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Commercial Asset Based Lending Works - Here's Why
Commercial asset based lending in Canada is basically a healthy alternative to traditional bank financing solutions that business owners and their financial mgrs are looking for to run and grow their companies . Most business people agree there is nothing better than healthy competition and asset based lending solutions, specifically business line of credit loans are a direct competitor to Canadian chartered bank facilities.
Dramatic changes in Canadian business financing have happened in the last ten years or so relative to the 2008-2009 worldwide recession . A number of ' new ' ways to finance your business make commercial borrowing facilities more accessible than every . Commercial lenders are offering viable solutions to working capital, debt, and cash flow needs sought by the Canadian business borrower.
These independent commercial finance companies, both 100% Canadian as well as some U.S. players doing business in Canada compete directly with traditional finance sources to offer a wide array of financing solutions for your SME COMMERCIAL FINANCE needs. Even internet solutions now empower the Canadian business borrower - those searching for ' abl asset based line of credit ' via an internet search find numerous offerings that can be specifically tailored to their needs.
Also on the rise are short term working capital loans - these loans arose out of the cash flow loans made to predominantly retailers and are now well suited to general business borrowing in pretty well every industry.
No secret that Canadian chartered banks often command the first train of thought when it comes to business finance for a revolving line of credit . Asset based business lending for lines of credit gains more traction everyday.
So let’s provide some clarity around ABL finance in Canada. If there is one differentiator of the product it’s simply that the total focus of the facility revolves around one word, ' assets '. Non bank asset based loans are more flexible than a traditional bank offering, and at a time when more is better they leverage your assets significantly greater than a bank facility. Remember that an ABL loan is typically from an unregulated lender; they have different sources of capital and don’t require key elements that are necessary in the Canadian chartered bank system.
Asset based business credit lines are not to be viewed as 'term loans ; They are simply a ' monetization ' of the assets you have in your business already - specifically receivables, inventory, equipment, and , if applicable, real estate.
While our banks focus on ratios, covenants, outside collateral, personal guarantees, etc the Asset Based Lender focuses predominantly on .. you guessed it .. Assets !
So why the sudden and growing popularity in asset based lending in Canada. We think the answer to that is the fact that it covers every type of industry, retail, manufacturing, service, etc. But more importantly it also addresses your company life cycle. Even more important is these credit facilities tend to grow almost automatically with your sales levels, allowing firms to capitalize on new markets, larger orders, new major customers, etc.
An asset based ABL finance facility can be achieved for a start up, an established growing firm, and yes, those firms that have suffered severe financial challenges. In the ' old days' (yes we remember them) it was not uncommon for forms of asst based lending to be viewed as a ' last resort' type of financing. Fast forward to today and some of the largest corporations in the world, in Canada included; utilize this financing as opposed to a traditional bank facility. So something must be working!
In order to assess your firms suitability for this type of line of credit businesses should be prepared to offer up to date financial statements , and proper agings of receivables, inventory and equipment lists if appropriate . Note - only unencumbered fixed assets may be considered as a part of your credit facility . Many firms of course have liens on some fixed assets they are leasing or are borrowing against .
Speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success to better understand how asset based loans can monetize your firm’s assets into an ABL business credit line facility that provides you with maximum working capital and asset leverage.
7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
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 .
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
