WELCOME !

Thanks for dropping in for some hopefully great business info and on occasion some hopefully not too sarcastic comments on the state of Business Financing in Canada and what we are doing about it !

In 2004 I founded 7 PARK AVENUE FINANCIAL. At that time I had spent all my working life, at that time - Over 30 years in Commercial credit and lending and Canadian business financing. I believe the commercial lending landscape has drastically changed in Canada. I believe a void exists for business owners and finance managers for companies, large and small who want service, creativity, and alternatives.

Every day we strive to consistently deliver business financing that you feel meets the needs of your business. If you believe as we do that financing solutions and alternatives exist for your firm we want to talk to you. Our purpose is simple: we want to deliver the best business finance solutions for your company.



Showing posts with label inventory financing companies. Show all posts
Showing posts with label inventory financing companies. Show all posts

Thursday, November 28, 2019

Here's What Really Matters With Inventory Financing Companies















Little Known Factors That Affect Inventory Finance Solutions







Inventory finance lenders in Canada provide the solution to ongoing working capital challenges encountered by Canadian business owners and their financial mgrs. Inventory is often a key component in the current asset part of many balance sheets , particularly those in industries such as manufacturing . There are some critical factors in an inventory financing loan that need to be understood . Let's dig in !

Inventory financing is of course the collateralizing of your inventory for cash flow purposes . Where it gets tricky is that it has to work for yourself and the lender , and can also get a little tricky if you have existing financing in place as a part of your overall business strategy.

Most working capital solutions revolve around inventory and receivables - if your sales are growing and you have business accounts receivable and are turning your inventory you are a candidate for more working capital - especially as these two asset categories grow!


The key to facilitating a solid inventory financing, or purchase order financing in Canada is to help your lender get the feeling they will never have to realize on that inventory to collect their loan or financing proceeds! You want to be able to demonstrate that your inventory is marketable, and that you have the ability to control and count the inventory. A perpetual inventory accounting systems helps a lot in that process , so investigate that with your accountant.

In some cases a purchase order financing solution or an a/r financing facility might be very complementary to the inventory financing loan. This is especially true for firms that take on much larger contracts or clients / orders.


When clients ask us what can go wrong in an inventory financing scenario we often simply state that you must be in a position to be able to turn inventory over and demonstrate your products are marketable in a worst case scenario .


We mentioned earlier about the challenge of managing through an inventory financing facility based on your current borrowing arrangements. In a perfect world (we know it’s not a perfect world!) you secure both inventory and A/R financing via a chartered bank. The alternative to this is an asset based lending facility, or what is known as an ABL line of credit. This facility margins inventory and receivables to the maximum value, which great increases your ability to draw down on cash flow needs.


In a working capital or asset based line of credit situation you will usually have a larger draw down on receivable, but a proper inventory financing scenario can easily secure 60-80% of your overall inventory values and that is a lot of additional cash flow if you need to draw down on it.

BENEFITS OF A PROPERLY STRUCTURED INVENTORY FINANCING LOAN



The key benefits of a properly structured inventory financing facility are that it supplements your overall working capital needs. The facility should revolve, and you should only be paying for what you use. You should also have defined borrowing limits on inventory, and the ability to repay, or draw more financing at your option.


Your best inventory financing ability will ultimately come from your ability, as we said, for you to demonstrate proper accounting and reporting of inventory, as well as information on customer prospects, contracts, etc.


Pricing on inventory and purchase order financing varies with the size of the facility, lenders interpretation of the marketability of your product, and your ability to turnover inventory at equal to or better than industry standards based on your own business model. Focus on demonstrating clearly how inventory financing will grow your sales and profits, that’s a win win situation for you and your inventory lender.

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





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

Click Here For 7 PARK AVENUE FINANCIAL website !




7 Park Avenue Financial provides value added financing consultation for small and medium sized businesses in the area of cash flow , working capital , and debt financing .



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.








Sunday, November 10, 2019

Inventory Financing Companies - The Inventory Finance Loan Solution !












Get Ready For Inventory Financing & Accounts Receivable Finance Solutions !






More and more Canadian firms require inventory financing as a component of their business and sales growth . Inventory financing in Canada is relatively under utilized and most business owners don't understand how it works . This new form of financing is growing .



Inventory growth needs put financial pressure on the balance sheet as vendors and suppliers continue to dictate payment terms in order to meet their own business and profit goals . As more financial managers know the ability to turn inventory over as many times as possible is a significant operating measure for any firm .


A company computes its inventory turns by simply dividing the ' Cost of Goods Sold' by the amount of ending inventory and ending up with a turnover rate . The rate of inventory turns is never an absolute number , as different industries have different acceptable inventory turns . Also, we should note that there are sometimes different inventory components - i.e. raw materials, work in process, and of course the final finished goods .


Many Canadian, ( and U.S.!) firms moved significant purchases to China in the last number of years , As China has changed its banking policy, and has also been a victim of the world liquidity crisis , more and more Chinese manufacturers are not willing to carry accounts receivable in the manner they did several years ago .


The crux of the inventory problem issue for any firm is the inability of the company to convert orders into sales simply because they don't have the inventory to satisfy their customers . Without orders the firm has no financeable asset . Day to day cash flow rarely is enough to generate significant additional inventory purchases.


The ability of a inventory financing companies to finance required inventory in turn allows a firm to generate receivables which are converted in true working capital .


An inventory finance firm will evaluate the company's overall prospects , its management, inventory controls, etc and determine what per cent of the companies inventory can be financed . To take the matter further a lender might, on occasion, require the inventory to be inspected at regular intervals, or in extreme cases, held in a separate location under the control of the lender . The inventory lender is looking for an acceptable business model which is replicable . Generally speaking inventory financing is never done on a ' one shot deal ' basis.


The risk in this type of financing is reflecting in the pricing . Normally the only other way a company could attract capital to generate high inventory levels is to issue additional equity . This is categorically more expensive than debt, or in this case the inventory financing cost .

 

 

The Top Ways to Succeed in Inventory Financing


They types of companies that require inventory financing are usually in the following categories :


1. Growing importers who sell wholesale in North America

2. Importers who sell to consumers

3. Intermediaries who purchase product and ' flip ' the inventory to someone else

4. Manufacturing firms with fast turnaround business cycles



They also have good gross margins which can withstand the more expensive cost of this type of financing .


In summary , inventory financing and accounts receivable finance is a growing component of business financing . It works well in certain industries . Most firms who require inventory financing are either start ups, or those who cannot get traditional bank financing . ( In our experiences banks can rarely, if ever, meet a company's inventory margin requirements . Seek out and speak to a trusted, credible and experienced  Canadian business financing expert who can assist you with your business finance needs.






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

Click Here For 7 PARK AVENUE FINANCIAL website !




7 Park Avenue Financial provides value added financing consultation for small and medium sized businesses in the area of cash flow , working capital , and debt financing .



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.