Is The ABL Facility The Type Of Lending You Are Looking For In A Business Credit Line?

You’ve Got Probable Cause To Check Out Asset Based lines of Credit !

OVERVIEW – Information on the benefits of an ABL ( asset based line of credit ) commercial revolving line of credit in Canada . How this business lending has revolutionized business credit lines.





An ABL Facility? We checked and its true, you've got ' probable cause ' to check out a unique form of lending that competes with Canadian banks when it comes to a lending facility that you need to facilitate a business credit line . Let's explain!

When we're watching our favorite crime shows on TV these days (CSI Brampton, etc) we’re always been enamored by that term probable cause.
Simply speaking it’s a ' reasonable grounds for belief '. And that’s our point today when it comes to our suggestion that you check out thoroughly the ABL facility, more commonly known as the asset based line of credit.

It's simply an alternative to bank financing. Whereas banks place a tremendous amount of focus on you cash flow and all the balance sheet and income statement ratios that come with that the asset based loan focuses 99.99% on your assets - typically receivables, inventory, equipment, and even your company owned real estate if that’s applicable .

Our Canadian banks are so strong and well known for growth, profits and conservatism simply because they are regulated, and enforce very strict rules around how much capital they can lend out , guarantees, and our previously mentioned ' cash flow coverage ' for any debt you have with them or anyone else .

The benefit to all that - it’s pretty obvious - unlimited capital with great rates, for those that qualify.

What if though? What if you don't qualify for a Canadian chartered bank line of credit? Typically you find yourself in one of the following situations - you have high or volatile growth, you’re just out of the start up stage, and on any given day you seem to be using cash, not generating a lot of it!

All the reasons and facts that we're provided for you above simply enforce why asset based lending via the ' ABL ' is getting more popular, It focuses on the underlying assets you have and monetizes them into one single borrowing facility .

The asset based lender is typically what us finance folks refer to as a ' non bank, non regulated lender '. The connotation is of course that they can do whatever they want within their firms own borrowing guidelines based on their management experience. They are also focused daily on managing the risk of the asset based loan and line of credit facilities they have provided to your term. Typically that means you're reporting on your financials and assets in a more regular fashion, monthly for sure. Some of our clients view that as a negative - we explain they should consider that in our experience many firms that report and understand their financial progress more regularly... guess what... DO BETTER!

The somewhat not so secret in ABL facilities is that many Canadian banks recognized that this is indeed a viable way to lend - so they have set up small divisions in their banks to also consider asset based lines of credit. Boy, talk about being two faced! Just kidding of course, because no one has more respect for our Canadian banks than us.

Asset based lines of credit work because they provide a lot more liquidity also. Receivables are financed at 90%, inventory is financed at more generous levels once your ABL lending firm understands your business, and they even throw your fixed assets into your daily borrowing mix. That’s liquidity 101!

Have we proven your PROBABLE CAUSE? We think so, hope so, so seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your business line of credit needs.

7 PARK AVENUE FINANCIAL
CANADIAN ASSET BASED 'ABL' LINES OF CREDIT EXPERTISE


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/abl-facility-lending.html




















Stan Prokop

Turn $500,000.00 Of Promises Into Cash In 4 Hours . Financing Receivables Via Invoice Discounting And Receivable Lending In Canada

Canada’s Newest Cash Flow Financing Tool


Information on financing receivables in Canada . How invoice discounting via receivable lending turbo charges cash flow and working capital .




Financing receivables in Canada. Trust us, it's not magic . The concept of invoice discounting and receivables lending practices in Canada allows Canadian business owners and financial managers to turn sales into cash ,, pretty well in 4 hrs .. ! In case you haven't thought about that a lot, 4 hrs is better than waiting 1, 2, and yes sometimes almost 3 months for your sales to turn into customer receipts of payment . Talk about bridging the gap!

Surely business owners can't be surprised when they hear that the majority of firms tend to drag their feet when it comes to paying their bills . In the world of corporate financing slowing down payables is actually part of the formula for cash flow calculations ! And be honest, you cant be surprised about that one since the your firm is probably itself in that same majority of firms who in a calculated manner only pay suppliers at the last minute .

At the root of the matter though is the fact that the slow down in receipts from your clients creates a problem for your firm . Can it be fixed ? Absolutely .

We'll quickly add that your own firm can do a lot internally to accelerate cash - that can be done by stressing payment terms with clients and maintaining a focused ( but professional ) approach to collecting your accounts . That type of policy also prevents you from hearing about invoice or product or service problems much too late in the business cash flow cycle .

While many firms want a positive business relationship rather than have their valued customers on ' credit hold ' its safe to say this is a tough balancing act to manage . One U.S. survey, and we're pretty sure it is the same in Canada had 1000 of the largest corporations in America acknowledging they were paying suppliers more slowly . We already told you the reason why of course . Another survey indicated by the way that 50% of all ' small guys ' were experiencing cash flow ' concerns'! No surprise, right .

Naturally the concern of the SME business owner and manager revolves around ' will I lose a client if we have a strict credit policy '. We don't think so , but at the same time that is yours to decide . We would add by the way that profits of lack thereof rarely takes down a company, but running out of cash ... does .

So, our ' magic solution ' on turning , in our example 500k of promises into cash . Its invoice discounting. It's basically getting cash before your client pays you, and it’s done via legitimate receivable lending firms, typically non bank in nature in Canada.

Your receivable or receivables are purchased when you issue the invoice, and typically, 4 hrs or so later you have cash in the bank. In Canada a typical advance rate is 90%, so if you have 550,000.00$ in sales you would receive approx 500,000.00$ in cash. Oh and by the way, that remaining 10% is yours when your client pays, less the financing cost.

Accounting for all this is quite simple , using one invoice as an example you would CR a/r and DEBIT cash and invoice financing expense . Mission accomplished!

The largest corporations in North America use a more formal program that typically is called ' securitization ' whereby they move their a/r off the balance sheet to a third party in exchange for immediate cash . Boy does that balance sheet look good. No A/R and plenty of cash.

The benefits of financing receivables should by now be pretty obvious - it comes down to customer retention, not running out of cash, better supplier relations , and the ability to feel you have a sense on future sales and growth financing .


Speak to a trusted, credible and experience Canadian business financing advisor on how your firm can benefit from invoice discounting. It's not magic, just experience and knowledge!

7 PARK AVENUE FINANCIAL
CANADIAN INVOICE FINANCING EXPERTISE


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/financing_receivables_invoice_discounting_lending.html

Franchise Loans In Canada . 4 Critical Components of Franchising Financing And Lending For Canadian Franchisees

Franchise Financing In Canada


Information on franchise loans in Canada . When it comes to franchisee financing and lending the applicant needs to identify key requirements of franchising loans.




Franchise loans in Canada. Is the financing for a franchisee opportunity really any different than any other type of business lending / loan? The answer is no... And yes ... so let's spend a bit of time defining those differences!

It's very safe to say that franchising is a sought after business model in Canada... all the reasons are obvious - proven business strategies, demonstrable examples of your success from existing franchisees, etc.

So the immediate problem then becomes: Where do I get the cash and financing to complete a successful transaction. Here's where your financial search begins, and as we noted, there are some strong similarities in what you need for any business loan - some of them being a business plan and reasonable financial projections.

Although the majority of business financing in Canada requires personal guarantees from the owners as a back up plan for your lender there are in fact ways to limit your personal guarantee when it comes to financing a franchise . One of the best options in that area is to consider a BIL/CSBF loan, which is a federally sponsored program that significantly limits your personal guarantee to 25%. Now that's good news for the prospective franchisee.

You can of course explore financing options with your franchisor - we very quickly point out to clients they should expect some solid advice from the franchisor as to how things might work, but certainly don't expect direct financing in the form of a loan, etc. That’s your job!

Are there some potential franchisees who actually expect they can get 100% franchising for their proposed new business? Unfortunately there are, and even more unfortunately they are wrong. You do need a personal equity component to your overall finance strategy. What amount is that? We can safely say is a minimum of 10% permanent equity, but you should be able to demonstrate access to other working capital sources that will at a minimum be able to help you get out of the gate until your revenue expectations are starting to be met .

So where in fact do franchise loans and financing for your new business come from in Canada. In reality it's a small handful of sources. Oh and by the way, we never recommend to clients that they entirely pay cash for their new business, as you do no want to put all your financials resources at risk in the even of a business failure or downturn. And by the way, That’s just another great reason ensure you are incorporated.

Lending for franchises in Canada comes from a small handful of specialized finance firms, although the majority of franchises under 350,000.00$ are in fact financed by the government small business loan. Financing can also be accomplished by cobbling together those two solutions with equipment financing and other forms of alternative working capital from non bank lenders.

Collateral. Is it required from a franchisee for franchise loans? In general, we can say it is not. Although your overall credit history and personal net worth are factors in franchise lending, or any lending for that matter, a properly structured franchise loan will in fact not require collateralization of personal assets ... and that's a good thing!

Your overall business experience and personal demeanor in your franchise loan presentation is key to a good financing package. Lenders look for people that have business and marketing savvy and who come across as positive and successful.

We identified in our title today 4 components of a successful finance lending strategy. In case you have missed them we've purposely kept them subtle, but in fact they are character, capacity, and collateral and credit history. Those by the way are components of any successful business financing, so as we said at the outset, while there are some nuances in franchise lending common sense business applies also!

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you to ensure lending for your franchisee dream is met with success.

7 PARK AVENUE FINANCIAL
CANADIAN FRANCHISE FINANCE EXPERTISE



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/franchising_loans_financing_lending.html

Downside Of Canadian ABL Asset Based Finance ? P.S. There Is No Downside! Business Financing And Lending That Works

Asset Based Lending Works



Information on ABL asset based finance. Explaining the perceived downside of lending via asset base lines of credit financing for Canadian firms.





So, which is it? We're big proponents of ABL asset based finance in Canada. So once in awhile a client pops the question. What's the question? It's ' Is there any downside to asset based financing for a Canadian firm?" Fair enough. ABL lending seems to have only good things attached to it in terms of the benefits. So about that downside...

We often hear the term perception versus reality. In the mind of the perceiver the perception is of course reality.

The world of ABL financing in Canada is in some ways fairly new. It's used by wholesalers, distributors, retailers, and manufacturers as an alternative to the commonly known ' bank operating line of credit '. One guesses that to be able to ' pan ' something and express concerns about the downside that you have to know what you're talking about.

In simple terms ABL lending in the context we're talking about it is a revolving line of credit secured by the assets of your company. Those assets are most commonly A/R, inventories, and in some cases we can throw unencumbered fixed assets and real estate into the mix. Again, simply speaking you borrow on a daily basis against the total value of all those assets once the asset value is agreed upon between yourself and the ABL lender.

So, on to that perceived downside! Many business owners and financial managers make the assumption that their firm must have the same credit quality that Canadian chartered banks require - that being profits, clean balance sheets, owner guarantees, the necessity for outside collateral on occasion, etc.

So the perception is that the downside here is that approval for ABL asset based finance is challenging. That clearly is not the case, if your firm has assets that can be financed you are in fact the best candidate for asset based lending.

Pricing. That clearly is perceived by many clients as the downside to this newer method of financing Canadian business. So, again, perception, or reality?! The reality is as follows: larger asset based lines of credit; particularly those in excess of 3 Million dollars are priced ultra competitively with Canadian banks. In some cases they might be lower!

How's that for a perception breaker?! For facilities between 250k and the, say 3 Million range pricing is done based on credit quality. In general these facilities are in fact priced higher, but in fact become the only alternative for firms that can't access any form of traditional financing at all.

‘Our company is public ' says a CFO. So we assume we can't access ABL revolver facilities?' Nothing can be further from the truth, as our ABL financing solution serves both private and publicly controlled companies, either on the TSX or Venture exchange in Canada. Even subsidiaries of U.S. companies by the way could qualify for asset based lines of credit. And in fact we think shareholders of public companies would like the idea that asset based facilities tend to grow and provide ongoing capital as the firm grows.

Fees. That’s the other common complaint we occasionally here about asset based finance. Here's where we will give in a little bit to those naysayers, as yes, there are some miscellaneous fees associated with ABL lending. But those fees only are a bit larger when we're talking about those very large revolving facilities, and in that case the pricing and access to more credit and working capital tend to offset any cost such as an appraisal fee, commitment fee, etc.

Finally, time to get approved and closed. Clients perceive ABL financing, perhaps because it’s different, as taking long to close. If you have solid reporting, can talk intelligently about your business and are prepared to commit to a new lending relationship we don't think there is any more time involved versus a bank line of credit.

So, perceptions. Realities. You decide, but be open to accessing this new method of financing. Speak to a trusted credible and experienced Canadian business financing advisor for assistance in your reality check!







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/abl_asset_based_finance_lending_financing.html

How Asset Based Loans And ABL Financing Provide Superior Canadian Lending Solutions For Your Company

Shouldn’t You Be Considering Asset Based Lines Of Credit?


Information on asset based loans in Canada and how this type of lending and financing via ABL facilities for inventory and receivables generate more cash than traditional bank lines for Canadian business .


It's certainly not an unreasonable question. The question from clients is simple: ' How Do asset based loans via an ABL financing arrangement provide more cash to a business than a traditional lending arrangement '. As we said, fair enough. Let’s explain.

Whether you are a manufacturer, a distributor or wholesaler, or even a retailer with inventory and receivable investments on your balance sheet... well guess what, you need a business line of credit.

A revolving credit facility via either a bank or an independent non bank finance firm provides you with ongoing operating capital to optimize your firm’s growth. Naturally your inventory and A/R are the essential collateral behind asset based loans. As you convert inventory into receivables or cash sales your working capital and cash flow fluctuate, on a daily basis. Naturally along the way there are seasonal or one time bulges in your sales and finance needs.

By monetizing that collateral (our aforementioned A/R and inventory) you create cash flow to keep your business surviving, and, hopefully, growing! Naturally you have one other alternative to all this, which is putting more of your own personal owner equity into the business, or bring in outside capital. That’s allowed by the way, it’s just more expensive and dilutes your ownership - so in general not a good thing for all the obvious reasons.

So back to our question, which was ' how does the abl facility add more cash than say, for example a bank facility '. The answer - it’s all in the margining. By drawing down on better margins on eligible inventory and receivables you accelerate cash flow based on growing sales. In essence you're also turning money over quickly, and those increased turns of your accounts and stock lead to a greater return on equity. That’s a good thing!

So that’s the basic theory behind abl backed revolving credit facilities - let's check into the real world for a minute and demonstrate exactly how that margining might work.


Naturally there are all kinds of ' inventory ' in the Canadian business landscape. And not to complicate things, but that inventory is broken down into raw materials; work in process (‘WIP’) and of course finished goods. By agreement with your ABL lender you create an ongoing borrowing base for your type of inventory, given its cost and salability.

In general we can make the statement that finished goods and raw materials can often be financed anywhere from 30-70 cents on the dollar.
We hate to generalize, but given the variety of inventory it’s safe to say each industry and company is a bit unique in that manner.

So, on to A/R. What's the scoop here? Receivables it can be said are the most coveted collateral by your abl lending and financing partner. Very common advance rates are in the 90% range, and it’s certainly not uncommon if you have good records and a track record to even negotiate one time temporary bulges.

In summary, when you consider that all companies in Canada of any substance are eligible for asset based loans, and giving weight to the fact that they provide more cash flow than traditional bank financing it is safe to say this financing solution should be at least examined by Canadian business owners and financial managers looking to enhance working capital .

Speak to a trusted, credible and experienced Canadian business financing advisor on how your firm can get a better deal on cash flow financing.



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/asset_based_loans_lending_financing_abl.html

Need Some Help ? How to Buy And Finance A Franchise - Canadian Franchising Funding & Lending For The Loan You Need

Here’s A Solid Foundation For Financing Your Franchising Dream In Canada

Information on how to buy and finance a franchise in Canada . What type of franchising loan is available for entrepreneurs and how does this lending and funding work ?




It's not an uncommon question from clients: ' Where Can I get help on how to buy a franchise ‘... and equally as important what type of financing lending and funding is available under a franchise loan scenario.

By that time the entrepreneur has already gone through those pros and cons of buying a business under the franchise model. The benefits can be significant, and of course no business model is risk free so there are cons and consequences do making the wrong decisions.

In general it’s safe to say you need less capital when you ' buy ' a franchise. Other businesses not under the franchise model might come with significantly higher costs, especially if they are established, profitable, and have assets and cash flow. These businesses are often sold on what the finance folks call ' multiples ‘. Those are basically increased weighting applies to things like cash flow and profit or goodwill.

As a quick example if a business is earning for example 100k per year and the owner is selling it a typical valuation for that industry might be a 5x multiple of income . So your purchase price now becomes a half million dollars. That’s ashen a franchise purchase and the ability to get funding for it becomes a lot more attractive.

Naturally if your franchisor is doing well you're looking at buying, hopefully at a reasonable price, a proven business model, and a well known brand that is growing in popularity.

Ironically, and we certainly don’t think it has to be the case, but financing and funding for a franchise loan often becomes a huge challenge for clients we talk to . Why? For some simple reasons, a lot of them simply human nature. Buyers of a franchise don’t understand the qualifications, and they come with pre conceived notions that the banks and other commercial finance companies wont want to and don’t finance this type of business.

The reality is that franchise lending is in fact alive and well in Canada, with most lenders recognizing the huge part that franchising plays in the Canadian economy.

So how do you identify a ' favorable' financial lending solution for financing your new business? Certainly we tell clients that they shouldn’t expect a lot of help from their franchisor, whose job it is to sell franchises, not finance them with their own capital.

The majority of franchises under 350K in Canada are financed by the BIL/CSBF program, which is a government loan that is guaranteed in large part to the lenders who participate; in most cases this is Canadian chartered banks . The terms are very favorable - we repeat very favorable. They include long amortizations, great rates (we think) and minimal personal guarantees.

The challenge for the prospective franchisee is simple locating a bank or franchise financing expert who has the knowledge to package a transaction that meets the criteria of the program. Many clients tell us they were declined initially simply because their package was poorly or incorrectly prepared, and we can assure you, it not rocket science.

Not all banks and BIL/CSBF lenders are the same. So seek and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with how to buy a franchise, and finance it with a loan that makes perfect funding sense.





ABOUT THE AUTHOR -

STAN PROKOP - 7 PARK AVENUE FINANCIAL

CANADIAN BUSINESS FINANCING

http://www.7parkavenuefinancial.com/how_to_buy_a_franchise_loan_lending_funding.html

Canadian ABL Loans Are Solutions To A Cash Crisis and Business Growth Financing ! Look Into Business Lending via a Revolver Loan Facility.

http://www.7parkavenuefinancial.com/abl_loans_lending_financing_loan_revolver.html




Asset Based Line of Credit Facilities In Canada


Information on ABL loans in Canada and why this type of business lending and financing revolver is the ultimate working capital loan facility.




Talk about two different problems... a cash crisis (or ongoing cash crisis!) and badly needed growth financing. Let's take a look at how abl loans via asset based lending and financing can be the perfect solution for your revolver facility loan needs.

In business there’s nothing more urgent than a ' call to action ' around a working capital or cash flow crisis. At this point it's all about ' righting the ship ' and allowing Canadian business owners and financial managers to get their business finances under control. It's more often than not a case of simple survival.

Naturally putting in a proper ongoing financial solution, such as an abl financing revolved allows you to get your eyes back on running the company normally on a daily basis - we meet with clients who regularly tell us that a huge amount of time is spent on managing cash crises and juggling things such as vendor payments . Bottom line, its time to stop putting out the fires and focus on a solution... that works.

A true asset based line of credit has the ability to allow you get back the confidence that your suppliers, lessors, and other lenders had in your business, and that’s important. It goes without saying that lenders, investors and suppliers truly have the ability to control the destiny of your company if the perception of a permanent cash flow shortage remains.

So, enough about the fear! Let's focus on a solution that works. Simply speaking, that’s asset based financing via a revolver facility that is generally non bank in nature. (Some Canadian banks now offer this facility but the credit requirements and deal size criteria are, in our opinion, exceptionally high).

The concept of asset based lending, aka ' ABL ' is simply securing your assets, leverage them to the maximum that is possible, with the result being greater liquidity for your company. And by the way, don’t think we have just leveraged up a ton of debt on your balance sheet - 100% wrong, we have simply monetized or ' cash flowed ' existing assets... allowing you to borrow against them .

Those assets are typically very clear categories of receivables, inventory, equipment, and occasionally real estate and tax credits due your firm. (Yes tax credits such as the SR&ED credit can be included in your financing package).

So the question then becomes, don’t banks do this already...? And you have tried that possible scenario. The quick take away here is two things. First of all abl loans and financing revolver facilities provide greater leverage on current assets. Receivables are typically margined at 90%, and inventory, often difficult to finance for cash flow, can be margined anywhere from 30-70% as an example. If you were getting 75% from your bank on A/R and nothing on inventory haven’t we just increased your working capital by anywhere from 50-100%?! Wow.

A very simple way to look at this, and we use this example with clients all the time is to simply think of the asset based lender solely looking at the collateral, while the banks will focus on collateral, but mainly historical cash flow, ratios and covenants, and outside collateral via personal guarantees, etc . (As a general rule very little emphasis is placed on personal guarantees when an ABL loan facility is put in place.

Oh and by the way, you absolutely don’t have to be profitable to qualify for asset based lending facilities, which in Canada start at a low of 250k and go to the tens of millions of dollars.

So, cash flow crisis. Growth challenges. Looking for a solution? Speak to a trusted, credible and experienced Canadian business financing advisor on ensuring an ABL working capital facility is right for your firm.






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/abl_loans_lending_financing_loan_revolver.html

Heard About Canadian Government Business Loans? Why Lending Under The SBL Loan Is Right For Your New Or Existing Business.

Don’t Forget to Check Out The Gov’t Small Business Loan Program

Information on the ‘ SBL ‘ loan , and why government business loans are the perfect financing and lending vehicle for new or existing businesses in Canada.




Small is big... in fact it’s huge! We’re talking about small business in Canada, and as most business owners know the large majority of all businesses in Canada are in fact ' small '. Small is relative of course. But when as a whole they represent a huge portion of employment and commercial sales it’s about time we acknowledged it.

Government business loans are one way in which our key business segment, the SME sector is in fact acknowledged. Its lending specially constructed for the small business owner; a loan new or existing business that makes sense, and in fact has attractive terms.

The simple reason why the government SBL loan should be so attractive to yourself as a business owner is simply that boy is it hard to get the financing you need, in case you haven’t found that out already.

Yes many alternative finance choices have become more popular... financing such as receivable finance, P.O. finance, tax credit monetization, bridge loans on equipment, etc.. but without a doubt the ' big kahuna' of small business finance is still traditional government business loans.

Even though Canadian banks can, we feel, quite legitimately be called conservative lenders the hard fact is that the financing they put through the government SBL lending loans is actually guaranteed in large part by the Federal government.

To its credit INDUSTRY CANADA, the department that administers the program has stayed to the program. Through recent economic recessions, market turmoil, etc the program has remain unchanged. Unchanged? Well not truly correct, because in fact the program got better!

During the 2008-2009 financial worldwide debacle Canada actually increased the loan amount under the program by $ 100,000... going from 250k to 350k. And the personal guarantee that you are required to make under the program remained the same, only 25%. Try and get any other business financing without a 100% guarantee backed by you personally... its simply not available.

But it’s still a tough environment out there; you need knowledge on which bank to deal with (the banks administer and fund the program under the government rules and guidelines). Additionally you need ' BOY SCOUT EXPERTISE “ ... by that we mean the motto ' BE PREPARED' never sounded better as applicable to ensuring government new business loans are achieved in a timely manner, securing the funding you need.

Simply speaking, knowing the rules, and putting some basic common sense strategies toward those rules allow you to get approved, as well as receiving the loan you need via our vehicle, the SBL loans in Canada.

You can greatly improve your chances of getting a government business loan, aka the ' SBL ‘. Knowing what conditions will in fact not allow you to get the loan is valuable information.

Speak to a trusted, credible and experienced Canadian business financing advisor on getting a proposal and package in place that virtually guarantees you approval under the program if you have covered off some very basic pre-requisites. Government business loans may be the perfect solution to the financing you need - check the program out!



ABOUT THE AUTHOR - STAN PROKOP

7 PARK AVENUE FINANCIAL

CANADIAN BUSINESS FINANCING !


http://www.7parkavenuefinancial.com/government_business_loan_loans_new_lending.html

Forget About A Traditional Finance Loan - Discover Why Canadian ABL Lending & Financing Loans Work.

Change Can Be Good In Canadian Business Financing !


Information on ABL Lending in Canada . Why asset based loan financing is a solid lending solution for a business line of credit finance facility . Asset based loans leverage assets for working capital .




We’re the first to admit ' change ' is one of the most difficult things to cope with sometime, both in our personal lives and in business. Hindsight becomes a great friend, and that’s why we use this analogy in talking today about ABL financing in Canada. When business owners and financial managers discover the true power of asset based lines of credit finance and lending in Canada their first reaction is ' where has this been all my ( business ) life!’

Let's examine some of the key differences, and benefits of asset-based loan financing in Canada, specifically the asset based line of credit revolving working capital facility. It seems simple... and also difficult to realize why this is different than traditional Canadian chartered bank financing. Because it’s simply a business line of credit financing facility secured by inventory and receivables. In many cases both equipment and real estate are added into our ' mix ', leveraging even more assets for working capital purposes.

So why do thousands of business owners utilize ABL loans (they are not loans per se ...more about that later)? The basic answer is that they cannot access this amount and type of credit elsewhere, predominantly at their bank.

So service firms, distribution companies, and companies that manufacture gravitate to this type of cash flow financing for the obvious reason - they can’t get financing elsewhere. In some cases clients have been asked to exit the bank and find themselves in ' Special Loan’ facilities - essentially a holding tank or purgatory for firms that have violated or cant meet bank ratios and covenants.

What size of facilities is available for asset based lines of credit in Canada? Small facilities start in the 250k range based on the overall size of your current assets, predominantly, as we said A/R and inventory. And from there? ABL financing loan facilities go up to the tens of millions of dollars, and some of the largest corporations in Canada have ' forgotten' about traditional bank lending and financing for credit lines, adopting the ABL model instead.

Oh yes... we had mentioned the term ' loans ‘. A true ABL facility is not new debt on our balance sheet; it’s not a term loan, its simply monetizing the current assets in to a revolving line of credit facility, that’s important to understand!

Start up firms in Canada can be financed by ABL lending, as can firms that have significant current operating and financial challenges... the one thing they do have, and need, is ' Assets ' to facilitate the type of lending we are talking about . That’s our other key take away point for clients, that the actual approval of such facilities is not, we repeat ' not ' dependent on balance sheet strength, profitability, or ratios and covenants. Even personal guarantees play a very small part in the approval of ABL facilities, or some of the subsets of this type of finance.

Naturally it helps when you are moving back to profitability via a plan that will work!

Our final point today on ABL loans is simply that it’s all about liquidity. Receivables are typically margined at 90% of your portfolio, and inventory is assessed on an individual basis, often ranging up to 70% in financing leverage.

So should you forgot everything you know about traditional finance business credit lines... maybe not a great idea, but we can assure you that you are missing out if you don’t consider the alternative ! Speak to a trusted, credible and experienced Canadian business financing advisor on the benefits of such a business financing in Canada.



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/abl_loans_lending_finance_financing_loan.html

Seriously , Can An Asset Based Line Of Credit Loan Facility Meet Your Canadian Financing Needs ? Yes , ABL Finance Works !

Why One Type Of Business Financing Is Starting To Dominate Commercial Borrowing In Canada



Information on how an asset based line of credit loan facility provides financing and capital for Canadian business lending needs and requirements .



We've often said that no one type of business financing in Canada has the ability to meet pretty well all of your growth and survival needs. That might not be true all the time in the context of an asset based line of credit loan facility.

ABL facilities are somewhat of a hybrid type of facility, and for that reason this type of commercial business finance lending actually does, in many cases, suit all of your financing needs. Let's examine how.

Part of the appeal of ABL asset based lines of credit is simply that unlike many forms of commercial business financing it is accessible by smaller firms, large corporations, start ups, and firms who sometimes find themselves in serious financial difficulties. We think we've covered the bases on that one!

Typical considerations for entering into an ABL facility revolve around being unable to qualify for what many dub as ' traditional lending ‘... In Canada that traditional lending comes via our chartered banking system.

So just exactly how does your firm move forward in considering an asset based line of credit loan financing? And, ready for a positive surprise? Asset based lending has total flexibi8lity around structure, term, pricing, and 99% of the time comes with less covenants and ratio restrictions required by our chartered banking system.

Is there a typical profile of a Canadian business looking for an alternative to a business line of credit? The immediate thought that comes to mind is simply your firm’s current inability to achieve the financing you need from a bank. Typically this means your profits and losses have fluctuated, or there are some balance sheet issues that simply have for firm temporarily under water, so to speak, re: the ability to qualify for a commercial bank business line of credit.

We also meet with many clients who have secured favorable credit facilities from a bank or commercial credit union, but they are unable to tap into, or leverage assets anymore than current limits prescribed by the bank. Typical working capital advances for receivables by a bank are 75% ...while ABL lending more often than not comes in at 90%... so right away you are up 15% in over all liquidity.

And we haven’t even started, because many firms who find the inventory component of their business difficult to finance are often surprised that inventory advances in an ABL facility can run from 30-70%... sometimes more, sometimes less.

So why can an ABL lender offer this type of financing when bank sometimes cannot? It's a good question many clients ask right out of the gate. ABL lenders tend to be unregulated institutions; therefore simply speaking heir capital comes from different places and different pricing. They re not bound by capital and conservative lending practices that our Canadian banks are so well known form.

While our banks are some of the strongest and well run on the planet the other side of the coin in this statement suggest a more prudent lending to commercial borrowers. That’s where the ABL advantage comes in. Asset lender turns your day to day assets, i.e. A/R, equpment, and inventory into a revolving line of credit that significantly leverages up your ability to borrow.

Simply speaking, it’s all about the assets, not the ratios! Another way we explain it to clients is simply that the bank in general is looking more at your financials... an asset based line of credit loan financing is looking more at your assets .

Pricing for this type of financing varies significantly. The simple explanation on pricing is that the size of your facility, the quality of your assets, and the type of firm you are dealing with dictate ultimate pricing. In many cases pricing is equivalent to the bank, however more often than not its more expensive, but, and its a key point... you have more liquidity and working capital on an ongoing basis, growing lock step with your needs.

Speak to a trusted credible and experienced Canadian business financing advisor who, seriously! can demonstrate to you the benefits of an ABL facility for your Canadian company.




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/asset_based_line_of_credit_loan_lending_financing.html

ABL Financing & Lending Is The New Version Of An Old Product – Asset Based Lenders Are The New Teachers Pet Of Business Finance In Canada

Why Asset Based Lines of Credit Are Starting To Dominate The Canadian Financing Landscape


Information on ABL financing in Canada . Why Asset Based Lenders offer business lending and loan facilities that makes sense in 2011.



The proverbial ' teachers pet ' - aka the new favorite. That's a pretty good term for abl financing, which is pretty well the newest form of business line of credit financing in Canada in many years. Let’s take a look at why asset based lenders and their lending facility, the asset based loan are starting to dominate the Canadian business landscape.

ABL financing has been around for awhile, in the past it was considered a very ' alternative' method of financing business lines of credit in Canada. It, as well as its subset, ' receivables financing facilities ‘ have not become a very popular choice for Canadian firms who cant qualify for traditional financing .

An additional comment we might make is that many clients we talk to do in fact qualify for some form of traditional financing, i.e. the Canadian chartered banks, but they typically can’t get all the financing they need. That goes for everything to start up to Major Corporation, as more and more large corporations are also gravitating to this type of financing.

Part of the misconception around an ABL financing loan is that this lending means different things to different people. In our context today we're talking about the monetization, for maximum leverage, of receivables, inventory and in certain cases equipment and real estate, which can neatly be packaged into a revolving business credit facility.

Another old saying we like is the 'mother in law pitch’. Whats that? It’s your ability to explain in a sentence or two, to your mother in law, why asset based lending is radically different from Canadian chartered bank facilities. Hers our version of the mother in law pitch in that regard - ‘Asset based lending relies almost solely on the amount and quality of your collateral, not your overall financial statements and general financial health ‘.

It’s as simple as that! Banks are required, by their charter and nature to focus on overall credit quality when granting business line of credit facilities. Therefore the main discussion point very quickly becomes debt to equity ratios, cash flow covenants and coverage, external collateral, personal guarantee emphasis, etc. That is somewhat thrown out the door in an abl financing and lending environment. Therefore it is very common, we repeat, very common for a Canadian firm to receive financial leverage on 90% of receivables, 50-75% of inventory, as well as appraised values of equipment and real estate, all into one convenient business line of credit.

Clients are great at coming up with simple questions. Hers a typical one - if this is a non bank facility how does my day to day banking work. Great question. The answer is that asset
based lenders use a dual account or lock box type system - your funds, as you need them, go into a regular business operating account.

Funds you collect on a daily basis from receivable and customer deposits go into another blocked account, at the same time reducing the amount you own on your business line of credit .Naturally this balance fluctuates everyday based on your firms business cycle, and the good news, similar to a bank facility, is that you are only paying for what you are borrowing.

So , in summary, while human nature often has us somewhat ' jealous' of the ' teachers pet ' the reality is that Canadian business owners and financial managers owe it to themselves to check out this dynamic form of business financing , under which almost all companies qualify . Speak to a trusted, credible and experienced Canadian business financing advisor for more information on the benefits of this type of lending.




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/abl_financing_lending_loan_asset_based_lenders.html

Deciding On How To Finance A Franchise? Canadian Franchising Business Loan Info On Financing and Lending That Makes Sense!

Make the Right Decisions in Canadian Franchise Financing

Information on how to finance a franchise in Canada . Getting a franchising business loan that makes sense for the entrepreneur . Financing & Lending tips for the new Canadian franchisee.


Not only do you want to have a solid plan when you want to finance a franchise in Canada - it sure helps when that plan makes sense for the business financing loan / loans that you need!

We think that most Canadian entrepreneurs who are either first time franchisees or perhaps are adding another location to their business would agree that its not as important as to where the franchise lending and business funding comes from, but that you get the full funding at terms that make sense for you personally .

Let's examine some of those key decision points and requirements that you need to fulfill a proper franchise financing solution in Canada.

We think that a lot of franchisees are sometimes overly focused on ' the interest rate ' when they are seeking a franchise loan. That’s human nature we guess, but the reality is that the loan is simply commensurate with your overall credit quality and in line with the types of financing that are out their in the Canadian business financing market - unfortunately that market for new franchisees is somewhat more limited that in the U.S.

In Canada franchises are financed really in only 3 or 4 different manners -- actually 5 we could say if you considered financing the whole franchise yourself through personal savings.

While that might seem a good idea we think in many cases it is not for a variety of reasons - i.e. collapsing personal investments and savings and assets when you don’t have to cant be an overall great strategy. We spoke awhile back to a franchisee who had pledged and used all his personal assets to acquire a franchise - business was slow, and he was unable to secure additional outside financing to re- boot the business because all his personal assets were pledged/gone. Bottom line, not recommended!

So the question then becomes as to how you decide to finance a franchise once you have made that acquisition decision. We'd like to share a couple key points. First of all, whether it’s a franchise or any business whatsoever, it’s financed by two guys, debt, and equity; i.e. what you borrow and what you put in yourself. Spend some time determining the optimal mix and you will best be able to gravitate to the right financing strategy.

In Canada these days we see franchisees putting in anywhere from 10 -50% as their personal investment into the business. Whats the perfect number? The reality is there isn’t one, because each business requires a different amount of financing and has a different mix of assets and financing needs. The key assets and financing needs in franchising are all your initial soft costs, such as the franchise fee, and then comes your costs to open the door, often called the ' turnkey ‘. That turnkey component consists of equipment, leaseholds and opening working capital.

We spoke of 4 methods of franchise financing in Canada .Those are as follows : Specialized commercial finance firms that have dedicated franchise finance divisions , Equipment financing, Working Capital term loans as a supplement to your overall financing, and finally the BIL/CSBF loan . The latter is the government SBL loan that is used by hundreds, probably thousands of franchisees to acquire their franchise. It only has one or two limitations, one of which is that it caps out at 350k, but that certainly covers a lot of franchises in Canada in different industry segments - examples restaurants, service businesses, etc.

So, today’s bottom line? Simply that spending some quality time early on in the process in understand which of the 4 options makes sense for you is a valuable investment. That time, coupled with your business plan and financial projections will help you ensure that you have the right mix of financing solution, as well as a properly chosen business loan strategy for your franchise.

Speak to a trusted, credible and experienced Canadian business financing advisor on how to best decide which financing mechanism works for you.




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/finance_franchise_lending_financing_business_loan.html

Don’t Risk Losing Out On Franchise Financing Loans - Info For Canadian Franchisees Re: Franchising Loan Success

You’ve Got An Important Decision To Make - So Get Informed On franchise finance in Canada

Information on Canadian franchise financing . What types of loans are available , who is lending , and is there one franchising loan strategy that makes the most sense .




The reality of owning your own franchise business should not be over shadowed by the risk of not obtaining the right, and full amount, of franchise financing you need for a franchising loan. So let’s examine the right, and wrong way, of franchise loans and lending in the current environment.

The right amount of financing you need for your acquisition is often a somewhat stressful time in the total process of buying a business in this segment of Canadian business ownership.

Commercial lending financing does exist in the Canadian environment, it’s a situation of knowing what’s available, and then, of course, executing on completing the financing. Sounds simple, but many Canadian would be entrepreneurs often find themselves challenged by the whole franchise financing journey... and in reality it’s a process, not a journey.

In a perfect world you are looking for a franchise loan that has low or at least acceptable interest rates, nominal fees associated with the transaction, and has the right term or maturity that suits your payback plans and general cash flow situation.

But, does such a loan exist? It actually does, and you'd be surprised where you might find it. Many clients tell us they have spoken to the Canadian bank with whom they typically have had a long term relationship, only to find that little information has been forthcoming as to how they might be able to successfully finance their new business venture .

Naturally any bank that finds you willing to personally pledge and collateralize your home, savings, etc is very anxious to have your business and approve that loan, but it mixing your personal assets with your business venture the optimal solution. We find it rarely makes sense to follow that strategy, buy hey... that’s just us.

In Canada the financing options of franchise lending and loans is available, but somewhat less limited than in the U.S. . . . One or two large firms dominate the major franchise financing opportunities in Canada - these firms focus on the largest name brands and larger transactions that in many cases can range up to several million dollars in total financing required.

But what about the hundreds, even thousands of franchise loans that are required for purchases in the 100-500k range. Who finances those, and if they are financeable does the financing come with those low rates and great terms and structures we spoke of previously?

Actually the Canadian BIL/CSBF loan program addresses that question pretty perfectly. It finances your franchise on terms that compete with the big boys. And we're always rooting for the little guy!

The BIL program assists business purchasers such as yourself to effectively finance the franchise you wish to purchase. Rarely will your franchisor be able to assist you with financing so your ability to prepare a solid 'package' of info and position the package from a solid financial point of view is critical. Other financial solutions such as specialized equipment and asset financing can also round out your financial solution.

Bottom line, franchise financing should not be a risky or stressful time for the completion of your business acquisition. Speak to a trusted, credible and experienced Canadian business financing advisor who can help you complete franchise financing with lending that makes sense... today.

http://www.7parkavenuefinancial.com/franchise_financing_lending_loans_loan_franchising.html

Good Decisions Around A Commercial Business Financing Loan In Canada – Canadian Lending Options

Don't go on wondering if you feel you that as a business owner or financial manager you don’t understand your options around Canadian lending around a commercial business financing loan. Let's cover off some key groundwork around possibilities and the players.

In many cases certain types of business financing in Canada should be viewed as a specialty or a niche. The financial borrowings you entertain might be subsets of a certain type of financing. Some specialty areas that you might consider are of course bank debt, typically viewed as the most senior and least expensive method of borrowing if your firm qualifies.

Other more esoteric areas, but still viable, popular, and in fact growing in popularity are areas such as purchase order financing, confidential invoice discounting , asset based lending, bridge financing and mezzanine and sub debt financing . We would venture to say that in some cases you may have not even heard of some of these financing possibilities, let along of course understand the benefits of and requirement around successfully completing such financing .

The major8ty of Canadian business owners think in terms of our Chartered Banks when it comes to revolving lines of credit and term loans for equipment and working capital. However the reality is that you should be also assessing the merits of an asset based lender, a very unique and often independent commercial business financing firm that relies almost totally on your asset base of receivables, inventory and equipment and real estate (or combinations thereof) to provide you with a commercial business financing loan structured as a line of credit. Their expertise and industry and asset knowledge quite often exceeds that of many commercial bankers in Canada, if only for the fact this is their sole focus.

Term loans in Canada for either equipment or cash flow tend to b e three to five years in term duration. On occasion a firm needs what is termed a ' bulge ' or a ' bridge' loan type of lending that satisfied a unique need at a certain point in time for your firm. Typically these loans are then taken out or refinancing under better rates, terms and structures once the initial need around the bridge loan is satisfied - for example a temporary working capital bulge .

Many firms entertain cash flow, or what is known as ' mezzanine ' type financing to satisfy a lending need that can’t be arranged via your senior lender, i.e. the bank for example. Commercial mortgages are also often viewed as a financing vehicle, often in the context of a re financing of real estate for working capital purposes.

Hundreds of equipment leasing and financing companies in Canada also can solve your lending conundrum - acquiring special assets that have value and revenue generation for your firm.

Private equity in Canada has tended to be somewhat under the radar but continues to grow as a commercial lending option. In return for giving up a portion of your ownership the use of private equity allows you to focus on a variety of options, including, but not limited to: growing our business, refinancing your capital base, going private if you’re a public firm, and in many cases allowing you to work out of a distress or challenged period. Naturally a majority or minority controlling interest comes with that equity scenario.

The process involved in any significant commercial business financing loan is rarely different - you want to be in a position to highlight management capability, have reasonable financial target and goals , and willing to go through the proper level of due diligence relative to the size and type of financing you are entertaining.

Consider seeking and speaking to credible, trusted and experienced Canadian business financing advisor with the credentials to assist you in determining the right commercial business financing loan in the context of Canadian lending. The skills and expertise in business financing that an advisor brings will help position your firm for business financing success.





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 .Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/commercial_business_financing_loan_lending.html

Why Canadian ABL Finance & Asset Backed Financing Loans & Lending Are An Important Development

‘A significant consequence ‘. That’s one definition of ' Development '. We think it’s a perfect one for describing how ABL finance and asset back loans and financing are becoming the ' go to ' for business financing in Canada. Let's examine why.

Two key elements make abl financing a step above a traditional bank line of credit with a Canadian chartered bank. Those two elements are ' collateral' and ‘liquidity '. Let’s focus on that for a bit. All asset based lines of credit for business revolve around your asset base. The amount and quality of these assets will drive the ultimate amount of the credit facility you achieve under an asset backed financing.

Canadian business owners and financial manager know only too well that the focus from a traditional bank perspective is not as much on the assets as it is your overall financial picture, which includes the income statement and your ability to meet ratio’s and covenants that are bank designed to protect their lending to your firm. We understand that, and we respect that... it’s just that sometimes it doesnt work for our clients.

Your firm could be in various key stages when you consider ABL loans. You could be a start up, you could be enjoying (and suffering) through hyper growth... and you could be fixing historical financial challenges or suffering thru some sort of business crisis or challenge now. That kind of covers the gamut, don’t you think. Which is exactly why we offer up ABL lending to clients looking for the 21'st century alternative to a business line of credit.

So how is your overall facility determined? It could not be much more straight forward - you borrow, on a daily basis, against the ' true ' value of your assets -hence the word ' asset' in ABL (asset based lending). Those assets typically are your A/R, your various stages of inventory (raw materials, work in process, finished goods) and fixed assets and real estate if that makes sense for your firm. (Those assets must be owned and unencumbered of course).

ABL lending distinguishes itself from traditional bank financing in that the firms offering this type of financing tend to view themselves as experts in ‘asset ' valuation and liquidation . What does that mean to you? Simply that you have just leveraged up your borrowing capacity significantly.

We remember one client who was a wholesale to the dollar store industry who leveraged a 200k bank line into a 2 Million dollar borrowing facility. How? The asset based lending facility had the expertise there to view the true liquidation value of the inventory. Simple as that. As a challenge call your banker up and ask what the margining base is for dollar store inventory and keep us posted on that answer.

A common question from clients involve the long term viability of this type of financing for your firm .First of all there is the cost issue, and here’s where it gets a bit complicated , because ABL loans can be cheaper, the same as, or more expensive than a bank facility . (We’re assuming you can get a bank facility!)

Secondly the ABL industry makes no bones about the fact that it is often a bridge solution for a year or two, allowing you to migrate back to what you consider a ' traditional' financing structure. We point out to clients though that ABL is more often than not the ' new traditional '! Historically it was viewed as distressed or alternative funding, that is absolutely not the case these days, with some of the largest corporations in the world utilizing this type of financing in Canada.

We can’t overstate the flexibility around ABL financing and lending. It covers special issues, seasonality, over advances on what you actually qualify for, and comes at a cost commensurate with any firms overall credit quality. Interested? We hope so. Intrigued? No problem! Consider speaking to a trusted, credible and experienced Canadian business financing advisor on the merits, benefits of the new age of business finance in Canada - ABL finance.


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 .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/abl_finance_loans_financing_lending_backed.html

Canadian Business Financing Challenges ? Let The Expert Lease Of Equpment Lending Be Your Guide!

No one said it was easy, that’s for sure. We're talking about the challenges Canadian business owners and financial managers face in business financing, specifically asset acquisition. So why does 80% of Canadian business utilize the lease of equipment as the solution to that challenge? Let’s look at equipment financing and lending as your stop gap to acquiring those new (or used) assets.

When you make the investment decision to purchase any asset for your business the ability to put together a lease agreement to match the useful life of that asset becomes puzzling sometimes. What type of lease and term is best?

Probably the best advice we can give clients is simply to make a reasonable assumption on the useful life of the asset and match the lease term to that same assumption. The quick example is of course not to use a 7 year lease to own scenario if you are financing a computer system. (Unless you're buying your computers at a better place than ours, we don’t seem to have generated 7 years from our last system!).

The other part of that equation is simply two worlds, ownership, or use. By focusing on those two elements you now have the ability to choose either a capital lease (ownership at end), or an operating lease (return or upgrade at end of term).
And those same two lease decisions can yield cash flow benefits, as well as accounting and tax implications that will work best for your firm.

It's probably just us, but we sometime intuitively feel that 99% of client looking to lease make that decision to conserve working capital. The lease of equipment is simply the answer to the lending question you've been facing - ‘How can we acquire the most amount of asset for the smallest amount of cash?".

The variety of assets in asset lending and leasing finance is endless. From a small photocopier of lap top to a major piece of production equipment on your shop floor, they all can be financed.

It's not unusual to view client thoughts on the lease of equipment as simply short term or temporary. But what is the shortest term you can lease an asset for? In the Canadian environment that term tends to be 2 years. Why 24 months. The honest answer is simply that it’s not really economical or profitable in the lending environment to lease an asset for a period less than two years. So now you know!

Many clients further enhance a shorter lease term by choosing an operating lease - recall that it is our lease to ' use ' strategy, which works best with assets not ultimately required by your firm, or those that have a lot of technological obsolescence attached to them. There are some accounting rules that need to be met when you are trying to achieve a pure operating lease, so it’s often best to talk to your accountant when structuring such a transaction.

At the end of the day the lease of equipment as your business financing strategy has to make sense from an overall viewpoint of rate, term and structure. Your firms own credit worthiness already determines your rate- you just have to ensure the lessor has the same opinion on credit worthiness as do you! And we’ve given you the ammunition on how to focus on term and type of lease already, so you're set.

So is equipment leasing the ' holy grail ' of business financing in Canada. We're not saying that. but, remember, 80% of all business is doing it, so that has to mean something. For expert advice, guidance and solutions on business financing via equipment lending consider speaking to a trusted, credible and experienced Canadian business financing advisor who can provide you with guidance for a proper asset 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 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.parkavenuefinancial.com/lease_of_equipment_business_financing_lending.html

Canadian Lenders In Franchise Finance – Lending & Funding Options For Franchisee Financing

Wouldn't it be great to know that after you made one of the largest decisions in your business life - (buying a franchise business) that you had some solid options and tips around acquiring the business?

Let examine the current state ( we always work in the real world ) of franchise finance in Canada - who are the lenders in franchising and what funding and lending options might work best for you .

Many clients that approach us seem automatically skeptical that franchise finance can be easily achieved in the current Canadian business environment. No doubt they can be forgiven as its been a couple tough years with respect to the financial implosion (2008-2009), recession, etc. So boy do their eyes light up when we assure them that franchise finance financing funding is still available, and the lending criteria and solutions are not as demanding as they might think.

On the other hand though, what part of business is not a ' cake walk ' .Almost none, right. Therefore your ability to be prepared is critical.

We can generally put the idea of being prepared into two categories - having a strong proposal, and ensuring also that you are prepared to keep up your half of the bargain with your funding partner. Whats that part of the bargain? It's your equity investment of down payment into the business, the balance coming from your franchise finance loan funding.

Think about it... in many ways it is probably actually more easy to secure business franchise funding than any other normal start up since you have the benefit of a ' brand ' and ' reputation' backing you .. I.e. the Franchisor.

We encourage all clients to start assessing their financing options way in advance of their franchise final decision. While you may think that you have to tap into major savings or home equity, or collapse RRSP's, the reality is that you need to come up with anywhere from 30-40% , generally speaking , of your desired loan amount.

Unfortunately, and we run into this almost all the time, many franchisees don’t have a sense of how the franchise funding lenders assess their personal credit history. It's more simply than you think. The entire personal credit history of everyone in Canada comes down to a numerical score at the credit bureau. The magic number you need is 650 (or more!). You can easily check your score yourself.

Next steps generally revolve around assessing your financing options. For some of the larger franchise chains one or two well known independent finance companies can handle all your franchising needs from a lending / loan viewpoint. But, here’s the kicker, the majority of franchises in Canada are funded by the Government BIL program .It is absolutely the best deal in Canadian business, flexible rates, terms and structures, low personal guarantees, ability to prepay without penalty... bottom line it couldnt get any better .

Naturally you want to expedite your transaction. That is done by ensuring you have a crisp business plan and financial forecast in place - highlighting your business experiences, profit and cash flow potential, and info on the success of your franchisor as your new partner in Canadian business. You simply want to focus on one thing, showing your ability to repay the franchise loan.

Supplemental financing can also be achieved quite creatively if you have the right assistance - that might come in the form of a merchant advance loan against future sales, equipment leasing, or a straight unsecured working capital term loan.

So the good news is you have some great options in franchise finance and financing your new business. It’s up to you to assess those options, be prepared to present your plan. Want some great assistance? Consider working with a trusted credible and experienced Canadian business financing advisor in franchise finance funding.





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 .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/franchise_finance_lenders_funding_lending.html