Important Decision Making On Working Capital Loan And Receivable Financing Invoice Solutions

Tweet


Tweet

Cross The Threshold On Invoice Finance Solutions

Receivable finance solutions that are offered in Canada ( there are several types ) are a valuable strategy for companies looking for alternative finance solutions when traditional financing is not available . Typically when we are talking about traditional financing we are talking about Canadian chartered banks of course !

So what does the business owner and financial manager need to know when it comes to invoice financing and complementary cash flow strategies ? For a starter A/R financing is not a loan per se, your firm is of course simply monetizing one of the main current assets on your balance sheet.

Years ago we venture to say that many business owners were not aware of alternative finance strategies . That of course also means that many of the benefits derived from factoring or Confidential Receivable Finance finance solutions. At 7 Park Avenue Financial we always strive to ensure our clients understand the various options available to meet their unique individual needs.

Our Cdn banks of course do not tout the benefits of a/r financing / factoring if only for the reason they do not offer this type of financing . That has sometimes tended to create an image that firms utilizing factoring finance are financially challenged . That's very wrong - in fact business folks might be surprised to know that some of the largest companies in Canada utilize this for of cash flow financing - in some cases they call it by a fancier name - Securitization .

Alternative finance solutions almost always cost more . Important to understand though that actual factoring of invoices tends to not be priced at an interest rate , as opposed to a selling cost of margin reduction - typically 1-2% for companies who have good paying clients.

Example - On a $ 10,000 invoice you would have a cost of $200.00 to finance the invoice . The benefit? Cash is available immediately after you invoice and ship /provide your service.

So our take away here of course is that a/r finance pricing is in fact a huge stumbling block to many clients, but only when they don't understand it.

A/R Financing only works when you have sales, so firms that are in severe distress or have seriously declining sales rarely are encouraged to utilize this method of cash flow finance.

Receivable financing solutions typically only work for business to business firms , aka ' B2B'. Firms that sell on credit or cash to consumers are best suited to working capital cash flow loans that monetize future sales based on your historical sales levels . As an example companies in the retail sector can typically achieve a working capital loan of 10-20% of their annual sales.

What else is important in the invoice financing area ? Simply that choosing a partner firm to access your financing needs.

If you are looking for the straight goods on which method of invoice receivable finance works best (We favor confidential A/R finance), how pricing is determined, and how the facility works on a day to day basis.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in crafting the facility that meets your working capital financing 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.

Stan Prokop

How To Make Money Factoring & Financing Your Invoices !

Fascinated About How Factoring and Asset Based Lending Solutions Might Work For Your Firm When It Comes To Business Cash Flow & Working Capital Needs?

Information on factoring financing in Canada. Invoice cash solutions, utilized properly , allow a business to grow when access to traditional credit sources might not be available

Invoice cash - can a factoring or working capital facility actually reduce your finance expenses and allow your business to grow at any rate profitably. We think we can show you how!



Canadian business owners and financial managers keep hearing about firms that ' factor ' their accounts receivables, their ' invoices ‘. This is a growing trend in Canada that has caught on to a financing strategy that has been successful in the U.S. for a number of years.



Is there a ' perfect ' financing solution for your firm that provides you with unlimited working capital and is actually cheaper than bank financing when you realize that you are carrying receivables 30, 60, and 90 days on your balance sheet ? While we might agree there is no ' perfect ' financing solution for all Canadian firms everywhere we strongly feel that we can very EASILY demonstrate who invoice cash, know as factoring, or receivable discounting will take your firm to the next level of sales and profits.



Let’s get back to our statement of how you can reduce your finance expenses, and grow your sales at any growth rate. We will even add that you can ' profit ' from this financing strategy.



We have to get a little technical here, but bear with us! --



OUR EXAMPLE:



Let’s say your firm has sales of 1 Million dollars, you have 40% gross margins, and you have operating costs of 38%, leaving you a 2% net income on your sales. Included in those costs are your bank financing costs from, for example, a Canadian chartered bank. We would point out that your bank credit line has a limit, and at a certain point, because your customers are paying you in 30, 60, and 90 days you are full utilizing your line of credit. Are you able to take new orders and contracts without new external financing - we don’t think so!



So whats the solution?! We have one for Canadian business owners or their financial managers. Let us set up a working capital factoring facility for you. The kind that we prefer is 100% non intrusive - that is to say you will continue to bill and collect your own accounts receivable. We call it non-notification. Ask any other firm if they like how their factoring facility works - if they don’t have a non notification facility they will tell you they don’t necessarily like it for a number of reasons , mainly customer intrusion , etc .



So we have our facility set up. You take on new orders and contracts and double your sales to 2 Million dollars.



Your competitors start talking about you!



Using the factoring, or invoice cash facility you get paid the same day you invoice. At the end of the year your sales are 2 million, they have doubled! Your net profit would be 130k, not 20k; you would have paid 70k in factoring and financing costs and still have made a lot more profit - in our example 110k more profit.



Again , we realize we're getting a little technical and accounting oriented in our example and explanation - so what is the laypersons button line explanation of what just happened - It is as follows -



You doubled your sales, you had no concerns about external financing or taking on new debt, and your profits went up, a lot!



Technically what happened is what KPMG calls on their website the ' Cash conversion cycle ' - you have turned over assets much more quicker, therefore you have greatly improved return on asset, return on equity, and net profit .



In summary. Invoice cash, factoring, receivable discounting, whatever you want to call it (at our firm we call it a working capital facility) works. It can work for you.



Sit down with a trusted, credible and expert business financing advisor and run the numbers. You will find you just got off the cash flow merry go round, and that’s a good thing.




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

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

Receivable Loan Solutions In Canada : AR Finance Via Invoice Financing Delivers Cash Flow When You Need It

Tweet



Getting Restless Around Cash Flow Financing For Your Business ? Here’s One Solution!

OVERVIEW – Information on AR finance solutions in Canada. A invoice financing receivable loan facility ( it’s not a loan ) is one of the most accessible and sought after Canadian business financing solutions today

Receivable loan solutions in Canada have significant advantages for Canadian business owners/financial mgrs seeking to improve (and accelerate) their overall cash flow / working capital situation. Shortages in ongoing cash needs, safe to say, leaves owners somewhat 'restless'! That's why the right A/R finance solution is critical when it comes to invoice financing. Let's dig in.

Invoice financing is, in essence, a form of asset based credit lines. They are the ' bank alternative ' and allows you to leverage A/R assets to maximize cash flow.

Factoring and invoice discounting firms are playing a larger role in the overall climate of business financing - coming off very challenging years ( 2008-2009) as the global meltdown severely hampered small and medium sized firms ability to raise financing for operating capital needs .


Borrowing against accounts receivable is a very simply way of leverage assets, without taking on additional debt to your balance sheet, and converting a/r into cash - allowing your firm to reduce payable and invest in ongoing growth and profits .

So those are all great positive aspects to working capital benefits - so the question remains to be asked, is there any ' downside '? The reality is that there is no one single perfect solution for any firm considering working capital financing - There are pros and cons to every method of financing your Canadian business.

So the recommendation we provide is simply, ' caveat emptor ' - or to translate that Latin phrase into plain English - investigate invoice discounting and factoring and determine if the benefits of that type of financing can help you survive and prosper !


When you secure an invoice discounting or factoring facility you have new flexibility in a number of areas - you have additional cash for one thing - never has the phrase ' cash is king' meant so much in today's competitive business environment.

Many Canadian firms have seized the day and taken the global financing challenge head on and in effect capitalized on invoice financing availability - they have acquired a competitor, merged with a synergistic partner, or in some cases engineered a management buyout. Factoring or invoice discounting and full asset based lines of credit can assist you in any of those strategies.

More often than not funds acquired through a factoring facility are simply used to reduce payable, or help to affect a business turnaround after a firm has had a very difficult year. In some cases traditional financing has been curtailed, and leverage of cash flow via factoring has emerged as the only option to business survival.

In the direst cases factoring or a full asset based line of credit has helped many a firm in fact survive the bankruptcy or re organization process. But it's important to know that some of the largest and most successful public and private companies in Canada finance A/R through non bank alternative finance solutions.

Why does A/R financing work? It's because it immediately frees up cash in your receivables - this helps to increase sales and allows your firm to invest in additional inventory - the cycle of course continue as this inventory is again converted into a receivable, generating further profits for your firm .

Many times smaller and medium sized firms cannot take advantage of the strategies that larger firms utilize to liquidate receivables - they don't have the funds to invest in corporate credit and collection personnel, as well as sophisticated cash management and planning. So, by utilizing factoring and invoice discounting issues such as being 'too small ', or 'too new a firm ‘holds little relevance.

Many Canadian firms adapt formal U.S. or European methods of factoring - careful investigation, best achieved by working with a trusted and credible advisor, will allow you to find a facility that meets your long term needs. In a perfect world we recommend to clients that they seek a facility that provides maximum loan to value on receivables, can incorporate inventory as some additional component of financing, and, most importantly, allows you to bill and collect your own receivables.

Our recommended solution in receivable loan financing? It's Confidential Receivable Finance, allowing you to have full control and bill and collect on your receivables, utilizing and paying for the amount of financing you need when you need it!

Is factoring or invoice discounting the optimal solution for your firm? Weight the benefits, and seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can help you eliminate that ' restless ' feeling that comes with funding challenges.


Stan Prokop - founder of 7 Park Avenue Financial –
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 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 & Contact Details :

http://www.7parkavenuefinancial.com

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


Email = sprokop@7parkavenuefinancial.com


'

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