Do You Know The Factors Affecting Business Financing & Business Lending

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Actionable Business Financing & Business Lending Tips

Business financing ! You've heard the rumour , namely that business lending is more available than ever. Whether it's small business funding or medium to larger corporations we hear capital is almost unlimited.

But for those firms that for a variety of reasons can't qualify for all, or even some of the financing they need from traditional sources such as Canadian chartered banks there is hope - in the name of asset based financing options.

Let's backtrack a bit and understand that a company, from a lenders perspective will always be identified relative to what stage of the company ' life cycle ' it is in. That might come in several stages , going all the way back to pre-sales revenue r&d to initial start up . It's a long journey to that ' high growth' stage . And it's not hard for the entrepreneur to dream about that final stage of business maturity where traditional financing sources are unlimited.

Have we forgotten anyone. Yes, we have , and it's prudent to mention that many companies, for a variety of reasons, are financially challenged and have poor financial performance and some serious cash flow or debt problems . Suffice to say the good news here is that even these firms can be financed or re-financed , as numerous alternative financing solutions are available .

Many firms often find themselves in the position of taking on larger orders or contracts that typical small business funding solutions can't deliver on .

3 OPTIONS FOR Alternative Financing

Purchase Order Financing - This is an increasingly popular method for a company to support purchase orders or contracts from new or larger clients. Without having to raise new equity or debt your order is financed by the lender based on who your client is and also ensuring you have a legitimate supplier .This financing can be achieved very quickly and makes sense when traditional finance doesn't work.

Accounts Receivable Factoring - This type of finance allows you to cash flow invoices immediately after you make a sale or deliver your services . The general credit worthiness of your clients allow you to get advances on your sales typically in the 80-90% of invoice value. Naturally this eliminates waiting to get paid, which these days seems to take anywhere from 30 to ..d are we say it.. 90days!

Simply speaking A/R financing is a cash flow accelerator!

Non Bank Business Credit Lines - Alternative financiers offer credit lines based on your inventory, receivables and equipment as a lump sump collateral . In our experience these credit line almost always exceed the amount you would receive under typical bank margining of these assets.

SUMMARY - If your business is growing , or even experiencing challenges investigate non bank solutions that will allow your firm to be in a constant position to access capital based on specific needs.
Seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a
track record of success who can assist you with success in business lending.




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

The Purchase Order Financing Plan to More Sales

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24 Hours to Improving Purchase Order Financing

What is Purchase Order Finance ?

That's a common question from our clients who haven't fully understand the availability of P O financing and inventory finance in Canada. It's certainly an underutilized strategy when it comes to financing more sales when your firm has financial challenges .

Inventory is a key asset in any business , unless of course you're a service business. Turning over and funding tht inventory are key to the profits you generate from sales . So what then are the costs and options when it comes to dealing with purchase order financing companies?

Purchase Order Financing: A Killer Way to More Sales

More sales is always a balancing act in business ; no inventory or improper levels of products won't allow you to fill those large new orders and contracts. Excess or poor inventory can drain cash flow.

Both Canadian banks and independent commercial finance companies finance inventory needs. Commercial finance firms, non bank in nature are often best to finance inventory because it is their business to understand your products and services. That expertise translates into greater borrowing power !

Purchase Order Funding for Better Faster & More Sales

It is important to understand the key players in the Purchase Order funding cycle . Simply speaking they are your firm, the borrower, the finance company, your supplier/suppliers, and finally, you guessed it- your customers.

Specialized services exists for your orders and contracts . Firms who are generating new contracts and large orders have a challenge in financing them because cash flow is often limited. Therefore PO Funding is a way to finance your current growth.

This type of financing makes payments to your suppliers , allowing you to receive product and deliver services. Your receivables turn into cash and the cycle is complete.

Inventory and P O finance works best when there is a holistic approach to collateralizing the purchase order , the inventory, and then the receivable arising out of that order. Don't forget to also investigate the asset based non bank line of credit, which also allows you to finance all your ' current assets ' under one umbrella.


Speak to a trusted, credible and experienced Canadian business financing advisor with a track record of success to ensure you understand solutions available to inventory and p o financing for long term sales and profit growth.

Purchase Order Financing & Inventory Financing : Benefits & Risks

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A P.O. ( Purchase Order ) and Inventory Financing Primer

Information on purchase order financing and inventory finance solutions in Canada. The ability to use P O Finance and inventory financing as revenue growth engines is key when your company cannot access traditional bank financing

In the old days Canadian business owners went to their bank for PO Financing and Inventory financing... no really, they did... yes really! Most companies now know that the financing of your inventory, purchase orders, contracts, etc is a formidable challenge in the Canadian business financing landscape.

Simply speaking, your purchase orders, or inventory were collateralized by the bank and you borrowed against them. Therefore cash flow and working capital that was in effect tied up, or rather invested in your inventory and contracts was monetized, and you had the ability to draw down against those dollars.

Well the business financing landscape changed – yet your firm still has inventory, you have growth needs, and you need the financing to drive that growth into sales and profits. If you can acquire inventory financing then the ability to borrow against that inventory and purchase order is a key benefit.

So if the banks aren’t really that into inventory and p.o. financing in Canada, then who is. Well the reality is that it’s done via a select and specialized group of private finance firms who have a total knowledge and focus on the value of your inventory, and furthermore usually carry significant knowledge about your industry and the overall business model you operate in.

You should approach inventory financing with a positive attitude – by that we mean that your presentation for the financing should focus around the positive aspects of your business – those should include inventory turns, marketability of your product, and, very importantly, the gross margins associated with your business. We can categorically say that businesses with very low thin margins are not the best candidates for inventory and PO financing, simply because the financing costs around this type of financing chip away significantly at those final remaining profits.

We mentioned in our title that you should be cognizant of the risks associated with inventory financing – by all means don’t consider the financing of out of date of very slow moving or unsaleable stock – this quite frankly will be viewed simply as a ‘ cash grab ‘ that doesn’t make sense .

You will obtain a better inventory financing and p.o financing deal if you have good controls on your products – that typically might include a perpetual inventory accounting

Clients always ask if there are any special tips or tricks around the financing proposals around p.o and inventory financing. We tend to focus on the basics, which always work - a listing, or preferably an appraisal of your inventory – updated financials, copies of pertinent purchase orders or contracts, and a business plan or cash flow forecast.

The bottom line is that 9 out of 10 financiers have never even heard of p.o financing or inventory financing, so seek the services of a trusted, credible and experienced advisor in this area to assist you in putting the right type of facility in place. An experienced advisor in this area will help you avoid some of the potential risk, pitfalls, and financial ‘damage’ associated with inventory and p.o financing gone awry. They might include higher than market rates, requests for additional hard collateral, locked in contracts you can’t get out of, or inordinate appraisal and inventory count costs.

If you are successful in avoiding those risk the benefits will clearly be obvious - the ability to grow sales with unlimited financing of new sales or contracts, quick turn around for approval, and cash flow benefits derived from your suppliers being paid directly by the finance firm. Additionally you may be in a position to negotiate better pricing on products, thereby improving those gross margins we talk about.

PO and inventory financing, its all about risk and reward – understand those risks, seek an expert to minimize them, and reap the benefits of increased sales and profit growth.






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


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

Inventory Financing & P. O. Financing in Canada

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Looking for The Skinny on Purchase Order Financing ? We've Got It

Information on inventory and purchase order financing for Canadian companies. This viable asset based financing solution can be the solution for working capital financing and growth

Most Canadian business owners and financial managers probably don’t know, in our opinion at least, that financing options exist in Canada for purchase orders and inventory. In covering off financing alternatives such as this with clients we tend to lump these two types of ( relatively unknown ) financing in with the terms ‘ alternative financing ‘ and asset based lending .


Clients who typically have a need for inventory or purchase order financing have typically been unable to arrange traditional financing with their banks or other term lenders.


One of the most common needs that drives these types of financings is the global economy – what do we mean by that. Simply that many clients are telling us that their new suppliers over the last several years are in the U.S. and China, and in some cases Europe. Naturally it is obvious that suppliers in those countries are unable to extend credit to Canadian firms. You know what comes next! They require cash up front in order to release goods.


Even in the best of economic times Canadian business would have a challenge in financing inventory and contracts, paying up front, etc. 2008 – 2009 and the start of 2010 certainly is hardly the best of times, so Canadian firms, especially small to medium size, face huge challenges in generating cash flow and working capital to fund inventory and purchase orders . (Let’s not forget that at that point you have only made the sale and now you have to wait 30-60 days or longer to get paid. Therefore your investment in inventory and receivables becomes even greater.


What is the solution? That solution is simple to consider inventory or purchase order financing as a mechanism to finance your business. This type of financing can be arranged for firms of all size, it will ensure your suppliers get paid promptly, and can be generally set up within a 30 day period if you employ the services of a trusted, credible and experienced business advisor in this area.


So what is involved in P.O. financing and inventory financing and how does it work. Any type of business financing requires a standard application process, i.e. info on your firm, its owners, your current financial position and prospects, etc. Naturally strong emphasis is place on the actual orders and contracts those selves, or the type of inventory that you require that needs to be financed. It is somewhat important that your clients and suppliers can be validated – i.e. are they legitimate companies who have the ability to either supply your firm, pay your firm , etc . A well known name as a client or supplier certainly helps, but with the assistance of the internet, Dun and Bradstreet, and other sources most companies can be validated today from anywhere!


When you purchase orders are financing your suppliers are paid up front on your behalf – you pay the purchase order firm generally as soon as you are able to generate a sale and receivable . For that reason it is necessary to ensure you have either a banking or receivable financing/factoring facility in place


Purchase order financing has a higher cost of finance that traditional financing, so it is also important that you have some good gross margin profit on your transactions, as those solid margins help offset the cost of the financing.


In summary, purchase order and inventory financing are becoming more popular in Canada, although many business owners are still unfamiliar with this unique type of financing. While the financing is costly it can nonetheless help you grow sales and profits tremendously. Investigate this financing with a specialist to determine if it’s the right growth driver for your firm .





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


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

Business Inventory and Purchase Order Financing Canada

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Inventory & Purchase Order Finance In Canada : Bottom Line ? It's Not Complicated!

Information on key benefits and aspects of business inventory finance and purchase order financing in Canada

Many Canadian business owners and financial managers are not fully aware of the availability and benefits of business inventory and purchase order financing .. These types of financing are very ‘niche ‘and are specialized areas of business financing in Canada.

The reality of these two financings is that they can be arranged individually, but quite often are sought by business owners as a combination as they are inherently linked by their very nature. That is say that your firm receives a purchase order (p.o.) or contract, and as a result required working capital and additional cash flow to buy the inventory required to fulfill those customer needs.

Business owners want to ‘unlock ‘the cash and working capital that they have in inventory. If your firm qualifies for traditional bank financing you will be margined against the inventory, in much the same manner as a bank would margin receivables. The challenge in the current financial environment is that banks, which have traditionally not enjoyed financing inventory, are even somewhat more reluctant to embrace this type of financing these days.


So are there solutions. Yes there are. In Canada you need to seek out and explore the services of a trusted and credible business financing advisor who can guide you through the inventory and po... financing maze. The basic solution to the business inventory finance challenge is a collateralized loan against inventory. What has to be addressed though is the relationship of that loan or working capital advance to the security you might currently have in place against your business vis a vis receivables , etc . That requires somewhat of a skill in order to satisfy all secured parties and give you the working capital you need in a manner that makes sense.

The exercise of obtaining this type of financing is worth if when you have a significant investment in inventory and your inventory asset can be collateralized and liquidated in some manner .We say this , because, as most business owners know inventory come sin three forms, raw materials, work in process, and finished goods. So care must be given in the analysis of what type of inventory you maintain and what are those three different levels within your working capital cycle.

Ultimately you should explore business inventory and purchase order financing ( In p.o. financing your suppliers are paid directly by the purchase order finance firm) if you are always short of cash flow and working capital, or have seasonality in your business cycle – i.e. huge amounts of product required for the Xmas season would be a good example.

Your firm is a candidate for business inventory financing if you can demonstrate the ultimate saleability of the inventory, as it of course becomes the main collateral. If you are unable to demonstrate the marketability of your inventory as collateral you will have a major challenge in obtaining this type of financing.

If your firm identifies inventory as a major working capital component and you have solid gross margins (inventory financing can be more expensive than traditional financing) you should explore the benefits of such business financing.

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

Everything You Wanted to Know About Purchase Order Factoring and Inventory Finance in Canada !

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Financing Cost and Methodology of Inventory and Purchase Order finance

Information on purchase order financing and inventory finance & factoring finance solutions in Canada

You may or may not agree we are technically still in a ‘ business credit crunch ‘ but you probably will agree that your Canadian firms ability to factor purchase orders and arrange inventory finance is still a major challenge . Is there any solution, traditional or otherwise, to this ongoing Canadian business financing challenge? We happily tell clients there is, it’s just a case of having the right knowledge and ensuring you qualify for such financing. And you may find that due to the specialized nature and experts in this industry that are available, that it is not as hard as you thought!

Traditional sources of purchase order factoring and inventory finance are the Canadian chartered banks. To qualify for such financing the pre requisites are very clear - a decent balance sheet and income statement, growth prospects, profitability, potential external collateral, and the guarantees of owners and shareholders . Easier said than done, right?!

Purchase order and inventory financing can provide you with the working capital and cash flow to grow your company. It is simply a case of securing this type of financing, but at the same time recognizing that that costs and methodology around this type of financing makes sense for your company.

By assigning or selling your rights in the purchase order to a specialized inventory and p.o. financing firm your supplier is guaranteed payment of goods that you require to fulfill orders and contracts. When your supplier is paid goods or product is shipped to yourself, or potentially your customer, less a financing fee, which is typically in the 3% range. That fee varies, but is a good general starting point for discussion and negotiation.

The concept of the financing fee around purchase order and inventory financing is critical as it relates to your gross margin, or overall profitability on your transactions. If you are in a low margin, slow turnover business the financing fee around a p.o and inventory financing scenario can eat away significantly at your overall profitability. Quite frankly the inventory and p.o. financing firm might deem your overall ability to complete the transaction as not making sense for all parties – there is no reason to just turn over sales and revenue if you do not have a solid profit outcome.

We all know the saying ‘timing is everything ‘, and how about another well worn but quite solid cliché – ‘the sale is not completed until your invoice is paid ‘. Those two well worn saying factor significantly into inventory and purchase order finance. The inventory finance firm expects to be paid when the product is delivered and your invoice is generated. In normal circumstances, if your firm is traditionally financed, you would borrow against your receivables and pay the inventory finance firm, which in some cases could be your bank. (If you had access to traditional finance). If your firm can’t repay the inventory and finance firm then it is wise, and in fact common, to arrange for factoring of your invoice. This is simply the sale and discounting of your invoice – with those funds you pay your supplier, your firm is now paid, and you have realized the actual cash profit on your sale. (Assuming you had those good profit margins we spoke of!)

By now you have probably figured out that a number of key players play a role in the inventory financing and purchase order financing cycle. Those key players are your firm, your customer, your supplier, and the inventory finance and P.O. finance firm. All are dependent on each other to perform properly in purchase order factoring , and in a timely fashion. Business owners and financial managers by now have probably realized the importance of validating your own customer, the purchaser or your product, as being credit worthy and agreed to your payment terms. If those don’t happen you clearly are at risk.

Despite the costs associated with inventory and purchase order financing in Canada there are a number of advantages – your company can grow significantly based upon access to large amounts of capital you might otherwise have not been able to raise or borrow .

And remember, inventory and purchase order finance is not debt on your balance sheet, you are simply monetizing inventory and p.o.’s to raise liquid capital.

So where do you obtain this type of financing. It’s a specialized form of business finance and we suggest to clients that they obtain the services of a successful, credible, and experienced business financing advisor in this area. That allows you to capitalize on opportunities for growth. That person can also assist and help you wade through the finance maze of basic issues, which might include the size of the facility you need, what info you need to provide to complete the financing, how long does it take to arrange the facility, as well as the costs associated with your transaction on a one of or ongoing basis.

When you are comfortable that his type of financing makes sense you should be able to complete your transaction within a number of weeks , assuming the proper level of transparency between you, your customer and your inventory finance and purchase order lender .

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

Inventory Financing in Canada

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What Would Happen If Your Company Had All The Business Financing You Needed To Finance Sales?

Information on business inventory financing and purchase order solutions benefit firms who have working capital and cash flow challenges relating to sales growth

Business inventory and purchase order financing in Canada is a much sought after yet widely misunderstood aspect of business financing in Canada. This type of financing is sought after by retailers, manufacturers, and wholesalers in all aspects of Canadian business products.

Business owners and financial managers know that maintaining inventory necessities the tying up, by necessity, of valuable working capital and cash flow. When your own resources, or the unavailability of Canadian chartered bank inventory financing do not meet your needs you need to assess, examine, and consider working with an independent commercial finance firm that specializes in inventory financing . This is a sub set of what is known as asset based lending in Canada, and the industry continues to gain broad appeal after the global economic crisis of 2008-2009.



To be able to finance your inventory is must be saleable, and a specialized firm that understands both your industry and the true value of inventory quickly becomes a valuable asset and ally. It goes without saying that the inventory lender must be able to properly secure the inventory asset via a proper lien registration on this component of your current assets.



Many clients we meet have bank financing in place, but quite often if cover receivables and only a small portion of inventory. Therefore inventory financing, and its ‘sister ‘– purchase order financing must be properly secured and broken out of your total current financing strategy. We have seen many cases where clients were receiving no, or modest advance against inventory, yet have then seen the margining on their inventory go to 50 – 80% in some cases when they have secured a true inventory financing program

The inventory of your firm becomes a clear identifiable and valuable asset in your overall financing strategy. In many cases bank financing treats inventory as simply bolstering up the overall bank security, but your true borrowing or margining power is somewhat insufficient based on your growth an customer fulfillment needs .

There is a combination of an art and science as it relates to inventory financing. Inventory is monitored regularly; usually a minimum of monthly, to ensure that is always can satisfy repayment of the loan. If you are a wholesale or distributor inventory is one of the largest assets you can leverage, and improving that leverage simply adds cash flow and working capital to your overall financing strategy.

Inventory becomes a receivable after it has shipped, so both your firm, and the inventory and purchase order lender want to understand your total cash conversion cycle – that is simply a financial phrase and formula that relates to how long it takes a dollar to go from product purchase, inventory, receivable collection, and back into true cash. Naturally this formula repeats itself over and over, and we encourage all business owners to understand their own cash conversion cycle. Even modest improvements in both inventory and receivable turnover can lesser your overall borrowing costs significantly.

The bottom line on inventory financing is that it is a specialized form of finance. Work with a trusted, credible expert. If your firm has a reliance on inventory to be successful you should investigate your ability to maximize and leverage additional financing on what is probably the largest asset on your balance sheet




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