WELCOME !

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

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

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



Showing posts with label account receivable finance. Show all posts
Showing posts with label account receivable finance. Show all posts

Wednesday, March 26, 2014

Account Receivable Finance In Canada: Properly Exploring The Hidden Value Of Factoring Receivables











7 Key Issues To Consider In A/R Financing In Canada










OVERVIEW – Information on factoring receivables in Canada. Utilizing Account Receivable Finance requires specialized information on seeking the right type of a/r financing that works for your business





Account receivable finance
is actively sought by thousands of Canadian business owners and financial managers. The A/R component, next to cash on hand itself, is the most liquid asset you have on your balance sheet.
What issues are key to understanding the true value of ‘factoring receivables’? There are several, so let’s dig in.

Prior to addressing so those issues its prudent to make sure we are also singing from the same hymn book as to what exactly A/R financing is . Essentially it's a direct competitor to bank financing, which also of course offers business lines of credit secured by receivables.

Banks collateralize your A/R and allow you to borrow against it, commercial finance companies offering 'factoring' solutions create paperwork that allows you to transfer ownership of receivables as you generate sales. The benefit to your firm is instant cash at all times.

Why then is account receivable finance a common choice for business owners? Simply because it's an ongoing source of funds without many of the constraints and approval criteria imposed by our Canadian chartered banks.

One of the best analogies in understanding why a business employs factoring receivables is to analogize it to a retail who offers credit card payment. Instead of waiting 30 days or more for payment and instead of limiting how much he can sell the credit card firm pays the retailer the same day.

Pricing of factoring services in Canada is considered more expensive than bank financing but the trade off is the cash flow that is no longer limited to waiting for large clients or government accounts , etc to pay your firm.

So let’s cover off 7 key issues that you must weigh, consider and discuss when selecting the right A/R Finance solution.

First of all owners need to understand that you are still responsible for any bad debt, as you would be in a bank financing scenario. But you should no also that non recourse financing and credit insurance can be implemented to offset the bad debt issue.

Issue # 2- your overall customer base will be a key factor in the pricing and risk attributed to your factoring transaction. 99.99% of the time all North American receivables can be financed. On occasion the issue of ' concentration ' i.e. having just a couple of major clients might become a discussion issue.

Issue 3 - Your historical ability to collect your A/R and the invoice size are always considered. Typically the best pricing for factoring A/R is for facilities in excess of 250k, but bottom line any size of A/R portfolio can be considered for financing

Issue 5 - there are numerous A/R financing firms in Canada, all of them have different focuses as to size of transaction, types of industries they prefer to finance, and even where they themselves are located as to where your business is located.

Issue 6 - Numerous specialty areas are often the most fertile ground for A/R finance firms - they include transportation, trucking, personnel firms, etc. But the bottom line is that any commercial receivable can in fact be financed.

Our final point, issue # 7 is our recommendation to consider CONFIDENTIAL RECEIVABLE FINANCING. Unlike most receivable finance services it allows you to bill and collect your own A/R without notice to any other client, supplier, etc. It's as close to bank financing as you'll get.

If you're interested in ensuring you have covered off all the issues in considering Receivable Finance seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success
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 Account Receivable Financing 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

Fax = 905 829 2653

Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '