ABL Loans Are The Newest Trend in Canadian Asset Finance – Why Lenders Offer This Revolver For Asset Finance

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Why An ABL revolver asset finance facility Might Work For Your Firm

Information on ABL loans in Canada . What lenders offer this type of asset finance working capital facilities and why this type of operating line of credit, known as an ABL ‘ revolver ‘ can be the best thing that ever happened to your company

Let's get right to the point. Are you not surprised that many Canadian business owners and financial managers are unaware of the importance that ABL loans via abl lenders play in the asset finance arena in Canada. Are you not even surprised that this type of loan financing (actually it’s not a loan - more on that later), called a ' revolver ' competes with Canadian chartered banking facilities on a day to day basis, and wins!?

Part of the confusion , misconceptions and mis information around this type of financing actually comes from the name and terms around the ABL revolver, which can ,and do mean different things to different people .

In the pure sense and most relevant meaning of the term in Canadian asset finance the ABL facility provides a comprehensive asset financing or monetizing of current ( and in some cases ) fixed assets which allow a company to significantly enhance their working capital facilities . This type of facility competes head on with Canadian charted bank facilities.

The asset finance lenders in Canada have recently gained significant traction. We feel the primary reason is simply that their facilities offered enhanced borrowing with a focus on assets, unlike comparable chartered bank facilities which come with a stringent requirement of clean balance sheets, profitability, ability to maintain rations and covenants, and in many cases requiring outside collateral.

The 2008 and 2009 global recession enhanced the viability and visibility around ABL loans. Banks all over North America pulled back on commercial lines of credit and revolver finance - leaving thousands of companies with reduced, restricted, and in some cases no borrowing or operating facilities.

Most Canadian business owners and financial managers are simply not aware of who the ABL asset finance lender is. Typically they are smaller boutique firms, often subsidiaries of major U.S. corporations and banks .Their teams are small, highly focused on one thing ( monetizing assets for cash flow and working capital !) and offer facilities anywhere from 250k to hundreds of millions of dollars .

Many Canadian companies are also not aware that several of the Canadian charted banks have created asset finance lenders within their bank, and the ultimate irony is that when a loan is called by a chartered bank a competing division within the bank can often rescue the company. We'll let you mull that one over!

As we noted facilities are available for any amount over 250k but the pure play ABL revolver typically comes in at 3 to 5 Million dollars as an entry point. Rates are often competitive to Canadian banks, and small firms can pay a significant premium in financing charges , the offset being able to access working capital to facilitate growth and profits,

In summary, every business owner or financial manager concerned with operating finance should investigate and consider an ABL solution. Normal banking criteria does not apply and you have the ability to grow, restructure, and in some cases easily acquire a competitor using this finance strategy. You consider your firm unique and different, so investigate a new and unique type of business financing. Confused? Hopefully not. Interested? Speak to a Canadian business financing advisor on ABL loans today.




Click here for 7 PARK AVENUE FINANCIAL 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

Canadian ABL Loans Are Solutions To A Cash Crisis and Business Growth Financing ! Look Into Business Lending via a Revolver Loan Facility.

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




Asset Based Line of Credit Facilities In Canada


Information on ABL loans in Canada and why this type of business lending and financing revolver is the ultimate working capital loan facility.




Talk about two different problems... a cash crisis (or ongoing cash crisis!) and badly needed growth financing. Let's take a look at how abl loans via asset based lending and financing can be the perfect solution for your revolver facility loan needs.

In business there’s nothing more urgent than a ' call to action ' around a working capital or cash flow crisis. At this point it's all about ' righting the ship ' and allowing Canadian business owners and financial managers to get their business finances under control. It's more often than not a case of simple survival.

Naturally putting in a proper ongoing financial solution, such as an abl financing revolved allows you to get your eyes back on running the company normally on a daily basis - we meet with clients who regularly tell us that a huge amount of time is spent on managing cash crises and juggling things such as vendor payments . Bottom line, its time to stop putting out the fires and focus on a solution... that works.

A true asset based line of credit has the ability to allow you get back the confidence that your suppliers, lessors, and other lenders had in your business, and that’s important. It goes without saying that lenders, investors and suppliers truly have the ability to control the destiny of your company if the perception of a permanent cash flow shortage remains.

So, enough about the fear! Let's focus on a solution that works. Simply speaking, that’s asset based financing via a revolver facility that is generally non bank in nature. (Some Canadian banks now offer this facility but the credit requirements and deal size criteria are, in our opinion, exceptionally high).

The concept of asset based lending, aka ' ABL ' is simply securing your assets, leverage them to the maximum that is possible, with the result being greater liquidity for your company. And by the way, don’t think we have just leveraged up a ton of debt on your balance sheet - 100% wrong, we have simply monetized or ' cash flowed ' existing assets... allowing you to borrow against them .

Those assets are typically very clear categories of receivables, inventory, equipment, and occasionally real estate and tax credits due your firm. (Yes tax credits such as the SR&ED credit can be included in your financing package).

So the question then becomes, don’t banks do this already...? And you have tried that possible scenario. The quick take away here is two things. First of all abl loans and financing revolver facilities provide greater leverage on current assets. Receivables are typically margined at 90%, and inventory, often difficult to finance for cash flow, can be margined anywhere from 30-70% as an example. If you were getting 75% from your bank on A/R and nothing on inventory haven’t we just increased your working capital by anywhere from 50-100%?! Wow.

A very simple way to look at this, and we use this example with clients all the time is to simply think of the asset based lender solely looking at the collateral, while the banks will focus on collateral, but mainly historical cash flow, ratios and covenants, and outside collateral via personal guarantees, etc . (As a general rule very little emphasis is placed on personal guarantees when an ABL loan facility is put in place.

Oh and by the way, you absolutely don’t have to be profitable to qualify for asset based lending facilities, which in Canada start at a low of 250k and go to the tens of millions of dollars.

So, cash flow crisis. Growth challenges. Looking for a solution? Speak to a trusted, credible and experienced Canadian business financing advisor on ensuring an ABL working capital facility is right for your firm.






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/abl_loans_lending_financing_loan_revolver.html

ABL Loans Are The Newest Trend in Canadian Asset Finance – Why Lenders Offer This Revolver For Asset Finance

Let's get right to the point. Are you not surprised that many Canadian business owners and financial managers are unaware of the importance that ABL loans via abl lenders play in the asset finance arena in Canada. Are you not even surprised that this type of loan financing (actually it’s not a loan - more on that later), called a ' revolver ' competes with Canadian chartered banking facilities on a day to day basis, and wins!?

Part of the confusion , misconceptions and mis information around this type of financing actually comes from the name and terms around the ABL revolver, which can ,and do mean different things to different people .

In the pure sense and most relevant meaning of the term in Canadian asset finance the ABL facility provides a comprehensive asset financing or monetizing of current ( and in some cases ) fixed assets which allow a company to significantly enhance their working capital facilities . This type of facility competes head on with Canadian charted bank facilities.

The asset finance lenders in Canada have recently gained significant traction. We feel the primary reason is simply that their facilities offered enhanced borrowing with a focus on assets, unlike comparable chartered bank facilities which come with a stringent requirement of clean balance sheets, profitability, ability to maintain ratios and covenants, and in many cases requiring outside collateral.

The 2008 and 2009 global recession enhanced the viability and visibility around ABL loans. Banks all over North America pulled back on commercial lines of credit and revolver finance - leaving thousands of companies with reduced, restricted, and in some cases no borrowing or operating facilities.

Most Canadian business owners and financial managers are simply not aware of who the ABL asset finance lender is. Typically they are smaller boutique firms, often subsidiaries of major U.S. corporations and banks .Their teams are small, highly focused on one thing ( monetizing assets for cash flow and working capital !) and offer facilities anywhere from 250k to hundreds of millions of dollars .

Many Canadian companies are also not aware that several of the Canadian charted banks have created asset finance lenders within their bank, and the ultimate irony is that when a loan is called by a chartered bank a competing division within the bank can often rescue the company. We'll let you mull that one over!

As we noted facilities are available for any amount over 250k but the pure play ABL revolver typically comes in at 3 to 5 Million dollars as an entry point. Rates are often competitive to Canadian banks, and small firms can pay a significant premium in financing charges , the offset being able to access working capital to facilitate growth and profits,

In summary, every business owner or financial manager concerned with operating finance should investigate and consider an ABL solution. Normal banking criteria does not apply and you have the ability to grow, restructure, and in some cases easily acquire a competitor using this finance strategy. You consider your firm unique and different, so investigate a new and unique type of business financing. Confused? Hopefully not. Interested? Speak to a Canadian business financing advisor on ABL loans today.

-


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/abl_loans_lenders_revolver_asset_finance.html