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

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

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






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

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

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

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

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

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

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

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

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

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

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




Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :

7 Park Avenue Financial = Canadian Business Credit Line Financing Expertise





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

7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Direct Line = 416 319 5769
Office = 905 829 2653

Fax = 905 829 2653

Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '

Stan Prokop

Canadian Business Financing . Learn From These Commercial Credit Mistakes!

Tuition In Business Financing Experience Can Be Very Expensive . Learning from Business Failure !



OVERVIEW – Information on Canadian business financing options . How business can learn from commercial credit failures




It's not always Happy Talk! When it comes to Canadian business financing and commercial credit in Canada we can learn a lot about the mistakes we and others have made in the past, right. We're full of sayings today, but our other favorite is that there is a lot of tuition

to be paid in the school of business experience.

In many cases when it comes to business finance a mistake can be corrected - the worst case is of course business failure, bankruptcy,etc Those experiences make business owners and managers shall we say ... ' resilient '.

Securing financing improperly is one of the worst mistakes your business can make. And that doesn't necessarily mean rate, it means structure and purpose of the financing. And when you don't know how and when to raise capital or monetize assets that just compounds the problem.

From your lenders perspective it’s all about risk and the amount they are willing to take with your business. So you become a winner when you obtain the financing you want and your bank or commercial finance firm feels they have not taken excessive risk. That's a great point to remember.

To make their loans and financing ' less risky ‘banks and other finance firms make ask for personal assets as collateral. While in many cases that can't be avoided the business owner should take great caution to over collateralize their lender. That mistake becomes very costly in the even of a business failure.

Matching the right term to your financing is critical. Remember that a bank or finance company, Lease Company, etc always feels less certain about a longer term. Why? Simply of course because the long term future is uncertain for any business.

Many businesses are forced to give up some for of equity in their early years. That might be from an investor, a lender, a partner/strategic partner etc. When you do that you're of course giving up significant returns at a future point in time.

We probably couldn’t count the number of times we have felt that clients have simply aligned themselves with the wrong firms, people and financing. In a perfect world you want to deal with people who are knowledgeable about your company and industry.

We hear a lot about ' bootstrapping ' these days. Essentially it’s utilizing personal and ' friends and family ' savings as opposed to seeking outside funding. That’s good and bad we think. You do have less or no external debt, but again you've pledge personal assets that ultimately will affect your personal credit history. The best bootstrapping arrangement is one in which you feel very confident about future cash flows.

What is the key take away today ?Simply that Canadian business financing, either via debt or cash flow and commercial credit asset monetization must be taken on in the context of short term, long term, and daily operations financing . There are serious implications to taking ' other people’s money '. You can pay a lot of expensive tuition when you don't understand your needs and potential sources of commercial credit in Canada.

Seek out and speak to a trusted, credible Canadian business financing advisor who can assist you with your commercial credit needs, with the benefits of experience.


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/canadian-business-financing-commercial-credit.html

7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS FINANCING EXPERTISE


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