Business Line Of Credit Needs? Check Out Non Bank ABL Private Lenders. Number 2 And Trying Harder

Maximum Thrust Minimum Drag For Your Business Financing Needs !


OVERVIEW –Information on the business line of credit in Canada . Which choice makes sense for your company, a bank facility or the ABL solution from commercial non bank private lenders

Business line of credit needs in Canada . Two basic alternatives emerge when your company requires revolving credit lines. One is of course the traditional commercial chartered bank solution. And number 2 and trying harder..? That's when a non bank commercial ABL facility just might make more sense, or is more readily available. Let's dig in.

The aeronautical term ' maximum thrust / minimum drag ' made sense to us when it comes to the financing needs of your business. You're looking for maximum financing that won't hold you back - It's our version we guess of rocket propulsion when it comes to growth financing.

Most Canadian business owners and financial managers we talk to associated Canadian business financing with our Chartered banks in Canada. Included in this category also are U.S. banks which have charters to operate in Canada also.

But what about that # 2 and trying harder solution. It's the ABL (asset based line of credit) offered by private lenders. And in the context we're talking about ' non bank ' simply refers to commercial finance companies that are not regulated under our banking rules. We suppose that means they can do what they want.

How does the business owner/manager decide which of these two solutions works for their company? Both solutions typically finance receivables and inventory. However ABL distinguishes itself by also adding your unencumbered fixed assets into the mix. Simply speaking that gives you more borrowing power.

Many companies use business credit lines to facilitate acquisitions or mergers. They are simply capitalizing on the assets of their company and the other business combined, monetizing these for additional cash flow and working capital. While the bank solution in this strategy might typically involve some level of term debt the ABL solutions is more suited to simply maximize borrowing power for the combined new firm.

Cost is often a key factor in deciding which credit facility makes more sense for your firm. If your firm can meet the fairly stringent requirements of our banks when it comes to borrowing (profitable, clean balance sheets, strong cash flow coverage, solid debt to equity) the actual cost of credit these days couldn’t be lower. ABL solutions cost more, but as we said they are more easily accessed from an approval point of view

Why does ABL cost more then? Basically that’s because non bank private lenders offering ABL solutions have a higher cost of funds. They typically also take more risk and have less stringent credit approval criteria. We would venture to say that they higher overall expenses in running their business.

So what are in effect the approval criteria for non bank commercial private lenders when it comes to asset based finance? It's pretty basic stuff - you must have the ability to produce regular and proper financial statements, you'll need to report more often on assets such as inventory and A/R levels, and those fixed assets that are now part of your daily credit line needs will almost always need to be appraised at least once.

Does size count? We're talking about facility size of course, and ABL solutions range from 250k into the tens of millions of dollars. It goes with saying (but we'll say it anyway!) that most commercial bank facilities typically start in the 500k range with no upper limit.

So which financing solution works for your firm . Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your credit needs . Minimum drag, maximum propulsion!






Stan Prokop - founder of 7 Park Avenue Financial


http://www.7parkavenuefinancial.com


Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :


7 Park Avenue Financial = Business Line Of Credit Expertise



CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653
Email = sprokop@7parkavenuefinancial.com



















Stan Prokop

Understanding Canadian Working Capital Finance – Cash Flow and Institutional Loans & Private Lenders

Commercial Business Cash Flow Financing In Canada

Information on working capital finance options in Canada . What offerings are available from banks and private lenders when you need business loans or cash flow financing.



Having the right information simply becomes a small investment of your time and can turn into tremendous benefits... that are why your ability to understand working capital finance loans from both private lenders and other institutions is noteworthy.

When Canadian business owners and financial managers think in terms of capital typically Canadian chartered banks come to mind. That’s what business people tend to call traditional financing in Canada. But is it always readily available and possible to obtain? Many businesses find themselves in the position of needing to grow, or in some cases simply survive around the need for extra cash flow and liquidity.

The optimal solution is of course simple - have some sort of facility in place to access cash... when you need it! Two choices come to mind - a traditional working capital term loan from a bank - its essentially long term working capital with fixed monthly payments. Alternatively, and in many cases the better option, a non bank facility from private lenders is a better, if not more accessible solution.

And to be clear, let’s define ' private lenders' as that term is often mis understood in the context of a Canadian working capital loan. It may mean other things to you, but in our discussion today we are simply referring to a non bank entity, quite often a commercial finance firm that has a specialized niche in business lending and working capital.

What facilities are offered by these ' private lenders' if we can call them that? They include offerings such as receivables purchasing, working capital facilities that combine the borrowing ability of your inventory and receivables into one facility. Essentially a business line of credit from a non bank entity. Other offerings, somewhat more specialized include purchase order and contract financing, tax credit financing, and what we call the ' big kahuna ' of working capital cash flow financing in Canada - ABL (Asset based lending).

When we think of the facilities as describe above we're talking about the ' current assets ' part of your balance sheet - that’s where the liquidity lies.

Working capital outflows though can also be stemmed by utilizing lease financing or a sale leaseback strategy... that’s for your fixed assets of course.

Thousands of retail businesses in Canada often find themselves in the working capital finance conundrum. In recent years merchant cash advances, or loans against future sales have become a solution for the smaller retail business.

Advantages of a bank loan for working capital purposes are pretty clear - it enhances your commercial credit history, rates are the lowest and most desirable.

So the essence of your subject today is that you're in effect surrounded by working capital finance and loan options from both private lenders and Canadian chartered banks. It's a question of knowing what those sources are, and, most importantly... which one works best for your firm, whether you're a small retail business or a small to medium sized established corporations. (The big boys do quite well on their own, thank you).

Permanent or temporary solutions are available in many forms, as we have noted.Speak to an experienced, trusted, and credible Canadian business financing advisor who can ensure your working capital sources are just steps away.



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/working_capital_finance_private_lenders_loans.html