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OVERVIEW – Information on inventory loans and purchase order financing solutions in Canada. These alternative financing solutions provide much needed capital to firms who are unable to achieve traditional financing in order to achieve sales growth
As sales and new order opportunities grow many Canadian business owners and financial mangers find that financing these to critical areas (inventory / p.o.’s) is increasingly become in a challenge. We advise clients that if these two critical areas of finance were a challenge in past times, that challenge is certainly magnified ten times over in the current global and Canadian business environment.
Are there specific solutions for inventory and purchase order financing in Canada. Yes there are, that’s the good news, but these are very limited and specialized in nature. We encourage all clients to speak to a trusted, credible, and experienced business financing advisor in this area who can provide guidance, assistance, and most importantly clarification on how this type of financing is achieved.
Inventory and purchase order financing in Canada extends beyond traditional Canadian chartered banks, who wrestle with the ability to truly understand a customer’s inventory component as a key part of working capital. (Working capital is derived from the continual conversion on inventory into accounts receivable).
Purchase order financing can be accomplished when your firm has the ability to generate sufficient orders from a major client, or clients, who are creditworthy. You must also be prepared to convince the inventory and p.o. finance firm that your company has the ability to fulfill customer orders successfully.
Starts ups in Canada can achieve inventory and p.o. financing, but be forewarned that management must have a strong background in the industry – you have to demonstrate you can perform and deliver.
The financing of inventory and purchase orders is achieved via a direct payment or payments that made to your suppliers for product you need in order to fulfill orders and contracts. For Canadian customers this more and more means that key suppliers may well is located in the U.S., and in many cases, China. This does not deter the inventory and p.o. lender, but you must be in a position to show that you have sufficient gross margin ( i.e. profit !) in your business model in order to be able to withstand the additional financing charges that come with inventory and p.o. finance .
Also, unbeknownst to many business owners, the inventory and p.o. finance firm likes to generally get paid when an invoice to your customer is generated by your company to your customer. This requires that you have banking or factoring facility in place to convert receivables into cash, in order that the inventory and p.o. lender can be a paid.
We encourage all customers to take some time and understand the total costs of such a facility – you need to remember that your firm will bear financing costs for , often, between 60-90 days from the time you get and order, obtain product from your supplier, manufacture and / or ship the order, and, last but not least, wait to get paid !
Inventory and P.o. financing can be expensive, but naturally the alternative to avoiding this type of financing means simply lost order, opportunities, customers, etc.
No Canadian firm chooses to become less competitive by virtue of not wanting to incur finance charges to convert new sales into profits.
Speak to an inventory and finance expert – understand the basis paper flow and the charges involved in this unique method of business financing. Turn inventory and purchase order and new contract challenges into increased revenue and profits to promote your competitive edge.
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Office = 905 829 2653
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 .
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
