Business Credit Lines In Canada - Eliminate The Crash Landing Aspects Of Funding Your Company

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What You Need To Know About A Business Line Of Credit

Business credit lines in Canada.  We sometimes think it’s a lot like ' sensible shoes '.  You suddenly realize how important they are! So when it comes to working capital funding in Canada the business owner quickly realizes the importance and value.

 

WHAT TYPE OF CREDIT DOES YOUR COMPANY NEED

 

But is the Business ' LOC’ something that only the Ouija board can discern as to what's the best business credit for your firm? Some firms even use a business credit card as their line of credit/short term financing solution - that's one of the ways to bank your firm, but not the best of course, it just takes some drilling down into what is available and what's best.

 

 

WHAT IS THE MAIN USE OF BUSINESS CREDIT LINES

 

If there is one solid use for business credit lines it’s simply their ability to finance your business as you move along in growth. If you're not self-financing and don't have a huge equity position (coupled with slow-paying clients) the corporate credit line gives you cash flow.

 

ASSED BASED LENDING SOLUTIONS CAN ALSO FINANCE ACQUISITIONS!

 

Don't forget also, as we've been known to preach that solid a/r and inventory balances can even be used to partially finance acquisitions - all the better if the firm you're acquiring has those same type of current assets.

 

2 KEY CHOICES IN A BUSINESS CREDIT LINE - WHICH ONE WORKS BEST FOR YOUR FIRM

 

In Canada, you have 2 Choices for access to business revolving credit. One is the ' go-to ' - our Canadian chartered banks. Interest costs with banks are of course low, and these days they actually couldn't be much lower.  Bank requirements for business credit lines might be viewed as 'strict' by many borrowers.

 

Quite frankly we have never felt they were necessary strict - it's just that we must assume if the bank is lending unlimited amounts at low rates that they can be easily forgiven for asking for companies with good financials, profits, positive cash flows, external collateral, and good personal credit history/credit score of owners, including of course the proverbial ' PG ' - the dreaded personal guarantee.While the business owner may wish to separate their credit profile from the business the banks do not see it that way - they want to know if you manage your personal finances similar to the way you run or will run your company!

 

ASSET BASED CREDIT LINES ARE THE NON BANK SOLUTION FOR WORKING CAPITAL

 

When your firm can't access bank credit for revolving facilities your other choice is in fact a lot more accessible. It's the ' ABL ' - The asset-based business line of credit.  Although 98% of the time asset-based credit facilities are more expensive they are easier to access from an approval perspective.  Facility sizes run on the small size to the 250k range - and large facilities run to the tens of millions of dollars, usually funded by independent commercial finance companies. There is no reason for your firm to be using business credit cards to fund your business on a day to day basis!

 

WHAT IS THE COST OF ASSET BASED CREDIT

 

When it comes to interest rates in asset-based lending is more costly, but your firm has access to more business cash - and of course, you only pay interest on what you are using in the facility. Subject to credit approval both a variable or fixed rate is available in most credit facilities both in traditional banking and alternative finance.

 

DO BANKS OFFER ASSET  BASED CREDIT FACILITIES

 

An interesting thing about ABL credit is that it's offered by the Canadian banks as a part of their business loan offering. but they don't run many TV commercials on that one. We won’t get into why we think that’s the case, but give us a call anytime and we'll tell you why we think that way!

 

ALL ASSET CAN BE FINANCED UNDER AN ABL FACILITY

 

Surely most business owners know they can't really access business credit line facilities if they don’t sell on commercial credit terms.  From the occasional call, we get we're never quite sure they do in fact realize that. However, an interesting point is that ABL lending has subsets of inventory and equipment financing, so you in theory could have an ABL line that simply margins inventory and equipment. A good example might be a retail chain.

 

Our banks are very trusting when it comes to letting you run your business on a credit line. They in some cases only do an annual review of your financials, in certain cases, you might be reporting monthly on some basic business metrics. By the way, you maintain the use of the same business bank account in ABL lending.

 

ENSURING  YOU HAVE PROPER FINANCIALS AND UP TO DATE BUSINESS INFORMATION AND AGINGS

 

Asset-based lenders offering credit lines are more giving but less trusting with small businesses . By that, we mean that they trust, and they verify! So be prepared to do a bit more reporting and expect the odd personal visit here and there!  We meet many business owners who wonder what their bank looks like!  But of course, there are a lot of great bankers in Canada who know their clients business. There is no defined credit limit in asset based financing as the facility grows as your assets and sales grow for your products and services.

CONCLUSION

 

Don't feel that the non-access to funds via a business credit line puts you in 'crash landing' mode. Take advantage of different financing options in order to get approved for the funding you require . Understand your needs, alternatives, and seek out a trusted, credible and experienced Canadian business financing advisor who can assist you with your funding needs.

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

Isn't It Time You Understood Operating Lines Of Credit Alternatives ?

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Is There A Better Way to Access All The Working Capital You Need ? We've Got One !

Operating lines of credit, or Asset based lines of credit , via ' non-bank' lenders, are fast becoming one of the most flexible and popular methods for small, medium, and large customers to finance their operations


. Asset based lending is getting increasing popular with Canadian firms. Terms are more accommodating, and are usually ' non covenant' based . Unpredictable cash flows and seasonality are often other reasons why an asset based line of credit has substantial appeal to business owners and CFO's. These operating loans are totally focused on the assets of the business , most predominately receivables and inventory .


The total focus of the facility is the ' Current asset ' portion of your balance sheet, ie receivables, inventory. In certain cases equipment, real estate, and intangibles can be financed . Credit line facilities are set up based on your borrowing requirements relative to your receivable and inventory assets . Generally receivables under 90 days are financed, as those > 90 days infer uncollectability . Although some focus is placed on over all viability and secondary sources of repayment overall the focus is on the business assets . Rates vary based on size of facility, overall asset quality, and the lender pricing model.


This type of financing provides the firm with significantly more liquidity as the Canadian chartered banks usually lend only 50-75% on current asset categories such as receivables and inventory .


More and more Canadian businesses in the small and medium sized enterprise space are finding it difficult to achieve the operating lines of credit they need from our traditional lenders such as the Canadian chartered banks. These firms are turning to asset based lenders . In our experience many companies are not even aware that such a financing option exists .


Asset based lending places less emphasis on proven track records and financial strength , instead focusing on key business assets such as accounts receivable, inventory, and in some cases equipment and real estate .


True asset based lending should not be confused with ' factoring '. In a factoring environment the company in effect sells their receivables to another firm at a discount . Asset based lending allows the company to bill and collect its own receivables . The loan is paid down and reduced , in a fluctuating manner , as the company collects its invoices .


This type of financing can in effect become a strong lifeline in the current liquidity and credit crisis . Banks traditionally margin receivables in a more conservative manner , and further significant reliance is placed on the customers over all financial health with respect to the current balance sheet and income statements .


The one negative aspect of this type of lending is that it comes with a higher cost . The lender usually has a higher cost of capital and is looking for a significantly higher return than a traditional chartered bank .


In most cases more reporting by the company is often required . That is to say they are more often submitting updated reports related to current receivable and inventory levels . Overall a more rigorous due diligence is in place .


The current asset based lending market in Canada is still quite small , but the industry is clearly growing .


In summary, small and mediums sized businesses should check out asset based lending as an alternative to traditional bank financing . Due to the complexity and relative lack of knowledge around this industry the firm should work with a trusted business financing advisor . Asset based lending can provide unlimited liquidity to firms who are growing - because it focuses on the assets, not the balance sheet and income statement !


Business owners and managers should seek qualified assistance in locating an asset based lender that suits their industry and overall financing requirements re loan size, etc . A study done by the CIBC several years ago indicated that business owners who sought out trusted financing advisors had revenues 76% above those who did not seek a business financing specialist or trusted advisor . Traditionally these types of loans or operating facilities are for firms with under 50 employees .


Asset based lending in Canada is a classic case of a source of capital at the right time, given the current turmoil in the financial and credit markets . Many special situations can be addressed by a constructive asset based line of credit - these include buyouts, cross border projects, and debt restructuring . Many firms that are even in bankruptcy or receivership can avail themselves of a true asset based lending agreement .


Although it is often a more expensive type of financing the case can be made that the asset based financing is much cheaper than the firm issuing additional equity and diluting ownership . Key benefits are improved cash flow, stronger reporting capabilities and the maximization of receivables and inventory financing .






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 area 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.
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

Canadian Commercial Business Bank Financing - What’s Right ( And Wrong ) With Your Banking Strategy

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INFORMATION ON BUSINESS BANKING SOLUTIONS IN CANADA

Canadian business owners and financial managers assess their commercial business banking and financing needs at different times in their company's life.

As in many other facets of business it's a little difficult to develop a solution and fix a problem if you don't understand the fundamental problem.

The need to grow your business and be profitable usually drives a bank financing need. A growing business consumes, and needs more cash, if only for the fact that you’re building up receivables and inventories.

In Canada business operating lines of credit are offered by our chartered banks. These facilities finance your A/R and inventory via specific margin calculations.

Most Canadian firms that have this type of credit facility submit monthly financials and aged receivables, which in turn create a new borrowing base under which you can draw funds. Companies that are having challenges ( i.e. they are in special loans ) or who are in breach of covenants may in fact be required to submit almost daily cash flow and receivable reports .

Although the basic arithmetic around bank financing and commercial banking is simple in reality there are a lot of other factors that might end up affecting your bank facility.

What are some of these? In the continuum of time certain industries fall in and out of favor. No better example of this is offered up than the auto industry. Other factors that you as a business owner might not like that affect your bank financing are issues such as your profits ( or lack thereof!) , they quality of business and outside collateral, and your banks insistence on personal guarantees.

Bank financing works best under the following condition - your company is expanding, but at a reasonable rate. One of the greatest ironies of Canadian business financing is that a hyper growth business, even if its generating profits, is often viewed as financing challenged by a Chartered bank.

Business banking utilizes a very basic concept that is often misunderstood by the Canadian business owner. That's simply the fact that with a commercial bank line of credit you're drawing on assets of your growing business to pay older items. But wow, when your business ceases to grow, or profit your ability to draw cash flow out of your A/R and inventory business line of credit stops. But you still have operating and fixed term payment obligations and it now becomes difficult to pay suppliers.

Companies that have a solid handle on cash flow needs and their historical working capital inflows and outflows are in the best position to manage their firms and access bank financing.

Time and time again we meet with clients that tell a very similar story - business grew, expansion plans were put in place, fixed and operating costs grew, and .. you guessed it .. sales started flattening or going down. The result - a recipe for financial disaster!

The ability to manage your cash flow, or, alternatively, slow down your business is key. Speak to a trusted, credible and experienced Canadian business financing advisor for commercial bank financing that makes sense from where your firm is now.






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

Asset Based Lending - What You Wanted to Know and Were Afraid to Ask!

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Asset Based Lending - Canadian business owners and financial managers continue not to take advantage or investigate one of the most powerful business financing strategies available to Canadian firms today.

While asset based lending, or ABL lending as it is sometimes called is a very common U.S. and European financing tool Canadian business has been slow to catch on and investigate this option.

ABL lending is coming into popularity on a slowly but increasing basis in Canada because it provides your firm with increased liquidity - i.e. more working capital and cash flow! Asset based lending is certainly not the only choice - your firm can be financed by a Canadian Chartered bank line of credit, a single factoring or invoice discounting facility, or possibly by some other mix financing strategies.

When we meet with business owners and talk about why this financing is coming into vogue it is our opinion that this is not a fad, but a financing solution and reality brought about by the 2008 and 2009 liquidity crisis in Canada which affected every aspect of Canadian business financing. New, start up, and even established corporations found it more difficult to get business financing that suited their needs, so, necessity being the mother of invention, Canadian business owners looked to see what was working where! ABL lending in Canada is a huge industry, with many market participants. The Canadian market place, similar to other aspects of Canadian and U.S. business comparison is smaller, more fragmented geographically, and a bit less robust.

We strong recommend that business owner's work with a trusted, experienced and credible advisor in this area to map out an asset based lending solution that works best for your firm, as each industry differs with respect to asset based and capital requirements.

We have all heard the term 'perception versus reality 'and this is a great example of that phrase. By that we mean that many perceptions exist about asset based lending that simply aren't true, or if they were perhaps true once they certainly are not now. As and example your firm might not be willing to entertain asset based financing because 'ABL 'is simply unknown to many of your business peers. The reality is that many of the largest and most successful organization in Canada, some of them public entities utilize ABL solutions.

Asset based lending is clearly an 'alternative financing 'form for your business liquidity. Many customers view the word 'alternative 'as a negative statement, which might infer financial problems etc. ABL should simply not be viewed in such a negative way. If your Canadian firm had an asset based financing facility that gave you more working capital, greater cash flow turnover, less restrictive covenants, and competitive pricing would you view that as a negative? We clearly don't think so!

In summary, investigate asset based lending for your firm as an alternative long term source of working capital and cash flow. Work with a dependable and experienced advisor to structure a facility that meets your working capital needs. You might quickly find that other firms in your industry and your competitors start to realize that your firm differentiates itself in a very positive manner based on your new financing facility - i.e. access to more working capital, better relations with suppliers, ability to finance more inventory and receivables and grow your business. ABL - investigate and inform yourself of the possibilities.


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

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
















Article Source: http://EzineArticles.com/expert/Stan_Prokop/432698


Article Source: http://EzineArticles.com/3951685

What’s Your ABL Finance IQ? Info On Canadian Financing By Asset Backed Lenders !

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Business Asset Based Lines of Credit

Information on ABL finance in Canada . What is this type of asset backed financing and who are the lenders that offer this business line of credit? Asset based lines of credit work!

We're pretty sure that most Canadian business owners consider themselves knowledgeable about their business and options they have in both operations and financing. But seriously, how much do you really know about ABL finance - were you aware that asset based lines of credit is the ' new financing ' paradigm shift in Canada .

So who exactly are these assets backed lenders and why can they take your firm to new heights in growth? There isn’t a day when we don’t read of many ABL ( asset based lending ) transactions happening here in the U.S. - for tens of millions of dollars.

Is that happening in Canada but we just didn’t know it? Well yes and know, in case you haven’t heard we've got a smaller economy, but we can assure readers that ABL Financing is becoming a mainstream solution to Canadian working capital and cash flow needs .

Did you know that in the last decade over 10 Billion dollars of ABL financing was taking place in Canada on an annual basis? Right under your eyes!

But we're realists and we fully realize that many Canadian firms aren’t aware that asset backed lenders exist, let alone are using them. Ours therefore is to inform!!

We do forgive some quasi well informed clients that have a perception that ABL finance was a financing of last resort so to speak. The reality is that ABL does in fact finance many firms that are challenged and can’t obtain traditional bank financing.

But, and its a big but, thousands of firms in Canada utilize asset backed lenders for their operating lines of credit to facilitate growing their companies, expanding into new lines or geographies, acquiring competitor, or simply re financing their company in a manner that works better!

So why is Canadian business migrating to this new form of business financing? Simply because it’s more creative and flexible than the more formulaic approach that our great friends at Canadian chartered banks take.

And what is the cost of this type of financing. More often than not that’s questions number one when we sit down with clients. We'll put on our lawyer hat and say ' it depends ' which isn’t quite the answer we think you were looking for..!

The reality is that ABL financing is based on size of facility, who you are dealing with, your overall asset quality (abl finances receivables, inventory and equipment and real estate) as well as your firms overall credit situation - i.e. good / bad/ugly. (Yes ABL finances ugly.

One or two more things to know to fill up and increase your intelligence quotient (IQ!) on lenders that offer this financing . Simply that many are non bank independent finance companies , some are U.S. based but doing great jobs here, and some are Canadian but smaller in size - but still able to satisfy the majority of Canadian firms .

Well that’s it... Oh! Did we forget something? Oh yes. What is ABL by the way!! Simply a revolving line of credit that lenders against the value of your current and fixed assets on a daily revolving basis. It's a business line of credit!

Looking to fill up more on your ABL IQ? Speak to a trusted, credible and experienced Canadian business financing advisor who will help you determine if this facility is the best thing that ever happened to your business financing needs.


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

New Ways To Achieve Accounts Receivable and Inventory Financing - The Working Capital Finance Loan Facility

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Canadian Inventory Finance Loan Solutions

Information on inventory financing in Canada . What are the best ways to finance inventory and accounts receivable via a loan arrangement that works ?

Successful business owners and financial managers are always looking for a new... no wait, ' better ' way business financing success. No where that is more obvious than in the quest for

accounts receivable and inventory financing

, the actual monetization, if you will, of your balance sheet current asset accounts.



So we have dubbed the solution as W/C solution if you will . What's W/C - Why working capital of course, and a variety of ' flavours of this type of financing loan facility are available to your company. It's just that they are not well known - Until now!



Is it unique, or novel to be looking for way to raise cash flow and working capital out of your receivable and inventory investments? Absolutely not, its just that its become a lot more difficult in the past several years - and we're talking from the start up right up to major corporations - No one has been exempt from the pain challenge of raising working capital, that works!



So what sort of ' cash flow products ' if you will, are available? Many clients are skeptical that it is difficult, or impossible to generate a stand along inventory finance facility. There is some truth in their belief, in that the collateralization of your inventory is in many cases tied to the overall collateral that your company offers up, usually in the form of a blanket General Security Agreement given to your lender, in some cases Canadian chartered banks.



However the hard reality, even harsher since the 2008-2009 recession, is that inventory financing in Canada has been difficult to achieve.



So let’s cover off your options in this regard, one of them might well be the option you are looking for. At the top of our order is of course straightforward bank financing that is margined against your collateral, typically the A/R and inventory we mentioned. That’s probably optimal, but the requirements that come with that facility are significant, they are good financials, owner guarantees, strong operating performance... well you know the drill.



However, did you know that there are independent finance firms that offer a working capital facility along the same lines as that chartered banking arrangement we mentioned. The most valuable facility is the asset based loan, a financing arrangement that in many ways is similar to a bank deal, but significantly margins your inventory financing needs simply because real value and appraisals are made on your inventory. There are numerous situations where clients have been able to double, and even triple their overall working capital loan facility with this type of transaction.



A number of what we call ' second tier ' firms step in for many small and medium size transactions, for facilities that generally range from 250k - to 3 Million dollars. These facilities are more expensive, but again give you very solid borrowing power.



And back to our main theme, is it possible to achieve a pure inventory and contract financing in Canada. This solution is more expensive, but non bank in nature, and provides a method in which you suppliers are paid directly , with your rights in inventory and contracts being assigned to the lender an independent finance firm, somewhat boutique in nature . You are simply leverage the actual inventory prior to it being sold and generated into a true receivable, which of course itself can then be monetized.



So, whats our take away here? Pretty basic, yet giving you hope. Various forms of direct inventory, non bank financing, and contract and purchase order financing do exist in Canada. They are becoming more mainstream everyday. Intrigued? Got questions? Have a unique situation? Speak to a trusted, credible and experienced Canadian business financing advisor real world solutions to an inventory financing loan facility in Canada.

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

Business Line Of Credit & Commercial Loan Called ? Important Info On Special Loans Financing In Canada

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Information on the availability of special loans financing in Canada . If your business line of credit or commercial loan has been called here are your options

Special Loans Solutions For Canadian Firms – A business line of credit alternative

It's not pretty. It’s actually a bit stressful also. We're talking about finding yourself in the position of requiring Special loans financing in Canada when your commercial loan or business line of credit has been called... typically by the bank.



Options .Yes! Strategies and solutions - a double yes! Let's examine some real world solutions around the difficult situation of both being in and emerging from a special loans environment.



Typically the assets that have been used to finance and qualify your for your business operating loan of credit and/ or commercial loan are receivables, inventory, misc working capital accounts, and equipment . These assets have of course been collateralized by the bank under both a demand loan and general security agreement.



When we meet with clients who are facing a special loans financing requirement they typically have been up for review and renewal of their credit facility and have been advised that the facility will not be renewed under the favorable terms they have been receiving. Moreover other severe ramifications emerge, most notably a demand letter to exit the bank by a certain date.



It's critical at this time to assess in a very realistic manner the quality of your assets, as they are the accounts that will allow you to emerge under a satisfactory refinance strategy.



So let’s get back to that asset discussion, because that is what is going to take you successfully out when you are in a position of a commercial loan called scenario.



Canadian chartered banks have typical margining and borrowing for certain asset classes. In the case of receivables its typically 75% while inventory, no matter in what state, rarely reaches a 50% margin eligibility, whether its raw materials, work in process, or even saleable finished goods .



As challenging as it may be to finance inventory in the current Canadian business financing climate it just might be that inventory line on your balance sheet that allows you emerge from a special loans facility. Why, one word - ABL! Well it’s actually an acronym for ' asset based lending ' because it is typically an asset based lending arrangement that will be your exit strategy from a commercial loan that's been called.



In our opinion and experience one Canadian chartered bank will typically only in rare occasions re finance a customer who is in special loans financing need? Why? We think there are many reasons, but the main one being that in general credit analysis and posturing with commercial clients all banks have the same general criteria of commercial loan credit extension.



Therefore if you are out of covenant or off ratio based on your current loan agreement doesn’t it make sense that another similar institution would not waive those covenants and ratio arrangements that your firm has broker. Its just common sense we think.



So, it is the asst based lender that will typically be your solution, and yes savior in some circumstances when you require an exist strategy in special loans financing. Banks will rarely margin receivables and inventory to the extent that an ABL lender will, therefore increasing your borrowing base and in many cases not only providing you with an exit from the bank, but in fact more working capital that you had before.



In summary, it is often only an ABL... asset based lending arrangement that will be your solution to a called commercial loan in Canada . Facility structure and size and pricing vary great, so a great suggestion is to consult an expert, an experienced, trusted and credible Canadian business financing advisor who can work with you to relive the stress and financial ramifications of special loans financing in Canada.





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

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

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