How Does Non Bank Receivable Financing Work ?

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Confidential A/R Finance Is The Best Kept Secret In Business Credit Finance

Accounts Receivable financing isn't always in the headlines - we're the first to admit that . But it should surprise business owners and their financial managers that thousands of Canadian firms are moving toward a working capital financing facility known as receivable factoring.

There are numerous reasons why businesses choose, or must choose to finance their sales outside traditional bank norms . One reason might be they aren't able to access all the business credit they need ; in other instances they might not qualify for any traditional bank credit solution while at the same time their business is growing !

Confidential Invoice Financing

Here is a question . What if you could get invoice finance that would allow you to bill and collect your own receivables under this facility? Possible? Absolutely.

Canadian business financing solutions such as Confidential A/R Finance provide your business with unlimited cash flow, and, unlike your competitors, you , not a third party, are in control of your facility.

HOW RECEIVABLE FINANCING WORKS

Most Canadian business owners and financial managers know a bit about how factoring, aka receivable financing works.

The Confidential AR Financing Difference :

Factoring , we call it ' old school ' factoring, is 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 third party lender 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.

Why Trade Receivable Financing :

Clients of 7 Park Avenue Financial like the end result:

Instant Cash Flow

Constant Working Capital replenishing

What they don't necessarily like is the 3rd party firm taking over the client relationship as it relates to accounts receivable.

Enter Confidential Receivable Financing - Under this scenario your receivables are billed and collected by your firm , and there is no third party interference with the relationship you have with clients when it comes to billing and collecting.

Business owners like this latter model - The bottom line is that your financing relationship is not disclosed to your customers, and that’s a good thing. Your firm achieves 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.

Using a solid non bank a/r finance model gives you a competitive advantage - It 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.

Cost Of Factoring / Confidential A/R Finance

The cost of confidential invoice discounting is the same as traditional factor financing - so that’s a good thing! This method of financing is costlier than bank interest rates, but does not require the significant emphasis that banks place on personal guarantees, outside collateral, ratios, covenants, credit limits , etc. In fact business owners may be surprised to know that credit limits are virtually unlimited if you business has the sales levels to justify increases in the facility, and that the facility is operating properly .

Speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success , one who will assist you in closing this valuable type of working capital financing solution.







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

Important Decision Making On Working Capital Loan And Receivable Financing Invoice Solutions

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Cross The Threshold On Invoice Finance Solutions

Receivable finance solutions that are offered in Canada ( there are several types ) are a valuable strategy for companies looking for alternative finance solutions when traditional financing is not available . Typically when we are talking about traditional financing we are talking about Canadian chartered banks of course !

So what does the business owner and financial manager need to know when it comes to invoice financing and complementary cash flow strategies ? For a starter A/R financing is not a loan per se, your firm is of course simply monetizing one of the main current assets on your balance sheet.

Years ago we venture to say that many business owners were not aware of alternative finance strategies . That of course also means that many of the benefits derived from factoring or Confidential Receivable Finance finance solutions. At 7 Park Avenue Financial we always strive to ensure our clients understand the various options available to meet their unique individual needs.

Our Cdn banks of course do not tout the benefits of a/r financing / factoring if only for the reason they do not offer this type of financing . That has sometimes tended to create an image that firms utilizing factoring finance are financially challenged . That's very wrong - in fact business folks might be surprised to know that some of the largest companies in Canada utilize this for of cash flow financing - in some cases they call it by a fancier name - Securitization .

Alternative finance solutions almost always cost more . Important to understand though that actual factoring of invoices tends to not be priced at an interest rate , as opposed to a selling cost of margin reduction - typically 1-2% for companies who have good paying clients.

Example - On a $ 10,000 invoice you would have a cost of $200.00 to finance the invoice . The benefit? Cash is available immediately after you invoice and ship /provide your service.

So our take away here of course is that a/r finance pricing is in fact a huge stumbling block to many clients, but only when they don't understand it.

A/R Financing only works when you have sales, so firms that are in severe distress or have seriously declining sales rarely are encouraged to utilize this method of cash flow finance.

Receivable financing solutions typically only work for business to business firms , aka ' B2B'. Firms that sell on credit or cash to consumers are best suited to working capital cash flow loans that monetize future sales based on your historical sales levels . As an example companies in the retail sector can typically achieve a working capital loan of 10-20% of their annual sales.

What else is important in the invoice financing area ? Simply that choosing a partner firm to access your financing needs.

If you are looking for the straight goods on which method of invoice receivable finance works best (We favor confidential A/R finance), how pricing is determined, and how the facility works on a day to day basis.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in crafting the facility that meets your working capital financing needs.




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

Factoring Financing – Three Things You Need to Know About Receivable Financing In Canada

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Fiction vs. Reality - Debunking Factoring & A/R Myths In Canada



Information on factoring and financing and receivable finance solutions in Canada. Debunking the misunderstanding around how it costs, how it works !

You have made the decision to consider factoring financing as an overall business financing strategy. In some cases you may be factoring and receivable financing currently, but are not happy with a number of key issues that weren’t discussed when you set up your facility. Let’s explore the three things you need to know around factoring financing in Canada, and debunk some of the myths and misinformation that is out there on this subject. These are:


All factoring Companies are the same

Factoring is expensive

Factoring is intrusive to my customers and suppliers, but my firm has to live with that


The reality in Canada is that as a country we came late to the factoring party. Factoring started in the U.S. and Europe, and has been established for hundreds of years. As a result the factoring that tends to dominate Canadian business financing, both in business model and pricing is heavily influenced by a small number of foreign firms.

We should probably do a very short ‘primer’ on factoring to ensure we’ve got the basics in place. Factoring, or receivable financing is the sale of your invoices or accounts receivable to a third party. It is very dominant in certain industries, i.e. trucking and transportation, staffing, etc, but quite frankly is now prevalent throughout Canada in many industries. What differentiates factoring is really the three points we’ll discuss – who is offering it to you, what it costs, and how does it work.

We recommend to clients that they deal with Canadian firms when considering a factoring option. Because this business financing is somewhat unique, and mis understood we strongly recommend you work with a trusted, credible, and experienced advisor in this area who can guide you through what many consider the factoring maze.

So let’s get back to our three key areas: First factoring firms vary in Canada by size, geography, and financial capability. You need to align yourself with a party that is most suited to your type of business, the size of your receivables portfolio, and the ability to deal on a one on one basis on any issues that come up .As we stated, it seems common sense that your best partner will be a Canadian firm who as direct representation in your geographical area.

Lets move on to point # 2 - Is factoring expensive? We always hate saying this, but the answer is that it depends. Receivable financing certainly has the aura of being expensive, and unfortunately most clients we meet are always focus on rate. A few key points need to be made, so let’s be clear on this issue. First of all factoring in Canada has a discount rate of between 1-3% per month. We use the term discount rate because the industry itself doesn’t view the rate as an interest rate; it views it as essentially a reduction in your overall gross margin. Let’s use a quick, clear example. Let’s say you have an invoice for $ 100,000.00. Factoring allows you to get approx 90% of the funds on that invoice the day you generate the invoice. (The balance, 10%, is paid to you when your customer pays,) and out of that holdback comes, say a 2% discount fee to the factor firm) the factor industry view that 2% as a commission for financing your invoice. If your customer pays in 30 days Canadian business can be forgiven by saying – I paid 2% per month, that’s 24% per annum that is expensive.

One of the main points we can make when advising clients on a proper factor financing facility is that the funds you get on immediate cash conversion can be used to purchase inventory at a better price for cash, or alternatively, you can take the many 2% net ten day discounts many suppliers offer . If that was the case on all your business we can make the statement that you are recovering 100% of your financing costs via this strategy, plus you have unlimited working capital .That’s financial power.

For our third and final point we address the issue of customer intrusiveness. We alluded the U.S. and U.K. firms who follow a very clear process on the receivable financing for your firm – they send your invoice to your customer on your behalf, they corresponded with the customer , and they call your customer for money .But , and this is a large ‘ but’ did you know that with proper negotiations and the use of a proper advisor you can negotiate and implement a facility that allows you to bill and collect your own receivables, while at the same time getting all the benefits of factoring – i.e. immediate working capital and cash flow?

In summary, factoring can be easily mis understood. Assess what you think is wrong or might not work with this method of financing, and develop a receivables financing strategy with the knowledge that you will not be making the mistakes of others who are less and ill informed.

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

How Commercial Factoring Works In Canada: Costs & Benefits of AR Receivable Finance

OVERVIEW – Information on receivable finance in Canada. The right Commercial AR Factoring solution delivers on classic business credit line attributes

Commercial factoring in Canada addresses some of the major issues your firm faces everyday in cash flow and working capital challenges. Let's go inside the business credit line battle

- an ongoing wrangle between traditional banks and commercial finance companies. Let's dig in.


Most business owners know the drill - customers have always been slow to pay, and that's not getting any better. On top of that cash flow requirements change daily as your business addresses working capital needed to finance inventory and receivables, and at the same time managing investments in ongoing operations, debt payments, commitment to suppliers, etc.
Is there a solution to those challenges? We know there is. Is it as expensive as you may have heard, we are pretty sure it is not. The reality is that commercial AR factoring solutions have dramatically dropped in pricing over the last few years.
So what is A/R financing, and what solution, traditional or alternative, works for your firm?


Commercial factoring is the ongoing sale of 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.


Let's talk about costs. . When many customers calculate their 'all in 'cost of borrowing from banks it is often a lot higher than they might think -despite those low bank rates . So it is important not to get 'seduced 'by your low rate expectations around traditional Canadian bank financing- not to mention the rigorous criteria banks impose for those low rates and flexibility .
We're big supporters of banks - when our clients qualify - which isn't always the case. Many 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.


Looking for unlimited working capital/cash flow for your business - Consider factoring, since as long as your sales and orders grow so does you access to cash flow - In essence unlimited!

A bottom line - 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.


A/R financing is growing all over the world, North American no exception, and certainly in Canada it has been on the rise also.
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 shouldn't you? So even if your firm may have had some financial losses, or is 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 what’s our bottom line? Seek out and 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.



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 13 years - Completed in excess of 100 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 & Contact Details :

http://www.7parkavenuefinancial.com

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

How To Finance Cash Flow Via Purchase Order Financing & Direct A/R Receivable Finance

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Eliminating That Painstaking Challenge of Cash Flow & Working Capital Funding Needs For Your Business

OVERVIEW – Information on a/r receivable finance solutions in Canada . Purchase order financing and direct funding for accounts receivables ensures cash flow success

Purchase order financing & Receivable Finance via a direct A/R funding solution are two key ways for Canadian business owners and financial mgrs to maximize working capital via key financeable assets - in this case either :

Accounts Receivable

Purchase Orders / Contracts

If they can't fund these two asset categories their firm will run the risk of serious working capital and cash flow deficiencies.

To paraphrase one of the most famous lines ever written - ' it's the best of times and the worst of times ' ... that being the case when sales and profit potential is great but owners are challenged by key issue such as :

- New owner equity or outside equity
- Debt (loans)
- Operational efficiencies

We're going to focus on that third area - improving operational efficiencies via proper financing of your current assets and sales. By the way, believe it or not that’s actually the cheapest way to finance your firm - given the higher cost of long term debt and the even higher cost of bringing in outside equity.

By leveraging your current assets - typically A/R and inventory you have the ability to both increase bottom line profits as well as optimizing cash flow.


Let's look at purchase order financing as an example. If you choose a purchase order financing facility you are obviously in a position to take on larger contracts and generate more profits for your firm. Overall larger orders and contracts also increase your competitiveness in your industry - with typically your competitors wondering how you do it!

By utilizing a p.o. financing strategy you simply allow the p.o. finance firm to pay suppliers for goods and service you need to facilitate the order. When your product is shipped and delivered the purchase order finance firm is paid via your bank or A/R Financing facility.

Although to many the perception is a higher cost of financing let’s look at what really has happened - you have converted inventory into A/R into cash - Payment by your customer generates profit. Without the financing of the purchase order you more often than not could not have fulfilled such large orders or contracts. So by sacrificing some gross margin you have grown revenues and bottom line profits.

Firms who have a significant investment in inventory can achieve similar financial success. With an inventory financing facility in place you can stock more products and generate those additional sales.

For firms who cannot achieve the traditional bank financing sought by most a combination inventory and receivable financing facility is available via an asset based line of credit. Here it's all about the ' cash conversion cycle ‘- turning A/R and inventory into cash and profits.
The higher interest rates charges by asset based lenders can easily be significantly offset by smarter volume purchasing and negotiations with key suppliers on pricing : Bottom line - you know have cash to pay for products and services.

The cost of not taking discounts or being unable to make volume purchases for cash is significantly great than the financing costs you have for alternative financing facilities such as inventory financing, purchase order financing and receivable financing.


KEY POINT:

Even if purchase order ,inventory and receivable financing were equal in cost to the cost of carrying receivable and inventory on your own books it would still be a viable solution because you would have less sales and less competitiveness in the marketplace .

Example - if f your firm could buy 500,000.00 of inventory on 2% net ten day terms and you were unable to take the discount the opportunity cost of not taking that discount is over 36%.

The simple statement we make to clients is as follows ' the cost of paying in full is usually much higher than the cost of borrowing '!

If your firm is focused on selling more, efficient financing around asset turnover and proper focus on the opportunity cost of working capital seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can help you determine the exact working capital / cash flow strategy around your company needs.

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 10 years - Completed in excess of 100 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 & Contact Details :
http://www.7parkavenuefinancial.com

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

Confidential Cash Flow Factoring - Turn Accounts Receivable Into Your Best AR Finance Strategy

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Information on cash flow factoring in Canada and how confidential accounts receivable financing can turn your AR finance strategy into an unlimited cash flow machine for your growth, and profits. Finally a strategy that allows you to be in charge!

We are going to demonstrate how a little known, and in our opinion almost a secret strategy can called confidential cash flow factoring can turn your accounts receivable into a virtual cash flow machine, turning past AR finance obstacles into cash flow solutions!

Search engine analysis will show you that thousands of Canadian businesses search everyday for what they hopefully believe will be valuable information around the most popular method of business financing today. Those businesses, of all types and sizes by the way (even the largest corporations in Canada) want to know why cash flow factoring offers unlimited unlocking of cash flow based on your sales and receivables.

Initial explanations and overviews to clients sometimes become bogged down in key issues such as the cost of this method of AR finance, and, equally important, is the unwillingness of some clients to accept how invoice discounting (that's another name for this type of financing) works.

Canadian business owners and financial managers want to like a good thing, at the same time they want to know how it works and how they avoid any pitfalls. Lets discuss the ' how it works ' portion first and then share with you the method we believe eliminates the major pitfall perceptions viewed by many firms considering this type of financing.

We'll focus on small and mediums sized business - the larger corporations have access to all sorts of financing and external finance strategies - while the small and medium sized businesses in Canada tend to rely on their own cash flow to fund their ongoing growth and working capital. In fact many firms realize they have potential to grow sales and profits, but cant because of that lack of working capital.

Back to the 'how it works'! Cash flow factoring of accounts receivable is the ongoing sale, in whole or in part of your sales invoices as you generate them and deliver products and services to your customer. The invoices are purchased at 1- 3% discount from yourself, and you receive cash, 99% of the time the same day, for those sales. So, in effect all your sales now fuel that cash flow machine you have turned your company into.

So far, so good, right? Where complications arise, especially in Canada, is the fact that this type of financing requires your client to be notified of the process, directly, or indirectly, and payments are required to be forwarded to your factoring finance firm. Canadian business, in our eyes, has a reluctance to involve their customers in their internal financing policies, and challenges. As a result, many firms are skeptical of entering into AR finance of this manner.

Is there a solution? We told you there was - it's a breakthrough called confidential invoice discounting. This type of financing comes at the same cost, allows you to bill and collect your own receivables, and gains all the benefits of that cash flow factoring machine we turned your company into.

Speak to a trusted, credible, and experienced Canadian business financing advisor who can put you into a proper AR finance facility, allowing you to reap the benefits of cash flow invoice financing, while at the same time allowing competitors, customers, and vendors to remain exactly where you want them to be, outside your financing strategies and challenges! Let's let your competitors try and figure our how you're doing so well in both growth and profits.



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/cash_flow_factoring_accounts_receivable_ar_finance.html

Article Source: http://EzineArticles.com/expert/Stan_Prokop/432698

Article Source: http://EzineArticles.com/6072401

Working Capital Solutions & Factoring In Canada : Breaking the Receivable Finance Mystery !

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Our Canadian Business Financing 'Dear John ' Letter ? !

Information on working capital financing in Canada . Factoring and other related receivable finance solutions might just not be what you thought. Here's why !

Dear John - Working Capital Factoring is not what you thought it was, so I have heard. When I heard that you were disappointed in your working capital factoring facility I wanted to try and provide you with proper information and insights into what will in fact get you the cash flow and working capital that you anticipated with your new Canadian working capital factoring facility.

So John, what went wrong after we initially talked. You wanted business financing that would allow your business to grow in order to be more competitive in your business and grow those profits and sales.  Factoring seemed like a great solution, and you indicated it is not up to expectations.

Let's backtrack a bit. I think at the end of all this you will see a viable way to achieve ALL of your business financing goals!

Here's where we think things went wrong for your firm. You need to understand that factoring came to Canada from the U.S. and Europe. Their method of doing business there is somewhat more ' abrupt ' if we can use that word. As a result you entered into a U.S. model type of factoring with a branch of a U.S.  Factoring firm. Under that facility you do receive immediate cash for your receivables but you found out only later the factor firm more or less bill, collects, and follows up with your customer directly.  Many Canadian business owners don’t like that method of doing business.

So, John, the solution, and I remind you it’s the one we proposed, is a non-notification factor facility. Guess what, under this facility you of course still get same day cash, but you bill and collect your own receivables. Now we're talking, right!

You just achieved total financing control, you are getting all the cash flow you need, (i.e. not waiting 30-60, or 90 days) and you're able to re invest in more inventory, sales, etc.

John - you said that you were considering going back to your bank - just remember that all the financing that you need is, in our opinion, not going to be achieved by either a bank term loan, or a Canadian chartered bank line of credit. You will have a great interest rate , but you business will not have the cash flow and working capital that is required for your current sales and contracts .

So whats the bottom line John - it is as follows - work with a trusted, experienced , and knowledgeable business advisor - put a working capital factoring facility in place that runs the way you want it to, and then focus on your business growth and let the cash flow and working capital work for you to those goals . Investigate non notification factoring / Confidential Receivable Financing - It’s a Canadian alternative to everything you didn’t like about factoring, with all the benefits!



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 10 years - Completed in excess of 100 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 & Contact Details :

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

http://www.7parkavenuefinancial.com