The Key To Working Capital Financing - Asset Based Lenders

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Wondering how your competition seems to have all the working capital financing they need and you don't - the key to that answer might just be asset based lenders and the asset based lines of credit they offer to Canadian businesses such as yours.

Let's examine how this relatively new and unique method of business financing can totally alter your business financing success.

The acronym for this type of financing is A B L; simply speaking its daily cash flow provide against your current, and sometimes now so current assets. What do we mean by that? Simply that this facility allows you to margin your receivables, inventory, and in most cases, should you choose, fixed assets and real estate.

You are probably saying to yourself that you could arrange financing on your own re those fixed assets and real estate - but we are talking about using those assets as collateral for your daily revolving line of credit. So you aren't borrowing, you are not bringing debt on to your balance sheet, you are just leveraging your ' assets ' (that's the 'A' in ABL!) for daily cash flow and working capital.

And why are we claiming that this type of working capital financing just might be your key to business success. Simply because you have probably found it has been challenging to get the full amount of business credit you need. In some cases you might have discovered its been a challenge to get business lines of credit of any manner.


So if your competitors are using this type of financing today, who exactly is eligible for it, and is your firm a candidate. The answer is simply that if your firm has a combination of 250k in working capital assets you are immediately eligible for asset based lines of credit. We would add that firms with smaller asset sizes can still monetize those receivables via invoice financing or discounting, but that's not our key focus for today's information exchange.

So now you now the offering are out there. But why should you consider it. Simply because your firm might be in one of a number of special situations - that includes issues such as your need for increased daily operating cash, you wish to merge with or finance an acquisition, you have been unable to obtain inventory financing elsewhere, you are growing to quickly for traditional Canadian chartered banking financing, etc! We are pretty sure you get the picture now!

The benefits to this type of business financing must by now be pretty obvious. It's all about access to working capital financing and cash flow that you couldn't access before. Assets that couldn't be financed are now financeable, and inventory financing, previously limited or unavailable now looms on your growth horizon.


Who are these asset based lenders, and what is the cost of this financing? We'll leave that one for another day, but if you want to investigate asset based lines of credit for your firm ( remember, your competitor probably already has ) then speak to a trusted, credible, and experienced Canadian business financing advisor who will assist you with identifying benefits and the best solution for your current strained needs in business finance.







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.







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


Article Source: http://EzineArticles.com/5895090





Stan Prokop

Buying And Financing A Business Acquisition : Loans To Finance Existing Businesses

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Buying a business? Need Financing


Information on buying and financing a business acquisition in Canada . Loans and Finance availability for the SME sector of Canadian business

Buying and financing a busines acquisition is one of the major challenges of firms in the SME (Small and medium enterprise) sector in Canada.
Unlike the big boys who have access and funds available to hire expensive talent to complete the transaction the Canadian SME business owner and financial manager has the desire to complete a transaction , but needs help and information they traditionally don't have immediate access to .

Naturally acquisitions can be completed via an all cash purchase, the reality is that most businesses don' have the capital to complete a deal in that manner. And another thing, completing a transaction without acquisition loans and funding doesn't make perfect sense all the time because you are not taking advantage of leverage and return on investment.

So what information is in fact required as you are contemplating buying that firm? Is there in fact a ' short list ' of information? A great start would be some basics such as a business plan or executive summary which profiles the transaction.

Other critical data are the financial statements of the firm you are acquiring, some cash flow analysis, and most importantly, some financial modeling around the future profitability and cash flow generation of the combined business.

It’s those cash flows of course that will repay your business acquisition loans and financing!

A key concept around your deal is the equity component in the transaction. There has to be some reasonable equity in the combined firm, and that can come from your firm, the assets of the firm you are acquiring, or potentially some new equity and ownership participation.

So what can go wrong in a transaction like this? Well without the assistance or information we have spoken of, lots!

Timing is always a key component of your deal. The closing of your transaction can be driven by external deadlines, the deadlines imposed by the seller, or your own commitments to closing. Bottom line, leave enough time - it’s as simple as that.

A lot of transactions we look at have some huge ' gaps ' of missing information. To complete a proper purchase and financing a business acquisition properly with the right amount of loans, debt, etc requires all the missing pieces in the financial puzzle to be on the table.

So how can the acquisition be financed? There are some great and innovative strategies you can utilize to complete a deal successfully. They include and asset based lending scenario which monetizes the assets of the sellers firm. Smaller transactions under 350k can be efficiently handled via the Canadian CSBF loan program which has solid rates, terms and structures.

Business people need to remember also that you need to borrow enough to not only acquire the business, but to ensure you have the working capital and access to liquidity to grow the firm.

There are some great reasons to consider buying and financing a business. Some typical reasons include diversification, the ability to grow sales and reduce costs on a synergistic basis, and in some cases you just might have discovered a ' jewel in the barn ' - the type of firm that is undervalued or has a motivated seller.

Your key goals are to analyze the operating activities of the firm to be acquired, ensure you have a financing plan in place, and, as we said ensure you have the capital ready to ensure proper cash flow and replacement and upgrade of any needed assets.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your business acquisition loans and financing needs.








7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

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

Do You Know How To Raise Cash For Financing A Business Purchase Acquisition?

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Hitting a Bull’s Eye In Canadian business acquisition financing!


Information on raising cash and debt financing for your business purchase acquisition in Canada

When financing a business purchase acquisition it kind of comes, fortunately or otherwise, to the fact that ' size counts '! . So the cash you need will directly relate to the size of the business you are financing, as well as the asset quality.

Naturally how the company you are purchasing and raising cash for is doing play a key element, as often less cash is required and the focus is on financing remaining assets. So a solid rule of thumb to keep in mind is simply that the amount of cash and ' finance power ' you need is very directly related to your targets situation on profitability. In other words a lot less real cash is required if a company is not profitable or barely breaking even. That certainly makes the job easier, right?

In talking to clients about financing a business purchase we often feel they are focusing solely on the purchase, and not on the on going capital and cash flow needs of your newly acquired business.

We also have to consider the fact that raising cash for a business might often be more feasible if you have a strategic partner or other equity investor. That unfortunately will dilute your equity position but might be realistically the best course of action. And it does certainly allow you to purchase and fund a business with less ' monetary' contribution to the deal.

In the case of larger transactions Canadian business people might well look to a private equity partner in the deal. Their assistance in helping you complete an equity investment, as well as their experience in any specific industry is of course a valuable consideration. And to sum up the whole issue of getting either a strategic or operating partner or private equity group we can simply say that often times this might well add credibility and realism to your offer in the eyes of the seller.


Bank financing in Canada is available to finance business acquisitions. You or your Canadian business financing partner needs to address the following issues at this point:

A concise overview of how you will run the business - i.e. management depth, experience, etc

You need to ensure the industry your business is in is ' in favor ' when it comes to a bank appetite

Your business plan and projections have to be realistic relative to cash and working capital resources re operations and growth

In a perfect world - and we know it's not! You want to be in a position to demonstrate sales growth, profits, and a balance sheet that hopefully won’t have a debt/ equity ratio of 3:1 as an example. And your assets such as inventory and receivables should demonstrate borrowing power quality.

Other ways to finance your business purchase include asset based lending, bridge loans, use of sale leasebacks, and even the government SBL loan if the business has under 5 Million in revenue.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor when it comes to a capital raise for a business purchase acquisition in Canada.

7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8


Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com


Click here for 7 PARK AVENUE FINANCIAL
http://www.7parkavenuefinancial.com


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .



' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.

Stan Prokop

Lawyers Guns And Money : Acquisition And Merger Financing And Business Lending In Canada

Buying and Financing A Business In Canada

Information on business lending strategies and solutions for merger and acquisition financing

Acquisition financing in Canada. Lawyers, Guns and Money?! Do we really need all three of those? Of course not, in fact Money and probably some measure of ' lawyers' should do.



Warren Zevon's rock classic of the same name ‘... send lawyers guns and money ‘didnt include unfortunately any merger busines lending advice for business owners and managers in the SME sector who contemplate properly completing an M&A transaction.



Let's examine some key strategies and tips around your consideration of an acquisition financing
or merger. There are different reasons for buying a business, and at the same time numerous financial strategies exist to achieve the final goal. Proper merger and acquisition financing compliments the final exit strategy of both the founders of the firm being acquired, as well as for the owners of the newly created firm .



Today we're talking mostly about what's known as the ' forward merger' wherein your company survives by acquiring the other.



To say you need a team of experts in a successful transaction is a major understatement. That team will allow you to properly position both companies and ensuring proper valuations are in place prior to and post M&A.



Its human nature for buyers to bid low and sellers to ask high, so solid analysis of current financing structures is critical.



Leverage is a key concept in pre merger and acquisition financing analysis. And we're talking two kinds of leverage - both financial and operating g. Transactions often don’t make sense if the financial leverage is more than 3:1 from a debt to equity perspective, and the operating leverage analysis includes fixed and variable cost analysis.



The amount of leverage you will ultimately have will often determine what type of financing and what lender will successfully complete your deal.



The concept of ' friendly debt ‘, which can be a vendor take back is a great place to focus , and transaction that include a healthy ' VTB' are generally viewed as favorable . Of course if your lender for the acquisition financing considers the VTB as pure debt that's a different story.



But, as we said, generally speaking a solid VTB component of your transaction leads to a good deal. It's a great way of buying a business, especially if you view the financing of the transaction as a challenge. The reality is that a solid VTV plus the potential for profit in a business has the makings of a solid M&A deal. Quite often of course the VTB structure is much more favorable than traditional bank or commercial finance firm debt, and it gives all parties a reason to succeed, even the seller holding the VTB.



A solid down payment of equity in your own current business, proper M&A financing, and a solid VTB from the current owner or owners simply make for a probably successful acquisition financing win.



There are numerous financial considerations and analysis required for a solid M&A deal that represents a win/ win. They include our previously mentioned debt to equity, as well as other concepts such as cash flow servicing.



In the end result the amount of debt you take on in a merger via a business lending vehicle can make your firm more conservative in nature as you're focused more on servicing the debt than focusing on new opportunities



Talk about some complex scenario - identifying the opportunity, value and pricing your target, and, oh yes financing via a proper business lending strategy. So, as our friend Warren Zevon sang ' send ' lawyers, guns and money ‘, but our recommendation is to focus on # 3 - Money for your merger and acquisition financing in Canada.

Speak to a trusted, credible and experienced Canadian business financing advisor for assistance on your SME M&A financing needs

7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

Click here for 7 PARK AVENUE FINANCIAL

http://www.7parkavenuefinancial.com


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .



' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.

Stan Prokop

One Way To Buy A Company . Use ABL Finance Via An M & A Business Loan For Acquisition Financing

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Acquisition Finance For Success – The Why And How



Information on acquisition financing in Canada . Consider a business loan via ABL finance to successfully complete your transaction with no money down ? !

There's just a lot of interest these days, it seems, in acquisition financing as a way for Canadian business to achieve various different objectives. On way in which they can be successful is via an ABL finance business loan to finalize that objective.


Why do companies want to acquire each other ? Of course it's for a variety of reasons, including growing sales, becoming a market leader in their niche, cost reduction, or buying the ' secret sauce' technology of another firm.


We're always on the look for some new thoughts in Canadian business financing , so we were drawn to an article in one of the two leading Canadian business newspapers the other day which had the catchy title of buying a company with ' no money down. The article was written by one of Canada's respected investment officers and fund managers.


No money down? And acquire a significant business at the same time. We were intrigued. The essence of the article was that many ' bargains ' are available in Canadian business - it’s a question of finding them! The article went on to say that the essence of such a search, once you have found a target firm, is to go back 50 years. Go back 50 years ? !Actually what the author meant was that at this point in your search it's time to call on Benjamin Graham , acknowledged as the father of value investing by almost all, including his prize teach pet student Warren Buffet .


What's recommended by these ' guru's is to look at ‘ net working capital ‘ - something we focus on a lot in our own preachings. That figure is made up of receivables, inventories and any cash on hand.


What about the other assets though? Essentially it's offered up that they don't mater. We think they do, but Mr. Graham and Buffett actually disagree with us .. the nerve!


So this is where we come in. Where the author of the article focuses on dealing with Canadian chartered banks we prefer a faster better route, ABL finance.


The beauty of ABL financing, via an asset based line of credit is that it can also include the fixed assets that seemed to have been discounted by Mr. Graham and Mr. Buffett.


A true asset based line of credit encompasses our previously mentioned current asset accounts, as well as unencumbered fixed assets. And while the article we referenced focused on bank financing the reality is that an acquisition financing via ABL finance provides a higher margin level on these assets. Typically those margins are 90% of receivables, significant inventory advances subject to appraisal / valuation, and financing for liquidation value of fixed assets.


More often than not firms in the SME sector that want to buy another business can generate no interest in Canada from ' private equity ' or ' VC' firms, as those firms focus on larger transactions.


So, no money down? The jury might still be out on that one, but we do assure clients that an ABL loan is a great financing alternative when you are looking to purchase another firm for competitive reasons.


Speak to a trusted, credible and experienced Canadian business financing advisor when you want to further your acquisition finance objectives.

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

Traditional Versus Non-Traditional Financing - What Are the Differences?

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Business owners at either start up or sometime in the business existence need financing. Many a joke has been offered regarding financing offers when you don't need it, however if you need financing to survive that becomes a different story. Business owners must be able to assess whether they are candidates for traditional or non- traditional financing. Traditional lenders want to grow your business; they are not looking to fix your problems. When business owners have to attract additional equity the problem usually is that they have to give up a healthy piece of the ownership of the firm. So who are these 'Traditional 'lenders? It is essentially a short list:

Banks and Trust Co's
Independent Finance companies
Venture Capitalists /Private Equity Firms
Government

Let's discuss some of the basics of those traditional players. Banks are the most obvious of all traditional lenders - they focus on assets and collateral and personal guarantees of the principals. If a firm cannot meet their lending criteria it's three strikes and you are out scenario. Venture Capital firms look for healthy portions of a firm's equity. They want big gains over a longer period of time. Generally venture capital deals are very significant in dollar size. These funders are very professional and have deep pockets, backed often by large institutions.

We feel strongly that the biggest mistake firms make when contemplating venture capital is either the small size of their transaction, or that funds are being solicited for the wrong reasons. Independent Finance firms are largely collateral based. Rates are typically a bit higher than bank type rates, and specialties include leasing and asset based lending, as well as non bank working capital arrangements, commonly called ' ABL''s. Various government loans and grants are available to business borrowers. They have very good rates and good structures - the main complaint of borrowers is time to consummate a transaction. Non- Traditional Lenders: This group can be categorized in 4 categories.

Employees
Friends/Family
Private third party lenders
Suppliers

Most business owners do not realize key employees are often an untapped source of capital. They have a vested interest in their employment and careers, and often want to be considered for ownership and in succession scenarios. Management buyouts are a very common and quite successful strategy. Friend and Family is of course a sensitive area - we all know comments made around mixing friends, family and money. Care is required in this area.

Most business owners never consider suppliers as a form of potential capital. This group has a vested interest in making your firm successful - your firm is a customer, and they quite often can see the advantage of some sort of strategic alliance. Even a simple restructuring of your payments to a key supplier can bring valuable capital to your firm. In summary, there are various sources of traditional and non-traditional funds available to business owner. They certainly are not unlimited in choice, and every business has a unique need and situation that requires a special focus and assessment.

7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .

' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.

Stan Prokop












Article Source: http://EzineArticles.com/3645694

The Secret Of Commercial AR Factoring And An Accounts Receivable Financing Loan In Canada

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Why Confidential Invoice Finance Works

Information on an alternative commercial ar factoring and accounts receivable financing loan strategy known as confidential invoice discounting . A ‘how to ‘overview and benefits recap

Mind your own business! That's what a Canadian business owner or financial manager would prefer to do when they are considering accounts receivable financing, aka a commercial ar factoring loan. AR is of course accounts receivable, your second most liquid asset next to cash. Oh and by the way, the good news is it’s not a loan, per se, more about that later. Unfortunately current practices don’t allow you to ‘mind that business ‘.

So is there a way your company can obtain all the advantages of factoring , receive a competitive financing rate, and at the same time implement what is in effect a confidential invoice discounting program ? There is. First let’s cover off some basics.

You know the drill already. Your client base and investment in accounts receivable is taking up a huge part of your working capital. Sales are growing, or you have some major new contracts and business, forcing your working capital needs to go up.

The strategy. It's of course what thousands of business in Canada are starting to consider everyday - factoring. (Also called commercial invoice discounting). If you were going to implement this strategy in the manner that your competitors currently are then you would sell your receivables as you generate them , obtaining immediate cash flow to generate more sales, more profit , and of course cover all those operating costs you need to run your business on a daily basis .

But wait a minute. As commercial ar factoring and ar financing stands now in Canada, utilizing the U.S. and European model, your clients must be notified that you have sold that receivable to the finance firm.

Is there a way to avoid that somewhat ' sticky ' process and embrace the theme of our shared information here, which is ' minding your own business ‘? There is. The secret we are sharing is the availability of ' C I D' which stands for confidential invoice discounting. This is clearly the accounts receivable financing of preference for Canadian business.

Let’s examine what just happened as you have implemented this program. You have a bankable, liquid asset, your receivable portfolio. You now have the ability to in effect ' monetize ' that investment into working capital and cash flow today.

The costs of factoring are always a concern or subject of discussion when we talk to clients. The cost is in the 1-3% range per month. However companies such as yours need to understand that you can often cut those costs in half by effectively using your new cash to generate immediate sales an profits, take advantage of supplier discounts, and purchase more effectively and ' smarter ' from valued key suppliers .

So how does our ' secret ‘, i.e. confidential invoice discounting (factoring) work? It could not be any simpler. You bill and collect your own invoices, still receiving funds for them as you generate them. C I D rates are the same as ' regular ' commercial ar factoring, yet you are now in control of the process. And remember, important for you to understand this whole process is not a ' loan ' as we mentioned, you are just monetizing assets and turning them into working capital as you need them.

Let’s recap - the strategy = generate cash! The tactic - C I D - Confidential invoice discounting. Do you qualify? We are pretty sure you do, so why not speak to a trusted, credible an experienced Canadian business financing advisor on this valuable working capital concept.



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

Advantages of Sale Leaseback Equipment Financing In Canada? Are There Alternatives?

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Let A Sale Lease Back Financing Improve Cash Flow Today

Information on the benefits, and alternatives to sale leaseback equipment financing in the Canadian business environment . Let this type of financing fix your cash flow and working capital challenges

Canadian business owners are looking for some information they can trust on the concept of a sale leaseback. Are there advantages to this type of financing, and more importantly, being a business owner or financial manger who likes alternatives, is there another solution to the sale leaseback of equipment cash flow dilemma.


Let’s examine the real world advantages of a sale/leaseback type strategy. When structured properly this type of business financing allows you to obtain additional cash flow and working capital while not giving up the right to the ownership of business assets.


Saleleaseback equipment financing often comes up as a profitable solution when firms are challenged by working capital and cash flow needs and requirements. The reality is that if you structure this type of financing properly it’s the ultimate business financing solution to a temporary business challenge.


It is not secret that the sale and leasing back of business assets becomes more popular when economic times are ' tight '. The strategy is many times a positive and good decision, because you are freeing up cash that is sitting in fixed assets that are not utilizing their maximum earning power for your business.


Let’s not also forget that your balance sheet also improves at the same time because your overall debt to tangible net worth improves when utilizing a sale leaseback financing, and your write off (depreciation) and financing costs are also lowered at the same time! That's a solid one two punch of good business news to any business owner.


In some ways this method of business re financing is an alternative and creative strategy. What your firm does with that additional capital is of course your decision - it can be used for general working capital purposes, a down payment on new and required assets, or to retire additional debt or loans that you might be carrying on your balance sheet. If you can use the new freed up capital to increase revenues and profits that is simply an additional benefit.


We caution clients to look at two key areas in this type of transaction. It is critical to maximize the value of the transaction, so more often than not a qualified appraisal of the asset has true value for the business owner, and should not be considered a wasted expense.


Remember also that most lenders when financing a sale leaseback transaction financing what is known as a percentage of loan to value. An example might be that if an asset is appraised at 200,000.00 the lender might as a policy loan 60% of that value, so your ability to increase the value of the asset via a qualified appraisal provides additional working capital to you and of course comfort to the lessor or lender. Rates are the second item to investigate, as you want to ensure you receive a market rate for this type of financing, which typically carries a premium to new equipment financing.


Is there an alternative to a sale leaseback equpment financing transaction? One of our favorites is a short term bridge loan on the asset. In this transaction you are not locked into a longer fixed term that often comes with sale lease back financing, and you have the option to often pre pay or temporarily renew the bridge loan on an annual basis. Bottom line, a very viable alternative.


Investigate the benefits and the alternatives to sale leaseback equipment financing if your firm has an interim cash flow or balance sheet enhancement need. Speak to a trusted, credible and experience Canadian business financing advisor who can assist you in structuring a transaction that optimizes benefits and increases cash flow.



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