Business Credit Solutions In Canada : Exploring Asset Based Finance & Loans

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Time For Self Help In Asset Based Finance Business Credit : Right Loans For The Right Time

OVERVIEW – Information on asset based finance solutions in Canada . Business owners & financial mgrs should focus on business credit alternatives and loans and cash flow monetization strategies that make sense for their company

Asset based finance solutions for your business are a solid ' self help ' strategy that delivers on loans & business credit alternatives made to run and grow your company . ‘Self help ' seems to be more popular than ever ... so let's dig in.

Companies face a lot of challenges these days, and financing is certainly one of them. Let's not forget thought that those challenges might have a positive spin to them - sales growth opportunities, competitor acquisition, yet can also be daunting when it comes to threats against your very existence in today’s competitive environment.
How then can asset based finance aid your firm in allowing you to generate the working capital and cash flow you need to prosper and grow, let alone survive?

Asset based financed helps your firm in both good time and challenging times. It comes in a variety of forms - it is commonly in the industry itself referred to as ' ABL ' financing, and typically your firm would negotiate what is simply or commonly known as an asset based line of credit . The facility provides you with a revolving line of credit very similar to a chartered bank facility.


Non bank operating credit lines might also include a significant inventory financing component, and usually address what we could best call special needs or special situations re: turnarounds, growth, distress, etc.

The finance costs are higher, but asset finance solutions deliver! Pricing in Canada on asset based lines of credit is all over the map - We tell clients they can expect to pay anywhere near a point or two over prime up to an including 1.5-2% per month . What defines that huge difference in pricing? The answer is that that there are different what we will call ' tiers ' in ABL lending in Canada, and the overall size and deal quality of your firm will ultimately drive you to an asset based finance partner that more closely matches your needs and your overall ' risk profile '.


A perfect match? The best candidate for an asset based finance line of credit is a firm that is experiencing strong growth but can't attract the traditional capital that is used to finance receivables, inventory, plant and equipment, and even in some cases real estate.


Creativity is the benchmark for asset based financing. Essentially your balance sheet can be financed ' to the max ‘based upon your different asset components. In some cases even intellectual property or patents might be included in the overall financing, although that clearly is not the norm.


The reality is that asset based finance has somewhat changed the overall face of business financing in Canada and more and more firms , both large and small are gravitating to this form of finance . Deal sizes in Canada vary greatly - we do not encourage clients who have an under 250k/mo need to explore asset based finance because at a certain point the reporting, costs, etc done make sense for neither your firm or the ABL lender .

Other general asset based financing solutions include:

A/R financing

Inventory Loans

SR&ED Tax Credit Loans

Sale leasebacks on owned equipment/real estate



Is there any downside in asset based lending and an ABL working capital facility ask our clients? With relative certainty we can say any downside is significantly offset by upside. The facility gives you almost unlimited working capital, and margins assets that might otherwise not be finance able. And don’t forget, this type of facility does not add debt to your balance sheet, you are simply monetizing your hard and in some cases soft assets.
Speak to a trusted, credible and experienced advisor in asset based lending.


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

Business Loans In Canada : Real World Working Capital Financing Sources

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Business Loans In Canada – No Alternative Facts Here !

Just Clear Info On Financing Sources & Solutions

OVERVIEW – Information on working capital & business loan financing sources in Canada . Identifying the right funding sources enhances chances of business and profit growth

Business loans in real world scenarios don't rely on 'alternative facts ' when it comes to achieving the right solution in working capital finance sources, as well as other types of funding your company might need . Looking for some solid 'real' facts on Canadian business financing? Let's dig in.
The one guarantee we provide clients is telling them that business financing is never a question of why, it's usually ' when ‘!
Working capital and cash flow are of course the heart of every business.

The challenges of obtaining that financing become a question of time. Cash flow is required for your regular ongoing business, as well as your growth strategy. In most cases your company is part of a regular cycle - you buy inventory, your produce things, you sell, bill and collect. In a perfect world your suppliers give you unlimited time to pay, and unlimited credit limits. And of course your customers pay you in exactly 30 days. Guess what? It's not a perfect world!

If you are a traditionally financed firm you have access to bank capital for revolving credit lines based on your business needs. But for a growing number of Canadian firms that access to traditional bank capital is not available. Many firms simply can't meet the numerous basic requirements that our banks demand for those low cost traditional bank financing scenarios.

You therefore probably need help in identifying sources of business financing that work for you. The solutions actually are quite numerous - its becomes a question of:

What funding solution best suits your need

What are the costs involved

Does your business model suit a particular financing solution

Working capital financing comes in several forms - it can include:

Non bank asset based lines of business credit

Inventory loans

A/R Financing

Sale Leasebacks

SR&E tax credit financing

P O Finance

Working Capital Term Loans

Merchant loans

One of the most important things you can do for working capital business financing is to ensure that the type of financing you source matches your needs. What we mean by that is that you should match short term needs with short term financing. Factoring, aka ' A/R Financing ‘might be a good example. If your receivables aren't financed, and you need cash to meet inventory and supplier commitments that type of financing is immediate and addresses your needs. Why would you enter into a five year term loan at fixed payments for a short term capital need or requirement?

Understanding your current asset mix and turnover are key to successful business growth & cash flow turnover. Those assets can quickly be monetized into a working capital facility that comes in a variety of methods. The reality is that your inventory and accounts receivable grow lock step to your sales and your ability to finance them on an ongoing basis will give you access to , in essence, unlimited working capital .


There are some solid technical rules of them around how you can generate positive pricing for working capital facilities. By calculating and analyzing some basic financial ratios (we call them relationships) in your financial statements you can get a strong sense of what’s available in working capital business financing and what pricing might be involved. Those ratios are your current ratio, your inventory turns, your receivables turns or days sales outstanding, a, and your overall debt to worth ratio. Depending on where those final ratio calculations come in will ultimately allow your working capital financier to put your firm in a low risk, medium risk, or high risk band of pricing?

The bottom line - Pricing and solutions vary, and your ability to convey the positive aspects of your business to the working capital lender will ultimately lead to a final pricing and solution.

If you're looking for ' facts ' on business financing speak to a credible, experienced and trusted working capital business financing advisor to determine what solutions are the best for your firm.


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

Asset Based Lending In Canada : Your Counter Strike On Business Loan & Cash Flow Challenges

Can Asset Based Lending Save Your Company ? You Decide!

OVERVIEW – Information on asset based lending in Canada . This business loan /cash flow solution solves various financing & growth challenges

Asset Based Lending in Canada seems to be catching the ears of more & more business owners/financial mgrs in Canada. Is it possible this business loan / cash flow financing solution can actually save your company - or at a minimum grow it? We'll let you decide! Let's dig in.

Let's try and make some common sense around this somewhat unknown financing solution - beginning with: What is an asset based line of credit and could it actually ‘save’ your firm and if your firm doesn’t need ‘saving’ could this method of business loan still make sense.


In order to determine if asset based finance can ‘save ‘your firm it might do us well to understand what it is. Don't get confused around the ' jargon ‘which tends to sometimes complicate what you are looking for, which is adequate business financing that meets cash flow and working capital needs.


The basics? Simply that asset based lines of credit are revolving working capital facilities that totally focus on your asset base. When you are comparing this type of financing to a banking facility you will of course quickly realize that the Canadian chartered banking facility that provides a similar (but not exact) type of financing places a lot of focus on issues external to your assets. As we know banks focus on and require very solid balance sheet rations, outside collateral and guarantees, etc.


That’s banking 101. That is not the requirements that are over focused on when it comes to a business credit line. Asset financing lines of credit / loans are business financing working capital facilities that are revolving lines of credit secured specifically by receivables, inventory, and in many cases equipment and real estate if those two latter items are applicable .



You basically borrow, on a daily basis, as you need to, on the sole strength of those assets. Many of our clients are in fact able to also on occasion arrange temporary bulges which can even take them higher than their asset based borrowing capability!



An example of this might be bring a purchase order financing scenario into play which would allow your firm to temporarily borrow against purchase orders and contracts you have received from your customers . This type of additional supplemental financing is best suited for manufacturers, distributors, and firms who export goods or who are wholesalers.


Asset based financing solutions tend to be lumped under the umbrella of ' Alternative Finance ' solutions - fast becoming more popular. While firms with some level of financial distress or challenge use asset financing a lot, the new reality is that this type of financing is being utilized by every type of corporation of all sizes and all industries in Canada, from startups to Canada’s mega corporations. Something must be working!
The reality is though that in many cases firms who have business financing challenges indeed are the perfect candidates for asset based lines of credit if only for the reason that they provided you with capital and cash flow when traditional source can’t.


So if your business needs to be ‘saved ‘ because of issues such as inability to achieve traditional bank financing, or you have traditional financing but it is not enough, than an ABL facility is what you should consider . ABL, by the way, is the acronym for asset based line of credit. Sorry for the jargon!


Other issues you might be facing might include firms that are in a turnaround or workout situation. We have worked with a number of clients who in fact are in ‘special loans ‘scenarios at their bank and they require exit financing from that relationship. Fortunately or unfortunately for traditional business financing in Canada it’s all about the ratios and covenants.

Alternatively your firm might be in a turnaround from either a difficult year or a difficult ‘one of ‘situation that took place. Perhaps your firm is losing money but is on the road to rebuilding sales and profits again? Asset financing loves sales growth by the way!

Asset based lines of credit eliminate those ratios you can’t meet because of being over leveraged (too much debt), or having dramatic seasonal cash flow changes based on your business model and your industry.
The bottom line is simply that your firm now has the ability to be ‘saved’, using our jargon, because you have maximum flexibility in borrowing on your assets, with those assets being the sole focal point of your borrowing base.


As a general rule ABL financing is more expensive than bank borrowing, which is currently at some of its lowest levels in Canadian history. But even paying a premium or significant premium on your ability to borrow in an unlimited fashion against your asset base can still 99% of the time make total sense, that’s simply because your ability to turn capital into profits takes care of a lot of the financing charges.


Speak to a trusted, credible and experienced business financing advisor and discover if the asset based funding makes sense for your firm.


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

Working Capital Financing In Canada : Business Funding 101

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Working Capital Financing : Looking For The Real Thing In Business Funding?

OVERVIEW – Information on working capital financing & Business funding solutions in Canada. What if your company had all the cash flow you need to run and grow your business?

Working capital financing challenges require the ' real thing' in business funding. Is it even possible to imagine your company having enough cash flow all the time? That would certainly alleviate the daily challenges that seeming consume a large amount of the time when it comes to owners/mgmt. Let's dig in.

Part of your success in attaining the right amount of working capital understands what it is and what it is not. The most applicable way we encourage clients to understand the term is simply the funding needed to manage your daily business operations.

So in general it is 'short term 'in nature, although business owners can readily be excused for wondering why it is 'short term' if they are thinking about it all the time!

Understanding and recognizing the problem is half the challenge. That allows you to focus in on real world solutions, which by the way are available! Classic cash flow often simply revolves around understanding how you can finance inventories and A/R.


The concept of a 'cycle 'is very important in understanding the cash flow conundrum and the solutions around that conundrum. The bottom line is that the working capital ties up in your current assets changes - daily!

Cash becomes inventory which becomes a receivable which becomes cash again... what a concept! You will be in a better position to understand the working capital needs, and how to address them if you understand the length of your working capital cycle - simply put: How long does inventory remain on the floor and then converted into saleable inventory, and how long does it take for a receivable to be collected.

Delaying payables is the opposite way to work your way to fairly perfect working capital. Naturally that is not practical or recommended, but our point is simply that your working capital financing investment in your current assets is offset by the timing of your payables, which assists in your cash flow cycle.

So we've focused on the problem, what about solutions? It comes down to 3 basics:

Permanent working capital

Outside commercial financing/ or bank financing if available

Internal cash flow mgmt - i.e. payables mgmt & asset turnover focus

Which one or ones are best for your firm? Focus on understanding the turnover of your receivables and inventory - very quick rudimentary calculations can determine that. Also, develop a realistic cash flow forecast, because you now know what the needs are based on the knowledge we have obtained around understanding our turnover and requirements.

One useful tool? Clients we meet are often searching for a 'quick fix 'number - One calculation you can use in a general matter is that your firm requires working capital in the amount of 25% of your sales. That is of course a very general guideline.

To finalize working capital financing and business funding for your company your options are a long term fixed working capital cash loan, in some cases this is called mezzanine or sub debt financing. At the same time you may be in a position to secure bank financing of receivables and inventory, which has become more of a challenge than ever in the current economic and business environment.

Your firm is probably a candidate for a working capital factoring facility, which monetizes your receivables the same day you issue them - this is one form of generating all the working capital financing you need for business funding. These are provided by commercial non bank financing companies.

Bottom line: Understand what working capital financing is, calculate how much you need and when and why, and then implement the right solution that matches your business overall needs and credit quality. Seek out and speak to a trusted, credible, and experienced business financing advisor in this area of Canadian business financing.


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

Top Working Capital Funding and Facility Solutions

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Information for Canadian business owners on working capital funding and the type of working capital facility for a small or medium sized company  that will meet your firm's needs. How to measure and recognize the need for a cash flow solution that meets your firms requirements.

What Is A Working Capital Loan

Every Canadian business owner and financial manager wants to know that their firm has financial health in the short term. Your company's ability to access cash  means only one simple thing - you have the ability to pay off your short term liabilities such as accounts payable, taxes, source deductions, etc.

Those larger companies have access to a lot of other means of capital, venture capital, private equity, etc. Our focus is on SME Canada , those small and medium sized enterprises that are the backbone of the economy, in good times, and those less than good times !

So do you, in fact, need a better type or working capital facility today, and, if so, what are your options. We can't cure the patient unless we can confirm he is sick... so how in fact do you determine if that working capital need exists. It could not be simpler. Go to your balance sheet, add up cash, receivables, and inventory, and if they in total don't cover your accounts payable, guess what... the patient has a problem.

Two points worth mentioning, we fully realize the most successful business managers and owners know intuitively that they have a challenge in the area of cash flow. It's simply recognizing that on a day to day basis more and more time is devoted to working capital management - i.e. collections, invoicing, juggling payables, etc.

What Is A Working Capital Loan? Who Are The Working Capital Lenders

There are very specific cash flow solutions for your working capital funding requirements. But believe it or not many of them can actually be fixed internally. Your ability to negotiate better terms with your suppliers is a critical cash flow factor. More importantly, many business owners don't focus on the turnover and quality of your current assets such as receivables and inventory.

By effectively measuring and monitoring your turnover in receivables and inventory can significantly improve cash flow.

Technically we're talking about reducing day's sales outstanding and calculating inventory turnover. Your goal is to reduce the amount of time it takes for a dollar to flow through your company. It is all about managing those  ' working capital ratios '.

So we have identified the problem, and the measurement issues around that problem, let's focus on solutions and the financing of working capital.

In a perfect world, and we know it's not, your Canadian chartered bank would be financing all your receivables and inventory on an ongoing basis, and when you need it to offer up a bulge type facility to take you through a working capital rough patch. That type of working capital facility is generally referred to as a business operating line of credit.

As we said, it's not a perfect world apparently!... And thousands of firms, perhaps yours, don't have access to this type of facility. So the Canadian marketplace offers up a number of solutions, for medium-sized and larger firms the alternative is an asset based line of credit that comes without the restrictions of a bank facility ( ratios, covenants, outside collateral, etc) but in fact provide you with more working capital than a bank could.

 For smaller firms, a working capital facility term loan is available via the government related bank in Canada. For smaller and medium sized firm's receivable financing facilities, known as factoring, can turn your receivables into a constant ATM machine, albeit at a higher cost.

So what's our bottom line. Simply the right business loans via a working capital facility will put life back into the patient, your company! Knowing what facility works best, what your options are, etc is really the only challenge, Speak to a trusted, credible and experienced Canadian business financing advisor to guide you through to the right cash flow solution.


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 competencies 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

















Article Source: http://EzineArticles.com/expert/Stan_Prokop/432698

Article Source: http://EzineArticles.com/5364669

Accounts Receivable Finance Solutions: Investigating Cash Flow Factoring Solutions

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Beyond Reasonable Doubt This Cash Flow Financing Solution Works – Here’s Why & How

OVERVIEW – Information on cash flow financing solutions in Canada. Factoring is the fastest growing accounts receivable finance solution in Canada - Here's why

Cash flow needs for Canadian business owners usually have them in one of two camps - either they have unlimited cash resources (doubtful!) or they are constantly hampered by day to day challenges in growing and managing their business - (probable!). Accounts receivable finance solutions such as factoring could well be the solution to all your problems. Let's dig in.


Canadian business owners and financial managers face, on a daily basis real world cash flow challenges. Let’s look at an example at why accounts receivable finance can be your holy grail of working capital financing. Cash flow financing goes by a number of different names in Canada that is part of the confusion we are always trying to wade through on our client’s behalf.

Various terms apply to this type of business financing. They include: factoring, invoice discounting, A/R financing, and our favorite and most recommended solution - Confidential receivable financing. Depending on how your transaction is structured and who you are dealing with is really the key issue - It's not about what the financing is called!

Clients always want to know if they are a candidate for this type of business financing. There are some perfect candidates, so let’s look at a profile or two in order that you can determine if you fit. Generally you will have accounts receivable that pay fairly regularly but are on occasion slow.

Your overall bad debt experience has probably been in the satisfactory/respectable column. Your invoice and stated terms for your customers is 30 days, but guess what? Some or many clients in 60 and 90 days. Bottom line - you're in the category of needed an A/R finance solution.

Does size count? Depends what you're talking about of course! In cash flow financing it really doesn’t. Speaking in general terms if you have at least $ 50,000 of invoices a month you are a candidate for accounts receivable finance. The reality is that corporations with millions of dollars in receivables actually utilize this form of financing also.

Where size might count a bit is that it has a potential effect on your overall financing cost. In our experience you can potentially reduce the cost of your accounts receivable finance facility by close to 1% per month if you have a large facility. However, we spend many hours and many meetings educating Canadian business on factoring pricing, which is grossly misunderstood by most clients who look into this type of business financing.

So the bottom line is that you should not let your company size, or any other challenges you might be facing (temporary financial losses, restructuring, etc) affect you ability to successfully achieve an accounts receivable finance strategy.

Many times the decision to consider factoring of your receivables comes from directly related issues to collections. In some cases the slow pay nature of your client may be affecting your ability to purchase inventory or meet payroll - It that type of classic situation that drives clients to seek outside financing assistance.

When you finance (in effect you are selling) your receivables under this type of facility you immediately receive a 90% advance on your invoicing - that allows you to meet obligations and expand your business.

Traditional sources of business financing in Canada, i.e. chartered banks have made it challenging for firms to finance receivables in a manner that makes sense for the business owner. In some cases, as we noted, your business has or had challenges that prohibit you from temporarily sourcing cash flow financing from banks.

Speak to a trusted, credible and experienced business advisor, and focus on getting into a facility that meets your needs re day to day workings and cost.


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