Asset Based Invoice Finance : Steady To A Fault Receivable Factoring Solutions

Is Your Company One To Take Advantage Of Receivable Financing ?

OVERVIEW – Information on the advantages of asset based invoice finance in Canada . Who offers receivable factoring and how does this business finance solution provide all the cash flow your business needs

Asset based invoice finance solutions , also known as ' receivable factoring / invoicing financing ' has become a ' steady as a fault ' business finance solution for thousands of Canadian businesses who utilize it as their main cash flow / working capital source . Why... and how? Let's dig in.

Thousands of businesses in Canada find it a challenge to manage their businesses from ' get up and go ' to a ' get up and grow ' stages. Firms that are new, smaller, or financially challenged in some way find it even more difficult...


So how does this all work? It’s simpler than you might think. Given that your accounts receivable are typically the largest next to liquid cash asset that your company has, this asset becomes your short term financing strategy. The result? With the right solution in place you're now in a position to meet payrolls, buy products and services, and... dare we say it... grow your business.

By ' pledging' your receivables as the asset you are ' monetizing ‘you’re in effect securing ongoing short term lending. Here it's important to emphasize though this is not a loan / debt scenario. The Receivable factoring paperwork/security documents position your company as selling your receivables as you generate sales to access the amount of cash flow you need.

While Canadian chartered banks have ' dabbled' in asset based invoice finance the reality is that on balance 99.9% of all receivable invoice financing is done via commercial finance firms who compete with the banks for your working capital business credit lines .

If it was all about price and rate the banks would win hands down, given that commercial receivable financing from factor firms is more expensive than those low bank rates. The reality though is that many businesses can't qualify for the amount of financing they need in part or whole.

If you're looking for some even better news in how these facilities working then consider looking into Confidential Receivable Financing, which allows you to garner all the benefits of ' traditional’.. aka ' old school' factoring but given you the power to do all the invoicing and collecting with no notice to your clients, suppliers, etc. This eliminates the ' notification' required by old school firms that insist your clients be notified of whets going on.

The majority of firms that utilized asset based invoice finance do this as a bridge to going back to accessing traditional bank capital. Typical current scenarios in their businesses include:

- An urgent requirement for cash flow
- Inability to get Canadian chartered bank financing
- Requiring more cash flow than is typically available
- High growth
- The requirement to carry higher levels of inventory and A/R

The formula for receivable factoring is quite simple:

Your receivables are eligible for 90% financing of your month end a/r for all accounts under 90 days (Note - if you have a/r over 90 days you probably have a bigger problem )

In summary receivable factoring is not a loan, brings no debt to your balance sheet, is easier to get approved, and allows you to grow in an almost unlimited manner as long as you have revenues that are stable or growing .

If you're suspecting that the bank financing you seek is somewhat remaining in the bank vaults 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 ' steady to a fault ' financing solutions .


7 Park Avenue Financial :

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 . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN ASSET BASED INVOICE & RECEIVABLE FINANCING EXPERTISE



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


' 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

AR Financing . Your Every Question Counts When It Comes To Receivable Factoring

Lost Your Operating Manual For Receivable Financing In Canada?



OVERVIEW – .Information on AR financing in Canada . When it comes to receivable factoring what does the Canadian business owner/manager need to know with respect to operating and benefiting from a successful cash flow strategy .




AR Financing in Canada. When clients we speak to think about receivable factoring solutions they tend to have more questions on this solution than some other types of financings. Why is that we thought? We're not 100% sure but we know those questions need to be answered. So our solution, a mini ' Operations Manual ' on A/R finance in Canada.

It's those operations manuals that provide us with ' how to ‘, dangers, warnings, recommendations, so it seemed quite appropriate to adopt that type of information delivery! Let's dig in.

Canadian business owners and financial managers utilize Receivable factoring for a variety of reasons - one main one being it provides your firm with working capital and cash flow without dilution of your ownership equity in the company. It is often viewed as a short term or intermediate finance solution, avoiding long term commitments and long term debt.

It differs from bank financing from a number of perspectives. When you finance you A/R with a bank you provide an assignment of those receivables that you're financing. When you utilizing an A/R finance scenario you simply bulk up on ' Cash On Hand ' as you are in a position to constantly ' sell' your A/R on an ongoing or bulge type basis .

Both factoring and bank receivable finance advances you a per cent age of the value of your sales. In the case of Canadian chartered banks it's a 75% advance; Receivable factoring typically provides you with a 90% advance, so you have more liquidity.

Does our ' Operations Manual ' of advice recommend any one type of AR financing over another. Ours does! It recommends that you consider Confidential A/R finance
which allows you to bill and collect your own accounts - there are no notices to customers, you are completely independent of your finance partner, and at the same time you have the same or better pricing with respect to limits and credit lines.

In effect you're in control. That ability of Canadian firms to run their own businesses without any ' negative ' client reaction from their customer base. That's a good thing! , when it comes to the somewhat more conservative Canadian landscape of business ' perceptions '.

Receivable financing in Canada is a sub set, we can say, of asset based financing... So in many cases your cash flow financing for your receivables can be combined with inventory of fixed asset financing, allowing you to truly ' bulk up ' on capital needs .

The security for your A/R financing is pretty well the same as that of any Canadian chartered bank. Typically its most easily accomplished with the same type of General Security Agreement that collateralizes the financing.

So does the concept of an ' Op's Manual ' when it comes to receivable factoring make sense. If you're concerned about ' how things work '. ‘dangers’ , 'recommendations', etc consider a LIVE operations manual by seeking out and speaking to a trusted, credible and experienced Canadian business financing advisor who can assist you with your cash flow needs.




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 = Canadian Receivable Financing Expertise





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

Finance Factors In Canada . Decided If You’re For Or Against Receivable Factoring Cash Flow Solutions ?

The Dreaded ‘ F ‘ Word - It’s Factoring, Funding and Financing Your Sales !



OVERVIEW – .Information on RECEIVABLE FACTORING AND FINANCE FACTORS
in Canada . Letting the Canadian business owner/financial manager understand the role and value of finance factors




Finance factors in Canada. When the Canadian business owner / financial manager considers the weight of evidence for a receivable factoring solution he or she wants to be in a position to have the facts on how this method of financing sales works, costs, and attracts benefits otherwise not obtained . Let's dig in!

Whether your business is mature, a start up, or growing like crazy you need to be in a position to ' model ' your cash flow. That's something you need for your own management of your business, as well as being available for any term or operating lenders. The advantage of having such data is that over time you get a strong sense of your cash flow and working capital needs, giving you comfort on what’s coming in. and going out!

Feeling disconnected lately? One reason for that is what we see in talking to clients all the time - actual cash flow and profits are vastly different things. Are you really comfortable with the way your A/R tracks sales, or visa versa, and do you understand the implications of growth and working capital needs.

That’s where Finance factors come in. A receivable factoring solution reduces the time gap that it takes you to generate cash out of your products and services.

Unlike bank financing where you assign or collateralize your receivables via a line of credit the Factoring solutions is a straightforward immediate ' sale ' of your revenues as you generate sales. It gives you ' immediate funding ' and by that we mean basically the same day. So if you hopefully generating invoices to clients in the morning you receive the cash for that sale the same day. That’s cash flow optimization!

Although the function and the formula for A/R financing seems either strange or exotic or unheard of to some in reality this form of financing has been around for hundreds of years. It is widely popular in the U.S. and gains more traction in Canada everyday. Quite frankly it’s the alternative to having to put more equity in your company, or arrange debt financing that you may or may not be eligible for. (And business owners can unfortunately spend a lot of time these days on financing solutions that are either wrong for them or unattainable)

Where confusion reigns supreme sometime is when some of the terms, pricing and players in the Canadian A/R financing industry seem a bit confusing to the factoring ' newbie '.

A short overview of some key issues, points to consider is as follows:



A/R factoring documentation is between your firm and the finance factors.

Our absolute recommended solution is a confidential invoice financing facility whereby you bill, collect and finance your sales to the amount you require and need.

Generally receivables under 90 days can be financed at anytime. Your receivable might be 1 day old or 60 days old. It's your call on when you want to cash flow them

The terms advance rate and discount fee are absolutely critical in understanding A/R receivable factoring in Canada. Typically 10% of the financing is held back as a buffer or hold back, and the charge to discount or finance that sale is in the 2% range for a 30 day period. So using a $100,000.00 invoice as an example you would receive 98,000.00 of immediate cash for that item. Proceeds could be used to generate more sales and service and profits - and in fact your payables could be offset by taking discounts for prompt payment with your own suppliers.

If you wish to smooth out and normalize cash flow, be less afraid of growing or taking on larger orders and contracts, and avoid ' cash crunches ' the weight of evidence might just suggest you should consider receivable factoring. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your cash flow needs.



FINANCE FACTORS
RECEIVABLE FACTORING





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/receivable-factoring-finance-factors.html




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

Canadian Receivables Financing ‘ Grow Cash Flow And Lose Money ! Receivable Factoring Equals Business Cash Flow

Why Canadian A/R Finance Just Might Be The Cash Flow Solution You Are Looking For!


Information on receivables financing for Canadian business . Receivable factoring is a cash flow generator and here’s why



Canadian business owners and financial managers should not be ' tricked' around our statement of 'grow cash flow' and ' lose money’ as a recommended strategy. But when they understand the essence of receivables financing they do see the truth in that statement, which revolves around how receivable factoring is priced and how it benefits their benefits their business.

Receivable finance is a source of working capital. It is not debt financing, which is a common misperception of what it is and how it affects your business. In technical terms the A/R is sold to your A/R partner. That sale is done at a discount basis, meaning that over a 30 day period you would typically receive 98,000.00 on a 100,000.00 receivable. That 2k cost is in essence a loss, or a financing cost. What you do with those funds and how you run your business allow you to sell more, do more, and recover a huge portion of that financing cost.

This type of financing arrangement is used in a wide variety of industries in Canada, by thousands of companies, including, we bet, many of your competitors.

If we had to identify the two major benefits of this method of Canadian business financing we would say it’s simply the high advance rate on your sale/receivable, as well as of course the quick turnaround.

Quick turnaround? If you consider same day funding for any sale you make in our book that’s a quick turnaround.

Relatively speaking (relative, say, to a Canadian chartered bank) the financing is perceived as expensive. We say perception, because when we sit down with clients and review the fact that they are already carrying receivables anywhere from 60-90 days , plus the fact that the new found cash flow can be used for a variety of profit generating activities .. well we think you get the point. And that's that perception is not always reality.

When receivables financing arrangements are done properly you are even in a position to ensure that you are not introducing a third party to your client process. Our recommended strategy is a C I D facility, which is the term for confidential invoice discounting, allowing you to bill and collect your own A/R, reaping the benefits and eliminating the disclosure!

We're pretty sure you're getting our main point today, which is simply that information, facts, and the proper interpretation around this method of financing is what generates a winning combination.

Some of the key benefits can simply be grouped under the term ' predictable cash flow. And if you choose the right partner firm and our recommended confidential A/R facility your strong customer relationships stay intact.

We're open enough to say that the majority of firms who in fact entertain receivable factoring can't get financing elsewhere, particularly at their bank. But don't forget also that many instances involve firms such as yours who are growing too quickly or who have landed that ' big contract' or order. It's at this time that busines owners appreciate the fact that their net worth, profitability, debt coverage, or operating losses arent under the microscope anymore. And your firm is free to explore other methods of debt financing outside your A/R assets.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you to work through the benefits of this type of finance.




Stan Prokop - founder of 7 Park Avenue Financial –


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/receivables_financing_receivable_factoring_cash.html

Study : Can Financing Receivables Via A Confidential Receivable Factoring & Funding Solution Save Your Company?

Do The Benefits of A/R Finance Solve Your Working Capital Challenges ?


Information on financing receivables in Canada . What is a receivable factoring solution and how does funding a/r solve the gap in your firms cash flow and working capital needs.




We're pretty sure, based on talking to clients, that thousands of Canadian business owners and financials managers start every Monday worrying about business financing and cash flow. A lot is being said these days about financing receivables as a subset of asset based lending in Canada.

But can a receivable factoring and funding strategy really save your company? And another thing, what's a confidential invoice funding strategy and how does it work. A lot of questions! Let’s get some answers.

It is somewhat ironic that the growth your firm faces, which is clearly a good thing is offset by the need for more and more cash flow and working capital as you build receivables, and yes, inventories also. It's a very simple gap - simply the time between being paid for your customers and the need to pay suppliers and your operating costs. In a perfect world (it’s not apparently) your suppliers would be willing to wait an unlimited amount of time. They don't.

Therefore financing your receivables as you generate them provides you with cash flow needed - you are simply closing the proverbial gap in waiting for your clients funds.

In Canada you should expect, via a receivable finance strategy to receive in the area of 90% for your receivable funding as you submit invoices. What about that other 10%? It’s simply held back as a holdback or reserve to leave a buffer for financing costs and any short payments for your clients.

Financing costs. That’s the real discussion point these days on receivable factoring in Canada. Those costs range from 1- 5%. That’s a big range, so what defines that range. Typically the 4-5% range is defined by firms having very small receivable balances and who themselves are relatively small firms. A more typical range in Canada is 2%. While many clients view that as and interest rate on a 30 day basis it’s actually the discount your finance partner bases the purchase of your receivables on. So, utilizing a $100,000 dollar invoice as an example you should be expected to ultimately receive $ 98,000 for the invoice. That’s at settlement time when your client pays and you also receive the rest of the holdback we referred to.

So is that financing fee too much for your firm ?History tells us its not, in that your ability to generate more sales with the cash flow you receive daily usually significantly outweighs lost sales revenue , or , even worse, your ability not to meet your obligations to supplies or other creditors . The majority of clients we speak to are looking to grow their business and use a receivable factoring strategy as a tool to do that.

If you are looking at the traditional type of receivable finance facility in Canada that is offered there is one aspect that doesn’t appeal to many business owners, in that 99% of the firms in Canada who offer A/R finance require a notice to your client around this financing. That’s where a confidential invoice funding strategy works best, you bill and collect your own receivables, and your method of financing your firm is just that, yours, and no one else’s business.

So, can financing receivables save your company? We thing if it isn’t a matter of saving it’s a least a mechanism for growing, and that’s not a bad thing. To be honest though many firms that face financial challenges are often saved by an interim funding strategy such as ours when they cant obtain traditional bank type finance .

More info? Questions ? Speak to a trusted, credible and experienced Canadian business financing advisor on the benefits of a confidential invoice finance strategy.




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_receivable_factoring_funding.html

What’s the cost of confidential invoice finance and how does receivable factoring work?

Read all about it! Read all about it! Heard the news today? We're talking about the fact that thousands - yes thousands of Canadian firms are moving toward a working capital financing facility known as receivable factoring. But, what if you could get confidential invoice finance that would allow you to bill and collect your own receivables under this facility? Possible? Absolutely.

So what if you had a commercial business financing facility that gave you unlimited cash flow, and, unlike your competitors, you were in control of your facility. Most Canadian business owners and financial managers know a bit about how factoring, aka receivable financing works.

It’s a process whereby you sell your receivables and receive immediate, same day cash for those invoices. 99.9% of all the financing done in Canada under this business model has the factoring firm collecting your invoices and notifying the customer. They also follow up for collection and interact with your customer, because, as we said, you have sold them your receivable, or receivables in whole.

Like most of our clients, you like the end result, i.e. instant cash flow and working capital, but you aren't necessarily in favor of the factoring firm taking over your client relationship as it relates to accounts receivable. That’s why you should consider confidential invoice factoring. Under this scenario your receivables are billed and collected by yourself, and there is no third party interference with the relationship you have with clients when it comes to billing and collecting.

Maybe it’s just because we're Canadian, but we find out clients are very much in favor of that business model. The bottom line is that your financing relationship is not disclosed to your customers, and that’s a good thing.

So what has happened here? Simply that you have achieved all of the benefits of accounts receivable financing, but under the confidential invoice finance model your receivable factoring is in your control.

Under traditional U.S. And U.K. type receivable factoring your customers receives a letter from either yourself or the factor firm, notifying your clients about the issue of your firm having sold its receivables. If you don’t care about that, no problem...! But if you do care about what the perception of that letter might be then you should consider confidential invoice finance.

While factoring is a high growth area in Canada, the ability to get confidentiality around this process is not fairly well known . .So you know something others don’t, and in business that’s a competitive advantage . It therefore differs from bank financing, and is the alternative to the traditional factoring of invoices that we have talked about here. The bottom line is there is a world of difference in the facilities offered,

And oh yes, the cost? The cost of confidential invoice discounting is the same as traditional factor financing - so that’s a good thing!

Speak to a trusted, credible and experienced Canadian business financing advisor on who will assist you in closing this valuable type of working capital financing 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 6 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

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

Real World Advice on Cost of factoring of receivables in Toronto – Board the Receivable factoring Bus!

Whether they are hearing about it from their business peers, reading about it, or being ' pitched' on the factoring of receivables, whether in Toronto or the rest of Canada is a hot topic in the world of Canadian business financing.

We think we can simplify the issue into some valuable basic pieces of information around what receivable factoring is, what it costs, and more importantly, how it works re benefits and solutions!

At its most basic it is simply the ' sale ' of your receivables as you generate the . Think of it - receiving cash flow and working capital the day you generate a valid sale and invoice. The cost of that service is a fee, generally between 1-3% which you as a business owner have to rationalize against the benefits of receiving that cash immediately and making use of it. That really is where the crux of our advice comes in, that the cost of the instant cash flow actually can be offset significantly, in some cases totally, by the effective use of those funds.

That is achieve in the following manners - more sales and profits, taking on orders and contracts you couldn’t even consider before, and finally, the less tangible but very real benefit of using that cash flow to purchase in larger and smarter quantities, as well as taking payment discounts which might e offered through suppliers . If those benefits don’t ring clear then we confess we will have to give up now to demonstrate the clear benefits of factoring of receivables.

Whether its Toronto factoring, or anywhere else in Canada the challenge for the business owner is really to get the best advice on what type of receivable factoring to get, who to get it with, and where to get it. In all businesses we rely on experts, and the financing of your business in Canada surely demands an expert - there is not a lot of room for error when it comes to how your business is financed. So seek the services of a trusted, credible, experienced Canadian business financing advisor who can set you on the right track.

It’s frankly all about the nuances, and as we speak to clients and determine they don’t really often understand how receivable factoring works it’s at that time they need advice. It's really about the day to day. We rarely get into debates with clients about ‘do they qualify ' because frankly if you have a business and are generating commercial receivables then, guessing what, you qualify.

So free up the cash flow, maximize on the working capital benefits of factoring of receivables, and whether it’s Toronto factoring or anywhere else in Canada feel free to board the receivable factoring bus! Just do it right though.
--

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 6 years - has completed in excess of 45 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/factoring_receivables_toronto_factoring_receivable.html

Understanding Cash Flow For Business and Why Receivable Factoring Just Might Be The Solution

Choices. Alternatives. Robert Johnson, an old blues legend wrote of being at the ' crossroads ' and had choices.
That’s what Canadian business is looking for more than ever when it comes to the Canadian business financing marketplace for small and medium size businesses. (We suspect the big guys want the same thing!).

If your business can't obtain any (or enough) cash flow for business growth then receivable factoring just might be an option. Naturally you're the client, so we'll let you decide.

Clients always ask ' why can my firm obtain working capital financing via receivable factoring when we can via the bank. The answer is really not that mysterious - it’s a case of your new financing partner looking solely at the asset and not the big picture, which our friends at the bank tend to be focused on.

And don’t get us wrong, if you firm can obtain ' all ' the financing it needs from a Canadian chartered bank you clearly have the ultimate cash flow security in place... however the reality is that we havent really met many of those firms in the tumultuous environmnet post 2008-2009 global business financial meltdown.

So yes, the cost of factoring in general is more expensive (in some cases it actually might be cheaper!) but with receivable factoring your are operating your business in an entirely different manner.

As a Canadian business owner and financial manager you should not feel embarrassed that you haven’t heard a lot about receivable financing via a factoring working capital facility. It’s been around as a financing tool for quite some time, but it’s been a little under the radar, and oft considered an alternative tool for Canadian business financing.

Essentially it is the sale, on a one of, or ongoing basis (it’s your choice) of your receivables to a third party. You receive funds instantly, and we mean basically same day! And the total focus is very simple and straightforward - the transaction is only about the value of your receivable, its not additional debt for your balance sheet, and it monetizes your receivables to the extent that you choose.

Control is the key word here, as you control what you need to borrow, when, and what those funds will be used for. Traditionally all our clients use the funds for just one purpose - financing their business for more growth and profits.

Perception is often confused with reality, and the perception is that a receivable factoring strategy to generate cash flow for business is expensive. Yes, no... Maybe! The cost of this type of financing tends to be in the 1-3% per month range. What many of our clients miss is that putting yourself in this type of facility assures you unlimited sales and profit growth. Your investment in receivables (and inventory) has essentially been monetized on a long term basis. Also, the funds you obtain from this type of financing allow you to take supplier discounts, enhance supplier relationships, purchase smarter and in larger quantities, and increase your A/R and inventory turns, which technically play a huge role in your return on equity.

So, is receivable financing and factoring your working capital solution for business cash flow - only you can decide, but you do have choices and alternative you previously might not have been aware of. Speak to a trusted, credible, an experienced Canadian business financing advisor to ensure you choose the right method of financing when you're at the crossroads!
--
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 6 years - has completed in excess of 45 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/receivable_factoring_cash_flow_for_business.html

How Commercial Factoring works in Canada -Receivable factoring Costs and Benefits

Commercial factoring in Canada addresses some of the major issue your firm faces everyday in cash flow and working capital challenges. You know the drill – customers have always been slow to pay, they seem even slower these days. Your cash flow requirements change daily as you address working capital needed to finance inventory and receivables, and at the same time manage your investments in ongoing operations, debt payments, commitment to suppliers, etc.
Is there a solution to those challenges, we think there is. Is it as expensive as you may have heard, we are pretty sure it is not.
Commercial factoring is the ongoing sale of your receivables for instant cash. For many customers it always comes down to the rates and pricing they have heard about this type of financing. In Canada those costs range from anywhere from 9% per annum to 1-2% per month. So let’s address that cost issue a bit. When many customers calculate their ‘all in ‘cost of borrowing from banks it is often in the 11% range as an example. So it is important not to get ‘seduced ‘by your low rate expectations around traditional Canadian bank financing. Furthermore most clients we meet with simply can’t meet the requirements, (the banks call them covenants) for borrowing on a revolving ongoing basis for working capital, particularly receivables and inventory. So the conversation around pricing becomes somewhat moot.
Instead of worrying b about the cost of factoring consider the following – If you have money tied up in accounts receivable for , as an example, 60 days, then you are losing the opportunity to receive payment and re invest in your business and increase your overall return on equity . The more quickly you can get paid allows you to reinvest in further sales for your firm, those sales create more profits.
If you complete a receivable factoring agreement you have successfully negotiated a great coup – what is that coup? You have in essence provided your firm with unlimited working capital, because as your receivables and customer backlog of orders grow your cash flow from commercial factoring works lock step with that same growth. The bottom line is that most business owners view cash flow as unpredictable, and commercial factoring removes that unpredictability – you in effect control the cash flow valve – financing all or a part of your receivables when you chose.
Receivable financing is growing all over the world, North American no exception, and certainly in Canada it has been on the rise also. Many clients are in industries which might be viewed by others as ‘out of favor ‘. In general factoring doesn’t discriminate – if you have a receivable you can generate cash flow from that A/R – today!
Some of Canada’s largest corporations use this type of financing – when it comes to larger corporations fancier finance terms like ‘ securitization ‘ are used . Bottom line, General Motors factors, why you shouldn’t. That brings up a further point , which is that we do acknowledge that firms that have particular, unusual, or one of challenges are often the mainstream candidates for receivable financing . So your firm may have had some financial losses, be in a turnaround situation, etc – you are still a solid candidate for this type of business financing.
Factoring is the ultimate in off balance sheet financing – you are simply monetizing your receivables and generating cash instantly. The secret of factoring costs, or their perceived costs, is your utilization of those funds. You can use cash flow generated from receivables sales to pay invoices from suppliers and take a discount, or negotiate better terms and pricing for your products .

When you have additional working capital you can grow sales and revenue and increase profits – that financial flexibility is what this type of financing is all about. Sometimes it is a ‘bridge ‘solution, in certain cases it can easily become your long term ongoing working capital solution.

So whats our bottom line? Simply that you do have choices in working capital solutions. Commercial factoring is one of them. Understanding the true cost of the financing, how it works, and utilizing that cash for the right reasons just might be your best alternative for cash flow longevity.

Speak to a trusted, credible and experienced working capital advisor to ensure you understand the benefits of this unique type of business financing in Canada.

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

Accounts Receivable Factoring in Canada

Guess what? Whether you are a start up, an established business, growing like crazy, or just trying to survive and stay competitive - you need business working capital financing. That is why one solution might be accounts receivable factoring in Canada.

We hasten to point out that while receivable factoring, factoring accounts due to your firm is often used by firms that are unable to get traditional financing that some of Canada largest corporations utilize this method of working capital financing to grow . Larger more sophisticated firms might call it securitization, or make it a component of an asset based lending facility, but, bottom lines it is still called factoring.

Canadian firms gravitate to the benefits of factoring as they are significant relative to financial resources they might be otherwise unable to obtain. At the core of the factoring accounts solution is simply the ability of your firm to get a predictable cash flow in place that is, in essence, unlimited. Why is that? Well it is because as your sales grow you create receivables and if you cant financing those receivables with traditional bank lines or working capital term loans you have the option, using receivable financing, of turning those receivables into cash flow at your discretion. So you can factor one receivable, all your receivables, or some of your receivables – you make the call!

Another way you can view this type of business financing is simply that it’s a mechanism to link your sales to your cash flow immediately. Although some view the cost of this type of financing as a deterrent we can say , after discussions with many clients, that most business owners and financial managers don’t understand the true costs of factoring, or , an even better way to put it that they don’t understand the costs of not being able to discount their receivables .

One other critical aspect of factoring is simply that it’s not debt – you are not adding debt to your balance sheet – you are simply monetizing one of your largest and most liquid assets, your receivables. In some cases if we term this type of facility a ‘working capital ‘or ‘asset based lending’ facility an inventory component can also be considered for financing, thereby even further increasing your overall liquidity.

As we said before the true beauty of this type of cash flow financing lies in the fact that it is applicable for companies of all size and type of business. As a result if your business is experience challenges, has tax or lien problems, etc you can still be a solid candidate for this financing.

Understand the basics. That’s what we tell clients when they ask us how factoring work, what are the different types, and how does a business assess the costs. Let’s recap some of those basics. If you have a bank line of credit your receivables are owned by your firm, but they are assigned to the bank, which finances them. In factoring accounts receivable are sold, giving you immediate cash , almost same day, in fact usually the same day . You are then in a position to grow sales and extend credit to customers.

Costs and they way factoring works on a day to day basis should be understood also. Invoices are typically funded in the 90% range, meaning you get 90% of funds for the invoice immediately, the rest is held back. Factoring fees in Canada vary from less then 1% per month to 2-3% per month. Factor firms in Canada don’t view this as an interest rate; they call it a discount fee. We point out to customers that they have potentially the ability to recoup a huge part, if not all of that fee by using funds to take supplier discounts and negotiate better pricing. The biggest bottom line is the elimination of your working capital worries.

In Canada things get confusing because there are many factor firms, some are foreign based, some are Canadian, some are large, some very small and unable to services your needs from a viewpoint of capital you require . In many instances the factor firm will bill and collect your receivables, we are not in favor of that method and strongly suggest you maintain account and customer control by negotiating a facility that allows you to bill and collect.

You have now seen many of the advantages of receivable factoring, and should understand now the basic of ‘how it works’. Speak to a trusted, credible an experienced business advisor in this area to determine how you can be in control of your working capital and cash flow needs.
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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 6 years - has completed in excess of 45 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details:
http://www.7parkavenuefinancial.com/accounts_receivable_factoring_canada.html