Accounts Receivable Finance In Canada : Eliminating Potential Danger In Receivables Lending Solutions

A Peek Inside Accounts Receivable Financing In Canada: Receivables Lending Deconstructed

OVERVIEW – Information on accounts receivable finance . Here are the issues to understanding receivables lending solutions in Canada

Accounts receivable finance solutions in Canada require some level of ' deconstruction' to understand both the benefits, and pitfalls receivables lending offerings. Let's dig in.

A/R financing in the Canadian marketplace is a ' non bank' solution, allowing businesses to finance their receivables for cash flow and working capital needs. They key difference from bank financing is simply that the cost of this financing is expressed as a ' fee ' as opposed to an ' interest rate' solution via traditional Canadian chartered bank offerings.

The ability to get ' same day ' cash for sales you generate is appealing to Canadian business owners/financial mgrs. One of the appeals of this type of financing is that the amount received on the receivables is almost always more than a bank would advance. (Typically 90% - that remaining 10% is simply a holdback reserve that you receive when your client pays your invoice)

At its simplest accounts receivable finance works almost always as long as you have commercial ' business to business' invoice sales that reflect product and or services your firm has delivered on.

Receivables lending solutions should never be viewed as 'debt ' or ' equity' financing. All you are doing is monetizing existing assets - your A/R.

Cost is always a factor when owners / mgrs consider financial solutions. Recall we indicated invoice financing is billed as a ' fee ' and that fee is typically 1.5-2% of your sales. (The fee will always be a function of how long your receivables are outstanding - prudent owners/mgrs can therefore reduce financing costs by effective A/R mgmt)

The benefits of a receivables lending solution are many - they include the ability to grow your business at almost any level of growth: additionally you can improve supplier relations and take payment discounts from your own vendors, thereby enhancing key vendor relationships. In many cases if your firm has good margins and can absorb growth financing costs you're in a position to take on larger contracts or even sell to the government as well as large corporations who tend ( intentionally ?) to pay SME firms much more slowly . ( Hint – it’s their version of cash mgmt!)

Have we forgotten anything? Oh yes, those potential ' dangers ' in acquiring the right solution. They include understanding the following basics:

Ensuring you understand whether you or your commercial finance firm is responsible for bad debts - your ability to extend credit properly and manage collections reduces financing costs

Being able to articulate your customer base to enjoy better pricing - size and invoice age are factors that will help determine your pricing

Working with the right company - many of the offerings in the Canadian marketplace are focused on specific industries - example: Trucking; working with a firm that understands your industry... you guessed it.. helps.

Finally, the majority of receivable finance solutions that are non bank in nature in Canada require that your clients be notified of the finance process. Our recommendation? Consider a Confidential Receivable Finance solution that allows you to bill and collect your own accounts.

If you're interested in a solid ' peek ' into A/R financing solutions in Canada , with a focus on best solution that suits your firm while eliminating pitfalls seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success that can assist you with your cash flow needs.


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 RECEIVABLES LENDING & 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 '

Stan Prokop

Account Receivable Funding : Here’s Your Redesign In Receivables Lending Thinking

Mind The Gap ! Fixing You’re A/R Finance Challenge

OVERVIEW – Information on account receivable funding solutions in Canada . Receivables lending is all about choosing the right finance solution for the right reasons – here’s why.. and how

Account receivable funding in Canada conjures up the ' Mind the Gap ' expression for us today. That's of course the out loud warning that subway passengers hear when they board train doors. However in our case we’re always cautioning our clients to mind the gap when it comes to receivables lending. Let's dig in.

That ' gap ' is of course when business owners in the SME (small to medium enterprise) sector in Canada find themselves cash flow poor / challenged while waiting for client receivables to come in. Since A/R and inventory represent your most liquid current assets (next to cash) your ability to ' move ‘(i.e. manage) or finance those assets is key to the survival of your business.

Non bank A/R Finance is the quickest way to working capital success when traditional bank finance doesnt work for your business. For Canadian companies that can't afford to lose sales opportunities or the inability to meet their other operating and loan obligations. The total win/win for this type of financing is when it is receivables lending shortens that gap given that sales are immediately converted to cash. When businesses can't access traditional capital and they don't want to give up expensive equity A/R funding is one solid solution. And the good news about ' limits'? There are none, as basically unlimited financing is available for any business that has the sales revenues/receivables to match.

This type of lending is often short term in nature, as most clients tend to work their way back to what they consider ' traditional' finance that comes with lower costs/rates. Remember also there is no 'debt ' on your balance sheet when AR finance is employed - it’s an asset monetization strategy. During this period of utilizing receivables finance your supplier relationships tend to improve and your general credit profile is enhance given your new liquidity .

The immediate benefit of a combination of A/R financing combined with good management provides a double whammy of business financing success. How for example? Consider a firm that finances AR, receives cash immediately on making a sale, and uses that cash to take supplier discounts or achieve better pricing on service and products they purchase. They have effectively ' minded the gap'! Although the majority of companies out there can't achieve ' negative cash gap ' (receive full payment before they pay suppliers) those that can effectively finance the gap as well as manage assets are... winners.

If there is one thing clients tell us they ' hate' about commercial a/r financing and factoring solutions it's the oft requirement to have their customers ' notified' of the entire financing process . Looking for some good news on that one? We recommend CONFIDENTIAL A/R FINANCING that allows you to achieve all the benefits of receivables lending while at the same time billing and collecting your own accounts.

If you're looking for a total ' redesign'

in finance thinking for your business 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 receivables lending needs.




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 ACCOUNT RECEIVABLE FUNDING /LENDING 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

Receivables Lending In Canada : Stealth Financing Via Factoring Companies And A/R Finance Solutions

Receivables Lending In Canada : Stealth Financing Via Factoring Companies And A/R Finance Solutions`


OVERVIEW – Information on receivables lending in Canada . Factoring companies in Canada offer a unique solutions to business financing challenges





Receivables lending in Canada hardly suggests commentary by ‘The Bard ' - aka Will Shakespeare.

But when we discovered that some classic commentary of his might well relate to Canadian business financing alternatives we couldn't resist. Could Shakespeare really have been talking about Receivable factoring companies in Canada? We're not sure, but let's dig in!


"Mum's the word" - Henry VI, Part II- Alternative financing solutions such as CONFIDENTIAL RECEIVABLE FINANCE are still relatively unknown to thousands of firms that require working capital and cash flow financing .
Business owners and financial managers in Canada recognize that the ability to finance current assets such as A/R and inventory is key to overall success. But getting it right is always a challenge .While a solid cash flow plan or forecast is all about ensuring you have contingencies in place Murphy’s law often sets in and creates ' bulges' in your cash flow needs . That’s when factoring companies can provide you with a solution that works.



"A wild goose chase" - Romeo and Juliet - Business owners/ managers are often a little too close to the action and miss some of the warning signs in their business. Some of those include constant need to juggle payments to lenders or suppliers, declining profit margins, mounting CRA obligations, etc.

We're quite sure that the majority of Canadian business thinks of our Canadian chartered banks as the solution to the help they require financing their business. If your firm doesn't have all the requirements needed to meet bank financing then alternative financing is the key to survival and growth of your company. Note also that an asset monetization strategy such as receivables lending does not bring debt onto your balance sheet. Your A/R becomes in effect self liquidating as it turns into constant cash.

The A/R financing solutions is simply the commercial finance solution to a revolving line of credit, allowing you to monetize sales to ensure maximum availability of cash flow as you need it. And of course you only pay for what you use, which is key in understanding the costs associated with this method of finance in Canada.

The way to look at the cost of A/R financing in Canada is simply a cost of doing business that is offset by your ability to grow sales and profits , while not being ' the bank' to your clients who we are quire sure have similar problems!

"Too much of a good thing" - As You like It - A proper receivable finance solutions allows you to better manage the inflows and outflows of your business. It's that ' timing ' issue that is the key to an A/R solution, as you are able to monetize sales directly into cash flow. A proper receivable financing solution will also help you if your business is revenue or project based, allowing you to finance milestones in your work as they are performed.

"All's well that ends well" - All's Well That Ends Well - The perfect ending for any business, as it relates to financing is the owner/managers ability to be proactive in cash flow needs planning . Your ability to take discounts with suppliers and vendors and to take on large orders and contracts allow you to have a fresh outlook on your business prospects.

If you want to understand the various factoring/receivable financing options available to 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 solutions provided by factoring companies in Canada.







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 RECEIVABLE LENDING 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

Fax = 905 829 2653

Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '




















Stan Prokop