Working Capital Factoring. Your Persistence To Understand This Cash Flow Solution Has Finally Paid Off

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 Getting To Heart Of Working Capital Factoring In Canada

 

Dear John - Working Capital Factoring is not what you thought it was, so I have heard. When I heard that you were disappointed in your working capital factoring facility I wanted to try and provide you with proper information and insights into what will in fact get you the cash flow and working capital that you anticipated with your new Canadian working capital factoring facility.

So John, what went wrong after we initially talked. You wanted business financing that would allow your business to grow in order to be more competitive in your business and grow those profits and sales.  Factoring seemed like a great solution, and you indicated it is not up to expectations.

Let's backtrack a bit. I think at the end of all this you will see a viable way to achieve ALL of your business financing goals!

Here's where we think things went wrong for your firm. You need to understand that factoring came to Canada from the U.S. and Europe. Their method of doing business there is somewhat more ' abrupt ' if we can use that word. As a result you entered into a U.S. model type of factoring with a branch of a U.S.  Factoring firm. Under that facility you do receive immediate cash for your receivables but you found out only later the factor firm more or less bill, collects, and follows up with your customer directly.  Many Canadian business owners don’t like that method of doing business.

So, John, the solution, and I remind you it’s the one we proposed, is a non-notification factor facility. Guess what, under this facility you of course still get same-day cash, but you bill and collect your own receivables. Now we're talking, right!

You just achieved total financing control, you are getting all the cash flow you need, (i.e. not waiting 30-60, or 90 days) and you're able to reinvest in more inventory, sales, etc.

John - you said that you were considering going back to your bank - just remember that all the financing that you need is, in our opinion, not going to be achieved by either a bank term loan or a Canadian chartered bank line of credit. You will have a great interest rate, but your business will not have the cash flow and working capital that is required for your current sales and contracts.

So what's the bottom line John - it is as follows - work with a trusted, experienced, and knowledgeable business advisor - put a working capital factoring facility in place that runs the way you want it to, and then focus on your business growth and let the cash flow and working capital work for you to those goals. Investigate non-notification factoring - It’s a Canadian alternative to everything you didn’t like about factoring, with all the benefits!

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with cash flow financing needs.

7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com

Click Here For 7 PARK AVENUE FINANCIAL website !



7 Park Avenue Financial provides value-added financing consultation for small and medium-sized businesses in the areas of cash flow, working capital, and debt financing.



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. He is an experienced

business financing consultant

.

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 financing 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.


Click here for the business finance track record of 7 Park Avenue Financial







Stan Prokop
7 Park Avenue Financial/Copyright/2020

Working Capital Factoring - Leveraging Receivables, Inventory and PO'S

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Information on working capital factoring and financing solutions. Financing receivables and Inventory might just not be the challenge you think !

Working Capital - Canadian business owners want to maximize the utilization of their receivables, inventory and incoming orders and contracts to leverage cash flow. The goals are very clearly, grow business revenues and profit with the right combination of internal growth, borrowing from banks and others, and achieving the best blend of working capital and cash flow by leverage those current assets.

Long term debt or additional new equity is not often the business owner's choice in arranging more cash flow for the business.

We meet with many business owners who tell us they have the opportunity to significantly increase sales.They are looking for a financial strategy to grow those profits and equity while the at the same time minimizing loan interest and any other external financing costs. When a business gets its hand on a proper working capital solution it has the potential to reduce or minimize debt, and increase bottom line equity or value in the business.

Our point is simply that if your business can absorb a reduction in your gross margin - (the cost associated with receivable, inventory and PO financing) then you can avoid debt and equity scenarios and still grow your business.

The Canadian business owner and financial managers challenge is to grow the business and understand the cost of growing the business under various financing methods.

Clients are often surprised to learn how much their business can chance by a simple analysis of their financing choices.

Using factoring or inventory financing as a cash flow supercharger is many times the best strategy for working capital enhancement. Most non financial business owners do not appreciate that power that working capital turnover

There are all sorts of tools that your business can very easily use to monitor your working capital needs. One is simple you need to monitor your working capital to sales ratio.

How do we calculate the working capital to sales ratio? It's easy. Working capital is essential your current assets minus your current liabilities. Take that number form the balance sheet and divide it by sales. If you have a low ratio then you ability to generate cash flow is stronger.

The solution for Canadian business owners is to maximize the turnover of those current assets such as receivables and inventory via working capital facilities. If those facilities can't be arranged with a bank then you have the option of working capital lines of credit and asset based lines of credit that will cover receivables, inventory and even under many circumstances bulges for new contracts and purchase orders

Working capital facilities via factoring or inventory financing or purchase order financing maximize your cash flow - they also cost more and many Canadian businesses simply focus on the cost. But they fail to measure the cost of carrying those receivables and the cost of not turning over that inventory efficiently. These two costs alone have the ability to completely in some cases erase your cost of financing under a factor and cash flow facility.

How does a business compute its cost of credit? The formula relates to your firm not taking credit and payment terms extended by suppliers. Your suppliers give you terms that specify a payment date the amount of the discount if you pay early, and of course the due date. The cost of NOT taking that discount is huge! Most owners don't realize that. If your firm can negotiate better prices by utilizing financing strategies such as factoring and inventory financing and purchase order financing you have just become the best comparison shopper in business!

In summary, the cost of not taking trade credit discounts is very significant when your business has the ability to take those discounts via aggressively financing your receivables and inventory. Utilize innovative strategies, you will find that the cost of paying in full is higher that the cost of a working capital facility to cash flow those receivables and inventory!


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.


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 '

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




Article Source: http://EzineArticles.com/4010286

Working Capital Factoring : Connecting The Dots In Solutions Via Receivable Factor Companies

Receivable Financing Is The Equivalent In Going From Homeless

To Rich In Business Cash Flow










OVERVIEW – Information on working capital factoring in Canada . Why does the Receivable factor solution deliver on cash flow in a number of different situations that the Canadian business owner finds themselves in

Can working capital factoring solutions be our business version of ' homeless ' to ' rich '?

It's an interesting analogy if only for the fact that the receivable factor firm solution, properly done creates capital you never had. Let's try and 'connect the dots' in those solutions so the business owner / financial manager sees a clear path to business cash flow freedom. Let's dig in.

There are of course options in working capital finance - they include taking on debt under a working capital term loan or mezzanine unsecured cash flow loan; or the traditional route of Canadian chartered bank financing - theoretically available to all but unfortunately not always to those that need it most.

So why does financing your sales via A/R factor financing a logical step to business capital freedom? For a starter that low cost bank line of credit may not be available to your firm for many different reasons. If for any number of reasons your firm does not qualify for bank credit you're back to square one... our version of business homeless!

Many firms have the most incredible problem imaginable - they are too successful and growing too quickly. That ' rush ' from getting a large new contract or purchase order or seeing sudden surges in sales brings working capital nightmares, as more and more funds are tied up in materials, inventory, and finally accounts receivable

In certain situations your working capital is required for expansion needed for lease/loan payments on new assets, or marketing and headcount growth. Many clients we meet do great business only at certain times of the year - that seasonality causes cash flow needs to rise and fall dramatically at certain times, sometimes unexpected.

One final situation is the whole issue of payment terms and collections. Even large corporations are often typically the ones that pay the slowest, and then there’s... the government!

While certain situations immediately disqualify you for bank financing (negative net worth, fluctuating profits and cash flows, huge jumps in sales revenues) it’s these exact situations which make your firm a solid choice to be financed by a receivable factor.

By the way, in many cases a working capital factoring solution can be a component of a ' total ' asset based lending deal, whereby your A/R, inventory and un-liened equipment are combined into on solid business line of credit. It's typically called an ' ABL ' line by the pros.

Is there one type of receivable factor solution that works best? In our opinion it's non -notification CONFIDENTIAL RECEIVABLE FINANCING , allowing you to bill and collect your own receivables, draw cash against sales when you need it, and only pay for what you are using .

If you want some help in connecting the dots in A/R financing solutions 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 in that ' homeless' to ' rich' transition in business capital!




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 FACTORING AND CONFIDENTIAL RECEIVABLE FINANCING EXPERTISE





Stan Prokop









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

Working Capital Factoring . Your Persistence To Understand This Cash Flow Solution Has Finally Paid Off

We Got A Dear John Letter On Cash Flow Financing


Information on working capital factoring in Canada . Cash flow finacing solions explained .. finally .





Dear John - Working Capital Factoring is not what you thought it was, so I have heard. When I heard that you were disappointed in your working capital factoring facility I wanted to try and provide you with proper information and insights into what will in fact get you the cash flow and working capital that you anticipated with your new Canadian working capital factoring facility.

So John, what went wrong after we initially talked. You wanted business financing that would allow your business to grow in order to be more competitive in your business and grow those profits and sales. Factoring seemed like a great solution, and you indicated it is not up to expectations.

Let's backtrack a bit. I think at the end of all this you will see a viable way to achieve ALL of your business financing goals!

Here's where we think things went wrong for your firm. You need to understand that factoring came to Canada from the U.S. and Europe. Their method of doing business there is somewhat more ' abrupt ' if we can use that word. As a result you entered into a U.S. model type of factoring with a branch of a U.S. Factoring firm. Under that facility you do receive immediate cash for your receivables but you found out only later the factor firm more or less bill, collects, and follows up with your customer directly. Many Canadian business owners don’t like that method of doing business.

So, John, the solution, and I remind you it’s the one we proposed, is a CONFIDENTIAL factor facility. Guess what, under this facility you of course still get same day cash, but you bill and collect your own receivables. Now we're talking, right!

You just achieved total financing control, you are getting all the cash flow you need, (i.e. not waiting 30-60, or 90 days) and you're able to re invest in more inventory, sales, etc.

John - you said that you were considering going back to your bank - just remember that all the financing that you need is, in our opinion, not going to be achieved by either a bank term loan, or a Canadian chartered bank line of credit. You will have a great interest rate , but you business will not have the cash flow and working capital that is required for your current sales and contracts .

So whats the bottom line John - it is as follows - work with a trusted, experienced , and knowledgeable business advisor - put a working capital factoring facility in place that runs the way you want it to, and then focus on your business growth and let the cash flow and working capital work for you to those goals . Investigate non CONFIDENTIAL INVOICE FINANCING - It’s a Canadian alternative to everything you didn’t like about factoring, with all the benefits!

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with cash flow financing needs.




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




Stan Prokop