Conquering Canadian Business Cash Flow Challenges

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The Cash Flow Financing Conundrum.. Solved!

Information on business working capital and cash flow solutions for Canadian business . Solutions are available for operational credit and financing in the current economic environment ?

Interested in finding out why business working capital and cash flow challenges for operational needs are a challenge for small and medium sized businesses in Canada? We are pretty sure you are even more interested in some solutions to that challenge!

One report has noted,  among other things ,that  small and medium sized firms are still having huge challenges in raising the working capital they need - even though in many sectors business is back to ' booming ' again . As a Canadian business owner or financial manager you would like some solutions to get that cash flow booming again, we're sure.

For firms that are mature in age, have good assets and strong operational cash flow those challenges are limited. However, if your company is on the opposite side of that spectrum you're living in a  ' business hell ' if we can use that term - at least if it isn’t hell its purgatory!

How can you identify the best, what we can call ' straight forward ' options for working capital and business cash flow solutions? We think the answer is simply understanding and getting a handle around the traditional ( or conventional ) Canadian business financing techniques , but, even more importantly, understanding newer solutions that are becoming more mainstream in acceptance everyday .  Without the resources of an experienced business financing advisor you might not even have heard of some of these solutions, let alone having considered implementing them.

We're the first to agree that Canadian banks are lending again, rates are close to all time lows, and credit reins and collateral and covenants have slowly loosened. But again, small and medium sized businesses aren’t feeling it.  Another recent March2011 survey, albeit U.S. based said most business owners still experience temporary or severe cash flow issues, forcing them to delay payments to suppliers, and delay spending on new assets for business growth.

In order to implement better, or newer working capital and cash flow business operational strategies your firm must understand how you are managing your finances now, what assets are available to monetize, and, often forgotten, you must have a handle of what future cash flow needs will be.

As we noted, traditional bank financing is alive and well in Canada. For those that can't leverage the amount of operational credit that they require a better understanding of ' new ' solutions is required. And we know you've been waiting for what those new solutions are!

More recent and increasing  widely accepted methods of generating working capital include the following -  

asset based lending , working capital facilities that margin a/r and inventory as a combo ,  confidential invoice discounting , securitization, cash flow sub debt loans, purchase order and contract financing,  as well as bridge loans  on already owned equipment . Our favorite - asset based lending... but more about that one on another day.

Any of the above solutions will allow you get your cash flow and working capital under control. Speak to a trusted, credible an experienced Canadian business financing advisor. Reclaim your business cash and operational 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


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

Need Equipment Loan and Lease Financing ? Re-program Your Leasing Finance Strategy Today !

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Look at Equipment Financing in a Whole New Light !



Information on equipment loan financing and lease finance strategies . How to re program your leasing strategy to maximize benefits !

Sometimes you just need to re-program things to make them work better - that's what we're also suggesting when you review your lease finance and equipment loan financing strategies for your company.

Let's examine how you can maximize your leasing strategy to attain maximum benefits and minimum hassle! That's clearly a win win strategy.

Focus clearly on eliminating what we can only call the ‘hassles’ of dealing with other types of financing , It's all about ' time' and your ' business bandwidth ' today when you are visiting a new asset acquisition . Without a doubt we can state that leasing equpment is by far the quickest method of obtaining an approval, satisfying both your vendors need as well as your own time constraints.

With only a very basic financial calculator you can quickly review all your lease finance options - the favorite question of almost all clients is: ' What will my monthly payment be?’ It's about time for you to answer that question yourself, and make sure that your cash flow and working capital remain intact on the equipment loan financing you are contemplating. How? Just remember that the only elements to any lease are: term, rate, amount financed, payment, and end of term option. If you know any 4 of those you can always solve for the final item, which in our case is payment. You should assume an interest rate that is consistent with your firms overall credit quality.

Business owners and financial managers should view their lease finance acquisitions in the context of your overall financial strategy. You might need to’ re - program ' your thinking on buying and paying for assets outright . Doesn’t it make more sense to keep your cash and line of credit reserves intact, and match the useful economic life of the asset you are acquiring to a predicable cash outlay?

A quick way to’ re program ' your leasing needs is simply to always use the same business template for each asset you are acquiring . They key aspects of that decision template, if we can call it that are: cash flow budgeting re the monthly lease payment, reviewing the asset in the context of not having to draw on your business operating line of credit, determining how long you will use the equipment for (thereby matching term and payment) and finally, factoring in balance sheet and tax advantages into your asset acquisition decision.

What's the biggest’ re programming' issue with most firms . It’s simply their mild obsession with ' rate ‘. Yes a rate has to be competitive, but view the lease financing rate in the context of the current interest rate environment , the challenge of getting traditional bank financing, and the fact that in the current environment rates are probably going up and not down . The real reality is that you determine your own rates in your new leasing re programming strategy! That’s because the largest factor in determining rates for equipment financing is the manner in which you properly present your overall credit quality and financial health.

In summary, equipment loan financing, aka ' leasing' has been around for over a hundred years in North America. Take a hard look at why you finance your assets, reprogram your strategies around benefits and ' how to ‘, and acquire your assets with the knowledge you have made the best financial decision for your firm. Need help ? Given a choice we’ll take an expert over a rookie any day ! Speak to a trusted, credible and experienced Canadian business financing advisor who will work on your ' re programming strategy with you!








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

Unclear On Accounts Receivable Finance Solutions ?

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A/R Finance Companies Can Turn Your Business Around



Information on financing companies in Canada offering accounts receivable finance . Does a factoring / invoice discounting program work for your business?

The proverbial ' turnaround '. Typically we think of if as a reversal in fortune, whether in sports, life, or in our case today, ' Business'! More and more Canadian business owners that are looking for a turnaround in their cash flow and working capital are considering accounts receivable finance from financing companies in Canada to effect that turnaround.

But is that a sensible solution? It certainly is with the right circumstances and the right information. Otherwise consider it somewhat of a deadly minefield of misinformation and dealing with the wrong parties. And at a time when the Canadian business financing environment is at (or close to!) it's tightest it makes sense to have the right information at hand.

So it starts at the river, where the cash flows (or isn’t flowing!) That's lack of flow is absolutely the right time to contemplate an A/R receivable finance strategy. Simply speaking it's a tool that can be used by business of all size, from start up to major corporation. Financing companies in Canada sometimes do not do a great job of even explaining things properly, or even advertising them in a manner that makes it clear what the solution involves. So don't get confused when you hear terms like invoice discounting, confidential A/R financing, factoring, etc. Essentially they are all the same, simple as that.

Cash flow tends to slow down when your business or the economy, or both slow down. So it’s at that time when you're probably most creatively challenged to come up with working capital solutions.

Is bank financing for the start up or existing SME (small medium enterprise) extinct? We won't weigh into that debate, but safe to say that that if your firm is not a very solid citizen in good standing with the bank... well let's just leave it at that!

As we have intimated half the battle in accounts receivable finance is just understanding the solution, and knowing how to choose the right financing companies to implement that solution. First of all it comes down to understanding the benefits, and the mechanics of the A/R finance strategy.

There are essentially two key offerings in the Canadian marketplace, the traditional one that's been around before the Dead Sea was sick and a newer, and in our belief preferred solution to that same problem. The traditional solution has you receiving anywhere from 70-90% of your a/r via an immediate advance on the invoice, as soon as you generate it, or at anytime thereafter, as long as the invoice is less than 90 days old. When that invoice is collected by the finance companies that offer this traditional solution you get the remaining amount back immediately, less a financing charge which typically is in the 1-2 % per month range assuming a collection period of 30 days.

The alternative is a confidential invoice financing solution, allowing you to bill and collect your own receivables, while at the same time receiving the cash advances as you generate sales/invoices. It's the confidentiality of this type of offering, i.e. no notification to any of your clients or other creditors that we feel is appealing to the Canadian business owner or financial manager.

So the benefits of either of the above strategy now become immediately clear - you're in positive cash flow , suppliers can now be paid, payrolls and government remittances can be made, and , oh yes, you can grow your business again.

So depending on which solution you choose the bottom line is that your turnaround is in motion! Speak to a trusted, credible and experienced Canadian business financing advisor who can work with you to implement the solid cash flow solutions you need... today.








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

Business Credit Alternative : Solid Info On Canadian Accounts Receivable Loans & Financing

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Why You Should Consider A/R Financing in Canada

Information on accounts receivable loans to increase working capital financing via a business credit alternative strategy that maximizes cash flow and creates growth financing

Nothing is more important to a Canadian business owner or financial manager than being well informed - in business living in the past generally leads to failure in today’s competitive environment

So when it comes to business financing and credit knowing the advantages and costs of accounts receivables loans becomes valuable.

Many Canadian businesses still feel they are somewhat of a captive prisoner in the difficult business credit environment. While interests are low in Canada and the stock markets seem to be doing fairly ok its clear that access to business credit and financing is still very difficult.

It’s kind of like a slow thawing out, with the freezer of course being Canadian chartered banks. Many surveys suggest that a good percentage of Canadian business that applies for working capital and cash flow facilities do not get all of the financing they need, if in fact they are approved at all.

This forces you, the business owner or manager, to take a second look at what is available out there to keep your operating capital adequate. We're definitely not putting blame on the banks (we love Canadian banks) but could there be a better way for small and medium sized businesses to access credit...well we think so .

Isn’t the saying that ' necessity is the mother of invention '? In our case independent finance firms, both U.S. owned and Canadian have stepped up to the bar, providing accounts receivable loans for your financing needs. We hasten to point out that the word ' loan ' is a misnomer here... our clients use the term also but we caution them that the good news is that these facilities arent loans, they are just the moneitzation of your largest current asset - your a/r.

Accounts receivables loans in Canada go by many different terms, some you have heard of, some you may not have. They include invoice discounting, factoring, receivable financing, and our favorite, confidential invoice discounting or factoring. In effect you are maximizing your cash flow from operations by monetizing your assets, i.e. the receivables.

Accounts receivable loans are your answer to being stuck in the middle - at one end of the spectrum is your investment in accounts receivables and providing terms to your own clients, while at the other end it’s a questions of not being able to access traditional business credit to finance that same investment.

So, do you know a good solution when you see one? Receivable financing would appear to be that solution. Turning your company into a cash flow machine via receivable finance is a solid strategy being adopted by thousands of Canadian firms.

The process is simple, as you generate sales invoices are immediately sold, i.e. converted into cash, at a discount. In Canada the rates of business factoring range widely - anywhere from 9% per annum to 1-3% per month.

Business owners accept this pricing when they realize they have decent gross margins to absorb this cost, while at the same time using the new found cash to take discounts with suppliers and sell more and generate more profits. In some cases 50-100%of the financing cost can be offset in the manner in which you use your new found cash flow.

Canadian business owners would prefer that their clients and suppliers didn’t know they were financing their A/R via accounts receivable loans. That’s whey they investigate C I D, confidential invoice discounting, allowing them to bill and collect their own receivables as they wish. (Traditional factoring via the U.S. and U.K. model requires your clients be notified.

In summary, thousands of firms in Canada are moving to this type of financing. Speak to a trusted, credible and experienced Canadian business financing advisor who can review costs, procedures and benefits, allowing you to win the cash flow and working capital battle!

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

Inventory Finance Solutions Required ? Here They Are !

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Inventory Finance Solutions Required ? Here They Are !

Information on financing inventory . Loans for inventories require specialized finance solutions - Here's why !

Inventory loans or the financing of your inventory as a component of working capital are critical to the success of your business if your firm has a strong inventory component in working capital.


Inventory is one of the two components of working capital – the other is of course receivables. More often than not the receivable asset is typically larger, on a monthly basis than the inventory assets – but some firms based on the nature of what they do have a very heavy investment in inventory.


Inventory converts into receivable which convert into cash. We all know that. The crux of the matter though is the time in which this happens. Your ability as a manufacturer, wholesaler, etc to purchase inventory, re work it , bill your customer, and then, ( unfortunately ) wait for your account receivable to get paid in many cases can take 2-3 month . The financial analysts call this whole process the cash conversion cycle – the only way you can slow that cycle down and improve cash flow is, unfortunately, to delay payments to suppliers as long as you can . That’s not a desirable operating strategy.


Inventory financing and inventory loans work best when they are often within the context of a true asset based lending arrangement for a combination of inventory and receivables. However the bottom line is as we have stated - financing in this critical area of business financing is available, it’s specialized, but when properly put in place can significantly grow sales and profits.




So is there a solution. There is of course, and in Canada it is a highly specialized solution involving the financing of inventory as a key driver to improve your cash flow and working capital. If done properly you do not incur extra term debt – the reality is that all you are doing is ‘monetizing ‘inventory to generate additional cash flow and working capital for your growth and profits.


One or two critical challenges continually obstruct our client’s ability to properly monetize their working capital. Let’s examine some of those challenges and determine how they can be overcome.


The first challenge is simply that it is becoming increasingly difficult to obtain inventory financing from traditional sources such as the Canadian chartered banks. In fairness to our friends at the banks it simply is difficult for them to properly value and monitor and understand each company’s different inventory financing needs and the cash cycle around that inventory that we have discussed. One further technical issue arises here, which is simply that if your firm has an operating lender in place that lender has probably, sometimes unknowing to yourself, taken a security on the inventory as a part of their security agreement. That‘s not optimal, your inventory is collateralized, but you don’t receive any funding or margining against it.


We meet with many clients who are in this position, and need to work with them to unravel their current financing to properly allow for the monetization of their inventory via an inventory loan or margining facility.


Inventory financing in Canada is specialized – as we’ve noted. We strongly recommend you seek and work with a trusted, credible, and experienced advisor in this area .What are the benefits of such a relationship. First of all your inventory will be properly ‘understood ‘and valued, allowing you to borrow against its value accordingly. It is an unwritten but generally acceptable rule that most banks lend approximately 40% against inventory assets. Two points here – if you can get bank financing on inventory and get that 40% advance we would pretty well recommend you take it ; however if that becomes insurmountable, as it does for most clients, you actually can get anywhere from 40-75% from a true inventory financier .


Are there any special requirements to get proper inventory financing? In general no – a standard business financing application applies, and you must be able to demonstrate, preferable via a perpetual inventory system , that you can account for and report on your inventory on hand, usually on a monthly, but perhaps on a weekly basis .


If your business relies heavily on inventory as a key component for sales and profit growth consider the structuring of a proper inventory financing arrangement either separately or within the context of a true asset based lending or working capital facility .

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 '

A Better Way To Finance A Business Loan ? Consider The Asset Finance Strategy

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ABL Asset Finance - A Winning Business Financing Solution

Information on how the business loan strategy known as ' ABL Asset Finance ' can be utilized to run and grow your company

When you need asset finance and a business loan in the current economic environment any alternatives are great. One of those solid alternatives is an asset based lending arrangement which focuses on what counts, your assets!


As a business owner and/or financial manager you are looking for business financing that makes sense. ABL is the acronym for one of the more exciting business financing alternatives that is growing in popularity every year in Canada. Are we actually saying that asset finance via an asset based line of credit is ' exciting '? We will let you decide that, but if this financing is easier to achieve than bank financing, is cost effective, and provides you with unlimited capital... well our clients are excited... you make your own thoughts on that !


Asset based lines of credit simply are drawn down by your firm based on the value of ongoing assets. The assets that are always there are inventory, A/R, and to some degree your fixed assets that aren’t already financed. By collateralizing your assets, and, most importantly, leveraging them to the max if you need to, you are creating available working capital.


We are always explaining to clients that this leverage of assets is not taking on debt, you are not borrowing on a long term basis, and you are simply monetizing current and fixed assets based on current values. What are those values, typically they are 90-100% of receivables under 90 days, 40-75% of your inventory, and a liquidation type value on any equipment you want to temporarily monetize. Clients always ask - ' Do you mean that we can borrow, if we need to, on a temporary but ongoing basis on our fixed assets?". The answer is yes, if you are considering this type of financing strategy.


Let’s cover off the two key points clients always tend to focus on when they are investigating this unique business loan strategy- namely costs, and timelines to get the working capital facility in place.


In some ways cost is the most difficult area of explanation and investigation in an asset finance working capital facility. Putting aside the normal due diligence or commitment fee required to get a facility in place the reality is that there are a couple of key drivers that affect pricing . Asset finance revolvers can be just as competitive as a Canadian chartered bank financing (and less onerous to get approved) but prices varies all over the board in Canada because of the fragmented and specialized nature of this type of financing.


Typically we see rates as low as 9% per annum and as high as 1.5% per month. That’s a big spread and ultimately it depends on the size of the facility, the mix of your current assets, as well as any perceived industry or business risk associated with your firm. But again, we remind the reader, what price would you pay for unlimited working capital?


Typically it takes 2-4 weeks to close such a facility. In Canada as we noted the market is fragmented and these lenders are very focused, specialized, and by nature experienced in what they do, which is value your assets and finance them!


Speak to a trusted, credible and experienced Canadian business financing advisor around asset finance as a business loan strategy if your working capital needs ' aren't working ' now!

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

How Factoring and Accounts Receivable Funding Can Fix your Working Captital problems

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The Fix Is In ! Cash Flow Problem Solutions

Information on factoring and accounts receivable funding solutions . This type of financing fixes cash flow challenges when properly understood and utilized

When your payments from key customers are significantly slowing down many firms in Canada turn to accounts receivable financing
, otherwise known as ‘factoring’ for a solution to their working capital challenges. As unbelievable as it seems in many cases it is not unusual to have clients tell us that receivables are getting paid in 90 days these days, sometimes longer in fact. Gone seem the days when the 30 day term on your invoice seems acknowledged and honored.



When those payments do slow down that tends to cripple your cash flow. Naturally the solution to the problem, or the obvious one to most business owners is to make an all our effort to improve collections but focusing on increased accounts receivable turnover.

As an aside we think it’s very important that Canadian business owners and financial mangers know their accounts receivable collection period – you don’t have to be an analyst to do that - the simple formula is as follows –



A/R Times 365 Divided by Sales

To illustrate, if your firms year end balance sheet has receivables of 400k and your annual sales are three million dollars your collection period is 48 days. (We wish our collection period was 48 days we can hear you saying!)

Naturally you can alter the above formula on a quarterly or monthly basis by adjusting the A/R and sales level for your required period.

You can address the additional cost in carrying receivables by attempting to raise your prices with your customer to cover those increased A/R cost. However, that gets you profit, and not liquidity. That is where factoring and receivable financing comes in.

Factoring is quickly becoming the first alternative solution for firms who wish to get 85-90% of their cash immediately after they invoice. This solution is available through a pure factoring solution, or, if your firm is a bit larger ( 250k + in receivables) as part of a working capital facility or asset based lending facility.

The challenge, we tell clients, is ensuring you have the type of facility and factoring partner that meets your overall goals in day to day business financing. It certainly also helps when you have a solid business with good clients, but the hard reality is that factoring is available to almost every size and type of business is Canada – what will differentiate your facility is simply the overall pricing, terms, and structure of your facility .

Is your firm a candidate for a factoring or accounts receivable financing facility. It probably is if your customer payments are slowing down, sales are growing, and you are unable to obtain traditional bank lines of credit from Chartered banks. Factoring is hugely popular in the U.S. - Over 140 Billion dollars (yes that’s billion!) was done in 2009. The Canadian landscape is much smaller and fragmented, but bottom line, its growing.

We can’t over emphasize to clients that your factoring facility grows with your business, and your factoring credit facility can be adjusted upward very easily in terms of your growth.

Is there any downside at all to a factoring and working capital facility? When we sit down with clients and work them through the process we focus on 3 main areas –

Choosing the right factoring and receivable financing partner

Ensuring you understand your true costs ( and how to offset them )

Picking the right facility from a day to day ease of doing business perspective



Speak to a trusted, credible and experienced advisor in this area to ensure that you are comfortable that such a business financing is the solution to your cash flow and working capital problems.



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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