Asset based Lines of Credit – All the business financing you need!

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Asset Based Business Credit Is Your Go To Solution For Business Credit & Cash Flow

Information on how an asset based line of credit works - This non bank finance solutions cash flows your receivables, inventory and unencumbered equipment

Canadian business owners and financial managers place a great importance on their ability to achieve and maintain operating lines of credit.
Traditionally in Canada the bank line of credit is also called an ' operating loan ' . It is short term in nature, it actually revolves day to day, and so may finance people also call the operating facility a ‘revolver’

So what does that facility provide the Canadian firm with? It is simply a financing facility under which the bank agrees, in advance, to lend a maximum amount of money - typically against receivables and inventory

. The facility is short term in nature, not a term loan, so it does not include equipment or real estate, which is financed under other conditions.

In bank lines of credit certain conditions have to be met by your firm, and you are generally paying interest only o the amount outstanding on a daily basis. Revolving lines of credit or operating lines work best when they go up and down. Typically customers that are always at the top of their credit line are in fact candidate for other financing such as equity or cash flow term loans.
Most Canadian business owners know that the bank focuses more on receivables than inventory. Because inventory cannot easily be converted into cash by a bank, (if it had to) you will typically get a much lower advance rate or margin rate on inventory.
So, what happens when this traditional type of financing doesn’t work for your firm? You will know it is not working when some or all of the following seem to occur -

- You are consistently maxed out on the operating line

- Collections are slow, which further exacerbates the line revolving to your and the banks satisfaction

- You are worried that you do not consistently have enough cash flow and working capital to take on new orders or contracts.

Is there a solution. Absolutely - a new breed of line of credit financing is gradually taking hold in Canada - It is called ABL, or asset based lines of credit. The total focus of these facilities are to maximize the liquidity of your assets to a much greater extent - and when we say all assets we mean inventory, receivables, equipment , potentially real estate, and new contracts and purchase orders . That’s true asset based financing!

One of our customers had a 100,000.00 line of credit with a Canadian chartered bank that grew into a 2 Million dollar asset based financing arrangement.

The asset based lending industry is robust in Europe and the U.S. It is slowly taking traction in Canada. Although one or two of the banks offer these facilities, the majority of this type of financing is independent of the banks.

Due to the somewhat early and fragmented nature of this financing in Canada your firm is strongly encouraged to seek the experience, advice, and credibility that comes with talking to a business advisor in this area of Canadian financing.

Asset based lines of credit - they are newer to Canada, they work, and you should investigate the possibilities to maximize your cash flow and working capital 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

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 Line Of Credit : A Working Capital Alternative

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Time For Some Fancy Footwork Around Your Business Financing & Line Of Credit Needs?

OVERVIEW – Information on how an asset based line of credit is a formula for higher receivables and inventory financing in Canada and how these lending facilities offer a true working capital alternative








An asset based line of credit is an emerging financial alternative in Canada for companies of all size who wish to maximize working capital in terms of their growth needs.

More often than not asset based lending is associated with companies who are unable to arrange or qualify for what most business owner’s term as a bank operating line of credit.

Traditional bank financing places a heavy emphasis on the overall financial position of your income statement and balance sheet. Therefore, if that is the focus then firms such as yours with either balance sheet issues, or experiencing temporary financial losses or one of negative circumstances do not quality for margined lines of credit with institutions such as Canadian chartered banks.

Asset based lines of credit take the reverse position, simply that you have the assets, so lets finance your firm on the strength of your assets, with minimal, if any in fact, focus on ratios, covenants, outside collateral , operating metrics, etc .

An asset based line of credit partner will tend to work through with you unique challenges in your industry or your business model. Some of those challenges might be the seasonality of your business or the special ‘one of ‘situations we referred to. Some of those circumstances might be making an acquisition, restructuring your firm, or being in the receipt of large new contacts or purchase orders that are out of line with your traditional financing arrangements.

Operating capital financing, or rather the lack thereof! can often be the reason your firm is unable to take advantage of strong market opportunities to maintain your competitiveness.

One of the largest parts of an asset based lending facility is receivables financing. In small firms this is often taken care of by a factoring facility – your invoices are sold to the lender, you receive immediate cash, and you can structure facilities around such issues as credit insurance, non recourse to your firm, etc.

The asset based line of credit, in a true sense, offers all of the advantages of factoring, but operates instead like a true bank facility – your receivables, and inventory, are highly margined to the maximum value, and your access to cash availability is directly commensurate to your sales growth – in other words you have no real cap on your operating facility – you receive cash for receivables and inventory as fast as you can sell and move our product and services!

Your firm will probably find that anyone in the asset based financed area has a stronger knowledge of your business model and assets.

We recommend that you seek out and talk to an experienced and credible advisor in Canadian business financing to determine if the advantages of an asset based line of credit work for your firm!


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

Asset Based Lending Is Great News For Your Business : Here’s Why !

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Have You Figured Out Asset Based Lending Yet ?




OVERVIEW – Information on asset based lending facilities in Canada . These credit facilities monetize your business assets and provide valuable cash flow and working capital

Asset based lines of credit - Canada is catching on quickly to a new breed of financing facility that has been in existence in the U.S. for a number of years. Whether your firm is relatively new, large or small, you have the option of looking at an asset based line of credit as an alternative financing facility in Canada. Let's dig in.


Part of the reason that asset based lending - more commonly called ' ABL ' has caught on in Canada is the current state of commercial business banking and in Canada and the access to liquidity challenges that many firms face in the post 2010 business environment

When your company has significant assets tied up in accounts receivable, inventory equipment, and sometimes real estate you want to ensure you are financing them at optimal levels for both survival and growth.

Although the basic financing concept is new ABL has been prospering in the U.S. for a number of years - Canadian firms compete with U.S. ABL lenders in our own business financing marketplace

As we noted some of the largest corporations in Canada utilize this type of financing, but the demand for ABL probably grew more out of the need for smaller and medium sized firms in Canada - let’s say with revenues under 20 Million dollars - to get the operating financing they need .

The benefits of asset based lending seem very obvious to Canadian business owners and financial managers. The financing revolves totally around assets, and places only a very small reliance on debt to equity ratios, operating ratios, cash flow coverage, etc.

When Canadian businesses cannot satisfy their bankers on the above ratios and loan cash flow coverage they view ABL as an alternative financing solution. We would point out that ABL financing, similar to any other commercial financing, is not a solution to a firm who is in a death spiral - years ago ABL had the taint of a 'lender of last resort '- that is categorically not the case now, and is utilized by firms who want to maximize operating and working capital financing but cant in many cases satisfy all Canadian chartered bank requirements.

The typical scenarios under which a firm considers an asset based lending arrangement are:

Growing very quickly - in high growth mode

Expanding into new markets

Merging with another firm

In 'Special Loans 'now and wishes alternate financing

We can't over emphasis the before mentioned point about financial statement characteristics - Asset based lines of credit focus solely on assets, that is where the liquidity and the operating facility works at its best . In many cases firms which have previous financing arrangements can significantly increase their credit availability by switching to an ABL line of credit.

Our firm worked with a firm who was in Special loans with a chartered bank, they had an original line of credit of 750,000.00 - the bank cut it down to 500,000.00 and also put the customer into Special loans category. We originated an asset based line of credit for 1,000,000.00 based on the firm's receivables, inventory, equipment and real estate. The customer utilized the ABL for about 18 months and then migrated back to commercial chartered banking arrangements with another bank. That story plays out over and over again in Canada.

Asset based lines of credit – Your mission , should you choose to accept it? Investigate this unique financing option and work with a trusted business advisor if the solutions meet your working capital needs.



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 .







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


' 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 Credit Lines In Canada : How To Assess What Type Of Facility Works For Your Company

Feeling ‘Questioningly’ About Business Lines Of Credit?

OVERVIEW – Information on how business credit lines can be accessed by Canadian companies seeking revolving lines of credit and what types of facilities should be considered

Business credit lines in Canada often have business owners and financial managers feeling ' QUESTIONINGLY’. We're told that use of that term leaves issues ' open to controversy' and demands information and clarification. Which type (there are only 2!) of facility works for you and are is your firm eligible for one or both? Let's dig in.

As the debate rages around the ability of companies to access SME COMMERCIAL FINANCE needs the one thing that is clear is that the commercial lending landscape has changed. Many alternatives available to business are often misunderstood or simply not known to the owner/mgmt team. Do Canadian firms realize that probably way less than 1% of firms looking for VC/Private Equity/Angel funding ever succeed. We often doubt it.

That brings us back to... ‘CHOICES’. Only 2 real solutions are available regarding the need for a revolving credit facility. Those solutions:

Canadian Chartered banks

Commercial Finance Companies offering Asset Based Credit Lines


Banks enjoy ' top of mind ' when it comes to source of financing - it sure helps when Canadian banks enjoy the reputation of having the best capitalization and financial strength in the world. Working with the right banker (notice we said banker, not bank) not only gives you access to credit lines but also term loans, leases, etc) that’s the good news.

The issue? The stability of the banking system requires that loans be solidly backed up by collateral, cash flow, personal guarantees, and the banks insistence that certain... shall we call them ' relationships' on your balance sheet stay intact. Any one of those can knock your firm out and have your company classified as ' unbankable’

The problem that our clients have is that they are often using cash and not producing it! That's why our second solution, the asset based line of credit... aka the ' ABL' is a perfect alternative for business credit line needs.

Instead of focusing on ratios and formulas for cash flow coverage this type of facility focuses on your business assets. Your receivables, inventory and even fixed assets (yes your fixed assets!) are combined into one borrowing facility that allows you to draw on funds as needed. Surprisingly the borrowing leverage on these 3 different asset accounts is even more generous than bank lines - although they almost always come at a higher borrowing cost

If you're looking for clarification on ' QUESTIONINGLY ' when it comes to business credit lines and borrowing alternatives to your firm seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success
who can assist you in your borrowing needs.


Stan Prokop
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 . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS CREDIT LINE EXPERTISE



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


' 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 Finance : Here’s Your Hall Pass On Business Credit Lines

The Perils Of Perception In Asset Based Business Lines Of Credit




OVERVIEW – Information on business credit lines in Canada. Whether it’s the bank or asset based loan it’s critical for owners/managers to understand the positive and negative implications of each type of revolving facility

Business credit lines , we've found, come with certain ' perceptions' from business owners and financial managers in Canada. There are some dangers in those perceptions.

Let's dig in.

A business revolving credit line actually comes in a couple different shapes and sizes - and the differences between bank facilities and other commonly used financing methods are significant. So how about a ' hall pass '

on our subject. We'll look at the typical use of these facilities, who qualifies for what, and how they are structured in terms of collateral and security. Along the way you'll see there are some benefits and disadvantages from each type of facility, as well as some major cost differences.

Revolving credit lines are a specific type of secured financing and are directly related to the current and fixed assets of your business. Although Canadian chartered banks typically lend against receivables and inventory ( mostly receivables actually ) an Asset Based Lender has the ability to bundle a/r, inventory, and even your fixed assets into one asset base you can borrow against on a continuous basis . That's one of the key differences between a bank line and a credit facility

Credit facilities are available from either a bank or commercial finance firm for almost any size, and no firm is really ineligible - every industry really qualifies and that includes mfg firms, distributors, service firms, and technology related industries. Firms that sell on an all cash basis rarely qualify for bank or asset based credit lines unless they are large retailers where the financed asset is the inventory.

If there is one simple way to view the difference between a bank credit line and an ' ABL ' solutions it's simply the difference in how each of those two lenders looks at it. One is cash flow based (‘the bank ' )

and the other is asset based. (‘the asset based ABL lender').

Asset based lending focuses on the constant ebb and flow of turnover of assets - in almost every business there's a certain ' rhythm ' in that turnover that constantly repeats itself. So as the ABL lender gets comfortable with your peaks and valleys, and the quality of A/R and inventory it's relatively easily for your business to achieve all the working capital you need based on sales and asset growth.

Costs are a huge aspect of the conversation around bank vs. ABL lending. While mostly, (but not always) more expensive, asset based lending delivers on more borrowing power. The business owner/manager must balance access to credit vs. cost of credit. Additionally banks impose various covenant and ratio restrictions that must be met. Those restrictions tend to be only borrowing based focused when it comes to an asset based lien of credit.

If you're looking to maximize liquidity and borrowing power from business credit lines, and want to know the difference between your two choices seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can ensure your credit line needs are met with an objective and workable solution.





Stan Prokop - 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 90 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN ASSET BASED FINANCE AND BUSINESS CREDIT LINES EXPERTISE




Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
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



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop

ABL : Business Credit Lines Everyone Should Be Talking About : Here’s Commercial Line Of Credit 101

Choose Wisely, Not Randomly when it comes to Business Credit Lines

OVERVIEW – There are different solutions to a need for a commercial line of credit . ABL ( asset based lending ) business credit lines offer a solid alternative to traditional borrowing needs .

Business credit lines or more specifically, the lack thereof! ... Can be a major business and growth challenge for Canadian companies.

Top experts tell us a commercial line of credit is in fact a necessity for any business that sells on credit and has investments in one or either of receivables and inventory. ABL facilities compete with Canadian chartered bank facilities to try and satisfy the thirst for business credit. Let's dig in.

It should go without saying that commercial credit facilities differ significantly from consumer borrowing. There the emphasis is on personal credit, payment history, credit reports and scores.

The business of commercial borrowing revolves typically around your own firm's lending practices to your accounts, as well as the peculiarities of your own business model/business cycle.

Credit lines for business really come down to two key areas - how you are managing your assets, as well as what type of commercial borrowing best suits your asset base.

Canadian chartered bank credit line rates are currently at historical lows - so the ability to qualify and borrow against those rates is a win for any business. Businesses that seek out ' ABL ' (asset based lending ') fall into two basic categories:

1. For a multitude of reasons they don't qualify for bank facilities

2. They qualify for bank credit - but not for the amounts they need!

Businesses can also be considered for ABL lines if they are what the industry calls ' story credits '. Conditions for story credits typically include:

Explosive growth that doesnt allow for ' traditional ' financing

Erratic profit and loss history

Turn around

Management buyout

Businesses that have had their bank loan called - they are in the so called ' Special Loans' category at the bank

Numerous types of ' ASSET BASED LENDING ' players exist in Canada - they range from divisions and subsidiaries of our banks, U.S. owned commercial finance firms, Canadian finance companies focused solely on ABL lending, and... Sorry for making things more complicated... subsets of asset based loans that focus on niches.

Those ' subsets "? They include A/R financing , inventory finance solutions, Purchase Order Financing , SR&ED tax credit financing , and combinations of all the above !

So how do the Canadian business owner and financial manager choose ' wisely ' NOT ' randomly ' when seeking business credit lines?

First, get comfortable with how asset based lines of credit work. Typically they bundle your A/R, Inventory and Equipment values into one basic borrowing facility and you borrow as you need from there. By the way borrowing margins are more generous with ABL - receivables are margined typically at 90%, inventory anywhere from 30-70%.

Also, ensure you deal with a firm you are comfortable with from a management and reputation perspective. Some ABL lenders are divisions of asset liquidation firms - and in the past there have been examples of a focus on asset liquidation as opposed to client servicing via lending! Ensure also you're not paying monthly for borrowing facilities you are not using.

Firms that consider bank ABL facilities sometimes have found those facilities not dissimilar from traditional bank credit. And while rates are (almost) always higher for ABL lines of credit that must be balanced against your ultimate access to capital - don't just focus on cost. The good news - ABL rates have tended to come down.

If you want to better understand what thousands of business owners have been talking about, i.e. ABL... seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you in choosing ' wisely '.




Stan Prokop - 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 90 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS CREDIT LINE EXPERTISE



Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

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



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '


























Stan Prokop

Business Credit Lines : An Everyday Guide to Thinking Big On A Commercial Line Of Credit

How To Achieve business credit lines that actually work like the other 49% of Companies


OVERVIEW – Information on business credit lines in Canada. What access to a commercial line of credit means to your company







Business credit lines in Canada are often a solution to one of the biggest challenges business owners and financial mangers face - namely ' cash flow shortfalls'.

Canada's leading bank recently advised that over 51% of business has those cash flow challenges. So your company wants to be in that other 49% and a commercial line of credit can be the answer, so let’s dig in.

There's no greater lesson in working capital financing than managing your way through finance shortfalls. As simple as the solution is the business owner/manager will surely agree with one of our mentors who once said ' tuition is very high in the school of experience'.

While the Canadian banks tout support of the SME COMMERCIAL finance sector the reality is that bank credit lines are tough to get, and not everyone understands there are alternatives.

We always; point out that the need for any external financing can be eliminated though by some sound internal mgmt (PHYSICIAN HEAL THYSELF?!)

- that includes improving a/r and inventory turns, watching who you extend credit to, and matching finance options to finance needs . For example utilize equipment financing to finance long term fixed asset needs.

Often the issue of ' seasonality' or what we could call temporary bulges in financing needs is the root of the problem. Enter the business credit line, allowing you to draw on business assets via a revolving facility.

Companies in early stage have a major challenge in accessing credit lines, the main reason being they don't have the proven profits, debt structure, and cash flow ratios required. They then insist on outside personal assets which owners may be unwilling or unable to provide.

ALTERNATIVES? They include proven financing solutions such as -

Factoring / Confidential Receivable Finance

Secured inventory financing

Monetizing SR ED tax credits via a cash flow loan

Working Capital Term Loans

Sale leaseback strategies

Non bank ABL asset based lines of credit

P O / Contract Financing

Royalty Financing


Critical to achieving business line of credit success is your ability to present your case properly. This may be done by the owner, financial manager, or an experienced business financing advisor.

If you are unable to present your year end financials, an interim balance sheet and income statement, as well as a cash flow forecast you are already behind the 8 ball. If you want to really impress the bank or commercial finance company be armed with aged payable, receivables, and possibly a list of fixed assets.

We've provided everyday solutions to business credit needs. If your business is one of the 51% that needs some form of traditional or alternative cash flow financing via business credit seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you to ' think big' on fixing the financing conundrum.



Stan Prokop

- 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 90 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS LINE OF CREDIT EXPERTISE





Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

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



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '





























Stan Prokop

Without Business Credit Lines Or An ABL Line Is Your Company Failure Rigged : Commercial Credit 101

Are Business Credit Lines The ‘ Secret Sauce ‘ Of Growth For Your Company

OVERVIEW – Information on business credit lines in Canada . Bank commercial credit facilities or an ABL line play an important role in the growth and financial success of any business – here is how .. and why






Business Credit Lines in Canada are often the ' secret sauce ' that helps propel a company to financial success. Whether it’s a non bank commercial credit ' ABL ' line, or a Canadian chartered bank line of credit it's a fact that financing your working capital properly is often the differentiator in success or failure. It's one of the ' Secret Sauces ' in business success. Let's dig in.

As your business invests more funds in the products and or services that you deliver the need for commercial credit financing of some type increases. The very simple reason for that is the fact that your customers don't pay you the same day you deliver products or services, and quite often the gap in even getting to your invoice stage is significant.

Revolving credit facilities in Canada can be broadly grouped into two areas: bank lines of credit and non bank commercial asset based lines of credit. (In truth there are some subsets of Asset based lines of credit - they might include A/R finance only, inventory finance, leveraging equipment assets, or combinations thereof!)

Your ability to finance your current assets properly will deliver solid cash flow as your company grows. The gap between different industries is significant. We can only envy the internet retailer who gets paid before they even deliver product! Conversely a firm in another industry might take on a project that takes a month or two to deliver on, and another month or two, or more !.. to get paid. That’s the working capital challenge.

Knowing the value and the timing of your assets is key to financing business credit lines. Once the business owner/financial manager have a handle on the working capital cycle of a company the solution becomes a lot more achievable.

Having access to business credit for cash flow allows you to constantly stay ahead- its better to be planning growth than reacting to cash flow shortages in your operations. Simple very basic trends can be determined by having regular monthly financials and charting your trends in A/R, inventory, sales, etc.

Term lenders that you might have in your business (term loans, equipment leases, etc) want to rely on the fact that your cash flow from operations can retire your monthly obligations.

It should be pointed out also that if your business is ' capital intensive ‘for fixed assets, etc you simply require more access to commercial credit business lines.

Bank or ABL lines will finance on an ongoing basis the value of your A/R and inventory. In the case of ABL your fixed assets are also thrown into the mix, allowing you to borrow on a revolving basis against the value of those assets, together with inventory and receivables.

While bank pricing is lower and more flexible companies that are growing quickly and can’t access ' traditional ' financing should consider Asset based lines of credit.

If you are looking for the ' secret sauce' deliverable in a business credit line seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in achieving working capital and cash flow success.




Stan Prokop - 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 90 Million $ of financing for Canadian corporations . Info /Contact :

7 Park Avenue Financial = Canadian Business Credit Line Financing Expertise





Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
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

Fax = 905 829 2653

Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '

Stan Prokop