Access More Capital Than Traditional Banks Offer

 

Asset Based Credit Line Explained for Canadian Businesses

 

"Assets are not so much what you own but what you do with what you own." - J. Paul Getty

 

WHAT IS AN  ASSET BASED CREDIT LINE An asset-based credit line is a revolving business financing facility secured primarily by accounts receivable, inventory, equipment, or other eligible assets. Available credit rises and falls according to a lender-approved borrowing base. Canada’s six largest banks account for more than 90% of all chartered bank loans, which helps explain why alternative lending options matter for many businesses. 7 Park Avenue Financial’s published material also notes that smaller asset-based lending facilities often start around 250k, with larger transactions reaching millions. YOU'VE BEEN HERE BEFORE Sales are climbing, orders are bigger, and your bank line of credit hasn't moved in two years. Every time you ask for more room, it's another application, another wait, another round of "let us get back to you." Meanwhile, your receivables and inventory keep growing — but your access to cash doesn't. Let the 7 Park Avenue Financial team show you how an asset-based credit line works differently. Your limit isn't a fixed number someone approved once and forgot about. It's tied directly to what your business owns right now — your receivables, your inventory, sometimes your equipment. As those assets grow, so does what you can draw. No renegotiation meeting required. Why Is an Asset-Based Credit Limit a Formula, Not a Ceiling? An asset-based lending limit is recalculated using agreed advance rates against eligible receivables, inventory and sometimes equipment. Unlike a fixed bank line, available credit can increase as eligible assets grow and decrease as they are collected, sold or become ineligible—making the limit a dynamic formula rather than a fixed ceiling. Three Uncommon Takes on an Asset-Based Credit Line via Business Assets  Availability matters more than rate: Broader collateral eligibility may provide more usable cash than a lower-rate facility with restrictive rules.     Growth can temporarily reduce liquidity: Inventory purchases, unbilled work and extended customer terms consume cash before the borrowing base increases.     Customer quality can outweigh profitability: Strong, diversified receivables improve financing capacity, while customer concentration may restrict availability—even for profitable companies.   THE ASSET BASED FINANCING SOLUTION FOR GROWTH Asset-based lending companies have come a long way, baby! Seriously, though, business funding has dramatically changed in Canada. It was always a challenge, and guess what? Business financing is more challenging than ever. Let's not even talk about pandemics! Many growing companies don't realize that an asset based credit line is the natural, lower-cost evolution from invoice factoring once annual revenues cross $2M to $5M. Three Uncommon Takes on an Asset-Based Credit Line Availability matters more than rate: Broader collateral eligibility may provide more usable cash than a lower-rate facility with restrictive rules. Growth can temporarily reduce liquidity: Inventory purchases, unbilled work and extended customer terms consume cash before the borrowing base increases. Customer quality can outweigh profitability: Strong, diversified receivables improve financing capacity, while customer concentration may restrict availability—even for profitable companies. How Asset-Based Lending Preserves Ownership - Asset-based lending funds growth using existing receivables, inventory or equipment as collateral. This gives owners access to working capital without selling shares, bringing in outside investors or diluting ownership. BREAK FREE FROM CASH FLOW  CONSTRAINTS VIA CURRENT ASSETS / EQUIPMENT FINANCING  You have sales and assets but limited working capital—traditional financing doesn't help! Let the asset-based funding solution unlock the cash flow in your sales and assets. Every Canadian business owner and financial manager for companies of all sizes and industries knows access to flexible financing solutions is challenging when trying to access additional working capital. We've all heard that when the going gets tough, the tough get ... well, you know what we mean. So business financing via asset-based lending was slowly becoming more popular in Canada (it’s huge in the United States) and has become, can we say, 'ultra-popular' in our current time. THE BORROWING BASE  A borrowing base report is a formal financial document submitted by a borrower that calculates the total available credit on an asset-based credit line at any given time. It applies specific advance rates—typically 75% to 85% for eligible accounts receivable and 50% for eligible inventory—to your current ledger balance. Asset Based Lending Companies: A Newer and Innovative Type of Financing As new as it is in Canada, asset-based lending certainly can’t be called ‘innovative ’- it simply focuses on, guess what? ‘Your Company’s Sales &  Assets’! It is essentially an excellent financing solution by asset-based lenders for companies that are normal, distressed, leveraged, or experiencing high growth. By leveraging a company's assets—like accounts receivable, inventory, and machinery—businesses can access flexible funding to optimize cash flow and support growth initiatives. Asset-based lending works! The problem with asset-based lending or asset-based loans is simply that it is a bit of a catch-all for being used or explained to business owners. Government invoice assignment restrictions Some government contracts limit or require consent before receivables can be assigned to an asset-based lender. This may delay funding or make those invoices ineligible collateral. CRA deemed-trust and priority claims: Unremitted payroll deductions and certain tax amounts can take priority over a lender’s security. Asset-based lenders may reduce availability, establish reserves or require CRA arrears to be cleared before funding. ABL provides companies with access to additional working capital, which can be used to fund growth initiatives, manage cash flow, and improve operational efficiency. In an asset-based lending arrangement, the lender provides a loan based on the value of the company’s assets, such as accounts receivable, inventory, machinery, and equipment. A lien on the assets typically secures the loan, and the lender has the right to seize the assets if the borrower defaults. ABL is a flexible financing option that can be used for various purposes, including working capital, expansion, and refinancing. It is often used by companies that are rapidly growing, need additional funds during seasonal periods, or are undercapitalized. DID YOU KNOW? Asset-based lending market grew 10.8% in 2023 78% of businesses report improved cash flow with ABL Average facility size increased 15% year-over-year 92% client retention rate in the industry 60% faster approval than traditional loans TYPES OF ASSET-BASED LOANS VIA THE ASSET BASED LENDER Revolving line of credit based on asset size and quality Accounts receivable discounting/factoring line from factoring companies Inventory and trade financing Purchase orders financing Real estate bridge loans Additionally, asset-based lending can include revolving lines of credit and term loans tailored to meet specific business needs. BENEFITS OF ASSET-BASED LOANS The benefits of ABL loans include improving overall liquidity and the ability to manage through several different objectives, such as restructuring and exiting special loan workouts. Asset loans can be deployed more quickly than traditional bank loans and are competitively priced to asset quality. Asset-based financing solutions offer flexible funding options tailored to businesses' specific needs, providing faster access to capital. HOW DOES ASSET-BASED LENDING WORK? The reality is that this type of financing can be customized to every industry for companies of all sizes, from an a/r financing factoring company solution to improve cash flow for small companies to larger recapitalizations and restructuring. Asset-based financing leverages a company's physical and financial assets to secure loans, providing a flexible funding solution. On substantial transactions, an investment's net orderly liquidation value will be pre-determined by the asset-based lender via field exams, etc. The Process and Mechanics The process of obtaining an asset-based loan typically involves the following steps: Application: The company applies for an asset-based loan by providing financial statements, business plans, and other relevant information. Asset valuation: The lender values the company’s assets, such as accounts receivable, inventory, machinery, and equipment. Loan agreement: The lender and borrower agree on the loan terms, including the interest rate, repayment terms, and collateral requirements. Funding: The lender provides the borrower with loan funds, which can be used for various purposes, including working capital, expansion, and refinancing. Ongoing monitoring: The lender monitors the borrower’s financial performance and asset values to ensure that the loan is being repaid according to the terms of the agreement. Asset-based lending is a flexible and effective financing option that can help companies access additional working capital and achieve their business goals. QUALIFICATION CRITERIA However, we typically tell clients that the facility works best on transactions of 250k+ and ranging into the millions and tens of millions of dollars for mid-sized and larger companies. Physical assets such as machinery, equipment, and real estate are commonly used as collateral in asset-based lending. Asset-based lending companies can help you manage and grow your business, focusing on ‘grow.’ The biggest misunderstanding about asset-based lending is that it is typically not done through a bank; it is managed through private, independent finance firms that are very experienced in asset valuation and funding. Their experience allows them to look at your financeable assets and regularly maximize what is known as an ongoing ‘borrowing base’ for those assets. Typically, we talk about receivables, inventory, equipment, and, as we noted, in some cases, purchase orders and contracts at their face value for more flexibility around larger orders, etc. The benefits of working with asset-based lending companies are that it is a fast, innovative method of financing your company that is not focused on the requirements that a Canadian chartered bank would typically impose. We can honestly tell clients we have never seen an asset-based line of credit not deliver on significantly more financing than the customer would have ever achieved with a bank revolver. 3 Uncommon Takes On '  ABL ' Asset-based Lending companies often provide better market intelligence than banks due to their industry-specific focus. These lenders can actually help improve operational efficiency through their due diligence process. Some Asset Based Lending Companies offer inventory management expertise as a value-added service. Case Study #1 From The 7 Park Avenue Financial Client Files Company ABC Company, an Ontario industrial equipment distributor with approximately $12 million in annual sales. Challenge Seasonal inventory purchases exhausted the company’s $800,000 bank operating line several months before its main selling period. The owners were concerned about turning away confirmed orders despite having valuable inventory and strong customer receivables. Solution: How We Got There An asset based credit line was structured around the company’s inventory and receivables: $2.5 million revolving facility 55% advance against eligible inventory 85% advance against eligible receivables Monthly borrowing-base reporting Availability that shifted from inventory to receivables as products were sold Results Seasonal purchases were funded on time. The company accepted additional national orders. Borrowing capacity increased as receivables grew. The owners avoided selling equity to solve a temporary working-capital gap. CASE STUDY  # 2 Case Study: Auto Parts Manufacturer A growing supply contract increased ABC Company’s receivables and inventory beyond its fixed bank line. The company switched to an asset-based credit line that recalculated monthly against eligible receivables and finished goods. The borrowing base expanded with contract volume and adjusted during seasonal declines, providing working capital based on current assets without requiring repeated credit-limit approvals. KEY TAKEAWAYS Borrowing Base Understanding - Knowing how lenders value different asset classes determines your available credit. Collateral Management - Maintaining accurate inventory records ensures maximum borrowing potential. Documentation Requirements - Proper financial reporting unlocks faster funding access. Asset Valuation Methods - Understanding how assets are valued helps predict loan amounts. Monitoring Systems - Implementing strong tracking systems streamlines the lending process. Measure Asset-Based Lending by the Full Cash-Conversion Cycle Evaluate an ABL facility by comparing its total cost with the gross margin protected through filled orders, fewer stockouts, supplier discounts and uninterrupted production. A well-structured facility supports inventory before it is sold, then shifts its collateral support to the resulting receivable until the customer pays.   CONCLUSION - THE BUSINESS LOAN CHALLENGE IN CANADA So, what’s the bottom line of asset-based lending facilities? Simply that by investigating this business funding method, you can potentially enhance your overall business financing for growth and success. Call 7 Park Avenue Financial, a trusted, credible, and experienced business financing advisor who can put you on track to better business financing by financing the balance sheet and your sales revenues—let's get started on a good thing!   7 PARK AVENUE FINANCIAL ORIGINATES ASSET BASED CREDIT LINES FAQ: FREQUENTLY ASKED QUESTIONS How does asset-based lending work? Asset-based lenders establish a borrowing base to determine the maximum borrowing value on key collateral such as accounts receivable, inventory and fixed assets. Companies can draw down on funds as needed based on the borrowing base that is created monthly. Funds repaid to the company via a.r collections reduce the facility’s balance, which revolves continuously. If the loan is structured as a term loan, the company makes regular pre-agreed-upon installments. How does asset-based lending improve cash flow management? Converts existing assets into immediate working capital Provides predictable funding based on asset values Offers flexible draw-down options Scales with business growth Reduces reliance on vendor payment terms What makes asset-based lending different from traditional bank loans? Focus on asset value rather than credit history More flexible covenants Faster approval process Higher advance rates Greater flexibility in use of funds Can seasonal businesses benefit from asset-based lending? Accommodates cyclical revenue patterns Funding follows inventory build-ups Supports pre-season manufacturing Manages peak period requirements Bridges slow periods effectively How quickly can businesses access asset-based lending? Initial approval within 2-3 weeks  with cash into business account as drawn down Same-day funding once ABL support program  established Immediate response to collateral changes Real-time borrowing base updates on finance options Quick response to emergency needs What types of assets qualify for this financing? Accounts receivable (typically 80-85% advance) Inventory (typically 50-65% advance) Equipment (typically 70-80% of FMV) Real estate (up to 75% LTV) Purchase orders (case-by-case basis) How does the application process work? Initial consultation and asset review Financial document submission Asset evaluation and site visit Term sheet presentation Final documentation and funding What ongoing requirements will I have? Monthly borrowing base certificates Regular asset reporting Annual financial statements Periodic collateral audits Inventory counts as required Can I still work with my bank? Most ABL arrangements allow traditional banking relationships Operating accounts can remain separate Multiple funding sources often beneficial Complementary to existing credit facilities Enhanced overall banking relationships What happens if my asset values change? Borrowing base adjusts automatically Regular revaluation processes Communication channels stay open Flexible solutions available Proactive planning encouraged What factors determine asset-based lending costs? Asset quality and type Borrowing base size and utilization Monitoring and reporting requirements Industry sector risk factors Overall facility structure How does asset-based lending affect business operations? Enhanced inventory management Improved receivables tracking Better financial reporting Strengthened internal controls More disciplined cash management What makes a successful asset-based lending relationship? Clear communication channels Accurate reporting systems Strong collateral management Professional financial practices Proactive problem-solving approach Statistics The Canadian ABL market represents approximately $75–100 billion in active credit lines, within a North American total exceeding $800 billion in commitments. uCapital Average ABL advance rates run 75–85% of eligible invoice value on receivables, and 50–65% on inventory depending on industry and turnover velocity. uCapital ABL facilities typically close in 21–28 days, versus 60–90 days for conventional commercial bank loans. uCapital Businesses using asset based lending typically access 40–60% more working capital than they could secure through a traditional bank facility against the same collateral. uCapital Canadian lenders generally offer advance rates of 70–85% against elig Citations Bank of Canada. “Non-Financial Businesses.” Financial Stability Report—2026. Ottawa: Bank of Canada, 2026. https://www.bankofcanada.ca/. Bank of Canada. “Senior Loan Officer Survey.” Accessed July 25, 2026. https://www.bankofcanada.ca/. Innovation, Science and Economic Development Canada. “Summary of the Survey on Financing and Growth of Small and Medium Enterprises, 2023.” May 15, 2025. https://ised-isde.canada.ca/. Innovation, Science and Economic Development Canada. “Small Business Credit Condition Trends, 2015–2025.” 2026. https://ised-isde.canada.ca/. Office of the Superintendent of Financial Institutions. “Capital Adequacy Requirements Guideline, 2026.” Ottawa: Government of Canada, 2025. https://www.osfi-bsif.gc.ca/. ' Canadian Business Financing With The Intelligent Use Of Experience '  STAN PROKOP 7 Park Avenue Financial/Copyright/2026 CANADIAN BUSINESS FINANCING  Published by 7 Park Avenue Financial - Contact us to discuss funding options for your business. ABOUT THE AUTHOR: Stan Prokop is the founder of 7 Park Avenue Financial and a recognized expert on Canadian Business Financing. Since 2004 Stan has helped hundreds of small, medium and large organizations achieve the financing they need to survive and grow. He has decades of credit and lending experience working for firms such as Hewlett Packard / Cable & Wireless / Ashland Oil

 

 

Asset Based Credit Line : A Working Capital Alternative

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


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

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



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

Why Do Companies Consider ABL Finance And The Asset Based Loan

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

Non-bank asset based revolving credit facilities

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

Structuring a merger or acquisition or a management buyout

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

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

Turnaround and restructuring facilities/refinancing of existing debt

Financing The Purchase Of A Business

How Is Asset Based Lending Different From Bank Borrowing?

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

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

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




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

HOW IS THE ASSET BASED CREDIT LINE LIMIT CALCULATED?

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

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



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

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

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



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



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



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



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



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



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

What Does Asset Based Lending Cost? Factors To Consider

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

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



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






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

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


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

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

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



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




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

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com

Click Here For 7 PARK AVENUE FINANCIAL website !



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



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

' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR

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

business financing consultant

.

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


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


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







Stan Prokop
7 Park Avenue Financial/Copyright/2020

Pain To Power : An ABL Asset Finance Company Can Reverse Your Canadian Business Line Of Credit Challenges

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Information on the Asset Based Business Line Of Credit Solution In Canada - It's non bank and it ... works!

Can an ABL asset based finance company, via a new business line of credit make your transition from financing pain to financing power? We think there is a strong case for that, and here's why.

Thousands of companies in Canada find themselves constantly challenge when it comes to ensuring their company has the right financing in place to both survive and grow .

For the small and medium sized business owners and financial managers in Canada there are some serious issues on the table: the jobs of employees, the value of the asset base in your company, and the ability to at a certain point in time to transition that business to a family member or third party.

Management therefore needs to realize that any turnaround in the business often will revolve around their own commitment to explore new types of financing that will in effect turn that ' pain’ into ' power'.

Financial challenges and problems require that they be identified early. There are a number of tell tale signs of trouble in your firm that often might be clear, or not so obvious. They include pressure from your bank on your operating line, financial losses that will ultimately link back to cash flow problems, pressure from other competitors in your sales environment, and sometimes issues you could never control such as new market forces.

The business line of credit, whether it's via a bank or an ABL asset finance company is often a key driver in your transition from pain to power. If your firm currently has a Canadian chartered bank line of credit you are subject to certain restrictions.

This facility is ultra dependent on a large number of key factors such as profit, operating performance which is measure via ratios and covenants, and your availability to provide collateral inside and outside the business. And personal guarantees as most Canadian businesses know are key to a long term bank relationship in many instances,

Canadian businesses are often in the position of having their business lines of credit are somewhat of a scapegoat for short term losses and a trend to unprofitability.

So if your firm finds itself in a downward or negative spiral what’s the solution? As we said a solid one might just well be a non bank business line of credit from a commercial ABL asset finance company.

But why can such a facility save your company, turn it around, and ensure that pain to power transition. We would offer up that it’s simply a case of the ABL firm taking a sign cant amount of more risk with your business. That risk though is somewhat measured from their point of view, as they focus predominantly on your overall asset base.

So you new ABL term sheet takes all your receivable, inventory, equipment, and in some cases real estate and rolls it up into one new large revolving credit facility It goes without saying that your firm must have good records and controls, and reporting capability, but at the end of the day the ' power ‘as opposed to the ' pain’ is now in sight.

When the business owner considers that ABL typically provides 85-90% lending against A/R, 30-70% on inventory, and then throws in an equipment component also... well... you get the drill - your firm has just reached a higher level of liquidity.

This new facility will, as time goes on, repair your company. Pressure from trade creditors will subside, you can take advantage of new growth opportunities, and sales can be back on track to grow.

You achieve this new higher level of borrowing by being able to supply regular on going info on your assets, and in most cases you'll be subject to a quarterly, semi annual or annual visit from your ABL lender.

If a turnaround in your financing fortunes is required you just may have discovered it. Consider speaking to a credible, experienced and trusted Canadian business financing advisor on you can successfully reverse your business challenges.








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.



Stan Prokop

How To Decide if Financing Receivables Is a Solution for Your Working Capital Funding

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Know When It’s Time To Look At A New Way of Financing Cash Flow Needs

Information on working capital funding solutions.Financing receivables and other current assets is a solid way to ensure your business can meet it's cash flow needs

We call it the R R factor. And we are not talking about rest and recuperation! The R R factor will give you a sense it its time to consider whether a newer, more popular method of financing receivables is your working capital funding solution .

We're going to provide you with a quick but easy and powerful tool to determine if your cash flow challenges need to be addressed in a more positive fashion. It's the receivables to revenue ratio - hence the term R R . First, take you year end balance of A/R, which is of course your uncollected sales revenue at that point in time. Then determine how many weeks of sales that represents. Calculate this ratio historically and you have a method of determining whether your cash flow and working capital requirements are changing.

So how does business address the challenge of working capital funding when it’s as challenging as ever to borrow. Many companies are assessing factoring, or financing receivables. It’s a simple process that is only made complex and difficult when you don’t understand the pricing, how it works on a daily basis, or the important need to align yourself with a partner that offers and matches your business financing needs.

The process is actually quite simple --- On a daily, weekly, or monthly basis - it’s your choice, you sell your receivables. So what happens next? Simply that the day you generate that sale you have the same day cash for those receivables. Therefore the Canadian business owner and financial manager have created a true ATM machine out of the investment the company has in accounts receivable. Readers will also begin to immediately appreciate that they have just stumbled upon the ultimate cash flow solution, because every time they sale they have instant cash. So whats the catch?

We believe there are 2 catches, and when the business owner understands and addresses them the receivable financing solution becomes much more clear and common sense.

The first ' catch ' is the cost. The typical Canadian cost of financing a receivable is 1.5- 2% / month. The firms offering the service do not call that an interest rate, they call it a discount fee. You sold something, for cash, i.e. you’re receivable, and it was discounted by 1 or 2% for that privilege. Is that expensive. Absolutely ... maybe! That is because most business owners don’t pick up on the fact that they are in effect carrying those receivables already, which is a cost that is often not intuitively calculated by the business owner. Secondly, the term ' opportunity cost ' comes in to play, because the reality is that if your firm can generate a good return on investment you can use the cash flow from your receivable financing to generate higher profits .

So why isn’t factoring or receivable financing the choice of every Canadian business for working capital funding? The reality is, and this is a surprise to many, that the largest firms in Canada utilize this financing. They simply have a stronger ability, due to their financial strength, to determine how the facility works on a daily basis, the best type of facility we recommend to customers is one in which your firm is able to bill and collect its own receivables, which is not offered by 99% of firms in the Canadian marketplace. Search out that 1% solution is what we tell our clients - at that point you will have a competitive financing vehicle for working capital and virtually unlimited cash flow growth.

Speak to a trusted and credible business financing advisor who can assist you to put together a solid working capital funding solution.

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



Click here for 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 .

' 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