When Canadian business owners and managers are aware of the benefits of equipment finance leasing and leasing services their ability to get rates, terms and structure approvals that makes sense increase dramatically.
Equipment financing in Canada is one of the easiest methods of financing business assets bar none. However, at the same time the complexity of the different types of leasing and who offers lease financing can be a true challenge that you might not want to dedicate all your time toward.
You can obtain the best leasing services and rates by focusing in on what benefits matter to your firm from a priority basis – in many cases its simply the term and rate on the lease financing . Depending on what type of asset you are financing lease terms vary from 2 to 7 years – at the end of the day it depends on the equipments useful economic life, combined with the type of lease you structured. In Canada that is either an equipment finance lease, designating your desire for ownership, or an operating lease, designating your firm’s choice to use an asset, but not ultimately own it.
Leasing is often referred to as a cash flow enhancer – little or no money down, as well as your ability to craft monthly, quarterly, or semi annual payments with can either accelerate or decelerate as you require. That’s true cash flow management.
Equipment lease financing is all about benefits and use, not real pride of ownership. In most situations today assets depreciate... you certainly can’t look at your investment in computers and technology and make the case those assets are rising in value!
With today’s volatile finance markets, inflation, and the somewhat erratic timing of the need for your asset acquisitions isn’t it a safe bet to know that the decision process becomes much easier when leasing services provide you with an effective acquisition tool.
Clients always inevitably ask ‘why is lease financing so popular ‘? The reality is that is a triple threat to your competition. You can effectively stretch your dollars, extend your budgets, and acquire equipment and facilities with the most minimum investment of funds. That is simply because you are matching investment of your funds with the useful economic life of the asset – what else could make more sense.
Equipment finance leasing allows you to generate the payments you need to make for the asset from income produced by the asset – payments are made from current revenue and the equipment and assets you finance are in effect a ‘pay as it earns’ scenario . Today’s costs are paid with tomorrow dollars since lasing involves payment for equipment as it is used. Naturally if you chose to buy the asset outright we can make the statement that you would be using today’s dollars to hand tomorrow expenses, and we advise against that in conversations with clients.
Speak to a trusted, credible, and experienced Canadian business financing and lease advisor on how you can maximize the benefits of equipment lease financing to grow revenues and profits .
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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 6 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/equipment_finance_leasing_services.html
Our blog highlights Canadian Business Financing solutions via receivable finance , equipment finance, working capital financing, asset based lending, business acquisition financing,franchise finance, and tax credit monetization via SRED and Film Tax Credits. Our goal is to educate and assist Canadian businesses with their financing needs. You Are Looking For Canadian Business Financing! Welcome to 7 Park Avenue Financial Call Now ! - Direct Line - 416 319 5769
Tuesday, November 23, 2010
Monday, November 22, 2010
You Have Factoring Questions – Tips on Best Factoring Program and Factoring explained
We forgive you, and we are sure everyone else does also... for what...? Simply because you keep asking about the best factoring program out there and quite frankly you have factoring questions on this ‘relatively’ newer form of business financing.
So, factoring explained. Let's cover off some key basics and arm you with data to make an informed decision as to whether his type of Canadian business finance works for you.
Step 1 - understanding what we are talking about. It couldn’t be more simple. As you generate sales and receivables you enter into a ' program' to sell those receivables to a third party. As can be imagined, you receive a discounted price for your receivables , because you are getting cash today for something that would normally be collected 1, 2, and three months out .
The cost of factoring is always a key discussion point with our clients. The industry refers to this as a ' discount fee', and in Canada that fee is quite frankly all over the place. We can make a general statement thought that typically the fee is in the 1- 3% range. We can hear our clients already. ‘We’ll take the 1% please!". The reality is that you do have some control over the pricing in your factoring program, because the key drivers of the pricing are quite simple - the size of you A/R portfolio, the number of customers, where they are located, and their overall credit quality.
While customers tend to always focus on price in this discussion we frankly tell clients that the factoring questions they should be focusing on are more important - how does the program work on a day to day basis and how does it affect my clients and my business processes.
On a day to day basis you are advanced, as you generate invoices, approximately 90% of the invoice value - generally the same day you cut the invoice. Why only 90%. Simply because the finance firm holds back that 10 % as a reserve or buffer and it also covers off the financing cost. Let’s demonstrate a clear example. If you generated an invoice today for $100.00 you would receive via wire transfer 90$ into your bank account today. If you customer paid in 30 days ( you wish!) and the factor firm priced your program at 2% then when your customer paid the invoice you would receive your other 8 dollars back, the 2$ being the finance charge . It's as simple as that.
Its not hard for our clients to see some of the immediate benefits - all of a sudden ' factoring explained ' requests become quite clear - it frees up cash flow instantly for general working capital purposes, suppliers can be paid on time, and you can purchase additional products and services that you need to grow your business on a daily basis .
Factoring , aka ' receivable discounting' is different from banking - it comes at a higher cost , and works on a day to day basis significantly differently than if you were able to facilitate a bank line of operating credit . The harsh reality is that while many banks are pushing back on receivable and inventory facilities for small and medium business the factoring industry has kicked into hyper growth mode, seizing the opportunity to finance the liquidity gap in Canadian business.
Speak to a trusted, credible and experienced Canadian business financing advisor who will guide you through the process for success in Canada's newest mainstream business financing strategy.
on factoring questions raised by Canadian business . How does a factoring program work, what does it costs . Factoring explained from the terms of benefits and daily processes .
--
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 6 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.parkavenuefinancial.com/factoring_questions_factoring_explained_program.html
So, factoring explained. Let's cover off some key basics and arm you with data to make an informed decision as to whether his type of Canadian business finance works for you.
Step 1 - understanding what we are talking about. It couldn’t be more simple. As you generate sales and receivables you enter into a ' program' to sell those receivables to a third party. As can be imagined, you receive a discounted price for your receivables , because you are getting cash today for something that would normally be collected 1, 2, and three months out .
The cost of factoring is always a key discussion point with our clients. The industry refers to this as a ' discount fee', and in Canada that fee is quite frankly all over the place. We can make a general statement thought that typically the fee is in the 1- 3% range. We can hear our clients already. ‘We’ll take the 1% please!". The reality is that you do have some control over the pricing in your factoring program, because the key drivers of the pricing are quite simple - the size of you A/R portfolio, the number of customers, where they are located, and their overall credit quality.
While customers tend to always focus on price in this discussion we frankly tell clients that the factoring questions they should be focusing on are more important - how does the program work on a day to day basis and how does it affect my clients and my business processes.
On a day to day basis you are advanced, as you generate invoices, approximately 90% of the invoice value - generally the same day you cut the invoice. Why only 90%. Simply because the finance firm holds back that 10 % as a reserve or buffer and it also covers off the financing cost. Let’s demonstrate a clear example. If you generated an invoice today for $100.00 you would receive via wire transfer 90$ into your bank account today. If you customer paid in 30 days ( you wish!) and the factor firm priced your program at 2% then when your customer paid the invoice you would receive your other 8 dollars back, the 2$ being the finance charge . It's as simple as that.
Its not hard for our clients to see some of the immediate benefits - all of a sudden ' factoring explained ' requests become quite clear - it frees up cash flow instantly for general working capital purposes, suppliers can be paid on time, and you can purchase additional products and services that you need to grow your business on a daily basis .
Factoring , aka ' receivable discounting' is different from banking - it comes at a higher cost , and works on a day to day basis significantly differently than if you were able to facilitate a bank line of operating credit . The harsh reality is that while many banks are pushing back on receivable and inventory facilities for small and medium business the factoring industry has kicked into hyper growth mode, seizing the opportunity to finance the liquidity gap in Canadian business.
Speak to a trusted, credible and experienced Canadian business financing advisor who will guide you through the process for success in Canada's newest mainstream business financing strategy.
on factoring questions raised by Canadian business . How does a factoring program work, what does it costs . Factoring explained from the terms of benefits and daily processes .
--
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 6 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.parkavenuefinancial.com/factoring_questions_factoring_explained_program.html
Sunday, November 21, 2010
Leverage Canadian tax credits for film finance success via film tax credit financing
Is there a better way of leveraging your film, TV or animation project other than utilizing film tax credit financing on Canadian projects? We don’t think so, but we will let you decide.
Canadian tax credits for film continue to grow in popularity and make a strong case for many projects to be shot, produced, or post produced in the Canadian environment.
Difficult to understand? Not really... Canada's stable political and financial environment, coupled with a very generous and straight forward non repayable tax grant system for productions drive new interest to Canada every day.
Naturally Canada competes with major cities and geographies all over the world for its share of media production in film, tv and animation .These days its more often than not about cost , and Canada has a positive statement to make in the area qualified crews, great geographies, and the cost effectiveness . No one area takes Canada over the top, but when you add the aforementioned facts on top of the Canadian film tax credit system you have a strong power play .
Even the strong Canadian dollar, which seems to be approaching par in 2010-2011 is no longer a concern - previously the lower value Canadian ' loonie ' was a weak currency and a key benefit of shooting in Canada was quite simply, the Canadian dollar.
But the real kicker in all this is the Canadian governments film tax credit financing policy which now plays a key part in most decision to film or produce in Canada
Simply speaking Canadian tax credits for film refund to Canadian and foreign owned products a very large portion of their production costs. The ten Canadian provinces augment that program by adding in their own credits, further increasing the generosity of the program.
An interesting historical point is that in recent years may political regimes in the U.S. and elsewhere lobbied hard to compete against the Canadian film tax credit system. In 2003 the federal authorities increased the tax credit, and the provinces jumped on board again.
Certain of the tax credits were even increased in areas of non labour, i.e. your other below the line production expenses.
How could you not want to take advantage of any system that offers in the percentage range of 30-45% as a non repayable refund on your project? It makes no sense to not consider that option. And as long as the Canadian government feels that benefits outweigh cost who are we to disclaim the program - instead simply take advantage of it.
It's more often than not all about cash flow and working capital for your project. so owners of projects should strongly consider monetizing , i.e. financing their tax credits . Your ability to receive financing on a future tax credit receivable can great improve the confidence of your debt and equity investors, and enhance the overall returns on your project.
The entire process can be completed in a manner of weeks and involves a basic financing application, ensuring your tax credits are legitimate and vetted, and requires that you can properly demonstrate good accounting and financial controls re the preparation and filing of financial statements for your project. Naturally this sort of fiscal responsibility makes sense even if you weren’t going to finance your Canadian tax credits for film, TV, and animation.
Speak to a trusted, credible and experienced film tax credit consultant. Monetize or cash flow your claim if it makes sense. That a solid entertainment finance strategy.
-
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 6 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/film_tax_credit_financing_canadian_tax_credits.html
Canadian tax credits for film continue to grow in popularity and make a strong case for many projects to be shot, produced, or post produced in the Canadian environment.
Difficult to understand? Not really... Canada's stable political and financial environment, coupled with a very generous and straight forward non repayable tax grant system for productions drive new interest to Canada every day.
Naturally Canada competes with major cities and geographies all over the world for its share of media production in film, tv and animation .These days its more often than not about cost , and Canada has a positive statement to make in the area qualified crews, great geographies, and the cost effectiveness . No one area takes Canada over the top, but when you add the aforementioned facts on top of the Canadian film tax credit system you have a strong power play .
Even the strong Canadian dollar, which seems to be approaching par in 2010-2011 is no longer a concern - previously the lower value Canadian ' loonie ' was a weak currency and a key benefit of shooting in Canada was quite simply, the Canadian dollar.
But the real kicker in all this is the Canadian governments film tax credit financing policy which now plays a key part in most decision to film or produce in Canada
Simply speaking Canadian tax credits for film refund to Canadian and foreign owned products a very large portion of their production costs. The ten Canadian provinces augment that program by adding in their own credits, further increasing the generosity of the program.
An interesting historical point is that in recent years may political regimes in the U.S. and elsewhere lobbied hard to compete against the Canadian film tax credit system. In 2003 the federal authorities increased the tax credit, and the provinces jumped on board again.
Certain of the tax credits were even increased in areas of non labour, i.e. your other below the line production expenses.
How could you not want to take advantage of any system that offers in the percentage range of 30-45% as a non repayable refund on your project? It makes no sense to not consider that option. And as long as the Canadian government feels that benefits outweigh cost who are we to disclaim the program - instead simply take advantage of it.
It's more often than not all about cash flow and working capital for your project. so owners of projects should strongly consider monetizing , i.e. financing their tax credits . Your ability to receive financing on a future tax credit receivable can great improve the confidence of your debt and equity investors, and enhance the overall returns on your project.
The entire process can be completed in a manner of weeks and involves a basic financing application, ensuring your tax credits are legitimate and vetted, and requires that you can properly demonstrate good accounting and financial controls re the preparation and filing of financial statements for your project. Naturally this sort of fiscal responsibility makes sense even if you weren’t going to finance your Canadian tax credits for film, TV, and animation.
Speak to a trusted, credible and experienced film tax credit consultant. Monetize or cash flow your claim if it makes sense. That a solid entertainment finance strategy.
-
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 6 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/film_tax_credit_financing_canadian_tax_credits.html
Saturday, November 20, 2010
How Canada Sred Claims Deliver Cash Via Your SRED Financing Strategy !
We probably couldn’t count the worries or challenges you have around your competition in Canadian business. But one way in which Canadian business stays ahead of the challenge is via the Canada SRED grant program. Sred claims deliver billions, (that’s not a typo - it really is billions) of dollars of non repayable grant funds to firms such as yours. So could Sred financing assist your firm to stay even more competitive?
We tell clients that we think it can, if only because it accelerates the cash flow and working capital that your firm has coming from its R&D claim
Your ability to ' unlock ' sred funds is simply a cash flow accelerator. Clients often ask what the required uses for those funds are if in fact you do choose to finance your sred claim. The reality is that the funds can be used for any general corporate purpose - so that includes of course general working capital and cash flow, the purchase or down payment of additional new equipment and technology, or, at its most basic, retirement of short term or long term debt on your balance sheet .
Your ability to quantify and demonstrate your business processes and advancements can result in hundreds of thousands of dollars of non repayable sred funds under the combined federal and provincial program.
There isn’t a business owner in Canada today, certainly that we have met, that doesn’t have some issues and problems with the role of government in business. Want a method of striking back?! Take advantage of sred and sred financing. Sred claims under Canada sred legislation are your encouragement to recover 30-40%, even more in your funds spent in the previous fiscal year.
We advise clients that the process around the financed of a sr&Ed claim is much defined. In fact in the 2010 environment, based on some new rules for claimants, its even more defined. Claims are most successfully financed when they are generated by a proper party - in the industry this party is known as a sred consultant, and their ability to craft and present a claim under new guidelines from the government is key to the ability to maximize your claim. Maximizing you claim maximizes financing, simply because under sred financing a typical advance is 70% of your claim, so the size of your overall total claim determines the financed amount, as in our example of the typical 70%.
It's common knowledge in the sr&Ed industry that a huge majority of companies eligible to claim a sred grant don’t do it. We have heard all the excuses, and we won’t weigh in on them now, but they typically include - - ' we haven’t heard of the program .... Is there an audit involved ... isn’t expensive to prepare a claim, we don’t have enough time, ‘‘‘... etc, etc!
We would rather preach to the converted. So if you are filing sred Canada claims and want to accelerate cash flow immediately then consider monetizing your claim. It’s a very basic process, via an application, providing back up on you sred, and being agreeable to collateralizing the claim via a basic documented process.
Speak to a trusted, credible and experienced sred tax financing expert to ensure you can easily and effectively enjoy the benefits of sred financing via a cash flow and working capital financing of the claim.
--
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 6 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/sred_financing_sred_claims_canada_sred.html
We tell clients that we think it can, if only because it accelerates the cash flow and working capital that your firm has coming from its R&D claim
Your ability to ' unlock ' sred funds is simply a cash flow accelerator. Clients often ask what the required uses for those funds are if in fact you do choose to finance your sred claim. The reality is that the funds can be used for any general corporate purpose - so that includes of course general working capital and cash flow, the purchase or down payment of additional new equipment and technology, or, at its most basic, retirement of short term or long term debt on your balance sheet .
Your ability to quantify and demonstrate your business processes and advancements can result in hundreds of thousands of dollars of non repayable sred funds under the combined federal and provincial program.
There isn’t a business owner in Canada today, certainly that we have met, that doesn’t have some issues and problems with the role of government in business. Want a method of striking back?! Take advantage of sred and sred financing. Sred claims under Canada sred legislation are your encouragement to recover 30-40%, even more in your funds spent in the previous fiscal year.
We advise clients that the process around the financed of a sr&Ed claim is much defined. In fact in the 2010 environment, based on some new rules for claimants, its even more defined. Claims are most successfully financed when they are generated by a proper party - in the industry this party is known as a sred consultant, and their ability to craft and present a claim under new guidelines from the government is key to the ability to maximize your claim. Maximizing you claim maximizes financing, simply because under sred financing a typical advance is 70% of your claim, so the size of your overall total claim determines the financed amount, as in our example of the typical 70%.
It's common knowledge in the sr&Ed industry that a huge majority of companies eligible to claim a sred grant don’t do it. We have heard all the excuses, and we won’t weigh in on them now, but they typically include - - ' we haven’t heard of the program .... Is there an audit involved ... isn’t expensive to prepare a claim, we don’t have enough time, ‘‘‘... etc, etc!
We would rather preach to the converted. So if you are filing sred Canada claims and want to accelerate cash flow immediately then consider monetizing your claim. It’s a very basic process, via an application, providing back up on you sred, and being agreeable to collateralizing the claim via a basic documented process.
Speak to a trusted, credible and experienced sred tax financing expert to ensure you can easily and effectively enjoy the benefits of sred financing via a cash flow and working capital financing of the claim.
--
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 6 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/sred_financing_sred_claims_canada_sred.html
Friday, November 19, 2010
Starting a Franchise ? Looking For Business Money To Finance A Franchise?
The priority of securing business money when you have selected and are starting a franchise becomes even more important as you focus on getting the business started and up and running .
Let's discuss some of the sources of capital in the Canadian franchise environment, and we'll share some tips and strategies that have helped many other clients looking for Canadian business financing in the franchise environment.
There are actually 5 sources of capital that will successfully allow you to complete the financing of your new business. They include your own equity injection into the business, i.e. your down payment, bank and institutional financing (its
s not what you might think, so stay tuned on that one ) , asset financing via an independent finance company, and finally a potential vendor take back from either the franchisor of the existing franchisee from whom you are buying the business .
Let's therefore backtrack a bit and hopefully give you some solid tips and new information around how this financing is, in our words ' cobbled together ' to give you a total financing solution for your new business.
It's always the same question when we talk to clients... ‘How much do we have to put in ‘... they are of course referring to their owner equity investment into the business. The truth is that the amount varies when it comes to the financing portion of your business. That amount is flexible and can vary anywhere from 10 - 50 per cent depending on the size of the financing and the amount of working capital you want to have on hand d on day once that will allow you to finance the business properly .
Another tip we'll share in the above mentioned ' owner equity ' area is simply that in many cases some franchisors will actually mandate how much you ' have ' to put in. We therefore recommend to all clients that they get a clear understanding up front so there are no surprises. In defense of the franchisor they are probably relying on their own experience that allows them to have determined over time what it takes to successfully run and grow one of their units in their franchise system.
So how exactly do the banks in Canada participate in the starting of your franchise? Is it as simple as approaching your bank and determining what business money they will lend to finance a franchise? Not really we tall clients. We have rarely if ever seen a direct term loan to cover the financing of a franchise. But yet the banks do participate in most of the franchise financing in Canada. How? They piggy back on a special government program called the BIL/CSBF programme. This loan is underwritten by Ottawa, and has very generous terms and conditions around rate and structure. Unbelievably you are actually only guaranteeing personally 25% of the loan, which is another benefit.
So our cobbling together of a financing package is getting there - another great strategy is to finance separate individual assets with an independent lease firm. This type of asset financing is easier to get approved, and can cover a significant portion of any assets that need to be financed.
We spoke of a potential vendor take back from the franchisor or existing franchise as part of the purchase package. We will share with you several tips and comments on this one - namely that you should not fully rely on getting this type of financing in place. Occasionally you might be successful, may times you wont. Why? Simply because the franchisor or existing franchisee is motivated to sell you a franchise, not finance it!
Speak to a trusted, credible, and experienced Canadian business financing advisor in the area of starting a franchise and getting the right business money in place to allow you to complete your new role as a Canadian entrepreneur.
---
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 6 years - has completed in excess of 45 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/finance_a_franchise_business_money.html
Let's discuss some of the sources of capital in the Canadian franchise environment, and we'll share some tips and strategies that have helped many other clients looking for Canadian business financing in the franchise environment.
There are actually 5 sources of capital that will successfully allow you to complete the financing of your new business. They include your own equity injection into the business, i.e. your down payment, bank and institutional financing (its
s not what you might think, so stay tuned on that one ) , asset financing via an independent finance company, and finally a potential vendor take back from either the franchisor of the existing franchisee from whom you are buying the business .
Let's therefore backtrack a bit and hopefully give you some solid tips and new information around how this financing is, in our words ' cobbled together ' to give you a total financing solution for your new business.
It's always the same question when we talk to clients... ‘How much do we have to put in ‘... they are of course referring to their owner equity investment into the business. The truth is that the amount varies when it comes to the financing portion of your business. That amount is flexible and can vary anywhere from 10 - 50 per cent depending on the size of the financing and the amount of working capital you want to have on hand d on day once that will allow you to finance the business properly .
Another tip we'll share in the above mentioned ' owner equity ' area is simply that in many cases some franchisors will actually mandate how much you ' have ' to put in. We therefore recommend to all clients that they get a clear understanding up front so there are no surprises. In defense of the franchisor they are probably relying on their own experience that allows them to have determined over time what it takes to successfully run and grow one of their units in their franchise system.
So how exactly do the banks in Canada participate in the starting of your franchise? Is it as simple as approaching your bank and determining what business money they will lend to finance a franchise? Not really we tall clients. We have rarely if ever seen a direct term loan to cover the financing of a franchise. But yet the banks do participate in most of the franchise financing in Canada. How? They piggy back on a special government program called the BIL/CSBF programme. This loan is underwritten by Ottawa, and has very generous terms and conditions around rate and structure. Unbelievably you are actually only guaranteeing personally 25% of the loan, which is another benefit.
So our cobbling together of a financing package is getting there - another great strategy is to finance separate individual assets with an independent lease firm. This type of asset financing is easier to get approved, and can cover a significant portion of any assets that need to be financed.
We spoke of a potential vendor take back from the franchisor or existing franchise as part of the purchase package. We will share with you several tips and comments on this one - namely that you should not fully rely on getting this type of financing in place. Occasionally you might be successful, may times you wont. Why? Simply because the franchisor or existing franchisee is motivated to sell you a franchise, not finance it!
Speak to a trusted, credible, and experienced Canadian business financing advisor in the area of starting a franchise and getting the right business money in place to allow you to complete your new role as a Canadian entrepreneur.
---
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 6 years - has completed in excess of 45 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/finance_a_franchise_business_money.html
Thursday, November 18, 2010
Eliminate Commercial Finance Pressures With An Asset Based Lender
Do commercial finance solutions seem out of reach - want a simple solution ?... go visit a Canadian chartered bank and get all the business credit you need! Unrealistic... maybe, maybe not, but one sure fire solution for your problems might be an asset based lender.
For many years now the non bank asset based lenders have been working with firms such as yours on credit facilities that fit the real world need of your company when it comes to inventory, receivables, equipment and real estate.
Canadian business owners and financial managers are probably asking themselves why they haven’t heard of this before - we'll hit you with another shocker, some of the Canadian banks even have internal divisions of asset based lenders that compete with their regular commercial banking business!
Anyway, the bottom line is that this Canadian business financing solution might be your ultimate cash flow and working capital solution.
For the uninformed asset based lending is essentially a revolving line of credit which provides you with working capital, cash flow to cover your operating expenses and growth needs. Why is it different then from a typical bank type operating loan? Simply because there is only one focus, the assets. And because the asset based lender is a specialist in commercial finance and the value of your assets you ability to draw on those assets intensifies greatly - in many cases you will obtain 50-100% more leverage on your current assets than you ever have before .
Again, why is this so different - its because the focus is on your personal credit, your company's current or past challenges... its soley on , you guessed it ..' the assets'!
In certain cases even a purchase order financing type facility can be put in place, and more often than not the asset based lender will accommodate what we term as ' bulges' or unusual temporary needs of your business based on seasonal cash flow, large new orders or contracts, etc .
As a business owner we think you can see that the total focus now seems to be on your future sales ability and the overall bench strength of your assets. It certainly is not untypical to receive 90% financing on receivables and 50% or often more on your inventory as ongoing advances for your cash flow needs. We also tell clients that unencumbered equipment can be factored into the facility also, so you in effect have a fixed asset that provides you with working capital. That’s creative financing!
Clients always asked what the approval criteria are - the truth is that the criteria that an asset based lender requires are significantly less demanding than those imposed by bank , the latter focusing on rations, covenants, external collateral, strength of persona guarantees, and on it goes .
Commercial finance made easy is a great by line for an asset based line of credit. After a standard business financing application and submission of back up date which would include aged receivalble, inventory listing, equipment list, recent financial statements, etc you would typically receive an expression of interest. After initial due diligence on your overall asset size and quality typical security documentation and registration takes a couple of weeks.
Speak to a trusted, credible, and experience Canadian business financing advisor who can provide you with clarity on cost, process, and most importantly, the benefits of an asset based line of credit or working capital facility.
--
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 6 years - has completed in excess of 45 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/commercial_finance_asset_based_lender.html
For many years now the non bank asset based lenders have been working with firms such as yours on credit facilities that fit the real world need of your company when it comes to inventory, receivables, equipment and real estate.
Canadian business owners and financial managers are probably asking themselves why they haven’t heard of this before - we'll hit you with another shocker, some of the Canadian banks even have internal divisions of asset based lenders that compete with their regular commercial banking business!
Anyway, the bottom line is that this Canadian business financing solution might be your ultimate cash flow and working capital solution.
For the uninformed asset based lending is essentially a revolving line of credit which provides you with working capital, cash flow to cover your operating expenses and growth needs. Why is it different then from a typical bank type operating loan? Simply because there is only one focus, the assets. And because the asset based lender is a specialist in commercial finance and the value of your assets you ability to draw on those assets intensifies greatly - in many cases you will obtain 50-100% more leverage on your current assets than you ever have before .
Again, why is this so different - its because the focus is on your personal credit, your company's current or past challenges... its soley on , you guessed it ..' the assets'!
In certain cases even a purchase order financing type facility can be put in place, and more often than not the asset based lender will accommodate what we term as ' bulges' or unusual temporary needs of your business based on seasonal cash flow, large new orders or contracts, etc .
As a business owner we think you can see that the total focus now seems to be on your future sales ability and the overall bench strength of your assets. It certainly is not untypical to receive 90% financing on receivables and 50% or often more on your inventory as ongoing advances for your cash flow needs. We also tell clients that unencumbered equipment can be factored into the facility also, so you in effect have a fixed asset that provides you with working capital. That’s creative financing!
Clients always asked what the approval criteria are - the truth is that the criteria that an asset based lender requires are significantly less demanding than those imposed by bank , the latter focusing on rations, covenants, external collateral, strength of persona guarantees, and on it goes .
Commercial finance made easy is a great by line for an asset based line of credit. After a standard business financing application and submission of back up date which would include aged receivalble, inventory listing, equipment list, recent financial statements, etc you would typically receive an expression of interest. After initial due diligence on your overall asset size and quality typical security documentation and registration takes a couple of weeks.
Speak to a trusted, credible, and experience Canadian business financing advisor who can provide you with clarity on cost, process, and most importantly, the benefits of an asset based line of credit or working capital facility.
--
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 6 years - has completed in excess of 45 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/commercial_finance_asset_based_lender.html
Wednesday, November 17, 2010
Looking for debt Financing ? Don’t Ignore Working Capital Funding Sources
We're not shocked - You wont be either - a recent U.S. survey by CFO Magazine stated that cash flow and working capital and accessing working capital funding sources was the biggest concern of any financial manager.
Welcome to Canada ! We are pretty sure we are in the same boat as we talk to clients who seek alternatives to debt financing and liquidity for their companies.
The other key item in the study was that business in general was dissatisfied with their banking relationships - again no real surprise.
So we all agree there is a gap in working capital solutions for Canadian business. Let’s discuss why that gap exists, and, more importantly is there alternatives to taking on more debt financing while at the same increasing cash flow in your firm.
As we have written in the past we always tell clients the best program in Canada, bar none in our opinion is the government small business loan program, which is underwritten by our good friends in Ottawa. Great rates, terms and structures, what more could you ask for. Well here’s the problem, the program only covers equipment, leaseholds and real estate - that’s called debt financing. So not working capital or cash flow is ever going to come out of that program for your firm. Let's move on then.
We can start by defining our working capital problem by simply saying it’s the day to day liquidity in your business that we are talking about - essentially the amount of funds you have in your company that could be liquid if you didn’t have them tied up in inventory, accounts receivable, and in some cases prepaid current assets. And of coruse the ' double whammy' comes in when you have your obligations on the other side of the balance sheet, i.e. accounts payable and term loans.
Working capital funding sources come from two areas, debt and the monetization of those current assets. We prefer monetizing and cash flowing things like A/R and inventory as opposed to debt financing, which infers a long term commitment.
So let’s get right to the point, what are your alternatives to cash flow success. The good news is there are a good handful of alternatives - they include operating lines of credit which can come from your bank or your non bank lender. Clients are increasing more interested in hearing about non bank lenders because these firms can more readily approve financing for your inventory and receivables. The ' buzz word' around this industry is asset based lending, and we advise clients to check it out, because in many cases it’s the ultimate solution to working capital success.
If you are a smaller firm you can employ accounts receivable financing, otherwise known as invoice discounting. If done properly ( and many times it is not ) it can turn your firm into literally an ATM cash flow machine, as you generate instant cash flow for all your sales . This type of facility comes at a cost and we find there are many misconceptions about the cost of this type of financing, and as importantly, how it works.
So lets summarize - you aren’t going to get working capital from our friends in Ottawa - if you qualify for bank financing employ it! Many of our clients don’t, so consider great alternatives for working capital funding sources such as asset based lines of credit, receivable financing, or in some cases even securitization.
So if your firm has a thirst for liquidity (!) speak to a trusted, credible and experienced Canadian business financing advisor who will work with you to solve your cash flow challenge .
--
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 6 years - has completed in excess of 45 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/working_capital_funding_sources_debt_financing.html
Welcome to Canada ! We are pretty sure we are in the same boat as we talk to clients who seek alternatives to debt financing and liquidity for their companies.
The other key item in the study was that business in general was dissatisfied with their banking relationships - again no real surprise.
So we all agree there is a gap in working capital solutions for Canadian business. Let’s discuss why that gap exists, and, more importantly is there alternatives to taking on more debt financing while at the same increasing cash flow in your firm.
As we have written in the past we always tell clients the best program in Canada, bar none in our opinion is the government small business loan program, which is underwritten by our good friends in Ottawa. Great rates, terms and structures, what more could you ask for. Well here’s the problem, the program only covers equipment, leaseholds and real estate - that’s called debt financing. So not working capital or cash flow is ever going to come out of that program for your firm. Let's move on then.
We can start by defining our working capital problem by simply saying it’s the day to day liquidity in your business that we are talking about - essentially the amount of funds you have in your company that could be liquid if you didn’t have them tied up in inventory, accounts receivable, and in some cases prepaid current assets. And of coruse the ' double whammy' comes in when you have your obligations on the other side of the balance sheet, i.e. accounts payable and term loans.
Working capital funding sources come from two areas, debt and the monetization of those current assets. We prefer monetizing and cash flowing things like A/R and inventory as opposed to debt financing, which infers a long term commitment.
So let’s get right to the point, what are your alternatives to cash flow success. The good news is there are a good handful of alternatives - they include operating lines of credit which can come from your bank or your non bank lender. Clients are increasing more interested in hearing about non bank lenders because these firms can more readily approve financing for your inventory and receivables. The ' buzz word' around this industry is asset based lending, and we advise clients to check it out, because in many cases it’s the ultimate solution to working capital success.
If you are a smaller firm you can employ accounts receivable financing, otherwise known as invoice discounting. If done properly ( and many times it is not ) it can turn your firm into literally an ATM cash flow machine, as you generate instant cash flow for all your sales . This type of facility comes at a cost and we find there are many misconceptions about the cost of this type of financing, and as importantly, how it works.
So lets summarize - you aren’t going to get working capital from our friends in Ottawa - if you qualify for bank financing employ it! Many of our clients don’t, so consider great alternatives for working capital funding sources such as asset based lines of credit, receivable financing, or in some cases even securitization.
So if your firm has a thirst for liquidity (!) speak to a trusted, credible and experienced Canadian business financing advisor who will work with you to solve your cash flow challenge .
--
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 6 years - has completed in excess of 45 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/working_capital_funding_sources_debt_financing.html
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