Receivable Loan Solutions In Canada : AR Finance Via Invoice Financing Delivers Cash Flow When You Need It

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Getting Restless Around Cash Flow Financing For Your Business ? Here’s One Solution!

OVERVIEW – Information on AR finance solutions in Canada. A invoice financing receivable loan facility ( it’s not a loan ) is one of the most accessible and sought after Canadian business financing solutions today

Receivable loan solutions in Canada have significant advantages for Canadian business owners/financial mgrs seeking to improve (and accelerate) their overall cash flow / working capital situation. Shortages in ongoing cash needs, safe to say, leaves owners somewhat 'restless'! That's why the right A/R finance solution is critical when it comes to invoice financing. Let's dig in.

Invoice financing is, in essence, a form of asset based credit lines. They are the ' bank alternative ' and allows you to leverage A/R assets to maximize cash flow.

Factoring and invoice discounting firms are playing a larger role in the overall climate of business financing - coming off very challenging years ( 2008-2009) as the global meltdown severely hampered small and medium sized firms ability to raise financing for operating capital needs .


Borrowing against accounts receivable is a very simply way of leverage assets, without taking on additional debt to your balance sheet, and converting a/r into cash - allowing your firm to reduce payable and invest in ongoing growth and profits .

So those are all great positive aspects to working capital benefits - so the question remains to be asked, is there any ' downside '? The reality is that there is no one single perfect solution for any firm considering working capital financing - There are pros and cons to every method of financing your Canadian business.

So the recommendation we provide is simply, ' caveat emptor ' - or to translate that Latin phrase into plain English - investigate invoice discounting and factoring and determine if the benefits of that type of financing can help you survive and prosper !


When you secure an invoice discounting or factoring facility you have new flexibility in a number of areas - you have additional cash for one thing - never has the phrase ' cash is king' meant so much in today's competitive business environment.

Many Canadian firms have seized the day and taken the global financing challenge head on and in effect capitalized on invoice financing availability - they have acquired a competitor, merged with a synergistic partner, or in some cases engineered a management buyout. Factoring or invoice discounting and full asset based lines of credit can assist you in any of those strategies.

More often than not funds acquired through a factoring facility are simply used to reduce payable, or help to affect a business turnaround after a firm has had a very difficult year. In some cases traditional financing has been curtailed, and leverage of cash flow via factoring has emerged as the only option to business survival.

In the direst cases factoring or a full asset based line of credit has helped many a firm in fact survive the bankruptcy or re organization process. But it's important to know that some of the largest and most successful public and private companies in Canada finance A/R through non bank alternative finance solutions.

Why does A/R financing work? It's because it immediately frees up cash in your receivables - this helps to increase sales and allows your firm to invest in additional inventory - the cycle of course continue as this inventory is again converted into a receivable, generating further profits for your firm .

Many times smaller and medium sized firms cannot take advantage of the strategies that larger firms utilize to liquidate receivables - they don't have the funds to invest in corporate credit and collection personnel, as well as sophisticated cash management and planning. So, by utilizing factoring and invoice discounting issues such as being 'too small ', or 'too new a firm ‘holds little relevance.

Many Canadian firms adapt formal U.S. or European methods of factoring - careful investigation, best achieved by working with a trusted and credible advisor, will allow you to find a facility that meets your long term needs. In a perfect world we recommend to clients that they seek a facility that provides maximum loan to value on receivables, can incorporate inventory as some additional component of financing, and, most importantly, allows you to bill and collect your own receivables.

Our recommended solution in receivable loan financing? It's Confidential Receivable Finance, allowing you to have full control and bill and collect on your receivables, utilizing and paying for the amount of financing you need when you need it!

Is factoring or invoice discounting the optimal solution for your firm? Weight the benefits, and seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can help you eliminate that ' restless ' feeling that comes with funding challenges.


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

Receivables Factoring And AR Financing Canada : Talking Points On A Receivable Loan

Removing The Ouch From A/R Financing Solutions in Canada

OVERVIEW – Information on A/R financing in Canada . Receivables factoring via a receivable loan ( it’s not really a loan ) can work as a short to intermediate term solution for cash flow and working challenges . Costs, issues and how the facilities work is discussed

Receivables AR financing in Canada comes with the perception of an ' Ouch ' when it comes to entering into this type of cash flow facility. But is perception reality in this case? We’re quire sure it isn’t so let’s focus in on the total ' receivable loan ' experience. (By the way, it’s not a loan; you're just cash flowing current assets). Let's dig in.

Whether a business is profitable or struggling back to profitability the issue of liquidity and the ability to meet your obligations is always supreme. The ability to finance your sales via a receivable factoring solution is a solid tool when traditional bank financing can’t be achieved. But the type of facility you enter into, its cost, and how it works is really the ' ouch' factor you need to address to be successful with this type of financing.


While the bank paperwork on A/R financing is done through an ongoing ' assignment ' of your accounts the receivable loan (again, it’s not a loan!) paperwork provides that you are in fact ' selling ‘the receivables you wish to finance.

The biggest ' ouch ' for most clients is that as cheques are collected from your client they are deposited directly into the lenders account, not yours, given you have received the benefit of the cash . Can this process be overcome? It sure can! And that comes via entering into a Confidential Receivable Finance facility that allows you to bill and collect your own accounts. By the way, whether it’s a Canadian chartered bank or your receivable factor firm each of those has a ' lien' on your receivables. That's the collateral for the cash flow.

By the way some of the largest companies in Canada or the world for that matter use these types of facilities. In some cases a fancier name (‘Securitization ' ) is attached to the loan (it’s not a loan - have we mentioned that?!) but at the end of the day it’s the same process - eliminating a/r from the balance sheet and generating cash at the exact same time.

Typically the same type of borrowing restrictions come with this type of financing - with one positive exception. Receivables factoring typically allows borrowing against 90% of your total A/R, while Canadian banks prefer a 75% borrowing base margin. (You’d think they were more conservative or something?!)

Otherwise the following borrowing base has the same rules:

All North American receivables can be financed

Receivables must be 90 days or less current

If you are billing and collecting your accounts on 30 day terms the cost to finance a $10,000 invoice as an example would be in the 200$ range . That 9800$ you receive when you generate a sale can be ploughed back into working capital needs, utilized for purchasing more inventory, or you can get back your 200$ by taking a discount with your own suppliers or arranging better pricing based on volume purchases .

Thousands of Canadian businesses utilize this financing as a ' bridge' back to traditional financial solutions. In fact if your business is growing ' too quickly ' for traditional financing it's often the best solution.

If you want to both remove the ' ouch ' from the receivable loan facility ( it's not a loan ..................) and wish to cover off more talking points on how this facility would work for your firm 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 your cash flow needs.



Stan Prokop - 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 90 Million $ of financing for Canadian corporations . Info /Contact :


7 PARK AVENUE FINANCIAL = CANADIAN A/R FINANCING EXPERTISE




Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:

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 '

Stan Prokop