Revolutionizing Cash Flow: The Hidden Benefits of Confidential Invoice Finance

 

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YOUR COMPANY IS LOOKING FOR  CASH FLOW FINANCING VIA

THE  A/R FINANCE SOLUTION!

INVOICE FACTORING AND CONFIDENTIAL INVOICE FACTORING IN CANADA

You've arrived at the right address! Welcome to 7 Park Avenue Financial

Financing & Cash flow are the biggest issues facing businesses today.

ARE YOU UNAWARE OR   DISSATISFIED WITH YOUR CURRENT  BUSINESS  FINANCING OPTIONS?

CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs

EMAIL - sprokop@7parkavenuefinancial.com

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

Unlocking Financial Potential: The Secret Power of Confidential Invoice Finance

 

AR Financing in Canada allows business owners and financial managers to remove some of the ' panic ' that sets in when a cash flow crisis seems threatening and just around the corner.

 

Numerous solutions exist for fixing a working capital shortage - one of them, confidential invoice finance, seems tailor-made for... the fix on those outstanding invoices in your sales ledger.  Let's dig in on the best accounts receivable financing solution.

 

INTRODUCTION

 

Maintaining a healthy cash flow is a significant challenge for many business owners. Fortunately, a powerful tool is available to address this issue - Confidential Invoice Finance. Effective cash flow management is vital for any company's success and expansion in today's competitive business landscape.

 

However, traditional financing options often prove inadequate, leaving businesses struggling to bridge the gap between incoming revenue and outgoing expenses. This is where Confidential Invoice Finance can make a difference. This innovative financial solution allows businesses to access the necessary working capital by utilizing their unpaid invoices. By unlocking the value in outstanding invoices, companies can gain immediate funds to keep their operations running smoothly.

 

The lifeline of any business lies in managing cash flow. It entails closely monitoring the movement of money into and out of a company to ensure sufficient funds are available to meet financial obligations such as payroll, rent, and supplier payments.

 

However, many businesses encounter cash flow challenges, especially when customers delay payment or unforeseen expenses arise. Such situations can strain resources and impede growth opportunities. Hence, effective cash flow management is crucial for the long-term success of any business.

 

Confidential Invoice Finance presents an attractive solution by addressing businesses' cash flow struggles. Leveraging unpaid invoices allows companies to access funds quickly and confidentially without needing traditional loan applications or lengthy approval processes. This financial arrangement provides immediate working capital, allowing businesses to cover their day-to-day expenses, invest in growth initiatives, or seize new business opportunities.

 

 

  

A/R FINANCING, AKA FACTORING, IS THE MOST POPULAR TYPE OF WORKING CAPITAL FINANCING IN CANADA   

 

A/R Finance is a subset of the comprehensive business solution called 'asset-based lending. Many people refer to it simply as ' factoring ' - although that is a generic term covering numerous receivable finance types. They include  ' invoice discounting, ‘'notification factoring,' 'forfeiting, '' spot factoring, 'non-recourse factoring,' etc. .. Etc..! Large well-known corporations, some of the largest in the world, in fact, call it ' Securitization' - they constantly move receivables off the balance sheet in bulk by selling them.

 

 

WHAT IS CONFIDENTIAL INVOICE FINANCE  

 

Confidential Invoice Finance is a flexible financing solution that enables businesses to access the value of their unpaid invoices. Unlike traditional financing options, this alternative provides immediate working capital based on outstanding invoices.

 

Unlike factoring, where the debtor is informed, and a factor handles collections, confidential invoice finance allows businesses to retain control over customer relationships and credit control processes. It will enable companies to manage their finances while unlocking the funds tied up in unpaid invoices.

 

  

  

7 PARK AVENUE FINANCIAL RECOMMENDS CONFIDENTIAL RECEIVABLES FINANCING AS THE BEST SOLUTION TO CASH FLOW NEEDS  

 

  

Some of that terminology can be a bit confusing in this third-party factoring and invoice discounting,  so we'll be zeroing in on just the key basics, including our recommended solution for this method of Canadian business financing, Confidential  A/R Finance.

 

3 TYPES OF 7 PARK AVENUE FINANCIAL CLIENTS USE A/R FINANCING

 

Most clients who use A/R finance solutions are in a couple of basic categories - they can't get all the financing they need from a bank  ( or can't qualify for any finance) or are in special situations, turnaround, growth, etc. In most cases, solutions such as Confidential Invoice Financing are an interim solution, possibly for a year or two, allowing customers to migrate back to more traditional financing facilities.

 

 

TRADITIONAL ' OLD SCHOOL' FACTORING

 

In traditional ' factoring ' solutions, the concept of ‘notification’ is key. Here the lender, usually a commercial finance firm, requires that your clients be notified about the process of financing your AR. That's because the paperwork surrounding this facility is unlike the bank. Banks' collateralize' your receivables; commercial factor firms have paperwork that specifies that sales invoices you finance are, in fact, ' sold ' to them.

 

  

  

IT'S ALL ABOUT CONFIDENTIALITY - HOW CONFIDENTIAL INVOICE FINANCING WORKS     

 

 

1. Application: The business applies for confidential invoice finance, providing information about their invoices and customers. Borrowers can choose between recourse factoring  and non-recourse factoring, as well as consider credit insurance to eliminate bad debt risk

2. Verification: The provider verifies the invoices and conducts due diligence on the business and its customers.

3. Funding: Approved business receives a funding advance of 85% to 90% of the invoice value from the provider. The remaining amount, minus fees, is paid when the customer settles the invoice.

4. Credit control: The business controls credit control processes, issuing invoices and collecting customer payments. The provider remains confidential, and customers are unaware of the financing arrangement.

5. Repayment: When the customer pays the invoice, funds are directed to a designated account. The provider deducts fees before releasing the remaining funds to the business.

 

The way to beat any notification, i.e. being ' Confidential ' about this whole process, is to enter into an invoice financing facility that allows you to bill and collect your invoices without anyone knowing how you are financing your business. Rates and paperwork are essentially the same.

 

CASE STUDIES HIGHLIGHTING THE BENEFITS OF FINANCING RECEIVABLES / CONFIDENTIAL AR FINANCING

 

Case Study 1: ABC Manufacturing

A growing manufacturing company, ABC Manufacturing faced cash flow challenges due to delayed customer payments. This situation affected their ability to purchase raw materials and pay suppliers on time. However, by utilizing confidential invoice finance, ABC Manufacturing found a solution. They accessed immediate funds based on their outstanding invoices, ensuring a healthy cash flow and timely supplier payments. This newfound working capital also allowed them to negotiate better terms with suppliers, leading to cost savings and increased profitability. With confidential invoice financing, ABC Manufacturing successfully managed its cash flow and seized growth opportunities.

 

Benefits of Confidential Invoice Financing for ABC Manufacturing:

• Immediate access to funds based on outstanding invoices
• Maintenance of a healthy cash flow
• Timely payments to suppliers and improved supplier relations
• Ability to negotiate better terms with suppliers, resulting in cost savings
• Increased profitability and opportunities for business growth
•  

Case Study 2: XYZ Services

XYZ Services, a service-based company, encountered cash flow fluctuations and overtrading issues. They needed additional working capital to invest in equipment and hire more staff to meet the growing demand. However, traditional financing options were not viable for XYZ Services due to their lack of substantial assets for collateral. Confidential invoice finance emerged as the ideal solution. By unlocking the value of their unpaid invoices, XYZ Services gained immediate funds to invest in the necessary resources for growth. They successfully maintained a consistent cash flow, met the demands of their clients, and delivered exceptional service.

 

Benefits of Confidential Invoice Financing Debtor Finance for XYZ Services:

• Access to immediate funds based on unpaid invoices
• Ability to invest in equipment and hire additional staff
• Maintenance of a consistent cash flow to support business operations
• Meeting growing demand and delivering exceptional service to clients
• Overcoming the limitations of traditional financing options
•  

In both case studies, confidential invoice financing was crucial in resolving cash flow challenges and fueling business growth. These companies accessed immediate funds by leveraging unpaid invoices, effectively managed their cash flow, and capitalized on growth opportunities. The benefits included improved supplier relationships, cost savings, increased profitability, and meeting client demands. Confidential invoice financing proved valuable for these businesses to overcome financial obstacles and achieve long-term success.

 

 KEY TAKEAWAYS - THE BENEFITS OF CONFIDENTIAL INVOICE FINANCING 

 

Confidential Invoice  Discounting finance offers several benefits that can revolutionize a company's cash flow management strategy. Let's explore some of the key advantages:

• Improved cash flow and working capital
• Increased flexibility and scalability
• Reduced credit risk and bad debt
• Access to professional credit management
• Ability to address concentration limit

With these advantages, confidential invoice finance can revolutionize a company's cash flow management strategy, providing the necessary funds, flexibility, risk reduction, and expert guidance to drive business success.

 

 

 

  

CONCLUSION  

Confidential Invoice Finance is a transformative tool for cash flow management in businesses. It offers a range of benefits that can revolutionize how companies handle their finances.

 

By leveraging unpaid invoices, businesses can unlock immediate working capital, enjoy enhanced flexibility, mitigate credit risk, and receive professional credit management support. With these advantages, Confidential Invoice Finance empowers businesses to manage their cash flow and achieve financial stability effectively.  

In some cases, factoring accounts receivable can be part of an asset-based lending facility, allowing you to also finance inventory and equipment as a part of your non-bank business line of credit.

 

Accounts receivable financing solves the unpaid invoices problem - Call  7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can assist you with AR financing that works best and removes the ' panic ' around cash flow needs.

 

FAQ FREQUENTLY ASKED QUESTIONS PEOPLE ALSO ASK MORE INFORMATION

 

Why do companies choose confidential invoice factoring?

 

If you value the confidentiality aspect of invoice discounting, you should consider confidential invoice factoring. This financing option operates similarly to regular factoring but with one key distinction in how the lender interacts with your customers. In standard factoring, the provider uses their name when contacting your customers. However, with confidential factoring, the provider assumes the role of your accounting department and communicates with customers using your company name. Confidential factoring combines the benefits of a cash advance and credit control found in traditional factoring while ensuring the confidentiality associated with invoice discounting.

 

 

What are the challenges of cash flow management?

 

Common cash flow management challenges faced by businesses, summarized in list format:

1. Late payments from customers and collections management and funding availability for invoice aging and debtor turnover days sales outstanding
2. Seasonal fluctuations in demand
3. Overtrading and the strain it puts on cash flow
4. Limited access to traditional financing options for small and medium-sized enterprises (SMEs)
5. Invoice reconciliation

 

 

What do the terms INVOICE DISCOUNTING / INVOICE FACTORING /SELECTIVE INVOICE FINANCING / SELECTIVE INVOICE DISCOUNTING AND SPOT FACTORING  mean in the types of invoice finance?

 

1. Invoice Discounting:

   • A simple form of invoice finance where a lender advances money against unpaid invoices.
   • Suitable for larger companies with a high turnover.
   • Confidential, allowing businesses to maintain control over credit collection.
   • Requires evidence of prompt customer payments and in-house capacity for chasing outstanding payments.

2. Invoice Factoring:

   • Allows companies to borrow money against their sales ledger, but the process is disclosed.
   • The lender takes control of credit collection and deals directly with customers.
   • Suitable for smaller businesses that benefit from not chasing outstanding payments.
   • It may not be cost-effective for SMEs with fluctuating cash flows.

3. Selective Invoice Financing:

   • Enables borrowing against specific invoices rather than the entire sales ledger.
   • Suitable for companies with significant income from large, steady customers.
   • It helps SMEs raise working capital with fluctuating cash flows.
   • Includes selective invoice discounting and spot factoring.

4. Selective Invoice Discounting:

   • Similar to invoice discounting, businesses choose the invoices they wish factoring companies to finance.
   • Useful for borrowing against invoices from a few big customers.
   • Confidential option to secure finance against invoices without customer knowledge.

5. Spot Factoring:

   • Borrowing money against specific unpaid invoices from business customers instead of the entire sales ledger.
   • Suitable for companies with a few large customers.
   • The factoring company assumes control of invoices, collecting invoice payments directly from customers via invoice verification processes and credit risk assessment
   • Useful for SMEs lacking resources to chase outstanding payments and prefer lender responsibility.

 

 WHAT IS THE HISTORY AND BACKGROUND OF FACTORING

Factoring has been around since Roman times. The word ' factor ' comes from Latin, meaning ' he who does things. '  That  ' doing things ' revolves around monetizing the sale via the monetization of accounts receivable between a 'seller ‘... that's your company and your customer.

 

 

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

Cash Flow Finance Solutions In Canada : Are You Part Of The Factoring & AR Financing Boom ?

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Inside the Business Of ‘ Factoring’ In Canada

OVERVIEW – Information on factoring and cash flow finance solutions in Canada. The proper role and use of of AR Financing determines the ultimate success of working capital solutions your firm undertakes. Here is how and why

Cash flow finance solutions in Canada are somewhat misunderstood as well as growing in popularity. To ensure you are a strong candidate for the AR Financing boom it's of course necessary to understand what this finance took, aka ' factoring' is all about. We're going to clarify some issues and debunk some of the misconceptions around how your firm can and should be financing its most liquid asset - accounts receivable! (Next to cash that is!) Let's dig in.

When a company can't leverage bank financing through traditional sources, and if they are unwilling to take on debt via working capital loans then factoring is in fact one solid solution to leverage cash flow and working capital. When financed properly your a/r can also help address other issues that might be on your balance sheet such as accounts payable and government super priority payments. Key point - when financed properly!

As we have hinted, factoring via A/R finance is not the only or be all and end all solution. You can add new owner equity to your business, or take on debt via a cash flow loan or some other kind of term debt (Bridge loans or sales leasebacks come to mind). Those of course are fixed options and must be met, come ' hell or high water' as your lender will note. So working capital solutions such as non bank A/R financing add no debt to the balance sheet - yet they do supply the cash you need.

Sales revenues via your receivables investment generates profits for your firm. The goal is to ensure that key asset - your sales & receivables are financed properly - keeping your balance sheet stable. Additional term debt can of course render your firm ' unstable’

No firm has to secure and access business credit lines such as bank facilities or commercial factoring solutions. However when you don't you'll often limit growth prospects. Companies that are self financing are often viewed as stable and successful - it's just that without external financing they don't often grow.

So the solution to growth finance. It's financing your A/R as you generate sales. That helps to meet business goals, increase additional profits and grow the total value of your business.

When business owners / financial mgrs address the cost of external financing several scenarios become very obvious:


- Continue to self finance and limit growth and competitiveness - including the obvious working capital and daily cash flow challenges
- Borrow on a term debt or subordinated debt basis
- Sell receivables as you generate them - increase sales and profits and capture all the opportunity costs of additional working capital

Somehow our third option remains more appealing!

So why are we not hearing more about Canadian business owners who have discovered a holy grail of financing? When we talk to customers we know the answer - they have entered into the wrong type of factor facilities.
The fragmented and U.S. influence on factoring in Canada has many firms entering into the wrong type of facilities. We advocate CONFIDENTIAL RECEIVABLE FINANCING,also called ' non notification factoring ' with no locked in contracts, and fair competitive pricing.

Check out the benefit of factoring in Canada, and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your capital and cash flow 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

Receivable Finance Canada: Finally Your Clear Explanation Of Factoring & AR Financing

Eliminating The Hail Mary Pass on Canadian Receivable Financing Techniques

OVERVIEW – Information on factoring and receivable financing in Canada. Only when certain elements of AR Financing and cost are understood does this funding strategy make sense for your company

Receivable Finance generates somewhat of a ' fear of the unknown' when we talk to clients who are business owners / financial mgrs looking at AR Financing, commonly known as ' factoring'.

The problem though is that with so much diversity out in the market the solutions they are offered are ' reheated' / misunderstood. Not knowing the different nuances often have your company feeling like it needs a ' HAIL MARY PASS' for their Canadian Receivable Financing needs. The solution? Understanding the offering and how it works and benefits your firm. Let's dig in.

A ' Hail Mary Pass’? That's the legendary term coined by NFL great Roger Staubach. He actually borrowed it from two 1930's players at Notre Dame who coined the term when they needed a last chance ' low probability' pass that needed divine intervention!

No divine intervention needed here, just common sense. Owners/finance mgrs just need to think of A/R financing as a business line of credit against receivables. Simple enough. But not so fast. Because the paperwork of ' factoring' shows that you don't have ' ownership ' of the A/R certain terms must clearly be understood. Let's cover off key basics.

Your borrowing ability on your factoring line of credit will always be based on specific collateral, i.e. the amount of your outstanding invoices, typically less than 90 days old. (Older invoices are deemed uncollectible).

How much can we get? is a typical client question. The answer -more often than not your advances will be 90% of your outstanding A/R.

Cost? Financing costs are higher in factoring. However you can lower your costs by up to 50% or more if you focus on strong collections to clients. Simply speaking - the length of time your clients take to pay determines your financing costs.

Miscellaneous fees abound for many offerings which can increase your cost. These include closing fees, ' facility fees’, aka standby fees, termination costs, monitoring costs, and up front deposits. Our answer to all of the above - with the right lender pretty well none of the above

should apply to your finance offering.









Receivable finance works best when your sales are constant or growing... We caution our clients who might be in high distress of have flagging sales that entering into the wrong financing arrangement at this time causes negative cash flow due the fact that borrowings will mostly go to reducing the credit line.

Have we forgotten anything? Just that our recommended facility for almost all our clients is CONFIDENTIAL RECEIVABLE FINANCING, allowing you to bill and collect your own invoices without the required notification to your clients that 99% of the industry requires. It’s much better than the ‘reheated’ versions of old school factoring offered by most Cdn firms.

Our bottom line? Work with a trusted, credible and experienced Canadian business Financing Advisor with a track record of success
who can assist you in determining the total cost, as well as benefits of ' factoring' , including comparing the facility to a bank line of credit. Common sense Canadian business financing - no Hail Mary Pass needed!


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 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/ar-financing-factoring-receivables-finance.html

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 '

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

Receivables Factoring And AR Financing Canada : Talking Points On A Receivable Loan

Removing The Ouch From A/R Financing Solutions in Canada

OVERVIEW – Information on A/R financing in Canada . Receivables factoring via a receivable loan ( it’s not really a loan ) can work as a short to intermediate term solution for cash flow and working challenges . Costs, issues and how the facilities work is discussed

Receivables AR financing in Canada comes with the perception of an ' Ouch ' when it comes to entering into this type of cash flow facility. But is perception reality in this case? We’re quire sure it isn’t so let’s focus in on the total ' receivable loan ' experience. (By the way, it’s not a loan; you're just cash flowing current assets). Let's dig in.

Whether a business is profitable or struggling back to profitability the issue of liquidity and the ability to meet your obligations is always supreme. The ability to finance your sales via a receivable factoring solution is a solid tool when traditional bank financing can’t be achieved. But the type of facility you enter into, its cost, and how it works is really the ' ouch' factor you need to address to be successful with this type of financing.


While the bank paperwork on A/R financing is done through an ongoing ' assignment ' of your accounts the receivable loan (again, it’s not a loan!) paperwork provides that you are in fact ' selling ‘the receivables you wish to finance.

The biggest ' ouch ' for most clients is that as cheques are collected from your client they are deposited directly into the lenders account, not yours, given you have received the benefit of the cash . Can this process be overcome? It sure can! And that comes via entering into a Confidential Receivable Finance facility that allows you to bill and collect your own accounts. By the way, whether it’s a Canadian chartered bank or your receivable factor firm each of those has a ' lien' on your receivables. That's the collateral for the cash flow.

By the way some of the largest companies in Canada or the world for that matter use these types of facilities. In some cases a fancier name (‘Securitization ' ) is attached to the loan (it’s not a loan - have we mentioned that?!) but at the end of the day it’s the same process - eliminating a/r from the balance sheet and generating cash at the exact same time.

Typically the same type of borrowing restrictions come with this type of financing - with one positive exception. Receivables factoring typically allows borrowing against 90% of your total A/R, while Canadian banks prefer a 75% borrowing base margin. (You’d think they were more conservative or something?!)

Otherwise the following borrowing base has the same rules:

All North American receivables can be financed

Receivables must be 90 days or less current

If you are billing and collecting your accounts on 30 day terms the cost to finance a $10,000 invoice as an example would be in the 200$ range . That 9800$ you receive when you generate a sale can be ploughed back into working capital needs, utilized for purchasing more inventory, or you can get back your 200$ by taking a discount with your own suppliers or arranging better pricing based on volume purchases .

Thousands of Canadian businesses utilize this financing as a ' bridge' back to traditional financial solutions. In fact if your business is growing ' too quickly ' for traditional financing it's often the best solution.

If you want to both remove the ' ouch ' from the receivable loan facility ( it's not a loan ..................) and wish to cover off more talking points on how this facility would work for your firm 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 cash flow 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 :


7 PARK AVENUE FINANCIAL = CANADIAN A/R 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



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop

Confidential Invoice Finance : Taking The Panic Out Of AR Financing Needs

Let ‘ He Who Does Things ‘ Work For Your Business Financing Needs

OVERVIEW – Information on the benefits of confidential invoice finance in Canada . Reaping the benefits of AR financing requires knowledge around who , what, where, when and why

AR Financing in Canada allows business owners and financial managers to remove some of the ' panic '

that sets in when a cash flow crisis seems to be threatening and just around the corner. Numerous solutions exist for fixing a working capital shortage - one of them; confidential invoice finance seems tailor made for... the fix. Let's dig in.

A/R Finance is really a subset of the broad business solution called ' asset based lending. Many people refer to is simply as ' factoring ' - although that is a generic term that covers numerous types of receivable finance. They include ' invoice discounting ‘, 'notification factoring', ' forfaiting ', ' spot factoring ', non recourse factoring ' etc. .. Etc..! Large well known corporations, some of the largest in the world in fact call it ' Securitization' - they move receivables off the balance sheet constantly in bulk by selling them.

It goes without saying that some of that terminology can be a bit confusing so we'll be zeroing in on just the key basics , including our recommended solution for this method of Canadian business financing , Confidential A/R Finance .

It's interesting to note also that for those clients we talk to that have never even heard of the term that in facts it's been around, and in practice since pre Roman Empire times. And the word ' factor ' comes from Latin meaning ' he who does things '. That ' doing things ' revolves around monetizing the sale between via the monetization of accounts receivable between a ' sellers ‘... that's you, and your customer.

The majority of clients who use A/R finance solutions are in a couple basic categories - they can't get all the financing they need from a bank ( or cant qualify for any finance at all ) , or they are in special situations re turnaround, growth, etc. In the majority of cases solutions such as Confidential Invoice Financing is an interim solution, possibly for a year or two, allowing customers to migrate back to more traditional financing facilities?

In traditional ' factoring ' solutions they concept of ‘notification’ is key '. Here the lender, usually a commercial finance firm requires that your clients be notified about the process of financing your AR. That's because the paperwork surrounding this type of facility is unlike the bank - banks ' collateralize' your receivables , commercial factor firms have paperwork that specifies that sales invoices you finance are in fact ' sold ' to them .

The way to beat any notification , i.e. being ' Confidential ' about this whole process is to enter into a invoice financing facility that allows you to bill and collect your own invoices, without anyone knowing how you are financing your business. Rates and paperwork are essentially the same.

In some cases this financing can be part of an asset based lending facility, allowing you to also finance inventory and equipment as a part of your non bank business line of credit .

So, consider letting ' he who does things ' work for your firms cash flow needs. 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 AR financing that works best , and removes the ' panic ' around cash flow 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 :

7 PARK AVENUE FINANCIAL = CANADIAN CONFIDENTIAL A/R 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



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop

Factor Finance In Canada : Are You Up To Date On AR Financing And Best Types Of Factoring In The Canadian Marketplace

Misconceptions in Factor Finance In Canada . You Just might be wrong when it Comes to A/R Financing In Canada : Here’s Why



OVERVIEW – Information on misconceptions around factor financing in Canada. When it comes to A/R financing and the types of factoring available dos the Canadian business owner/manager recognize the best solutions?








A/R Financing in Canada comes with a lot of misconceptions. We're not quite sure who starts some of these ' untruths' but we are though quite confident that when it comes to factor finance and the types of factoring in Canada that we can clear up the ' mess ' in helping the Canadian business owner and financial manager understand this method of financing.

Our goal - making sure you can handle the truth

- let's dig in.

One popular method of financing receivables is of course obtaining Canadian chartered bank facilities - i.e. the ' revolving business line of credit ‘. Where misunderstanding occurs is when the owner/ manager assumes this is the same way that Invoice financing supplies your cash flow and working capital. That's incorrect.

Banks take a collateral security agreement on all your assets, including AR, and allow you to borrow 75% of all your accounts under 90 days on an ongoing basis. Factoring, aka ' invoice discounting' utilizes paperwork that allows you to in effect ' sell ' your accounts as you generate sales. If you have the right facility in place you borrow 90% against your accounts, not the 75% the bank allows.

A/R finance is expensive isn't it? That’s one of the most common statements or questions we get from clients in initial discussion with them on how to finance cash flow. We'll let you decide that one - Consider this.

Banks have a low cost of capital and financing and borrowing costs are incredibly low - typically in the 4-6 % range per annum on your borrowing needs. The banks offset that low return and rate by taking minimum risk and only granting business credit to firms that have historical and consistent profits, owner equity and positive cash flows. That of course limits both the number of borrowers and the amounts you can borrow under bank lines.

Factor finance costs in Canada are handled in a totally different manner. You pay a ' commission' on all accounts you choose to finance, typically in the 2% range. So on a 10k invoice you would pay 200$ for the right to access cash the same day you invoice. We can already see our clients furiously pounding those calculators to come up with a ' financing cost '. But consider this:

1. First of all you have access to capital you might not be able to borrow on from a bank

2. You are already being ' the bank' for your customers already, as you carry receivables, at your expense, for 30, 60... and dare we say it, 90 days.

3. Furthermore the cash flow you gain from the right types of factoring allows you to take discounts with your own suppliers, which decreases your total cost of borrowing significantly. And that new found same day cash you achieve with financing A/R allows you to quickly generate more sales and more profits.

Don't forget also that while many firms consider this newer method of financing your firm as ' intrusive ' to some degree, that by utilizing our recommended solution: CONFIDENTIAL RECEIVABLE FINANCING , you can run your own business and bill and collect your own receivables, borrowing what you need when you need it



So there you have it - Total (we hope) clarity on a number of issues surrounding factor finance 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 account receivable cash flow finance 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 :


7 Park Avenue Financial = Canadian A/R 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



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '

Stan Prokop

AR Financing Just Got Seriously Better : Account Receivable Factoring Definition Redefined

Your Company Signed Up For A/R Financing & Didn’t Get What You Thought?


OVERVIEW – Information on AR Financing in Canada . When It comes to account receivable factoring are you aware of the best solution?

AR (account receivable) financing is a critical aspect of any, large or small, commercial business that sells on credit. That time gap from when you are finally able to issue an invoice, to when you get paid is one of the most critical time periods in any business. More often than not that time gap needs to be financed - in the right manner. Let's dig in.

Many clients we speak to have in fact already ' signed up' for some form of receivables finance - in certain cases they are ' factoring' their A/R. The challenge then? It's just a case of what they got isn’t necessarily what they signed up for. And a small handful of key tips can help you avoid any mistakes in this area.

Why do firms finance A/R? As we have hinted it’s simply that in corporate finance the ' working capital cycle' needs to be addressed. And typically the way to ' shorten ' than waiting to get paid scenario is addressing the financing of your firm’s receivables.

When firms use a third party finance company , as opposed to bank financing , to finance working capital its really the type of facility and terms that ' make or break' a good deal in this area . It is probably apparent to all, but we will say it never the less, that Canadian chartered bank financing is simply not available to all commercial borrowers in Canada. And sometimes, even when it is, it's not enough.

One of the true ironies of Canadian business financing is that our banks, in general, are not generally in favor of meteoric sales growth - the type that requires huge bulges in financing needs. As someone once put it, the challenge is to keep your company both ' going' and ' growing'!

So why do firms turn to a commercial finance company for factoring of their receivables? It's really the reasons, and how the financing addresses those reasons properly that’s at the crux of our discussion today.

And those reasons? They more often than not are as follows:

Inability to secure bank financing (company too new or no established track record

A/R Exposure to government receivables or out of country sales


Financing required is often greater than available through a bank even if the company were approved by its bank

Fast timing is required to address large orders/contracts

The need to address a slow down in payments from key clients

So is there a ' perfect’ factoring facility that addresses and cures all of the above issues. One that we feel does that is Confidential A/R Financing. It allows you to bill and collect your own receivables, is competitive in price, requires no notices to your clients, and allows you to margin up to 90% of your AR on an ongoing basis as your firm ' goes; and ' grows'!

Where do things go wrong then? It's simply when the business owner or financial manager doesn't understand the paperwork, pricing, and ongoing management of this type of facility. One way to correct that? Seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you in your account receivable factoring 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 details :

7 Park Avenue Financial = Canadian A/R 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



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience

Stan Prokop

Business Funding Seem Like Molasses Speed ? Let AR Financing Via Receivable Funding Reverse Your Cash Flood Positively

Not Happy With Business Financing Choices? That’s Predictable




OVERVIEW – Information on account receivable business funding in Canada . How does A/R financing work , and when could it be appropriate for your company . What is the best method of utilizing this financing tool




Business funding in Canada. Who is surprised whenever we read a large percentage of Canadian business owners and financial managers are not happy with their financing choices. And when it comes to the speed at which they can access working capital , let's just say it seems like Boston, 1919 all over again. (A major flood of molasses swept through the streets of Boston worse than a Tsunami - we're not kidding, check it out!)

Could AR financing via account receivable finance reverse your cash flow fortunes? We know it does for thousands of firms just like yours and here's how and why. Let's dig in.

There is no greater form of quick financing today that AR financing. It's valuable, easy to achieve, and has many similarities (and some differences) to the traditional bank line of credit. Because on balance this method of financing your sales is more expensive than bank finance companies that tend to utilize it don’t have the balance sheets, profits, and outside collateral needed to access Canadian chartered bank financing.

Many companies that have vendors / suppliers that offer payment terms take advantage of AR financing to take those discounts for prompt payment that are offered. As you can imagine, this offsets a huge part of the cost of account receivable finance.

There's always a debate in business as to whether ' size' is important. The reality around A/R financing is that it allows you to take on sales opportunities and new contracts etc that are much larger in nature that could otherwise not be considered. Bottom line on that one - A/R finance has made your firm a player! That's because there is no upper limit, per se on the financing you can achieve via this method of sales finance.

When does this method of financing not work? That’s the question clients ask us when we're walking them through the process. The answer? If your firm doesn't have some respectable gross margins and your sales are going down not up... well let's just say this method is no longer optimal. The perfect A/R finance client in Canada has good sales opportunities, is pricing their products and services properly, and understands the cost of this method of growth financing is easily offset by good asset turnover and strong sales growth leading to more profits.

Where business funding via account receivable finance falls apart is when the Canadian business owner or financial manager fails to understand some key terms and falls head first into a facility that doesn't make sense for their firm. So it's our job we suppose to warn of those dangers.

Looking for an optimal way to achieve the benefits of this method of financing your sales? Our recommendation is to consider CONFIDENTIAL A/R FINANCING. When properly structured it allows you to bill and collect your own receivables, finance them when YOU want, and still reap the benefits of same day cash flow on sales generation.

Is AR Financing for your firm? Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your cash flow needs and clarifying the process around this valuable method of working capital finance.




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 10 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 :

7 Park Avenue Financial = Account Receivable Business Funding Solution Expertise



CONTACT:

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

Stan Prokop