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HOW DOES ASSET BASED LENDING WORK ? LIKE THIS !
Operating lines of credit , as in ' access to ' have been a challenge for many Canadian business owners and financial managers. So is there an alternative to consider ? The answer is a resounding ' yes ' , and its called the asset based loan/line of credit. We can prove it because it's working for thousands of firms in Canada.
It is somewhat ironic that many business folks have not even heard of this type of facility , i.e. what it is, and more importantly, how it works.
There is some confusion sometimes around the fact that there are a couple different versions of asset based credit lines, also known as ' ABL 's '. Even some of the name changes on this facility are confusing, such as :
Working capital facility
ABL revolver
Asset Based Lending
Etc?
In pure terms this type of credit line is simply an operating line based on underlying collateral. The most common assets for this ' collateral' are accounts receivable and inventory. But also included can be equipment and real estate. Your ability to margin all these assets turns into true liquidity - bottom line more cash flow!
Chartered banks also offer lines of credit - no secret there . The difference is that asset based lenders use higher margins on your assets and credit requirements are much less restrictive . Most commercial asset based lenders have a lot of expertise in different industries . At the same time they really want to understand your business and require a consistent level of reporting.
The reporting we refer to above is pretty standard stuff, ie receivable and payables lists, sales forecasts, etc . ABL lenders are very much less focused on those ' ratios' that our friends in banking obsess about!
Don't think of asset based credit as ' term loans' or debt . You are simply cash flowing your assets that you already have , in a bigger way!
Bottom line? Check out non bank business credit lines if you have working capital needs that traditional lenders can't satisfy. Seek out and speak to a
trusted, credible and experienced Canadian business financing advisor .
7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
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 .
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.
