Cash Flow AR Financing In Canada - Is Invoice Cash The Working Capital Miracle ? You Decide

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Does Financing Your Sales & Cash Flow Needs Seem Like A Constant Duel To The Finish?

Here's One Solution

Information on how invoice cash, also known as factoring or invoice discounting can assist Canadian firms with working capital turnover and cash flow solutions for greater growth and profits . Our recommended strategy : Confidential A/R Financing

As a Canadian business owner you in fact feel that pressure every day - one business owner I know who has had his business for over 30 years says you aren’t an entrepreneur until you have ' sweated a payroll ' - which of course meets rising to the challenge of meeting that key payroll requirement for your employees .


Invoice cash - How can Canadian companies address the problem of growth and lack of working capital. The majority of any firm’s liquid assets are tied up in accounts receivable. Over the years customer that paid in 30 days now take 60 or 90 days to pay your firm. This then places tremendous pressure on working capital. Thats the problem - is there a solution.

How can a Canadian business owner of financial manager determine when working capital is tightening? They are some very basic calcs you can perform. There are a number of great indicators you can monitor - here is one - it’s the ' Collection Period ‘. Simply take your accounts receivable and divide you your average daily credit sales the longer your Collection period number is the greater attention you need to pay to working capital. Receivables are a huge component of working capital. So what if you had a solution to obtain all the working capital you needed based on current and projected sales growth?

That solution is invoice cash, or the immediate factoring or discounting of your accounts receivable. If you have no bank line with a Canadian chartered bank, by sacrificing a couple of percentage points in your gross margin, you can immediately monetize your accounts receivable.

The ' challenge ' - if we can call it that, in the Canadian marketplace is simply setting up the right invoice cash facility. We advise our clients on focusing on a ' non notification ' facility. Factoring , or invoice cash, or accounts receivable discounting, came to Canada via the U.S. and Europe , where the process has been in practice hundreds of years . Canadian business owners are less willing to turn over their accounts receivable function to a third party finance firm.

We therefore focus on non- notification solutions for clients - a financing facility where you can bill and collect your own receivables, and still get daily, weekly, or monthly advances ( It's your choice ) on your accounts receivable .

An ever better option is to marry an invoice cash facility with an inventory financing facility - you'll be able to finance your inventory also. That means only one more thing - additional cash flow and working capital.

Speak to an experienced, trusted business financing advisor on your options for Invoice Cash, also known as factoring, in Canada. Putting together the right type of facility will allow you to generate needed working capital and cash flow to run ( and grow!) your business .


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 100 Million $ of financing for Canadian corporations .


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

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

' Canadian Business Financing With The Intelligent Use Of Experience '

How Commercial Factoring Works In Canada: Costs & Benefits of AR Receivable Finance

OVERVIEW – Information on receivable finance in Canada. The right Commercial AR Factoring solution delivers on classic business credit line attributes

Commercial factoring in Canada addresses some of the major issues your firm faces everyday in cash flow and working capital challenges. Let's go inside the business credit line battle

- an ongoing wrangle between traditional banks and commercial finance companies. Let's dig in.


Most business owners know the drill - customers have always been slow to pay, and that's not getting any better. On top of that cash flow requirements change daily as your business addresses working capital needed to finance inventory and receivables, and at the same time managing investments in ongoing operations, debt payments, commitment to suppliers, etc.
Is there a solution to those challenges? We know there is. Is it as expensive as you may have heard, we are pretty sure it is not. The reality is that commercial AR factoring solutions have dramatically dropped in pricing over the last few years.
So what is A/R financing, and what solution, traditional or alternative, works for your firm?


Commercial factoring is the ongoing sale of receivables for instant cash. For many customers it always comes down to the rates and pricing they have heard about this type of financing. In Canada those costs range from anywhere from 9% per annum to 1-2% per month.


Let's talk about costs. . When many customers calculate their 'all in 'cost of borrowing from banks it is often a lot higher than they might think -despite those low bank rates . So it is important not to get 'seduced 'by your low rate expectations around traditional Canadian bank financing- not to mention the rigorous criteria banks impose for those low rates and flexibility .
We're big supporters of banks - when our clients qualify - which isn't always the case. Many clients we meet with simply can't meet the requirements, (the banks call them covenants) for borrowing on a revolving ongoing basis for working capital, particularly receivables and inventory. So the conversation around pricing becomes somewhat moot.


Instead of worrying b about the cost of factoring consider the following - If you have money tied up in accounts receivable for , as an example, 60 days, then you are losing the opportunity to receive payment and re invest in your business and increase your overall return on equity . The more quickly you can get paid allows you to reinvest in further sales for your firm, those sales create more profits.


Looking for unlimited working capital/cash flow for your business - Consider factoring, since as long as your sales and orders grow so does you access to cash flow - In essence unlimited!

A bottom line - Most business owners view cash flow as unpredictable, and commercial factoring removes that unpredictability - you in effect control the cash flow valve - financing all or a part of your receivables...when you chose.


A/R financing is growing all over the world, North American no exception, and certainly in Canada it has been on the rise also.
Some of Canada's largest corporations use this type of financing - when it comes to larger corporations fancier finance terms like ' securitization ' are used. Bottom line, General Motors factors, why shouldn't you? So even if your firm may have had some financial losses, or is in a turnaround situation, etc - you are still a solid candidate for this type of business financing!

Factoring is the ultimate in off balance sheet financing - you are simply monetizing your receivables and generating cash instantly. The secret of factoring costs, or their perceived costs, is your utilization of those funds. You can use cash flow generated from receivables sales to pay invoices from suppliers and take a discount, or negotiate better terms and pricing for your products .

When you have additional working capital you can grow sales and revenue and increase profits - that financial flexibility is what this type of financing is all about. Sometimes it is a 'bridge 'solution, in certain cases it can easily become your long term ongoing working capital solution.

So what’s our bottom line? Seek out and speak to a trusted, credible and experienced working capital advisor to ensure you understand the benefits of this unique type of business financing in Canada.



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 13 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

How To Finance Cash Flow Via Purchase Order Financing & Direct A/R Receivable Finance

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Eliminating That Painstaking Challenge of Cash Flow & Working Capital Funding Needs For Your Business

OVERVIEW – Information on a/r receivable finance solutions in Canada . Purchase order financing and direct funding for accounts receivables ensures cash flow success

Purchase order financing & Receivable Finance via a direct A/R funding solution are two key ways for Canadian business owners and financial mgrs to maximize working capital via key financeable assets - in this case either :

Accounts Receivable

Purchase Orders / Contracts

If they can't fund these two asset categories their firm will run the risk of serious working capital and cash flow deficiencies.

To paraphrase one of the most famous lines ever written - ' it's the best of times and the worst of times ' ... that being the case when sales and profit potential is great but owners are challenged by key issue such as :

- New owner equity or outside equity
- Debt (loans)
- Operational efficiencies

We're going to focus on that third area - improving operational efficiencies via proper financing of your current assets and sales. By the way, believe it or not that’s actually the cheapest way to finance your firm - given the higher cost of long term debt and the even higher cost of bringing in outside equity.

By leveraging your current assets - typically A/R and inventory you have the ability to both increase bottom line profits as well as optimizing cash flow.


Let's look at purchase order financing as an example. If you choose a purchase order financing facility you are obviously in a position to take on larger contracts and generate more profits for your firm. Overall larger orders and contracts also increase your competitiveness in your industry - with typically your competitors wondering how you do it!

By utilizing a p.o. financing strategy you simply allow the p.o. finance firm to pay suppliers for goods and service you need to facilitate the order. When your product is shipped and delivered the purchase order finance firm is paid via your bank or A/R Financing facility.

Although to many the perception is a higher cost of financing let’s look at what really has happened - you have converted inventory into A/R into cash - Payment by your customer generates profit. Without the financing of the purchase order you more often than not could not have fulfilled such large orders or contracts. So by sacrificing some gross margin you have grown revenues and bottom line profits.

Firms who have a significant investment in inventory can achieve similar financial success. With an inventory financing facility in place you can stock more products and generate those additional sales.

For firms who cannot achieve the traditional bank financing sought by most a combination inventory and receivable financing facility is available via an asset based line of credit. Here it's all about the ' cash conversion cycle ‘- turning A/R and inventory into cash and profits.
The higher interest rates charges by asset based lenders can easily be significantly offset by smarter volume purchasing and negotiations with key suppliers on pricing : Bottom line - you know have cash to pay for products and services.

The cost of not taking discounts or being unable to make volume purchases for cash is significantly great than the financing costs you have for alternative financing facilities such as inventory financing, purchase order financing and receivable financing.


KEY POINT:

Even if purchase order ,inventory and receivable financing were equal in cost to the cost of carrying receivable and inventory on your own books it would still be a viable solution because you would have less sales and less competitiveness in the marketplace .

Example - if f your firm could buy 500,000.00 of inventory on 2% net ten day terms and you were unable to take the discount the opportunity cost of not taking that discount is over 36%.

The simple statement we make to clients is as follows ' the cost of paying in full is usually much higher than the cost of borrowing '!

If your firm is focused on selling more, efficient financing around asset turnover and proper focus on the opportunity cost of working capital seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can help you determine the exact working capital / cash flow strategy around your company needs.

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

AR Business Funding In Canada . Going Insane Trying To Understand Accounts Receivable Financing ?

Avoiding The Wrong Type Of A/R Financing ? Here’s How!


OVERVIEW – Information on accounts receivable ( ar ) business funding in Canada . Costs and benefits explained





Canadian business owners and financial managers hear a lot about the business funding known as accounts receivable A/R financing. But occasionally when they try and understand how this financing works, what it costs, and what the benefits are they sometimes feel like they are going a bit ... crazy !

Is there a way to uncomplicate what frankly is a pretty simple method of funding your business? We think there is... all you need is some basic clarity!

In fact one way to look at how this whole solution works is to sometimes put yourself into the position of the finance firm offering you this solution. At the essence of your transaction is the very simply concept of selling your sales, aka your ' a/r ' as you generate revenue to monetize that asset into immediate cash flow. Simple as that.

So where do business owners and managers feel themselves going a bit ' crazy ' in trying to understand the process and interpret how this affects, and benefits their firm.

In talking to clients here are the basic issues that typically need some good old fashioned clarity. They include:

Understanding who in fact is using AR Finance and how long it’s been around

What is the pricing and how does that affect profits?


What facility size makes the most sense?

Are there any risks involved?

Are some firms not able to use this financing?

Who should I deal with to ensure this type of funding makes sense to my firm?


Most of our clients probably don't want to be guinea pigs when it comes to finding out they are the first to try something - with all the risks that come with that. So the good news is that Accounts receivable finance has been around for ... hundreds of years! Starting in Europe and moving to North America. Many simply call the industry ' factoring ' and in Latin that word means ' business doer ‘. Many early settlers to North America actually had their trips and early businesses financed by these ' factors '. So... bottom line, don't feel like you're being ' leading edge ' when it comes to new methods of financing your business - everyones doing it!

You only need to understand 3 simple concepts when it comes to cost of AR finance - they are:

The discount percentage you are being offered
The amount that is advanced against your receivables (typically 90%)
The time it takes your client to pay


Once you understand those basics you're close to being an expert in receivable business funding.

The reality is that even one small sale could in fact be financed using this method, on a one time basis. But the closer reality is that typical facilities tend to be in the 100k per month range or higher. And the upper limit? Frankly Scarlett - there isn't one!

We can make the statement that no additional risks in using this method of financing exist - any risk you currently take in extending credit to clients and monitoring their payments essentially stays the same. Customers that don't in fact like ' risk ' can opt to insure receivables.

Any business that generates sales and sells on credit can in fact utilize factoring. The type of facility that we recommend most to clients is a confidential facility, which allows them to bill and collect their own sales - retaining full control and client contact.

Still going crazy trying to understand factoring in Canada. Hopefully not! Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can clear the air. Quickly!

7 PARK AVENUE FINANCIAL
CANADIAN A/R FINANCING EXPERTISE


Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 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/business_funding_accounts_receivable_ar_finance.html


7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653
Email = sprokop@7parkavenuefinancial.com

Surgically Removing The ‘ Ouch ‘ Out Of AR Factoring in Canada . Financing Receivables Via A Factor Company Is Not Necessarily What You Think !

Should Your Firm Consider .. Or Avoid Factoring ?


OVERVIEW – Information on factoring in Canada . Financing AR Receivables via the ‘ right ‘ factor company is not what you think !





Our goal... simple... a surgical removal

of the word ' ouch ' from factoring receivables in Canada. Is such a delicate operation even possible? Is there a ( business ) doctor in the house …We think so... let's ' scrub down ' and get started!

There's a real inequality issue among many businesses in Canada... some of them have cash on hand, cash flow, and working capital, and some don't.

If your firm, large or small is in the latter category financing receivables in Canada is one of the most solid and effective solutions to your problem. But how does a factor company work, and where do you find one, and oh yes, what does it cost? That cost, quite frankly, is usually the 2nd or sometimes first reason that the ' ouch ' exists in the mind of the Canadian business owner and financial manager.

The actual tool itself is fundamentally easy to understand. Unlike borrowing against your receivables, which you do via a Canadian chartered bank or business credit union factoring works in the manner of having documentation in place with the factor company that specifies your ongoing actual sales of the receivables .

So the A/R isn’t collateral per se, the cash you receive for them is the proceeds of the sale. That’s the simple basic explanation most clients need to know when we point out the differences between a bank facility and a factor company that’s usually in the sole business of financing receivables.

We do add however that a number of other financing mechanisms can be ' bolted on ' to your factoring facility - typically they include inventory financing, PO finance, or allowing you to borrow against owned equipment. But that whole comprehensive solution we have just described is a conversation for another day - our focus here is just factoring AR.

So how much can a client finance their firm given they have opted to consider an A/R finance strategy. The answer is as much as you want, as long as you have the receivables to back up the solution.

The ultimate size and type of facility you enter into is driven by your firm’s general financial condition, the size of your annual sales revenue, and the quality of your customer base. We explain to clients that in general all your North American receivables can be financed, simply meaning that you can cover U.S. clients also under your factor facility . Foreign, non North American clients might require some sort of credit insurance - but you probably want that anyway.

The actual mechanism of the financing is worthwhile exploring for a moment. Your invoices are sold, via your original documentation agreement with the factor company at a discount of approximately 2% if you are selling on 30 day terms. That 2% reduction in the value of your sale is the factor company’s profit.

The absolute method in which we can assure clients that they can remove the ' OUCH ' factor in financing A/R in Canada revolves around a few basic issues:

Clear understanding of how pricing works

Getting a competitive rate

Dealing with the right firm - Hint - VERY IMPORTANT!

Ensuring you can get a confidential facility in place, allowing you to bill and collect your own receivables. (99% of the firms you might choose to deal with cannot do this for you)

So, operation successful? We hope so. Utilize the services of a trusted credible and experienced Canadian business financing advisor who can assist you with your factoring needs.

7 PARK AVENUE FINANCIAL
CANADIAN A/R FACTORING EXPERTISE

Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 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/factoring_ar_financing_receivables_factor_company.html

3 Questions ( And Answers ) On Factoring In Canada. Your AR Receivable Finance Questions Answered .. Finally !

Fundamentals of Factoring in Canada


Information on factoring in Canada . What every business owner needs to know about receivable finance and ar finance costs and strategies .




We get a lot of questions on factoring as a business finance solution in Canada. The concept, background, and mechanics of financing just your AR is somewhat misunderstood we think. Let's share some basics for the sake and benefit of those firms considering this method of business financing.

1. Where is factoring at in Canada? First of all there seems to be a general consensus that this type of finance vehicle for your business is one of the faster growing and certainly feels like it is getting more popular everyday. The reality is that it's been around for many, many years, and in the case of being around period it’s been around for hundreds of years in North America, Europe, etc... Kind of reminds us of that saying in the fashion industry, ' what's old is new again ...'!

As a potential user of A/R finance it kind of makes sense to know who you are working with. In Canada the market is somewhat smaller and fragmented, with firms offering AR finance being either small or mom in pop in nature, or to the other extreme subsidiaries of some very large U.S. and Global corporations. Talk about a choice!

It's also important for you to distinguish between firms who offer this financing as a part of their overall solution, or if you're dealing with a specialty firm, for all the right reasons! We've always preferred to work with an expert ourselves!

From our perspective it kind of feels that Factoring got a lot more popular after the 2008 recession. That's not hard to disagree with because of the way the business credit totally dried up at that time, with thousands of small and medium size firms finding they have a lot less access to business credit. Canada’s chartered banks clearly no longer dominated all of Canadian business financing, that’s for sure.


2. What size and type of Companies utilize factoring? Here’s where it get's interesting, and not doubt speaks to the fact of this new found popularity. Why? Small firms use factoring, start up firms use it, SME firms utilize it, and guess what.... some of the largest corporations in the world utilize AR receivable financing, although it takes a new name higher up the food chain, often referred to as a ' Securitization '. At the end of the day it’s all about taking A/R off the balance sheet immediately, replacing it with cash, and taking on a finance charge for that privilege of enhancing your balance sheet with cash.

3. When does Factoring work best? Several business situations arise that drive the popularity and success of this finance solution. Primary is the inability of the borrower, small or large, to get traditional bank type financing.

But we remind clients also that even start ups qualify for receivable financing, and many firms that are actually doing quite well ( too well in fact because they are growing too fast ) also embrace this finance , cash flow and working capital solution. It's also a great way to assist in the restructuring of a company that is having any one of a number of business challenges that preclude it from accessing working capital elsewhere.

Is that everything you need to know about AR Receivable financing in Canada? Probably not, but it’s not a bad start and business owners and financials managers should speak to a trusted, credible and experienced Canadian business financing advisor for more info and assistance on this widely misunderstood finance solution .

7 PARK AVENUE FINANCIAL
CANADIAN FACTORING EXPERTISE






Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 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/factoring_receivable_finance_ar.html
















Stan Prokop

Where Cash Flow Factoring Fits In The Jungle Of Business Financing And Short Term AR Finance

What Cash Flow Strategy Fits Your Company Needs?



Information on AR factoring as a short term finance strategy for cash flow in Canada.




No shocking news to the business owner or financial manager... but it's a jungle out there when it comes to Canadian business financing!

A lot of options and a lot of confusion... right? So where exactly does cash flow factoring ... i.e. short term AR Financing fit into the picture. Let's try and clarify.

Fundamentally it’s not that complicated... but there is a a lot of misinformation out there about pricing and daily mechanics... so lets clarify.

Essentially you are borrowing against receivables. Easy to understand so far, right? There are different reason why clients we talk to consider this option. For some its really basic... they want to eliminate themselves from the whole process of credit and collections.

For others it's simply a case of being unable to access traditional financing, or even better traditional financing in the amount they need. That applies very specifically to companies in high growth mode, or perhaps they are even a start up.

By selling your receivables to a third party, typically a commercial finance firm, you receive immediate cash and your facility is repaid as those receivables are collected.

In a perfect world you want to keep / retain the rights to the servicing and collections of that AR... your firm wants to be in a position to collect and service and liaise with your valued clients. There is a way to do that in Canadian receivable finance.

The whole process of a short term factoring strategy is pretty fundamental - you simply sell something for less than it's worth. In this case it's the receivable Using a $100,000.00 receivable as an example you invoice the client as soon as your firm has performed its product shipment or service - and you receive , that same day approximately $90,000.00 . You receive the other 10k, less financing costs, when your client pays... and typically that discount is approx 2 per cent if you are billing on a 30 day period.

The Canadian business owner and financial manager quickly realizes that if your customer is paying relatively promptly you have just created your own large cash flow machine.

So the biggest advantage to factoring in Canada is simply ' immediate access to cash ‘. You do have that financing charge , but surely you haven’t forgotten Business Finance 101 that says that you are in fact incurring costs to carry that receivable already .. And if you had the cash the same day you invoiced you would be in a position to buy more and sell more, generating even further profits instead of wafting 1-3 months to collect that AR!

Shorter term financing via an AR Cash flow strategy can also include that ' confidential ' component we discussed - allowing you to bill and collect your own receivables without notice to any client, supply, other lender, etc. Typically you can't have both a bank and factor strategy in place, but the reality is that many clients simply can't access bank finance, so they gravitate to cash flow factoring.

Speak to a trusted, credible and experienced Canadian business financing advisor on clearing up the ' jungle ' of Canadian business financing when it comes to a cash flow strategy.





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/short_term_finance_factoiring_ar_cash_flow.html

Factoring Receivables ? It’s Up To You - Pick The Right Business Finance Company As Your AR Factor Partner

‘Whats best type of business financing company for my firm' often ask our clients when they consider AR (A/R) financing and factoring of receivables. We believe strongly its all about the partner, as much as the facility arrangements and we think we can show you why.

A/R (AR) financing companies in Canada tend to be specialized focused niche lenders in the Canadian business landscape. Unlike our friends in the U.S. these firms tend to be non bank independent finance firms, Canadian, U.S, or U.K. based with respect to ownership.

This type of business finance company has one focus, advancing you cash and working capital on your AR (A/R) similar to a line of credit. The funds you can obtain are unlimited based on all your eligible receivables. ( In general receivable financing works for all receivables under 90 days old, as many clients think they are able to finance a receivable only immediately after it is generated , which is not the case by the way.

So could the right business finance company for the factoring of receivables actually be a bank. There are 1 or 2 players in the Canadian banking landscape that do in fact offer receivable finance, similar to a factoring model, however on a broadly speaking basis we can categorically state that banks don't finance receivables under the invoice discounting model that you are probably looking for .

We guess that anything is possible and one day we might see the banks gravitating to this type of finance... It certainly might be good from a rate and competition basis.

So we have determined that your search for the right firm re factoring receivables should focus on a specialist firm offering the type of facility you are looking for. But do you as a Canadian business owner or financial manager actually know the best facility when you meet it?!

Let's walk you through what we consider the key issues in finding the ' perfect ‘AR financing facility in Canada. First of all you want to ensure your partner firm can satisfy your facility size - some firms are very small and have limited capital themselves! which we think is something clients don’t often consider. Other key issues are as follow: facility limit, your ability to finance all your receivables, as certain companies impose restrictions on either the total amount for any one of your customers, and believe it or not some firms actually don't like government receivables for some legal and technical issues around their security.

Two other factors to consider is how clearly you understand the advance formula under which you will draw on the facility... and oh yes, did we forget to mention pricing ? That's a tongue in cheek comment of course as the majority of clients we speak to seem totally focused only on pricing, and not the ten or so other issues they should be considering.

Pricing varies significantly in Canada... anywhere from 1-3% of each invoice for a 30 day period. Rates are determined by overall facility size, the quality of your A/R and the number of days it takes your clients to pay.

Whats the optimal facility in Canada for factoring receivables? For us its 'C I D’, confidential invoice discounting or financing. This allows you to bill and collect your funds without any notice to your customer. This type of facility is perfect for your day to day operations.

In summary, of course you're the one that will make the final call on the type of facility that makes sense for your firm when it comes to cash flowing your A/R.

Consider also speaking to a trusted, credible and experienced Canadian business financing advisor who can navigate the waters of receivable financing for you on issues such as borrowing formulas, rates, terms and conditions, and your ability to improve on these factors.






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.7parkavenuefinancial.com/factoring_receivables_business_finance_company_ar.html

The Secret Of Commercial AR Factoring And An Accounts Receivable Financing Loan In Canada

Mind your own business! That's what a Canadian business owner or financial manager would prefer to do when they are considering accounts receivable financing, aka a commercial ar factoring loan. AR is of course accounts receivable, your second most liquid asset next to cash. Oh and by the way, the good news is it’s not a loan, per se, more about that later. Unfortunately current practices don’t allow you to ‘mind that business ‘.

So is there a way your company can obtain all the advantages of factoring , receive a competitive financing rate, and at the same time implement what is in effect a confidential invoice discounting program ? There is. First let’s cover off some basics.

You know the drill already. Your client base and investment in accounts receivable is taking up a huge part of your working capital. Sales are growing, or you have some major new contracts and business, forcing your working capital needs to go up.

The strategy. It's of course what thousands of business in Canada are starting to consider everyday - factoring. (Also called commercial invoice discounting). If you were going to implement this strategy in the manner that your competitors currently are then you would sell your receivables as you generate them , obtaining immediate cash flow to generate more sales, more profit , and of course cover all those operating costs you need to run your business on a daily basis .

But wait a minute. As commercial ar factoring and ar financing stands now in Canada, utilizing the U.S. and European model, your clients must be notified that you have sold that receivable to the finance firm.

Is there a way to avoid that somewhat ' sticky ' process and embrace the theme of our shared information here, which is ' minding your own business ‘? There is. The secret we are sharing is the availability of ' C I D' which stands for confidential invoice discounting. This is clearly the accounts receivable financing of preference for Canadian business.

Let’s examine what just happened as you have implemented this program. You have a bankable, liquid asset, your receivable portfolio. You now have the ability to in effect ' monetize ' that investment into working capital and cash flow today.

The costs of factoring are always a concern or subject of discussion when we talk to clients. The cost is in the 1-3% range per month. However companies such as yours need to understand that you can often cut those costs in half by effectively using your new cash to generate immediate sales an profits, take advantage of supplier discounts, and purchase more effectively and ' smarter ' from valued key suppliers .

So how does our ' secret ‘, i.e. confidential invoice discounting (factoring) work? It could not be any simpler. You bill and collect your own invoices, still receiving funds for them as you generate them. C I D rates are the same as ' regular ' commercial ar factoring, yet you are now in control of the process. And remember, important for you to understand this whole process is not a ' loan ' as we mentioned, you are just monetizing assets and turning them into working capital as you need them.

Let’s recap - the strategy = generate cash! The tactic - C I D - Confidential invoice discounting. Do you qualify? We are pretty sure you do, so why not speak to a trusted, credible an experienced Canadian business financing advisor on this valuable working capital concept.
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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.7parkavenuefinancial.com/commercial_ar_factoring_accounts_receivable_loan.html