Small Business Finance Needs ? Account Receivable Financing Might Be Your Utopian Solution

Inside The Hunt For Effective Cash Flow Financing For SME Commercial Finance Needs

OVERVIEW – Information on account receivable financing in Canada . This type of working capital / cash flow financing is often the perfect solution for running and growing businesses in the SME sector

Could account receivable financing help your firm? The dramatic rise of small business financing in accounts receivable (by the way, Canada's largest corporations use this tool also - they just call it something different!) is simply a case of companies such as yours wanting to capitalize on the working capital and cash flow that is, in effect, locked up in receivables Let's dig in.

It doesn't take rocket science for any business owner of financial manager to figure out that if his or her firm has investments in receivables and inventory then those assets, typically called ' current assets' requires financing in some form! Of course you can ' self finance ' - meaning simply wait for your inventory to turn into receivables, and then wait probably even longer for A/R to turn into cash.

The downside? That potentially forces you to give up on sales opportunities and challenges the very core of your financial health, given that we all agree cash flow is king - right?

If you are fortunate enough to be financing via a Canadian chartered bank you are of course familiar with ' collateral '- our banks do a great job of explaining that to you! Why don't you use your own firm's collateral, its assets, mainly accounts receivable, and monetize that asset into cash.

Clients are often fairly clear on the benefits of account receivable financing, which is also called invoice discounting or factoring. So how does that whole process work?

One you have such a facility set up it quite frankly is one of the easiest and quickest ways to unlock cash flow and working capital on a daily, weekly, or monthly basis. The power to choose your timeframes remains with yourself. And by the way, you only pay for the financing you are using. Let's get back though, to how it works.

In Canada there are two types of factoring, we'll focus on the most common one, which, by the way, isn't exactly our favorite (there is a better one) but let's keep it simple for now.

After your firm generates an invoice you submit it to your factor firm partner. That could be once invoice, several, or many or all. Funds for those invoices are wired, or sent to you, that same day into your account. Didn't you just feel your cash flow being totally unlocked and flowing?! Approximately 10% is held back as a buffer, but as soon as your client pays you get those funds back also, less what is known as a discount fee, typically between 1 and 2 %.

2% you say! Isn't that expensive for small business financing? Absolutely, positively maybe, but we actually don't think it is. That is because all in rates from your bank when you total up all the fees, services, standby fees etc often total to a range a lot higher than you might think.

And furthermore, if you take the huge amount of cash you just receive and use it to purchase more efficiently, or takes discounts on supplier invoice payments you make your total cost of capital goes down . And, another point, if you are in a competitive environment, (who isn't) does your ability to have unlimited cash flow put you steps ahead of your competition? We think it does.

There are a number of ways to finance your business. If your firm has A/R assets and you are challenged by the timing in which money flows through your business then consider the benefits of account receivable financing. Speak to a trusted, credible, and experienced business advisor on this popular financing tool for small 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

Government Guaranteed Small Business Loans . What’s Better Than An Inside Scoop On The SBL Program

Trouble Connecting The Dots With The GOV’T SBL / BIL Loan?


OVERVIEW – Information on government guaranteed loans for small business in Canada . Accessing approval for this valuable finance program helps the business owner financing equipment and leaseholds assets via finance otherwise not available



Government guaranteed loans in Canada. What Canadian small business owner wouldn't want any ' inside scoop ' on anything to do with the government and business.

The reality is that the Canadian business owner and financial manager has no real direct involvement of any sort with the govt on this program that he or she still seems to have a lot of problem in .. Connecting the dots... for financing success. We're quite sure we've got clarity, so let’s dig in.

For a certain type of borrowing in the Canadian start up and SME sector in Canada there is no better option than what ' main street ' calls the 'SBL' loan program . While choosing the right bank / banker to move your loan through is a challenge its still a great vehicle to put equipment and leasehold assets that you need on the right footing - inside your business!

While the perception might be that it’s difficult to achieve this financing you'll be surprised to hear that you can navigate the program with relative simplicity - if you have the right documentation and know what constitutes approval criteria. That's our job we suppose!

Commercial banking in Canada many times (in spite of those TV commercials!) does not lend itself to start up or leasehold financing. That’s where the small business government guaranteed loan comes in - it works specifically only in those areas.

The quick recap is as follows - maximum loan size = $ 350,000.0O - items financed are only equipment, leaseholds, and real estate. We'll quickly add that not many real estate deals are done under the program, because in many ways it doesn’t make sense -at the same time we'll add that computers and application software are in that ' equipment ' category that we referenced. So a great way to acquire some technology.

We are often amazed about why there is confusion under the program because the reality is that the ' basic drill ' has not changed. We think it’s because the general commercial borrowing environment has changed a lot more than the program - i.e. tougher!

So how can the business owner improve the odds of getting approved? A good way to provide that answer is to advise why you will be declined. You may well be declined for the following reasons:

Poor personal credit history

No business plan or cash flow

Unable to produce a premises lease that matches the term of your loan request

Inability to match the permanent 10% down payment/equity required by the program

We advise clients that a proper loan proposal meeting the basic criteria has a very strong chance of approval - and with rates, terms, structures, limited personal guarantees etc all being excellent every business owner should at least consider the program.
As we said, no government involvement at all (they simply guarantee your loan to the bank) and connecting the loan application dots is a lot simpler than you thought! Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your SBL small business loan .




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 = Canadian Government Guaranteed Loan Expertise

















Stan Prokop

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Confessions Of An SBL Government Loans Super Fan . The Canada Small Business Loan

Looking For A Creative Way To Finance Your Start Up Or Small Business In Canada? Here’s How!


Information on small business government loans in Canada. Why the SBL loan is a preferred financing vehicle for thousands of businesses like yours.



SBL government loans. I guess you could call us a fan, even a super fan. The word fan comes from the root word ' fanatic ‘, denoting an ' enthusiastic devotee. So why is the Canada small business loan the recipient of our full support. Let's try and preach to some of the potential unconverted.

More and more businesses in Canada, new, and established, are seeking loans backed by the government. Talk about a great co-signer! And remember that we are talking about a loan, not a grant. We're always being asked about ' grant money’... free money in essence. We're sure it's out there somewhere, we just haven't found it, and we're equally believers in the ' there is no free lunch ' concept!

The SBL loan is a great choice for business when you're in a touch economy; it’s all about choosing the right lender under the program and ensuring you are aware of some basic rules and regulations that allow you to qualify for the program. We feel quite strongly that every Canadian business owner can actually do a great job of pre-qualifying themselves in advance.

Let's recap some of those basic qualifications. They include being a Canadian citizen or being eligible to legally borrow in Canada. That's just common sense. Although you only have to only guarantee 25% of the loan personally that comes with the understanding that you have a reasonable personal credit history. In Canada the credit bureaus work on a ‘scoring ' basis, and for purposes of SBL government loans you should at least have a score of 650.

The questions of rates and structures always comes up in connection with questions from clients. Interest rates are ultra competitive given that you business is either completely new, or has under 5 Million dollars in revenue (That’s the revenue cap under the program). Rates on the SBL small business loans are in the 3% over prime range and a small government fee can usually actually be added into the financing of the loan.

Any business financing application has strong elements of one thing - and that’s common sense questions. You should therefore be prepared to address some very basics, including a resume or bio on yourself, a description of your business, a cash flow repayment plan (that’s critical). Additionally some supporting documents are required, all of which in our opinion are again. very ' common sense ' oriented. They include a copy of your tax return, your incorporation data, a premises lease, etc.

It's a great idea to also have a clear idea of the financing you are requesting. The three categories of assets that can be financed under the program are equipment, leaseholds, and real estate. Unfortunately it’s not a cash loan per se, so there are no working capital or cash flow borrowings under the program. And by the way that’s a popular misconception.

We should also add that you need to inject a minimum of permanent equity, in effect your ' down payment ' of 10% of your total borrowing.

It’s strongly recommended that you investigate the power of the Canada small business SBL loan. You just might find you will become a super fan also! Speak to a trusted, credible and experienced Canadian business financing advisor for help with this great program.






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/government_loans_sbl_canada_small_business.html

Not All Canadian Small Business Financing Is Difficult - Check out the SBL Canada Government Loan Program For Financing Needs

The SBL Loan - A Low Risk/ High Reward Approach To Canadian Business Financing

Information on the Canada government SBL loan . Small Business financing for Canadian firms from start up to established companies with revenues less than 5 Million dollars.



For start up and small business in Canada (In our case today we mean sales under 5 Million dollars) there is one very obvious option to some of the most basic financing challenges, and its the Small Business ' SBL’ Canada government loan .

So what are some of those financing needs we referred to? Clients look to the program for purchasing a business, including franchises by the way, or simply the basic equipment and leasehold needs when they are constructing a building of office. We point out that almost all other types of financing in Canada often, if not always, discourage the financing of leaseholds so the ' SBL ' covers that problem off quite nicely.

A lot of business wants to stay on top (and boy is it hard) of technology, so the Canada Small Business Loan is a perfect way to acquire and finance both technology hardware and software.

And may we again note that it is often a challenge for firms to finance software, which is an intangible, so, you guessed it, the Canada government small business loan again steps up to the plate to take care of that challenge. The software that is financed under the program must be ' application' software. Firms that develop their software and who are looking for financing assistance should consider filing a SR&ED claim to recoup a lot of those funds spent in this area. (By the way, the SRED claim is a non repayable grant, so other then the taxation aspect it’s the closest to free money we can think of!)

But we digress! so lets get back to how some of this financing is done. While clients are often aware that there are thousands of firms who receive Billions of dollars under the program what they are more concerned about are how this financing work does and what timeline is involved.

Let’s examine a couple key aspects of some of those basic financing needs. We'll cover off some info about assets first. In the case of either purchasing an existing business or buying a used piece of equipment the SBL Canada government Small Business Loan requires a proper value of the asset. That is very easily covered off by obtaining an appraisal which comes at a relatively low cost. That appraisal becomes the financing value under the SBL small business loan. Mission accomplished!

By the way, when it comes down to actual numbers the Canada government loan program finances 90% of all eligible assets and leaseholds. The additional ten per cent is in effect your down payment or owner equity into the transaction.

Clients often are under the misapprehension that the program is difficult from a paperwork and timeline point of view. We take exception strongly to that because either on your own or with an SBL expert you can easily put together a basic documentation and business plan that meets all the criteria of the program. The reality is that this can all be done and submitted for approval in a manner of days. This is where working with an expert pays off because they are familiar with the small handful of technical aspects of making the application look good - which include a business plan and cash flow and ensuring certain cash flow and liquidity ratios work. It's not as hard as you think.

So, is the SBL loan program difficult? It certainly is if you have no idea what you are doing and don't know what can be financed or how to prepare a basic proposal. Consider perhaps utilizing the services of a trusted, credible and experienced Canadian business financing advisor who can assist you to take the word ' difficult' out of the equation, and replace it with that other word... Easy!



ABOUT THE AUTHOR: STAN PROKOP
FOUNDER OF 7 PARK AVENUE FINANCIAL

CANADIAN BUSINESS FINANCING

WE FINANCE THE LITTLE GUY .. P.S. WE FINANCE THE BIG GUYS TOO!



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