Don’t Be HirooOnoda’d When It Comes To This Method Of Business Financing
Information on how a factoring company in Canada works . It’s time the Canadian business owner/manager understood the ‘factor’ concept and why and when it works for your firm
The factor finance solution in Canada. When it comes to this method of financing a Canadian business a few of the clients we meet these days admit they have done a HIROO ONODA in avoiding understanding receivable financing as a cash flow method.
HIROO ONODA? He was a soldier in the Japanese army that had heard the war ended on his remote island station. The result? He spent 30 YEARS doing things the same old way, not knowing the world had changed around him. So bottom line, it just might be time to surrender to the new alternatives in Canadian business financing. Let's dig in.
How then has one single method of financing your firm changed the landscape so much? Some might make the case that banking in the SME sector is somewhat 'down for the count ' these days - it’s simply hard to achieve in the amount that you need.
Part of the challenge around understanding what the factoring company in Canada does is being able to wade successfully through the different terms and offering of this finance mechanism. So it’s very easy to miss the big picture, or even worse, miss out on the right type of receivable financing that works best for your business.
Our own most recommended solution is CONFIDENTIAL RECEIVABLE FINANCING which allows you to retain full control of the billing, collecting, and financing function of your sales, while the entire time still generating the cash flow you need for operations. So pretty well everyone uses that these days right. Wrong, we would guess that only a small majority of firms who utilize A/R finance in fact are even aware of confidential factoring.
Why is the case then? We can probably chalk that up to a lot of factors - companies who don't take the time to investigate how A/R finance works, or industry players who don’t offer this method of financing and therefore have very little inclination to explain it to you. And by the way, pretty well all the banks in Canada don't offer a stand alone ' factoring ' solution unless it's a subset of much larger transactions in the millions. That certainly eliminates most of the SME sector when it comes to receivable portfolio size.
We're often amazed at how clients seem to stumble on the factor finance solution in Canada. They are looking for alternatives, start talking to people, and suddenly realize, just like our friend HIROO ONODA that there's a whole new world of financing alternatives out there.
While factor financing is frankly available in all sizes for every firm it tends to work best and make sense when your receivables are in the 250k range and above. In many cases, as we have alluded to, its a subset of a total asset based lending facility that includes your inventory and equipment, but stand alone factor financing - i.e. just for your receivable works quite well on a stand alone basis.
So what then should the business owner and financial manager do when they seek alternative non bank financing? A good choice might well be to speak to a trusted, credible and experienced Canadian business financing advisor who can help you ensure the cash flow achieved via a factoring company in Canada works to the max for your firm. That will allow you to bring on that full time new employee, working 8 hrs a day and generating the cash flow you need – aka the Factor finance solution.
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 = A/R Factor Financing Solutions In Canada
CONTACT:
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
Stan Prokop
