Pleading Guilty On Understanding Receivable Finance Options ?
OVERVIEW – Information on receivable finance options for Canadian business. What solutions are offered in non bank cash flow financing
Are Receivable Finance Options and cash flow financing in Canada an entitlement? We're told of course that that term is a ' feeling or belief' by the business owner that they ' deserve to be given something such as a ' special privilege’ when it comes to understanding what their choices are in business financing. Let's dig in.
So when clients come to us looking for receivable finance options is all about really one of two choices - The Canadian chartered bank solution or the use of a non bank commercial finance firm that provides A/R financing services in a manner that the banks can't and don't.
But which one is for your firm.
Receivable finance via an invoice factoring/discount solution gives you unlimited access to cash flow financing, but has the business owner rationalizing costs and different procedures.
The essence of the whole debate revolves really around how the two different methods are documented. In the case of the bank it takes a general security agreement on your A/R and takes an assignment of all your present (and future) receivables. You then borrow up to 75% of your outstanding AR that is under 90 days old. The banks logic is that if your accounts are older than 90 days that's your problem, not theirs! By the way, we agree, as you ability to manage your credit granting to clients is one critical factor in business success. It's the cash flow!
A/R Invoice financing works differently. Under that mechanism, in our ' not a bank ' solution you have paperwork that allows the finance firm to, on an ongoing basis, ' buy' your receivables, typically at a 98 - 98.5% discount. That basically closes the transaction off. One way to look at it is that the finance firm takes a commission for allowing you to generate instant, same day cash flow.
Same day Service?
Naturally you don't have to finance every sale you make, the prudent business owner and financial manager simply accesses cash as they need it as they sell products and services and grow their company.
One more tip. We strongly recommend CONFIDENTIAL A/R FINANCING, allowing the business owner to bill and collect all their accounts, finance them, without any knowledge of other parties such as suppliers, clients, etc. It's simply the bank alternative.
Looking for more info on AR financing? Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your receivable finance options. Don't please guilty to being unable to access the business financing entitlement you deserve - choices!
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 = A/R FINANCING AND CASH FLOW FINANCE EXPERTISE
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CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Email = sprokop@7parkavenuefinancial.com
' Canadian Business Financing With The Intelligent Use Of Experience '
Stan Prokop
