Business Factor Funding . Recycling A Centuries Old Financing Solution Via AR Finance

Looking For A Recent ( 4000 Year Old ) Business Financing Solution?


OVERVIEW – Information on business factor funding in Canada . Solving cash flow challenges via AR is a time honored financing strategy





Business factor funding in Canada. When it comes to cash flow financing strategies we're often quoted as proponents of new and alternative working capital strategies. But truth be told (similar to fashion!) there's one AR Finance strategy that seems new, but apparently is about 4000 years old . Recycling is hotter than ever... so let's dig in!


Are you aware that business factoring - aka ' receivable finance ' is ONLY about 4000 years old, supposedly starting during the reign of King Hammurabi of Mesopotamia. From that it grew even faster in medieval times as it helps growing garment and textile industries in Europe and North America.


So that quick history tour brings us up to today, where thousands of Canadian business owners and financial managers find themselves in what we can only often describe as challenging times in business finance. So cash flowing your invoices via AR finance, previously deemed as ' alternative' in nature is now simply one of the fastest growing business finance methods

We often find ourselves almost ' over explaining '

why and how factoring works. A simple explanation is to simply say that it's not ' borrowing ‘... it's ' selling'. The paper work around the accounts receivable financing solutions is the mechanism that allows you, at your will and choice, to generate immediate cash by invoking the AR finance mechanism ' factoring'.

So while many business owners/managers find themselves thinking of ' borrowing ' for business finance, they might just want to think more of ' Selling'. As they generate those sales they get immediate SAME DAY advance on the revenue they generate. By the way, the right A/R financing solutions allows to you sell invoices when you want, and certainly not all the time - only when you need the cash. Typically business owners tend to utilize the power of Factoring at key cash flow disbursement times approach - that might be payroll, term loan obligations, CRA payments, etc.



It's important to understand the concept of advance rate within this financing mechanism. Typically, more often than not, that advance rate will be 90%. That is to say if you have a 100k sale, which has been in fact ' earned' by shipping your product, or providing your service, you would receive that same invoice day, if you choose, 90k as immediate cash flow funding . The 10% is a holdback and that’s remitted to you as soon as your client pays. That hold back, in the case of our 100,000.00 invoice will typically have a 2k financing charge attached to it if your client honors typical 30 day terms.


If your firm has significant amounts of capital tied up in current asset accounts such as inventory and receivables you will clearly benefit from immediate same day cash flow received from your business factor funding solution. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in your working capital solutions.

P.S By the way, 4000 years ago CONFIDENTIAL RECEIVABLE FINANCING did not exist - today it does. That allows you to bill collect and finance your cash flow under total control of your own management. Check it out.




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 = CANADIAN A/R FINANCING AND FACTORING 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

5 Advantages Of AR Accounts Receivable Finance In Canada. Using A Business Factor Funding Program Works.

Looking For Some Solid Benefits In A/R Finance In Canada?

Information on advantages of ar accounts receivable finance funding . How does a business factor program work.



Thousands of Canadian business owners and financial managers perceive AR Accounts Receivable Finance as a solid strategy for financing their firms. Let's examine 5 key advantages of this method of working capital finance. But first let’s take a quick step back and ensure we understand the product and the mechanics of this type of finance service.

The heart of the AR finance strategy is of course your receivables. This financing differs significantly from a bank loan or more commonly the Canadian chartered bank line of credit. What is that main difference? Simply that under a bank facility the financing is based on your firm’s credit worthiness, with the receivables being assigned to the bank as collateral.

The difference then? It's simple and basic. AR financing is not a loan to your company per se, instead its the purchase of your receivables, generally on an ongoing basis , This sale of ar, via our business factor funding arrangement enhances your cash flow and working capital .. Immediately!

One of the main points of confusion that we find continually exists around this method of financing is the pricing. While the bank facility charges your firm an annual interest rate (plus some miscellaneous fees here and there!) invoice finance is the sale of your A/R, at a discount, allowing you to receive funds and replace A/R on your balance sheet with cash, immediately as you make sales.

In general, certainly more often than not, invoice receivable finance in on a recourse basis, just as if you had a bank facility in place. Simply speaking, you're responsible for any credit losses. Purchase of business credit insurance can eliminate bad debt risk, especially if you have foreign or concentrated receivables.



Finally let’s get on to those advantages we spoke of. Here are just five of them, and if you are having challenges in accessing bank financing these advantages should have significant appeal to your firm.

First of all, it’s a classic short term funding strategy without additional collateral requirements or major emphasis on guarantees of the owners of the company.

The second advantage is timing, and we're firm believers that timing is everything in business. The hard reality is that invoice financing provides you with cash flow on the same day as you generate sales. That shortens your overall credit extension cycle by... you guess it, 100%.

Our third advantage of AR Accounts receivable finance is simply flexibility. No debt goes on your balance sheet, you’re just monetizing assets and funds can be used for any general corporate purpose.

Our 4th advantage is somewhat of a double edged sword. Traditional AR finance in Canada has the busines factor funding your receivables as an extension of your credit department. We would point out that under the right circumstances your firm can acquire a confidential AR Finance facility which allows you to do all the billing and collecting yourself. Bottom line, it’s your call.

Finally, if your firm as a lot of U.S. or foreign receivables invoice finance is a solid way to address this business challenge. Even the exchange rate is taken care of in this situation.

You owe it to your yourself of check out and understand AR Accounts receivable finance in Canada. Do any of our listed advantages make sense for your firm? If so, speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in the solution for a proper facility.

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 :

http://www.7parkavenuefinancial.com/ar_accounts_receivable_finance_business_factor.html