Straight Talk On Confidential Factoring In Canada – Why Accounts Receivable Financing & Invoice Services Just Got Better!

Fact & Fiction on Receivable Financing In Canada


Information on Canadian confidential factoring and invoice services in Canada . Why C I D ( Confidential Invoice Discounting ) Just made factoring and accounts receivable finance a whole lot better!



We're the first to agree that when one of Canada's newest forms of business financing just got better that’s clearly a good thing! We're talking about the concept of confidential factoring, invoice services that finance your accounts receivable for working capital and cash flow.

Canadian business owners and financial managers demand flexibility when they look to alternate financing methods. If you choose the right facility, as in our case today, confidential accounts receivable financing you have just converted 90% of your receivable investment into immediate cash flow availability.

That benefit becomes even more dramatic when you consider this type of financing essentially gets larger as your sales increase; your financing ability travels locks step with your sales increases. Your revolving credit facility of confidential factoring becomes your new financing safety cushion.

While the majority of our clients use this type of financing for ongoing operations and growth remember also that you have the ability to use this finance mechanism for a number of other reasons - they might include acquiring a business , restructuring your company without the need for additional equity, etc.

Many clients utilize this type of accounts receivable invoice services in the context of also combining their inventory and purchase order financing needs .You've then created a triple combination of financing power for your firm , outside of traditional Canadian chartered bank financing .

So lets just backtrack a bit and ensure you understand the whole issue of confidentiality around C I D; Confidential invoice discounting. When you set up this type of facility you effectively retain total control over your A/R function - you are billing and collecting your own receivables.

Those familiar with traditional U.S. and U.K. type offerings available in Canada know full well that is not the case with the offering that is used by 99% of your competitors. Those firms in Canada that use receivable financing but without a confidential facility have in effected handed their billing , collection, and all important client contact info over to the factor company . Does that type of traditional factoring work? Absolutely. It’s just that confidential A/R financing puts you in control, not your finance company. You bill and collect your own receivables, without any notification at all to clients, suppliers, etc.

Canadian businesses are of course used to paying for added value. That’s just common sense. So then our clients can of course be forgiven for asking if confidential factoring services costs more. The answer is NO! Your advance rate and financing charges are the same with confidential factoring as they would be in the traditional for of notification model used by your competitors.

We would add however that to take advantage of confidential receivable financing a typical A/R portfolio should be at lease in the 250k range. There is no real upper limit on the size of any facility

Accounts receivable financing has filled on of the biggest voids in Canadian financing. It is often mis understood, in no thanks to some of the firms that offer it. If your company is growing, unable to attract more traditional financing then confidential then invoice services such as we have describe are for you . The optimal situation is when your cash flow is being drained because your sales are growing, requiring to maintain higher levels of A/R and inventories, etc.

If you wish to better understand the nuances and yes, the benefits of factoring invoice services in Canada, and which one works best for your firm speak to a trusted, credible and experienced Canadian business financing advisor today.



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/confidential_factoring_invoice_services_receivable.html

How To Get The Best Factoring Financing From Your Receivable Investment And How Factoring Firms Differ in Canada

Clients who are in the process of investigating factoring financing want to know their receivable investment is being financed in the best manner possible. So... are factoring firms different - oh boy - you dont believe how different they are.

Let's examine some of the key issues around factoring and receivable financing in Canada - lets look at what the best type of facility is (in our opinion at least!), how the financing works, and most importantly, why you should consider using it.

Let's address the last issue first, namely why you should be using, or at least considering factoring financing. The reality is that your business is in one of several categories - they might be as follows: you are unable to unable to obtain traditional bank type financing; your business is growing at an exceptionally fast rate to support bank financing approval, your firm has financial challenges re operating losses and other issues.

So how do you choose among the many factoring firms out there in the Canadian environment? This is where it gets tricky, and you will save probably thousands of dollars when it comes to working with the factoring firms that make sense for your needs.

Here's the basic ' lay of the land' in a nutshell. Canada has hundreds, and we mean hundreds of factoring firms that come in all shapes and sizes, small local boutique operations, branches of U.S. and U.K. firms, and everything in between. We recommend a Canadian receivable financing firm that is local to understanding your needs, and one that offers confidential invoice factoring, which by far in our opinion, is the best type of A/R financing.

As most Canadian business owners and financial managers know invoice discounting, aka factoring is simply the sale of your receivables, on a one of, or entire basis, for immediate cash. Sounds simple and sounds great, right. It is, but the type of facility you choose and what you pay can make or break your decision to finance your A/R investment.

Costs of financing your A/R with factoring firms differ greatly - Generally you can be expected to pay between 1-3% per month based on a few key issues such as the size of your A/R investment, the industry you are in, and your receivable turnover, or DSO as its known in the business.

We strongly recommend clients search for a confidential invoice discounting facility - by far the best. Your firm retains all the advantages of factoring financing, but bills and collects your own receivables, receiving cash instantly as you invoice. This facility compares to the other 99.9% of the industry which uses a cumbersome system that involves notification to your customers around your financing arrangements.

There isn’t a day when we aren’t asked by clients about the cost of factoring, which is perceived as high by many clients. We can assure you that yes, it is higher than bank financing, but ask your bank if they will give you an unlimited line of credit based on your receivables . Keep us posted on that one, because we thing you know the answer already.

Also, if you used receivable factoring prudently you could actually in many cases achieve the same costs as you have in bank type lines of credit, but that’s a subject for another day.

Unsure of how factoring finance works - lets cover it off then! You invoice you client for work or services or product done/shipped, etc. You receive the same day, cash flow wired into your bank for that invoice or invoices. Typically 90% is advanced same day, the other 10% is a buffer , held back and remitted to you when your client pays, less the factoring costs themselves .

So whats our bottom line then - we think we can sum it up as follows. There are different types of factoring - we maintain confidential invoice factoring works best. Cost vary between firms and you should ensure you work with a trusted , credible and experienced Canadian business financing advisor to get the facility that makes most sense financially for your company .


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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 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

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