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 ar factoring. Show all posts
Showing posts with label ar factoring. Show all posts

Sunday, November 24, 2019

Why Do Companies Factor Receivables ? Cash Flow !















Do You Qualify For Factoring Receivables ?







Factoring receivables in Canada is well over 40 years old in Canada. So why though do so many business owners and their financial mgrs. not know about the types of factoring and how pledging receivables work . More about that ' pledging' later !

Ironically A/R factoring has its roots was in one particular industry, fashion and garments .We can say tongue in cheek now that factoring itself is in fashion!

While many companies would be perfectly willing to arrange pledging receivables to their bank for a business line of credit the hard truth is that many firms don't qualify for Canadian chartered bank financing based on all the criteria that banks demand for business credit lines. That is why alternative finance, via solutions such as factoring and invoice discounting provide the same cash flow solution, albeit at a higher cost.



Most Canadian business owners and financial managers know only two well that their line of credit is capped at a certain financial amount. And that borrowing facility is subject to personal guarantees, sometimes other additional collateral, and most importantly loan covenants and ratios that restrict your business in a number of ways.




Many Canadian business owners know full well that if they do have a bank operating facility it is a low rate facility, i.e. the interest rate is great. But what if that facility cannot meet your business needs. In effect you have a small, or smaller let’s say line of credit than you need, its cost effective, but, guess what? Your company finds it difficult to grow without working capital.

So what about the different types of factoring ? Yes Virginia, there are numerous types, from old school full notification invoice discounting to asset based lending which monetizes your a/r much like a bank facility, allowing you to do all your billing and collecting with no notification to your clients .


Traditional U.S. and European factor firms with branches or subsidiaries in Canada offer the traditional version of factoring, which has the factor finance firm also involved in your credit and collections and credit extension. While this works for many firms we recommend to our own clients that they utilize a non notification facility . We call this Confidential Receivable Financing ! Your firm has all the financial benefits of factoring, and you in charge of their own destiny via customer relationships, amount of credit extended, etc.



When factoring is employed you receive an immediate advance against your accounts receivable . Moreover you are only paying for what you use, and , if you have structured the right type of facility you are not locked in, you have a competitive factoring or discount rate, and your are turning over receivables and inventory much faster than before . Those faster inventory and A/R turns translate into increased profits and owner equity.



Factoring in Canada is quickly overcoming a stigma that it is for companies in distress – the exact opposite is many times more true – which is that some of the largest corporations in Canada utilize factoring through asset based lending arrangements of their receivables, and inventory .


Speak to a trusted, credible, and experienced business financing advisor with a track record of business financing success to ensure that you understand the benefits of a true non notification working capital factoring facility.








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


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.
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.







Thursday, April 10, 2014

Accounts Receivable Funding In Canada : What AR Factoring Can And Can’t Do For Your Business







Putting Cash Flow Financing On Autopilot


OVERVIEW – Information on accounts receivable funding solutions in Canada . When , why and how does AR Factoring work for cash flow finance and working capital needs






Accounts receivable funding , implemented properly, is a great way to put your cash flow financing needs on ' autopilot'. Would AR factoring work for your firm, and more importantly, how in fact does it work? Let's dig in.

In business it’s a lot about sales revenues and cash flow drivers (there’s a couple hundred other issues, but let’s focus on these!) The core of our issue is that your sales, almost never, equals the amount of cash your company has in the bank.

Those two issues also are often key predictors of your current and future business ' health'. Another hard reality is that all businesses, small or large, are not created equal - as such some need a lot more cash on hand than others. A strong example is a capital intensive industry requiring heavy fixed asset investment, versus a service business that might carry no inventory and only requires receivable finance to support growth.

Unless you're a retailer selling on cash your only cash inflows are the A/R collections coming into your firm. (The only other way to get cash is to get outside equity or to sell assets) One of the great ironies of business is that you can be growing and profitable on paper and going broke on a cash flow basis. Ouch!

It's that operating cash that we're focusing on in our discussion - we're not talking about the ' investing' or ' financing' portion of the 3 part cash flow statement. Focusing on operating cash will always keep you business running ' normally.

If your business isn't generating the cash it needs relative to your sales or even how your industry competitors are doing you require AR factoring / financing of some sort.

To avoid small, or large cash flow crunches consider AR factoring as a solution. It's the ' unlocking ' of those receivables and converting them into cash that will put your company into cash flow problem immunity.

While most businesses sell on 30 day terms, most clients these days, small or large (the large clients are the worst?!) tend to pay you in 60-90 days.

AR Factoring, including our recommended version - (CONFIDENTIAL RECEIVABLE FINANCING) allows you to generate cash as you generate sales. Using a 30 day collection period this will cost you approximately 150-200$ on a $ 10,000.00 invoice. The key benefit - no A/R, cash in the bank.

While those financing costs are higher than a Canadian chartered bank facility they do provide you with all the cash flow and working capital you need to run your business, meet your obligations, etc.

While the only reason your firm would consider ACCOUNTS RECEIVABLE FUNDING is its inability to get proper bank financing we point out to clients that many of the largest corporations in the world utilize this same method of financing - they just call it something more fancy, such as ' securitization' etc, and in many cases for larger firms the costs is equal to or less than a Canadian chartered bank facility.

Factors that will affect your pricing and approval include size of your business, the quality and size of your A/R base, etc.

If you're considering a receivable financing solution , and you wish to consider the ' autopilot' features of AR factoring in Canada seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with your Canadian business financing needs.



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 :

http://www.7parkavenuefinancial.com/accounts-receivable-funding-ar-factoring.html






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

CONTACT:

7 Park Avenue Financial

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653


Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '