the short term liquid assets of receivables and inventory. That will allow your borrowing facility to fluctuate and lower overall financing costs. That constant turnover of sales into cash will make the ABL solution even more beneficial, and, important to know, these facilities can very easily be increased as you generate higher revenues.




Credit types vary, and traditional bank financing places a heavy emphasis on the overall financial position of your income statement and balance sheet. Therefore, if that is the focus then firms such as yours with either balance sheet issues, or experiencing temporary financial losses or other negative circumstances do not quality for margined lines of credit with institutions such as Canadian chartered banks.

HOW IS THE ASSET BASED CREDIT LINE LIMIT CALCULATED?

The calculation of your borrowing limits under your credit facility has some basic formulas attached to it . Accounts receivable and inventory are the two key drives, but fixed assets and any real estate can play a key role also.

The formula and final limits of your facility are called a ' borrowing base ' and this number is reviewed, typically every month to determine what your new limits are based on the value of your a/r and inventories. This is the revolving part of the facility, and often the fixed assets and real estate part of the facility are under a separate term type of loan. Usually the advance rate on your sales/receivables is higher than the inventory part of the facility, but it should be recognized that asset based lenders are experts in understanding the true value of inventory and are in a position to generate higher advance rates than chartered banks.



Typically A/R under 90 days is an essential part of the borrowing formuls. Typically funds are advanced a 85-90% of the a/r portfolio under 90 days. As you collect receivables your reduce the advances that have been made under the facility, not dissimilar to a bank LOC. The ABL underwriter will look at your overall DSO/COLLECTION period and also look at individual issues such as any one client being a large percentage of yoru sales ( 'concentration' ) or any set-offs you might have in place with suppliers or customers .

KEY POINT - It is essential that your firm is up to date on provincial and federal taxes, as CRA arrears can destory your lenders security on the facility. If you do have CRA arrears they can be paid out at the start of the facility, or you can ensure you have a documented payment plan in place on those arrears.

Inventory advances are where Asset Based Lenders shine. They understand the different components of inventory such as raw materials, work already in process, and finished goods. Their ability to underwrite and advance against inventories is a key differentiator in asset based lending. To you the borrower it's simply more borrowing power!



Asset based lines of credit take the reverse position from banks, simply that you have the assets, let's finance your firm on the strength of your assets, with minimal, if any, in fact, focus on ratios, covenants, outside collateral, operating metrics, personal guarantees, etc.



An asset based line of credit partner will tend to work through with your unique challenges in your industry or your business model. Some of those challenges might be the seasonality of your business or the special ‘one-of' situations we referred to. Some of those circumstances might be making an acquisition, restructuring your firm, or being in the receipt of large new contracts or purchase orders that are out of line with your traditional financing arrangements.



Operating capital financing, or rather the lack thereof(!) can often be the reason your firm is unable to take advantage of strong market opportunities to maintain your competitiveness.



One of the largest parts of an asset based lending facility is receivables financing. In small firms this is often taken care of by a factoring facility – your invoices are sold to the lender, you receive immediate cash, and you can structure facilities around such issues as credit insurance, non-recourse to your firm, etc.



The asset based line of credit, in a true sense, offers all of the advantages of factoring but operates instead like a true bank facility – your receivables, and inventory, are highly margined to the maximum value, and your access to cash availability is directly commensurate to your sales growth – in other words, you have no real cap on your operating facility – you receive cash for receivables and inventory as fast as you can sell and move our product and services!



Your firm will probably find that anyone in the asset based finance area has a stronger knowledge of your business model and assets. If your company has a strong focus on understanding the true collateral value in your business, and is focused on asset turnover in a/r and inventory your firm will be a true beneficiary of the asset based credit line. The general attributes of ABL financing

What Does Asset Based Lending Cost? Factors To Consider

Asset based lending credit lines and facilities usually are higher cost than bank financing when it comes to credit in the capital markets. The low interest rate environment has allowed asset based lenders to become more competitive and in a small number of cases asset based lenders can be competitive or on par with banks on higher quality deals. From a borrowers perspective clients need to weight the access to significantly more business capital versus the cost, more so when your company cannot in fact access bank credit.

Other tradeoffs are the requirements for more regular reporting on your receivables and payables and inventories and any miscellaneous audits or appraisals that might be required by the asset based lender to justify the higher borrowing levels. As we have stated the ability to access cash without the typical bank covenants and operating metrics is always top of mind with borrowers utilizing asset based lending. The overall flexibility in an asset based credit line tends to work well beyond traditional finance when all the options of each type of financing are considered.



While determining your borrowing strategy should be individualized based upon each business and tailored to your business’s specific needs, borrowers seeking working capital financing need to seriously consider the benefits of working with an asset-based lender, as it can provide greater flexibility and options for businesses seeking to look beyond traditional bank lending. Share which lending strategy has worked best for your business in the comments below.






Since asset-based loans don’t rely on the borrower’s operating performance, but on the quality of the collateral, fewer financial covenants are required of the borrower, and as compared with traditional bank lending, ABL lenders typically require a much more limited degree of reporting back to the lender.

KEY POINT - ABL facilities usually start at a minimum of 250k relative to the approved sized of the borrowing facility. This is the lowest end of the scale and there is no real upper limit to a company borrowing if the firm satisfies assets and sales revenue size.


If a company is too small, or for some reason is not eligible for abl lending then a factoring/ receivable financing facility should always be considered. Even startups or very early stage and smaller firms can consider the factor funding solution. Access to cash flow is fairly quick and easy for firms looking to just finance receivables. Providing your financials, aged payables and receivables and some other general info on your firm will typically get you started and approved quickly.

7 Park Avenue Financial recommends a CONFIDENTIAL RECEIVABLE FINANCING facility for firms considering just an a/r solution, outside of the asset based credit line.

This type of facility allows you to cash flow all your sales immediately, and your firm is responsible for all the billing and collecting very similar to a bank facility. In lieu of an interest rate commercial factoring firms chared a fee for discounting the invoice, and this is typically in the 1.5-2% range , so if your firm absorbs that fee and has good margins your cash flow problems are certainly solved.



We recommend that you seek out and talk to an experienced and credible advisor in Canadian business financing to determine if the advantages of an asset based line of credit work for your firm! It is a business loan with collateral that works.




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

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com

Click Here For 7 PARK AVENUE FINANCIAL website !



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



Business financing for Canadian firms, specializing in working capital, cash flow, asset based financing, Equipment Leasing, franchise finance and Cdn. Tax Credit Finance. Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations.

' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR

Stan has had a successful career with some of the world’s largest and most successful corporations. He is an experienced

business financing consultant

.

Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.


Stan has over 40 years of business and financing experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in-depth, hands-on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.


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







Stan Prokop
7 Park Avenue Financial/Copyright/2020

Business Credit Line Needs ? ABL Is The Bank Alternative

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The business credit line in Canada. Clients we meet to can visualize it... they sometimes just can't access it - it's almost as if it’s an ancient art they haven’t quite perfected. As a result... cash flow and working capital challenges. Does it have to be that way? We think you know the answer already... it doesn't and here's why. Let's examine the ABL bank alternative.

Clients at 7 Park Avenue Financial find asset based lending is the perfect credit line when traditional financing is not a good alternative or an alternative at all! This type of business credit line has some cost benefits to is, as well as having a large amount of flexibility. Additionally you self manage the facility to a large degree with no intrusion required into your suppliers or clients. Many companies have a measure of seasonality to the business, so ABL, ' asset based lending ' addresses that very well as limits are quite flexible and can be adjusted to your needs. 

 

Alternative funding  via ABL  asset based loans is clearly becoming the bank alternative and is widely used in the United States where this type of business financing originated. Focusing on the liquidity of key current and fixed assets these credit facilities have become the business finance alternative for borrowing for operating facilities. Some business owners will be surprised to know that ABL LENDERS can also be banks, as these unites operate as smaller boutique financing lenders within the traditional banking system, both in the U.S. and certainly in Canada.

We can make the business case that ABL Lenders are more comfortable in lending to many firms when banks either won't or cannot simply because they are experts in collateral value and have the ability to adjust the line against the credit lines they have set. One expert has called it ' real-time ' lending!

Business credit lines via  ABL finance lending are attractive to Canadian businesses seeking financing for a variety of reasons in almost any economic time, pandemics included. In fact, asset based lenders for the most part continue to fund business which has significant value to firms looking to access cash flow or to achieve more financing than they could otherwise achieve through traditional sources. Even companies that are restructuring are able to source business credit line arrangements based on assets.

The ability to have a source of credit that is creative and flexible will almost always provide greater liquidity to your company, with less reliance on the banking covenant based lending championed by Canadian banks. That's the business lending that 7 Park Avenue Financial clients tell us they want. The trade-off to the typically higher cost of an ABL line is increased access to capital, notwithstanding your obligation to be in a position to report more regularly on asset values such as a/r and inventory, which most firms should be looking at anyway, right?

For this type of business credit line to be successful your company has to have the ability to create the usual management reports that highlight your asset accounts so that typically would be aged receivables, payables, and inventory lists. That allows you to successfully manage and access this creative way of financing your business.




Part of the challenge of those business credit lines is simply the fact that the majority of business owners and financial managers are fairly focused only on one solution - which is of course the commercial bank line of credit.



That is definitely one solution. The other (What? There's Another?!) is a non bank asset based credit line facility. Both facilities monetize your receivables and inventory... the difference then? ... The Asset based credit line often monetizes and equipment and real estate also; as part of your overall borrowing power. The big difference is the real key point here - lending is more generous in a non bank asset credit line. Receivables and inventory are margined more aggressively, and in bank scenarios rarely are your unencumbered fixed assets monetized into credit lines.

Why Should Your Company Consider An Asset Based Lending Business Credit Line?

Most small and medium-sized companies in Canada recognize that Canadian banks cannot meet all their borrowing needs. This might be for a variety of reasons which include profitability, an industry being ' out of favour ', or the actual financial results of a company which might not have the balance sheets and income statements they require to lend against, given the banks are both regulated and somewhat risk-averse relative their fiduciary responsibility to shareholders and depositors. It is a true irony of Canadian business that banks generally do not like a firm growing, for example at 25% per year, which then requires constant working capital needs.

Because non bank business credit lines have your borrowing against sales and assets there is not the concern of higher growth, which is in fact: Encouraged ! More cash availability than standard bank offerings is the cornerstone of borrowing against your sales and core assets. It's not about the financials, it's about sales/assets.

As we have noted the thousands of companies using asset based credit lines in Canada use it for different purposes. Some companies might be early stage, some might be in high growth mode, while other companies that are in fact bank worthy utilize it because rates in the case of high quality companies can be very competitive to low bank rates. Naturally, the current low rate environment for business borrowing in Canada is a plus for all borrowers. 

 

Some firms that are experienced a level of distress might be using the facility simply based on the amount of their assets that still qualify for borrowing under a credit facility. These companies might find themselves in the ' Special Loan ' category of the bank. This can be a stressful transitionary period on the road to business financial recovery - asset based financing works very well to correct the financing and allows a company to get back on track. 

At this point customers would already be reporting on their financial more often and assessing a workout plan that might get them back into traditional banking, or on the other hand, transition their senior lending facilities into asset based business credit lines. They might still well be 100% financeable with having to raise additional equity or outside collateral. It allows troubled firms to protect the company with a workout refinancing that makes sense, often paying out the bank in the process.



The options and financing flexibility alternative your firm now has allows you to successfully operate on a daily basis. As your revenues grow your receivables and inventory will always fluctuate relative to business grwoth and how you manage your current assets. Those daily changes drive the ABL credit line. Many firms that are in high growth / hyper-growth find they cannot satisfy traditional bank requirements, with the asset based facility focusing on your sales and assets, not financial statement ratios within your balance sheet or income statement.

By allowing your financing partner to properly assess asset values and growth potential, allows you to borrow effectively on the true market value of your sales and assets. As an example receivables are typically financed at 90% and inventories are margined based on the type of inventory your firm has. It should be noted that many industries are different when it comes to quality and type of assets, your facility will resemble the industry norms around types of assets. Both banks and asset based lending firms recognize specific aspects of your industry.

The two main sources of borrowing in this type of credit line are your receivables and inventory. They are the main drivers that determine the amount of your facility but there can easily be a fixed asset/equipment component to the borrowing for all the hard assets your firm owns.

The true strength of this type of revolving credit is that it can grow as your sales revenues and other assets grow - they in fact determine the amount of the credit line. There are some very simple formulas around how these assets are margined for lending. As your sales grow and you collect your receivables the ABL business credit line fluctuates, allowing you to borrow less .. and finance less, or, more importantly, borrow more if you need it!

We have referenced those other assets you can borrow against within your credit facility, with those two asset categories being equipment and, if applicable, real estate. Those amounts have a value assigned to them at the start of your facility working, which might include an outside appraisal to determine maximum borrowing power. Naturally these two categories of assets are typically not in Canadian chartered bank business credit facilities, so they highlight the benefit and flexibility of revolving ABL facilities.

Many companies that are unable to satisfy bank covenants, ratios, outside collateral etc find they can easily double their borrowing power using the high borrowing leverage of a/r, inventory, and equipment/real estate. That becomes the ABL business credit difference, a business finance solution that is tailored to your company's specific needs. Your credit line availability is calculated on an ongoing basis, allowing you to plan for your business cash flow needs - at the end of the day is ' quicker borrowing '.

Accounts receivable plays a major role in the asset based business credit line model. Your financing firm will focus on the type of receivables you have, average size, major account concentrations with any one customer, account contras with suppliers that might be in place, as well as your a/r days sales outstanding turnover and bad debt. 

 Businesses should also be prepared to demonstrate that CRA and provincial HST  is not in default, but borrowers in default will be happy to know that these type of debts are often paid out of the first advance in ABL business credit lines by  asset based lenders.

The use of your business credit line in Canada, whether it's a bank line of non bank in nature can be viewed as a ' replenishment ' of cash from funds your firm has invested in working capital and fixed asset accounts. That need becomes even more acute when your business is growing. The simple reason - you've got more sales tied up in still uncollected receivables, inventory, and the need for some fixed asset or technology replacement here and there!





Whether you disagree or not, all banks have very specific rules in Canada around business credit lines. Bank credit lines for start-ups or very new businesses in Canada essentially... Don't exist! That’s because of our strong banking system in Canada places a large emphasis on historical strong financial history, solid profits, and squeaky clean balance sheets. So while corporate credit risk at banks for the middle market companies in Canada at banks focuses on profit, cash flow generation and shareholder equity ABL  has a focus on asset turnover and turning business assets into cash. We can say that the shorter-term operating cycle of a business is what drives asset based loans.

Business owners if not familiar with The Cash Conversion Cycle would benefit from checking it out.It is really tied into the concept of cash flowing your working capital assets and how turnover affects liquidity and the need for more outside business credit. The continual revolving ability of a credit line works without your firm being tied to any type of installment and loan debt. Here the power of ABL kicks in because as sales revenues grow cash flow via the abl line increases and receivables and inventory are liquidated.

If your firm is offside on banking requirements it's still exceptionally very safe to say that you qualify for an asset based credit line from a non bank commercial finance firm. And that higher leverage and borrowing power is still there of course - it’s another major appeal of the ABL (Asset based Line)



By the way, if you are in fact 'off side' with your bank on their key metrics, ratios, covenants, and collateral issues the ABL line rides to the rescue more time than you think. So while your business may have temporarily stumbled the non bank asset based line of credit steps in to keep cash flowing and working capital working! Their are different credit types and credit risk and the asset finance underwriter is well positioned to take the time to understand your firms situation.



It's not pure roses and sunshine all the time with your business credit line. You should always be prepared to supply proper reporting and updates on your business assets, even more so with ABL type facilities which in some cases might even require due diligence visits, appraisals, etc.

There are several supplementary / complementary solutions to the asset based credit line - These can be used with or separate to your business credit line facilities in asset based finance .

One of these is Purchase Order Financing. This solution becomes extremely valuable if your firm is in a position to receive large orders or contracts that in the normal course of your business you would be unable to finance due to the working capital component of the transaction, namely having to pay suppliers, facilitate your order or service, and then wait for the collection of your receivable related to that order/contract. The financing works as follows - your supplier is paid directly by your P O financing firm asset based lender. The receivable that is attached to that order or contract can then be financed under your already in place asset based lending facility, or in some cases a separate P O Finance arrangement if you do not have either a bank credit line or an asset based line in place. Purchase order financing rates are  higher and your firm must have good gross margins to absorb the 2-4% fee on the order but can be invaluable to firms looking to grow larger with access to traditional finance,


If there is a bottom line here in corporate finance  its that the business owner/financial manager needs to understand both the alternative to credit lines, as well as the nuts and bolts of how and why they work best. That will lead to a better capital structure and a more guaranteed level of long term success.


If you want to consider revolving credit lines based solely on collateral value or new and replacement alternative credit facilities seek out and speak to a trusted, credible, and experienced Canadian business financing advisor. Your want a finance partner/advisor that has a solid knowledge of the ABL lending market and has the capabilities and expertise and track record of finance success to facilitate business credit line needs.

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

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com

Click Here For 7 PARK AVENUE FINANCIAL website !



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



Business financing for Canadian firms, specializing in working capital, cash flow, asset based financing, Equipment Leasing, franchise finance and Cdn. Tax Credit Finance. Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations.

' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR

Stan has had a successful career with some of the world’s largest and most successful corporations. He is an experienced

business financing consultant

.

Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.


Stan has over 40 years of business and financing experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in-depth, hands-on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.






Stan Prokop
7 Park Avenue Financial/Copyright/2020

Can Asset Based Lending Help Your Company? The ABL Solution Works - Here's How!

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Asset-Based Revolving Lines of Credit and Term Loans

Is asset based lending the right financing for your business? That's a question that comes up all the time with our clients, and they want solutions now, not down the road! One ' size fits all' solution is, asset based lending. These 'ABL' techniques and solutions could provide all the financing your firm needs in today's competitive environment. Asset based lending industry statistics show explosive growth over the last decade .

What is Asset Based Lending, also known as ' ABL '?

Simply speaking it's a lending facility with the collateral being specific company assets. Utilizing the ABL formula allows your company fo fund A/R, Inventories, unencumbered equipment, and real estate is that latter asset is a part of your asset mix. The combination of those assets will significantly improve overall business liquidity/working capital.

One way to view this newer method of financing is to look at it as a ' blending ' of your company assets. This lending formula, therefore, delivers on access to more capital than any one financing. There are numerous, let us call them ' subsets ' of asset finance -

A/R Financing
Inventory loans
Purchase Order Financing
Sale Leasebacks

All of these deliver solid financing when your business needs it. But combined into an Asset Based Borrowing solution your firm maximizes total working capital needs. View it as an option to run your business on a daily basis, or in the terms of considering a management buyout or acquisition. It's working capital when you need it most.




Companies that are constantly growing and in need of additional operating capital are the best candidates for the cash flow generating power of asset based lenders. Many of the best candidates for this business finance solution are financially leveraged and are not best suited for traditional Canadian bank financing .



Business owners and financial mgr's are looking for finance that grows with their business. As it became difficult to get all the financing they needed after 2008's recession many business owners investigated the ABL loan solution.

Typically, ( but not always ) asset based finance is non-bank in nature - it's offered by specialized commercial finance companies . It helps businesses access more working capital and cash flow - typically "Job 1 " for any business.

If your company has long term debt, and is looking to avoid taking on more debt, payables are rising, and you're waiting longer to collect receivables asset finance is a very logical solution. Ironically many business owners and financial managers in some cases haven't heard of this type of financing.

In the ' old days ' ( we remember them well ) abl was often touted as a financing of last resort. No longer!! Using it can grow your business, expand into new markets, buy a competitor, and oh yes, just survive day to day!

Summary Of The Benefits Of ABL

New clients at 7 Park Avenue Financial always ask us to clarify the benefits of the asset based lending solution.

A combination of business assets delivers a higher level of liquidity than any one type of finance

The ability to unlock assets traditionally not margined by Canadian banks as part of a working capital revolver

The ability to restore your firm to a level of financial stability - we meet with a lot of management who by necessity are always spending mangement time on cash flow needs

Every industry requires different levels of expertise and funding - ABL suits a wide variety of industries

ABL is a legitimate ' catch-all ' for expansion, restructuring or refinancing ( Yes you can finance the purchase of an existing business )

Asset finance solutions are low cost when compared to equity financing

Traditional Canadain bank requirements around covenants, ratios, etc make ABL more accessible and it's ability to ' co-exist ' with other types of debt is viewed as a key positive for firms that have different levels of senior and junior debt.It is a funding structure that works! That what we at 7 Park Avenue Financial call ' covenant light '!




In it's purest sense asset based lending is often just a revolving line of credit that allows you to borrow against all, repeat ' all ' of your assets. Those typical asset categories include receivables, inventory and fixed assets.. even real estate if your company occupies and owns its own premises. Therefore the prime security of the loan is a focus on the overall value of your asset base, with less, or no reliance on external collateral, the focus on personal guarantees, etc.

LEVERAGING BUSINESS ASSETS TO ACCESS WORKING CAPITAL

The entire subject of leverage and margining your assets in ABL is critical to understand for the business owner and financial manager . ABL funded revolving credit facilities are based on a formula based on the liquidation value of your current and fixed assets. Naturally, a/r and inventory rank very high in liquidation value and will provide the maximum borrowing power . Typical advances on receivables are 90%, and percentages will vary based upon the many types of inventory specific to any one industry in Canada.

How Is The Exact Value Of ABL Secured Loans In Canada Calculated?

The asset based lender will focus on your firm's balance sheet with a view towards ensuring a detailed analysis of your overall potential liquidity. Factors that come into play include specific industry issues as well as current economic conditions, pandemics included!

As an example, the ageing for a/r and inventory will determine eligible amounts of borrowing under the facility, i.e. all receivables under 90 days is usually a typical measure of borrowing power. There might be a ' dilution' part to the formula - that might be an allowance for bad debts/uncollectible accounts.

The final borrowing base certificate will demonstrate maximum borrowing power for your firm.It should go without saying your firm should have a good reporting and accounting systems capabilities .



Canadian asset based finance candidates can appreciate that numerous fluctuations in their business sometimes deliver a challenge to those borrowing base calculations. Retails or distributors might require excess borrowing capacity at certain times of the year so seasonality must be factored into any common sense formula.

The best way to address that is to ensure your lender has visibility to historical documents around cash on hand, current asset levels, accounts payable, etc. Heres where overall averages can really help the final formula. Yes, assumptions must be made but those cushions will be an excellent ' shock absorber' in available borrowing.



Traditional bank financing often revolves around strict reporting periods on financial statements, and aged reports on receivables and inventories and often comes with a term loan structure. If your firm requires what the pro's call ' bulge financing ' traditional bank type facilities cannot necessarily solve the cash flow crunch. The more liquid your receivables and inventories are re turnover will mean a higher loan to value in drawing down on your facility.

THE ABL DIFFERENCE?  Simple - You can borrow significantly, on an ongoing basis, against those assets. Smaller ABL facilities tend to be in the 250k range, but they can easily run into the millions. Many large corporations use ABL also by the way!

By now you may have picked up on the fact that as your business grows you can borrow more on an ongoing basis, as your assets have grown also - with virtually no upper limit.

While Canadian chartered banks focus on ratios, covenants, personal guarantees and high net worth the asset finance solution focus.. you guessed it.. mostly on your business assets.

ABL comes in different flavours and can be specifically based or full service against all assets. That allows you to not postpone business success! Can you afford not to access this solution?

So what can ABL do for your company - if you're growing let asset based financing finance that growth? Growth financing is a challenge for every business .If you are considering funding an acquisition ABL can play a part in that financing. Many entrepreneurs don't realize the critical part asset finance can play in acquisition financing. It is often the cheapest, quickest, and most efficient way to fund acquisitions versus going the equity financing route. An asset based lending mortgage can also be part of any new facility.

If your requirement is a turnaround or recapitalization this method of business finance is well suited to your needs and can be delivered in a timely manner when timing counts! Working with an experienced advisor with a track record of financing success will also allow you to address any cross border financing that might be required.


The seasonality of any industry can greatly impact cash flow - let this form of financing help you with the cash flow strain. And should your company require the ' turnaround' asset finance is a proven method of restructuring your firm.



Speak to a trusted, credible, and experienced Canadian business financing advisor with a track record of success on achieving benefits of ABL finance. Let our team tailor a specialty facility tied to your business within its industry. We will demonstrate how to unlock working capital to meet all your cash flow needs with the right total financing option. Next step? Growth/success!






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

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com

Click Here For 7 PARK AVENUE FINANCIAL website !



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



Business financing for Canadian firms, specializing in working capital, cash flow, asset based financing, Equipment Leasing, franchise finance and Cdn. Tax Credit Finance. Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations.

' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR

Stan has had a successful career with some of the world’s largest and most successful corporations. He is an experienced

business financing consultant

.

Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.


Stan has over 40 years of business and financing experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in-depth, hands-on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.









Stan Prokop
7 Park Avenue Financial/Copyright/2020

Can Asset Based Lending Help Your Company? The ABL Solution Works - Here's How!