We’re Predicting Love At First Sight For This Canadian Business Financing Solution
Information on ' ABL ' asset financing credit facilities in Canada. It's time business owners & mgr's who can't access traditional bank credit lines check out this Canadian business finance financing solution
Business finance solutions are never 100% perfect all the time, and of course making a prediction is a sometimes risky scenario, potentially damaging to your credibility, but we're quite confident in saying that Canadian business owners will recognize non bank asset financing as credit facilities for business finance loans to be the best thing they ever heard of when it comes to financing their business. In fact, we're predicting a potential ' love at first sight ‘! Let's dig in.
Frankly we're probably not exactly going out and making a stretch comment because, hundreds if not thousands of Canadian firms are investigating and utilizing this type of financing. You just may not have heard of it yet.
As the Canadian business economy turns itself around going most of our clients are finally focused on growth again .But how is that growth to be financed , since lending standards and criteria at institutions such as the banks don’t appear to have been liberalized at the same pace that your company hopes to grow !
That’s where our trend prediction comes in. Asset based lending focuses on your assets and growth opportunities - it doesn’t focus on ratios, tangible equity in your company, covenants, cash flow coverage, etc, etc, etc! Are we forgetting the dreaded ' personal guarantee’?
So you are picking up on the opportunity, let’s see how things work. Asset based lenders keep it simple, they lend a very high value against your ongoing assets. What are the typical assets lent against - you can almost guess what they are. They are receivables, inventory, unencumbered equipment and real estate if in fact there's a real estate equation in your company's assets.
The big mystery around asset based lending in Canada, based on conversations with our clients, is that business owners don’t really know or understand who these firms are. So we'll tell you.
They are specialized firms, both Canadian and U.S. based, that focus solely on providing credit facilities and business finance loans with your assets as security. They take the same security as a Canadian chartered bank would, and you manage your facility on a day to day basis, drawing down cash as you need it. Funds are wired into your account as you need them, based on... guess what ... assets! That really is the one key difference that our clients pick up on, that the total focus of this type of assets financing is the collateral itself.
We already know your next question... because we've heard it a hundred times before. Its' how much can we get ‘... followed by 'what does it cost’?
Speaking in general terms your receivables are financed at 90% of their value, and because of the nature and marketability of different types of inventory this type of collateral is margined anywhere from 25-75% . Even work in process can be financed for those firms that have progress billings. Recall we had noted that unencumbered equipment can be drawn against also. Typically an appraised current market or liquidation value is agreed upon with you and the asset financing provider. That saves the sale leaseback approach, which by the way is also a separate viable option.
Costs vary around this type of financing. On occasion it is competitive with bank financing - and giving you twice the liquidity - but more often than not it’s more expensive. You offset those costs by greater access to credit facilities that will grow your business and profits.
Speak to a trusted, credible and experienced Canadian business financing advisor who can walk you through the Canadian landscape of business finance loans in the asset based lending area. You'll quickly find, we think, that our prediction is becoming more true every day, asset based financing is hot! And here to stay.
7 Park Avenue Financial :
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 . Info /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
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
