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

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INFORMATION ON ACCOUNTS RECEIVABLE FINANCING SOLUTIONS IN CANADA

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.


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

Cash Flow Is ‘ Tight ‘Is One Saying We’re Committed To Eliminating Via Receivable Finance And Confidential Factor Funding

Some Good Reasons Combating

True Weakness In Cash Flow Is Easier Than You Thought


OVERVIEW – Information on factor funding and receivable financing in Canada . Cash flow challenges can be solved via creative alternative financing that meets all the business needs for owners/managers






Receivable Finance...aka ' Factor Funding' In Canada . Quite frankly we couldn't count the number of times that a client has opened up to us with the line ' cash flow is tight '. That challenge, that appears sometimes, or in the case of some clients... all the time. Is there a way to combat that problem? Let's dig in.

Numerous types of financing can combat cash flow and working capital issues your company faces. We're focusing on some solid external solutions, but we'd be remiss to remind business owners and managers that a lot of cash flow challenges can be addressed internally through faster asset turnover, and simply hard focus on quality , reporting, of current assets and liabilities such as inventories, payables, and of course our focus today, A/R.

How does a business owner know when external financing solutions such as A/R Financing are needed? We suppose we are talking about those ' symptoms' of cash flow being tight.

When most business owners/managers think of external financing in Canada they think of ' the bank’. They go to ' the bank'. Traditional lending is great because it's low cost and plentiful if your firm qualifies. But more often than you think issues of financials, collateral, history of owners, etc prohibits many firms from accessing that plentiful ' low cost' bank financing.

We also meet many clients who in fact have low cost flexible Canadian chartered bank financing, but it’s a case of ' not enough '. Not enough is due to some of the issues we will now address.

At night business owners dream.

Those dreams often include the concept of high growth. While the future financials might look bright when it comes to profits and sales revenues quite often the investment that you need to make in people, materials, and inventory and receivables is improperly overlooked. So Receivable Financing is simply one way to get the profit and growth into your financials.

Many clients we meet are embarking on -

The big project
The new product line
Entry into U.S. and foreign markets
Major R&D projects
Major fixed asset upgrades

While equipment financing and SR&ED tax credits can help finance some or almost all of that expansion it still takes funding out of business credit lines. Factor funding is in fact a business credit line - it's a subset we can say of asset based lending in Canada. Cash flow derived from this method of financing helps fund your expansion, simple as that.

Cash flow may not be tight today, it often will be ' tomorrow ‘.

In financing that is known as ' the bulge '. So while a traditional bank business line is a fixed credit limit Receivable financing via confidential factor funding allows you to address ' the bulge '. That bulge is a lot easier than the one we're trying to eliminate at the gym! The bulge is when you get the big order, have a temporary buildup in receivables, or require products and services that necessitate major cash outflows.

Payroll financing is one other aspect of A/R financing. For some reason we have never quite figured out employees and contractors want pay cherubs and they want them on time. Factor funding allows you to pay employees before clients pay you.

If you want to understand how confidential factor funding works ( you bill and collect your own receivables , while getting funded daily ) seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your needs.



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 = FACTOR FUNDING AND CONFIDENTIAL A /R FINANCING SOLUTIONS



CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653 ( OFFICE )
Fax = 905 829 2653
Email = sprokop@7parkavenuefinancial.com























Stan Prokop

Receivable Finance And Factor Funding In Canada . Looking For Some Growth Tips On Financing AR And Growing Your Company?

What’s The Big Deal With ‘ Growth ‘ ? !


OVERVIEW – Information on factor funding in Canada . Implications of growth, profits and financing AR cost when Canadian business utilizes receivable finance



Whether he or she likes it or not Canadian business is somewhat obsessed with growth.

It might come from the perception that to be successful you in fact have to grow. We're not 100% sure we agree, but if your firm is in fact placing a high priority on growing financing is probably a challenge you're consistently facing.

We do admit there might be some risks to not growing a lot - they might include the ability of competitors to run all over you, even going as far as stealing some of your people and clients.

One of the ways to feel a lot better about ' growth ' is the utilization of Receivable finance as a method to enhance your overall return on capital. Your growth in fact can come from only 4 areas... they include acquiring business your competitors previously had, raising your prices, seeing your industry grow as a whole, and finally .. your potential acquisition of a competitor.

So, we suppose you could say we're getting a bit more converted to the concept of ' growth ‘... when it’s done properly. Sales growth, properly achieved, does in fact bring more value to your company, but how do you get the financing to get there. One of those solutions is factor funding.

Receivable financing, considered ' expensive ' by some in fact is a very critical and valuable form of business financing in Canada... and becoming more so everyday. It's simply an agreement between your firm and your chosen finance partner (choose one carefully!) to provide you with cash as soon as you generate sales. All of a sudden your balance sheet and perhaps some temporary operating losses aren't holding you back to... you guessed it... growing!

The Canadian business owner and financial manager can probably immediately see the advantages here of this method of finance. You are now in a position to improve relations with suppliers, take prompt pay discounts with cash now that you never had before, and all along the way you don't have to deal with restrictive bank covenants. Oh and finally, all of a sudden you’re on equal footing with those competitors who have been taking that business away from your firm. Finally... a level playing field.

A common questions from clients who suddenly are seeing the benefits of factor funding and growth is as follows - ' so what is the limit of the financing here?’ The answer? There is no limit - your sales in effect determine the limits you can finance against.

So when does financing your A/R work best? The following conditions create a perfect storm for this method of finance:

Good gross margins
Pricing ability on your products and service

And quite frankly, whether you consider the pricing of factor funding ' high' the ability to quickly and flexibly get all the funding you need in place is probably very much worth considering .

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your Receivable finance needs.





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 :

http://www.7parkavenuefinancial.com/factor-funding-receivable-finance-financing-ar.html






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

Warning ! Not Using AR Finance Could Be Hazardous To Business Health . Receivable Financing Via Factor Funding in Canada

A Canadian A/R Finance Strategy



Information on ar (A/R) finance in Canada. How does receivable finance via factor funding work, what does it cost, and why it doesn’t cost what you think.


AR (A/R) Finance is one method that Canadian business owners use to ensure they have the optimum level of accounts receivable and cash flow.

It doesn't take long for Canadian business to realize that their receivables are in effect their funds that are sitting in someone else’s bank. And trust us that the large corporations figured that out a long time ago - they invest thousands and millions of dollars in credit and collection departments. We know, we've sat there!

So how in fact does a firm extend credit in Canada, while at the same time minimizing the effect on working capital on a daily basis?

One of the things you have to do in advance is to calculate your firms ' collection period. If you monitor this over time you will find that you have a strong sense

Once you truly understand this calculation you will be in a position to understand the effects of increasing sales, taking on larger clients or projects, and knowing at the same time what it will cost you in financing costs and yes, even bad debt, as not all clients pay as we have found!

Most busines owners, particularly those in the SME sector don't often feel they have the tools or knowledge or expertise to calculate these types of ' what if ' scenarios. If that’s the case a business advisor, accountant, etc can help you for minimal or no cost. It's all about putting the variables on the table and looking at them - they include things such as your projected increase in sales, your costs to deliver that product or service, the cost of financing expenses from your bank or financing company, and the cash flow that will come out of those increased sales .


How then cans Canadian business utilize receivable financing, also called ' factor funding' to ensure they are masters in their kingdom - you know the kingdom we're referring to, it's the one where cash is king!

AR Finance simply accelerates the flow of money in and out of Canadian business. In a perfect world you are accelerating ' cash in ' and slowing down ' cash out ‘, i.e. payables, etc.

The cost of factor funding, aka receivable finance is a very misunderstood topic in Canada. A good start might be for you to calculate how much it costs you now to carry receivables. Its actually only three data points in your business - you annual sales, your a/r , and the amount you are paying your bank or financing company to carry that bank line or commercial receivables line of credit.

Let’s use a larger firm as an example - say it has 20 Million in sales, and they collect their money in 65 days. Let's say they are borrowing at the bank at 5%. Their total financing costs are 20M X 5% divided by 365 days in the year Times 65 days which is their collection period. Their cost to carry A/R is then 178,000.00.

The cost to finance this a/r via factoring would be about 10k more a month , but the firm now has unlimited access to cash flow and working capital, is growing sales, and have maintained their ' cash is king ' status with strong cash on hand .

Is that good or bad, and how does it compare with factor costs. The key point here is that your DSO in effect becomes zero when it comes to receivable finance, as you generate cash immediately as you invoice. You then utilize that cash to generate more sales, turnover working capital faster, etc.

In Canada, as a general rule receivables are financed at a discount of 2% on a monthly basis. So you as a business owner have to take the time to re-do our calcs and determine your new cost of financing. You may be well surprised!

Speak to a trusted, credible and experienced Canadian business financing advisor on how factor funding and receivable financing works, what type of facility works best (its confidential A/R finance) and how your firm can qualify immediately.






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_finance_receivable_financing_factor_funding.html

Receivable Cash Flow Financing .The Only 2 Times To Consider Canadian Factor Funding

Two Times To Consider An Alternative Financing Strategy


Ancient Chinese proverbs and receivable cash flow financing and factor funding. A connection? We thought so, as we were taken by one we heard the other day. It went something like this, ' the best time to consider planting a tree is 20 years ago, the 2nd best time is now '.

Timing is everything in business... Canadian business owners and financial managers know that .That is why we think a strong case can be made to turn our same proverb towards consideration of receivable financing , something you maybe should have done already, or perhaps start considering now . Let' explain.

When business owners look at financing alternatives they are usually looking at their current situation. As the Canadian economy seems to seesaw back and forth these days between good news and bad news its Canadian business that is caught in the middle, experience continual frustration for obtaining their financing needs.

We're talking mostly about small and medium sized businesses , as larger firms always seem to be in a better position don’t you think.

So that of course brings us to receivable cash flow financing, one immediate solution that you can access today for cash flow and working capital. It's generally viewed as an ' alternative ' financing but quite frankly in our opinion it's more mainstream everyday as thousands, yes thousands of firms embrace this finance strategy.

That of course just might mean that the time is... well... now for consideration by your firm. The reason you might be considering A/R finance now is simply your inability to collect receivables in a timely fashion, from clients that seem to feel they are forever on extended terms. (Clients tell us they don’t remember granting those extensions!) We add also that the ultimate irony sees often to be that the larger firms become a major collection challenge for companies, such as yours, who might be significantly smaller.

Often times your receivable portfolio is a function of your growth strategy. That growth strategy becomes capital intensive, as you are forced to continually maintain an investment in inventory and of course receivables. So while clients tell us they would like to see A/R reduced, to cash of course reality is that it rarely does for the typical SME type firm.

A lot of clients we meet are self financing. That is a double edged sword in that it constrains many businesses from growing. They are also reluctant to take on more debt and increase financial leverage. If sales drop or operating performance decline you can well assume problems are going to occur with respect to your relation with lenders to your firm.

Factor funding reduces leverage. It is not debt; it’s simply a monetization of your A/R into immediate cash at a cost of 2-3% on a monthly basis.

So when is the time for Canadian business owners to embrace A/R financing? According to our Chinese proverb it was either a long time ago, or today! Receivable cash flow financing allows you to monetize your A/R in real cash flow; you've just given yourself an alternative to bank financing, minimized the emphasis on personal guarantees, and put yourself in control of your daily or monthly borrowing.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in determining when this strategy is right for your term, yesterday, or today!




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/receivable_cash_flow_financing_factor_funding.html