Financing Receivables & Sales Is Best Achieved With These Various Factoring Solutions

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The Rise..And Continuing Rise Of A/R Finance Solutions In Canada

OVERVIEW – Information on business factoring in Canada. Financing receivables is an accepted way of ensuring your company can satisfy critical cash flow needs . Understanding how a/r finance works, what it costs , and how it can benefit your business is important

Factoring, known as the receivable financing solution continues to gain momentum as a financing alternative of choice for Canadian business owners and financial managers. We know why. Let's dig in.

The main reason? It's a case of a common sense approach to improving cash flow and working capital without taking on any debt and at the same time allowing your firm to grow without traditional type financing that might be difficult, or in some cases, impossible to achieve.

A lot has changed in the part of alternative financing, including rates / costs that have improved a great deal!


Clients ask us what risk or cost is involved in locking into a one year contract - the reality is that most firms considering factoring (also known as receivable financing, receivables discounting) actually do stay with this type of facility for at least a year. Firms that factor their accounts receivable usually have two options at the end of a one year fixed term - either move to a competitive factor facility, or in some cases migrate back to or achieve traditional Canadian chartered bank line of credit financing.

Never any doubt that traditional bank financing always has the lower rate, the reality is that it in many cases does not provide you with the amount of working capital you need if you are in high growth mode. Alternatively you may also have trouble meeting some of the bank ratio and covenant guidelines that come with those very respectable bank facilities.

We point out always to customers that the largest corporations in Canada and the U.S. in some cases also use A/R financing type facilities - it simply gives your firm, as well as the large firms, maximum leverage on working capital without taking on debt.
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The amount of your factoring facility and the rate it commands is dependent on three issues -

1 The general overall risk profile of your firm - re growth, profitability, type of industry etc

2. The size of your total receivables

3. The overall customer quality or credit worthiness of your customer base

If you are having financial or growth challenges it is generally not recommended by finance people that you take on more debt - factoring solves this problem nicely - you are simply liquidating your receivables faster without borrowing .

Our most recommended solution for our clients? Confidential A/R financing!.. Allowing you to bill and collect your own receivables while retaining all the benefits of factoring.

Seek out a trusted, experienced and credible advisor in this niche area of Canadian business financing and assess your factoring options relative to type of facility that meets your growth needs. A factor facility with rates, terms and structures that suit your business model and provide you with all the working capital and cash flow you need is a competitive advantage.



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

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

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

Factoring and Accounts Receivable Financing Expert Tips

Information, tips and advice on factoring and accounts receivable financing and factoring in Canada. Information focus on the importance of choosing the right firm and understanding the intricacies of this financing alternative and what pitfalls to avoid.

There probably isn't a day when Canadian business owners and financial managers don't hear about factoring and accounts receivable financing as a method of financing their business in Canada. Despite its growing popularity and, we can say, relative importance in the Canadian business financing marketplace this financing mechanism is still somewhat understood.

What information do business owners need to know in order to assess if factoring, also known as invoice discounting, is a viable transaction? Also, are there mistakes and pitfalls to be avoided when considering this financing strategy?

Let's examine the answers to some of those questions. You can be forgiven for trying to figure out why factoring has increased in prominence from a time when no one had almost ever heard of it! The answer to that popularity is more simply and obvious than you might think, and its simply that Canadian chartered banks are finding it increasingly more difficult to fund accounts receivable (and inventory of course) to the extent that their customers need this financing.

When you have a situation where the actual need for financing is acute, and the benefits and flexibility seems significant it is not hard to see the rise in popularity of such a financing mechanism.

First of all, 99% of the time, factoring provides your firm with a greater level of borrowing based on your accounts receivable levels. Quite of 90-100% of you're A/R under 90 days can be financed.

So is it all good news? Not necessarily, as we are always meeting with clients that have chosen the wrong type of funding or factoring, and, even worse, find them locked into contracts they cannot get out of. That is uncomfortable for any size firm as you can imagine.

As with any newer type of financing the playing field is complex. You can be forgiven for not knowing how many factor firms are out there, how they run, what their own limitations are, and, even to a certain extent, do they in fact themselves have the funding to survive, let along finance your firm. For that reason we cannot over emphasize the need to work with a credible, experienced and trusted professional in this area.

Lets talk about some of the nuances, we can call them potential 'pitfalls 'also, of picking the wrong factoring partner. For a starter if you choose a firm who itself is not well capitalized, as we said, you might find that the financing commitments made to you cannot be honored. Canadian business has never had to think that the Canadian chartered banks could be 'out of money 'but the Canadian landscape is somewhat littered with small and medium sized factor firms that do not have the financial wherewithal to support their funding commitments in all places. That just re - enforces our idea that a trusted industry expert will guide you to the best partner for your firm.

Other issues, again, we can call them pitfalls, to look for include:

- being locked into a contract

- having the total factoring cost, or pricing, not reflected properly in your term sheet

- advance rates which don't make sense relative to the price you are paying for discounting invoices

- excessive notification and intrusion with your customers, which is very prevalent in the U.S. model of factoring (Many Canadian factor firms are branches of U.S. firms)

So let's recap. It's simply that factoring is growing in popularity. It works because it is providing funding where banks often cannot. If you don't understand who you are dealing with and the various nuances of this type of financing it becomes a burden, not a solution. Investigate this great financing mechanism, but ensure you know what you are getting into. Talking to an expert always helps - that's just common sense


Stan Prokop - founder of 7 Park Avenue Financial –
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 13 years - Completed in excess of 100 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 & Contact Details :

http://www.7parkavenuefinancial.com

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
















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

Article Source: http://EzineArticles.com/4451465

Eliminate Commercial Finance Pressures With An Asset Based Lender

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Information for Canadian business owners and financial managers around a financing mechanism to solve for commercial finance pressures. Why an asset based lender might be your Canadian business financing solution

Do commercial finance solutions seem out of reach - want a simple solution? Go visit a Canadian chartered bank and get all the business credit you need! Unrealistic... maybe, maybe not, but one sure fire solution for your problems might be an asset based lender.

For many years now the non bank asset based lenders have been working with firms such as yours on credit facilities that fit the real world need of your company when it comes to inventory, receivables, equipment and real estate.

Canadian business owners and financial managers are probably asking themselves why they haven't heard of this before - we'll hit you with another shocker, some of the Canadian banks even have internal divisions of asset based lenders that compete with their regular commercial banking business!

Anyway, the bottom line is that this Canadian business financing solution might be your ultimate cash flow and working capital solution.

For the uninformed asset based lending is essentially a revolving line of credit which provides you with working capital, cash flow to cover your operating expenses and growth needs. Why is it different then from a typical bank type operating loan? Simply because there is only one focus, the assets. And because the asset based lender is a specialist in commercial finance and the value of your assets you ability to draw on those assets intensifies greatly - in many cases you will obtain 50-100% more leverage on your current assets than you ever have before.

Again, why is this so different - its because the focus is on your personal credit, your company's current or past challenges... its solely on, you guessed it..' the assets'!

In certain cases even a purchase order financing type facility can be put in place, and more often than not the asset based lender will accommodate what we term as ' bulges' or unusual temporary needs of your business based on seasonal cash flow, large new orders or contracts, etc.

As a business owner we think you can see that the total focus now seems to be on your future sales ability and the overall bench strength of your assets. It certainly is not untypical to receive 90% financing on receivables and 50% or often more on your inventory as ongoing advances for your cash flow needs. We also tell clients that unencumbered equipment can be factored into the facility also, so you in effect have a fixed asset that provides you with working capital. That's creative financing!

Clients always asked what the approval criteria are - the truth is that the criteria that an asset based lender requires are significantly less demanding than those imposed by bank, the latter focusing on rations, covenants, external collateral, strength of persona guarantees, and on it goes.

Commercial finance made easy is a great by line for an asset based line of credit. After a standard business financing application and submission of back up date which would include aged receivable, inventory listing, equipment list, recent financial statements, etc you would typically receive an expression of interest. After initial due diligence on your overall asset size and quality typical security documentation and registration takes a couple of weeks.

Speak to a trusted, credible, and experience Canadian business financing advisor who can provide you with clarity on cost, process, and most importantly, the benefits of an asset based line of credit or working capital facility.


Stan Prokop - founder of 7 Park Avenue Financial –
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 13 years - Completed in excess of 100 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 & Contact Details :


http://www.7parkavenuefinancial.com

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








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

Article Source: http://EzineArticles.com/5405332

Failure & Success – Let Mezzanine Financing & Canadian Subordinated Cash Flow Loans Be The Difference !

Mezzanine financing and subordinated debt and cash flow loans are a solid alternative to many firms who are searching for capital in the ' grey area ‘. Whats the grey area? Simply speaking it can be the ' high ground ' between debt and equity in your firm, both of those having their own challenges to rise. Let’s take a Canadian walk through the high ground!

There are some typical situations in Canadian business financing that strongly lend themselves to ' mezz ' financing. Typically the word ' growth ' will come up often! ... Simply because that’s one of the drivers all too often of the need for cash flow loans financing.

Business financing in general, certainly when it comes to lending is very tuned to ' ratios ‘. We have always tended to call them ' relationships ‘... a lot nicer term we think! But the reality is that a lot of the debt and cash flow and interest coverage ratios your firm currently may possess simply prohibit you from raising the capital you need... today! Naturally as we all know those ratios, covenants, etc, tend to be Canadian chartered bank driven.

Typical mezzanine and cash flow loans tend to be 3-5 years max... from a term perspective. The mezzanine and cash flow loans solutions you consider should be considered as an intermediate option, not a long term one. Sandwiched in between debt and equity subordinated cash flow loans are usually taken out by one or the other of those at the appropriate time.

Given the general nature of security, i.e. your cash flow, and your projected cash flow it seems to therefore make a lot of sense to ensure you have a management team that can convince the cash flow and mezzanine financing lender that ability to repay the loan is there. Common sense 101, right?

So what can cash flow loans be used for? Typical reasons include buying another firm, a buyout by the management team, simply growing the business, and working capital to fund ongoing and projected sales.

There are instances when the owners of a firm wish to recapitalize with mezzanine financing simply to recoup some of their investment... we would offer up that loading the company up with debt requires a strong case to do that. By inference to what we have talked about cash flow loans of this type are rarely for start up or early revenue firms, as those cash flows are somewhat unpredictable to say the least.

Speak to a trusted, credible and experienced Canadian business financing advisor who can determine if this types of financing suits your current profile. A successful mezzanine financing simply compliments and rounds out your full financial package, and provides the middle ground between our two friends, long term debt and equity.




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 .Info re: Canadian business financing & contact details :

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