WELCOME !

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

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

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



Showing posts with label asset based funding. Show all posts
Showing posts with label asset based funding. Show all posts

Thursday, April 11, 2013

Business Credit Lines . What Went Wrong And Why Asset Based Funding Can Fix That



The Real Reason Asset Based Funding Works Better


OVERVIEW – Information on why asset based funding is the new alternative when business credit lines don’t work for Canadian business financing needs




Business credit lines in Canada . What went wrong ? When we talk to Canadian business owners and financial managers it's simply a case often of ' not enough ‘, or not at all. They have challenges obtaining traditional bank financing for their operating needs. Is there a solution? One solution is in fact asset based funding for credit line need. Let's dig in and examine why!


The good news about asset based lending is that its pretty well for everyone - from start up to it's current usage by some of the largest companies in Canada . No industry cannot be disqualified by an asset based lending solution, if in fact you have the one requirement - assets!

Asset based funding for credit lines works because it uses somewhat of a... shall we say ' buffet ' approach. By that we mean that it takes a look at all of your assets and picks and chooses to combine into one borrowing facility that you draw down on an ongoing basis. It's that pooling concept that makes ' ABL ' (asset based lending') work. That pool of assets by the way includes receivables, equipment, inventory, even your real estate if your company owns it. Imagine using a portion of your companies building and premises as part of your day to day business line of credit. That's what ABL is/ does.

As a business you have in fact ' unlocked' your borrowing power, and when you combine that with the flexibility of bundling them together into one borrowing facility you in fact have... you guess it, cash flow power!

One aspect of ABL that is sometimes misunderstood, although we have hinted at it already above, is that it has various subsets. So yes, you can just have an ABL A/R facility, in industries where inventory is heavy on the balance sheet - for example a retailer, just the inventory becomes the borrowing power. Ditto for equipment and real estate.

Asst based funding almost always works better if only for the fact that it increases borrowing power. We've seen clients with no borrowing facilities finding themselves in a position of finally have a business credit line.

A recent example - take the case of a manufacturer who re organized their business completely due to a law suit by a major client. That re organization found them with zero borrowing power. Enter the ABL. By putting together a facility that includes receivables, inventory and unencumbered equipment a new facility was created for 500k. So 500k from zero - that’s new borrowing power.

Costs of finance ABL vary significantly. While it almost always is more expensive the business owner / manager has the ability to generate cash flow, grow their business in an almost unlimited fashion, etc. We do hasten to add though that in some cases on larger transactions Asset based funding is in fact cheaper than traditional chartered bank financing. But for the SME owner expect more borrowing power at higher costs.

If you want to discover why business credit line via asset based funding work better seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your credit facility needs .. but better liquidity - that's the trade off.




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 IS .. BUSINESS CREDIT LINES!






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