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

Don’t Let An Ouija Board Decide Your Business Financing Alternatives


OVERVIEW – Information on business credit lines in Canada. When it comes to funding your revolving borrowing facilities what choices are available and what works best – for your firm?


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.

But is the Business ' LOC’ something that only the Ouija board can discern as to what's best for your firm? Not really of course, it just takes some drilling down into what is available and what's best.

If there is one solid use for biz 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.

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.

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 unnecessarily strict - its 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 of owners, including of course the proverbial ' PG ' - the dreaded personal guarantee.

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.

An interesting thing about ABL credit is that it's offered by the Canadian banks, 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!

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.

Asset based lenders offering credit lines are more giving, but less trusting. 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.

Don't feel that accessing a business credit line puts you in ' crash landing' mode.

Understand your needs, alternatives, and seek out a trusted, credible and experienced Canadian business financing advisor who can assist you with your funding needs.



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 = Business Credit Line Expertise






CONTACT:
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






















Stan Prokop

Commercial Financing For Business Credit Lines . Is ABL A Revolutionary Way To View Operating Finance Needs

Looking To Get The Upper Hand When It Comes to A Business Credit Line?

Information on commercial financing in Canada . ABL borrowing is a viable alternative to bank business credit lines for firms that can’t always access the financing they need


Commercial financing for business credit lines. Is there a revolutionary new way to look at the way businesses in Canada can access operating credit? We know there is, and it’s the alternative to the good old stand by of bank commercial borrowing. It's called ' ABL ‘. Let's dig in.

ABL’s are asset based lines of credit that are typically ' non bank ' in nature. Some of the very reasons your firm might not be able to obtain bank financing are the same reasons you're the perfect candidate for a business credit line via ABL.

Non bank commercial entities offer asset based loans that operate in a very similar manner to bank revolving credit facilities. All these facilities monetize your current assets -typically A/R and inventory. The asset based credit line takes it two steps further:



1. It often includes fixed assets which increase your borrowing base, but the facility revolves in the same manner

2. Borrowing margins are significantly higher - Receivables typically financed at 90% - Inventory in the 30-70% range depending on quality and mix of the asset in question

Business owners who are growing or have their debt to equity and cash flow ratios temporarily out of whack are also very appropriate candidates for this method of financing. Dont get us wrong though - you still have to have qualified commercial receivables to decent clients, as well as inventory that have the appropriate amount of turnovers and can be liquidated by the asset based lender if needed. Hopefully that is never going to be the case though!

Asset based financing started in the United States, and is also prevalent in Europe. It continues to gain a strong foot hold in Canada, but clearly there are fewer players involved. This often makes it challenging for the Canadian business owner and manager to access the right partner . Some expertise in picking the right partner is highly recommended.

Clients often question us on minimum and maximums size of transactions for business credit lines that are non bank in nature. Typically $ 250,000 is the minimum, and all things being equal there is no upper borrowing limit if your firm has the assets to qualify.

Many businesses are pressured either via banks or other lenders or their equity investors to put additional equity into the company. ABL business credit allows you to eliminate the ' equity ' component of your overall financing strategy. As a result it’s good for larger retailers, tech firms, manufacturers, distributors, almost ever industry is a candidate.

Is it all ' apple pie and motherhood ' when it comes to ABL credit? Not all the time, as this method of financing is typically (not always) more expensive and you have to be prepared to report a bit more regularly on the assets being financed. That’s because they are the sole collateral for your borrowing! Debt to equity and cash flow coverage don't really play a role in this type of borrowing.

The average business owner, financial manager, CFO rarely feels they have the ‘upper hand ‘ when negotiating day to day credit facilities. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can help you select between bank and ABL facilities in a manner that suits your company best.


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 7 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
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

7 Park Avenue Financial = Commercial Financing & Business Credit Line Expertise













Stan Prokop

ABL Financing Gospel. The Difference In Business Credit Lines

Somebody Has Fixed Business Credit Lines And It’s Not Who You Think!


OVERVIEW – .Information on an alternative to business credit lines in Canada . ABL financing is the new paradigm shift in revolving credit facilities for Canadian business



Business credit lines in Canada. Unbeknownst to many Canadian business owners and financial managers there is a lot going on in revolving credit facilities financing. And we think you'll see that these credit lines have been fixed, but not by whom you necessarily think! Let's dig in!

Businesses in Canada utilized revolving credit facilities to attend to the ups and downs of collecting their sales receivables and managing cash outflows via payables, etc. This type of loan financing - its not a loan per se ... allows owners and managers to optimize working capital and cash flow... when they need it .

And in a perfect world you clearly would like to be in control of your destiny, i.e. service and collect your own sales without any interference by a third party such as in a traditional factoring finance solution.

ABL financing is the acronym for the asset based credit line. It provides the same borrowing mechanism as a Canadian chartered bank facility, with the only difference being a great one - more liquidity and access to capital! While traditional bank lines allow you to borrow 75% against your A/R the ABL solution typically comes in at 90%. So you're up 15% already - congratulations on that!

And then comes inventory. Whether inventories are in raw materials, work in process or finished goods they have traditionally presented a borrowing challenge to banks. The asset based line of credit focuses on business assets - your inventory is an asset, and as a result it's not uncommon to have borrowing power anywhere from 25-75% of your inventory component on the balance sheet.

While we have in fact focused on inventory as one of most firms current assets the reality is that many service and technology type firms in fact have no inventory on their balance sheets. In that case ABL financing focuses solely on the borrowing power of receivables.

Qualifying is of course the $ 50,000.00 question when it comes to accessing the capital you need to operate and grow. While approval for Asset based lending facilities can hardly be described as ' loose' the fact is that key measurements that the banks use to approve your firm aren't really on the table when it comes to ABL . While the bank focuses on profits, cash flow, and ratio covenants Asset based financing solutions focus on three other components - assets, assets, and, you guessed it assets!

Typically ABL financing works best when it comes to firms that require growth financing. The general rule of thumb is that your facilities grow as you grow - In the banking environment typical faculties are approved annually and you are then locked into a business credit limit. We've always found it interesting that a lot of bank credit analysis focuses on the past and not the future, but that's a discussion for another day!

Nirvana is pretty hard to find when it comes to a Canadian business financing solution. So when you do check out an ABL solution for business credit lines remember that there will be costs to appraise/assess your assets and that you'll be doing a bit more monthly reporting when it comes to aged a/r lists, inventory summaries, and a/p schedules.

But the bottom line? Simply that the ' gospel ' of ABL has created a powerful new tool when it come to daily business borrowing for working capital and cash flow needs .

Seek out and speak to a trusted,, credible and experienced Canadian business financing advisor who can assist you in understanding why there’s a new paradigm shift the the biz credit line in Canada .






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 = BUSINESS CREDIT LINES





CONTACT:
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



















Stan Prokop

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













Stan Prokop

Unlocking Business Credit Lines Secrets. Why ABL Just Might Be TheBest New Offering From The Commercial Lender

Can You Name The New Trendsetter In Business Financing?



OVERVIEW – .Information on business credit lines in Canada. The asset based non bank line of credit, the ‘ ABL’ , is the new trend in finance from your Commercial Lender





Business Credit Lines Via ABL . It's our feeling that this business financing solution via a commercial lender is the newest trendsetter in commercial finance in Canada. We've checked with legal and we're most comfortable in saying that. Why? Let's dig in.

We're told that a ' trendsetter ' is simply a person or thing that establishes a new trend. And that new trend, as far as we are concerned is the ' ABL ' (Asset based line of credit for business).

Thousands of business in North America, Canada included by the way! , are utilizing this unique business financing service to grow their company. ABL , most people agree originated in the U.S. and has gradually over the years moved to Canada and other European countries.

And what is ABL? It's simply speaking a method of borrowing against all your business assets under one operating line of credit formula. Those assets are receivables, inventory, equipment and real estate if that latter is applicable.

The true beauty asset based business credit lines is that they work in a large variety of circumstances. Those include:

- Fast growth scenarios
- Management buyouts
- Acquisitions
- Turnaround refinancing

Unlike some methods of financing it’s also perfectly suited to both public and private companies

It also works well in both good and bad times - good time’s typically meaning fast growth situations where maximum borrowing power is needed, and those not so good times when business credit is hard to achieve.

Why is this new form of business credit lines gaining more traction everyday? Top experts in the field say that it’s because of the flexibility that’s available to business owners and their financial managers. More and more companies are using it, so it’s all about market acceptance we suppose. While Canadian chartered banks provide tremendous amounts of liquidity to Canadian business it definitely can’t provide it all, primarily due to lending restrictions.



How much new working capital/cash flow can be obtained from a commercial ABL lender? We can comfortably say that it often is anywhere from 30-100%, as we have seen those examples all the time. Take the simple fact that ABL typically offers 90% A/R margining versus the banks 75%. Also inventory and equipment are then bundled into the equation; create a new surge in your borrowing power. It’s simply a case of quickly reaching your maximum borrowing power.

One key point that we make to clients is that the actual approval criteria when you compare bank credit lines with ABL are significantly different. While the chartered banks, by virtue of their mandate rely heavily on the quality of your profits, strong balance sheets and ratio and covenants that define those the ABL lender focuses on one thing - ASSETS!

Business owners and their finance managers that plan for the future pay close attention to their future borrowing power. When that ability to borrow what they need to survive and grow is restricted... well you can take it from there!

We point out to clients that there are some unique ' sub sets' of ABL business credit lines. They might just be for A/R, or just inventory (in the case of a retailer), or combinations of those that might include equipment, tax credits, etc. That same day / all day access to credit capacity is what differentiates ABL as the new ' trendsetter' in business finance.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with the needs you require from a commercial lender.






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 – ABL 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
















Stan Prokop