Reasons... and facts. That’s what Canadian business owners are looking for when looking for equipment financing. And quite frankly leasing for business has never been more popular, and made more sense.
Let's examine some of those reasons and facts to ensure you are well informed when you are looking to acquire capital assets for your business. And by the way, capital assets sure is a broad term, because it covers technology , plant equipment, business equipment, rolling stock, even your corporate jet .. (We know ' you wish ...').
So why are hundreds of millions of dollars, probably billions of dollars leased in Canada every year under an equipment financing strategy? It all comes down to a common saying among leasing people, which is simply that you generate profits and sales by using assets, not owning or paying outright for them .
The good news about leasing for business is that the key word is flexibility - credit approvals are more flexible, cash flows can easily be structured to meet your needs, and various balance sheet and tax benefits accrue to companies who lease.
We find in talking to clients looking for innovative lease financing options that we can talk all we want about off balance sheet, tax benefits, depreciations strategies, etc - but, at the end of the day they are simply concerned with getting credit approval and conserving cash. Otherwise of course these assets must be purchased out of bank lines that have already been tightened by your bank.
When we talk to companies that are using effective equipment financing strategies we find, more often than not, that they are simply ahead of their competition in innovative assets that drive revenues and profits. That’s simply of course because there is no huge outlay of capital when acquiring these assets, which more likely than not are depreciating anyway.
Don’t forget also that taxes are paid as part of your monthly installment when are leasing for business assets - a classic working capital conservation strategy. The bottom line is that your firm can grow when you have the ability to conserve cash flow and use it for operating needs and further re investment.
It sometime is difficult for business owners to determine who the right leasing partner is. There are hundreds of firms, many are in fact not Canadian, and all firms have different credit, deal size, and interest rate policies related to how transactions are structured. If you are looking for a quick way to navigate the entire equipment financing marketplace in Canada speak to a trusted, credible and experienced Canadian business financing advisor who will assist you in completing a transaction that makes sense and achieves the approval and benefits your firm is looking for.
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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 7 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/equipment_financing_leasing_for_business.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, January 11, 2011
Monday, January 10, 2011
How The Right Factoring Firms in Canada Can Provide Financing Factor Facilities Confidentially
You've heard about it - You suspect your competitors use it, you think it might work for you; it’s just that you don’t fully understand what it is! We're talking about factoring firms in Canada, and why financing factoring in the Canadian factor marketplace gains traction daily among small and medium sizes businesses all across Canada.
Let’s help you examine what this type of financing is, why it is grossly misunderstood by many business owners and financial managers, what it costs, and how it works. That’s a mouthful of information!
Financing factoring is an option you have to financing your business - it’s as simple as that. Clients are usually concerned about two things, how it works, and what does it cost?
Those are typical questions, in addition to wanting to understand the benefits of this type of Canadian business financing.
At its basic core the factor firm is a buyer of your receivables. The good news is that when you sell them you get immediate cash - we are talking same day cash. That brings to bear one of the largest misconceptions about this type of business financing, because the use of factoring firms in Canada you have eliminated the need to wait for the collection of your receivables. Typically these days clients are waiting anywhere from 30 ( you wish !) to 90 days, sometimes longer to collect their cash and generate cash flow and working capital back into their firm .
The cost of financing factoring in Canada generally is in the 1-3% per month range - while that initial information is often perceived as high to many clients the reality is they are spending that much, and more by carrying those receivables 90 days, and being further unable to utilize that cash to sell more and generate more profits.
So you can quickly see that with the right type of factor facility in Canada you have the ability to generate huge amounts of working capital and then in turn sell more, maintain relationships with suppliers on a better basis, and, as we said, create more profits, hopefully So that is what factoring is and why it can work for you.
But here's the biggest secret we can share - by working with the right factor firm or Canadian business financing expert and advisor you can actually create a facility that one ups your competition . That is because the factoring they are utilizing invoices the factor firm verifying billing and collecting with their clients. What you should actually be striving for is a confidential invoice financing facility that allows you to collect and bill your own receivables, with you in control, not the other factoring firms in Canada.
So, in summary, if you are carrying receivables, short on cash flow and working capital, financing factoring is clearly an option and solution. The optimal facility is the C I D - Confidential invoice discounting. Speak to a experienced, trusted, and credible Canadian business financing advisor who can assist you in putting together a facility that works.
--
Stan Prokop - founder of 7 Park Avenue Financial -
http://www.7parkavenuefinancial.com
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/financing_factoring_factoring_firms_canada_factor.html
Let’s help you examine what this type of financing is, why it is grossly misunderstood by many business owners and financial managers, what it costs, and how it works. That’s a mouthful of information!
Financing factoring is an option you have to financing your business - it’s as simple as that. Clients are usually concerned about two things, how it works, and what does it cost?
Those are typical questions, in addition to wanting to understand the benefits of this type of Canadian business financing.
At its basic core the factor firm is a buyer of your receivables. The good news is that when you sell them you get immediate cash - we are talking same day cash. That brings to bear one of the largest misconceptions about this type of business financing, because the use of factoring firms in Canada you have eliminated the need to wait for the collection of your receivables. Typically these days clients are waiting anywhere from 30 ( you wish !) to 90 days, sometimes longer to collect their cash and generate cash flow and working capital back into their firm .
The cost of financing factoring in Canada generally is in the 1-3% per month range - while that initial information is often perceived as high to many clients the reality is they are spending that much, and more by carrying those receivables 90 days, and being further unable to utilize that cash to sell more and generate more profits.
So you can quickly see that with the right type of factor facility in Canada you have the ability to generate huge amounts of working capital and then in turn sell more, maintain relationships with suppliers on a better basis, and, as we said, create more profits, hopefully So that is what factoring is and why it can work for you.
But here's the biggest secret we can share - by working with the right factor firm or Canadian business financing expert and advisor you can actually create a facility that one ups your competition . That is because the factoring they are utilizing invoices the factor firm verifying billing and collecting with their clients. What you should actually be striving for is a confidential invoice financing facility that allows you to collect and bill your own receivables, with you in control, not the other factoring firms in Canada.
So, in summary, if you are carrying receivables, short on cash flow and working capital, financing factoring is clearly an option and solution. The optimal facility is the C I D - Confidential invoice discounting. Speak to a experienced, trusted, and credible Canadian business financing advisor who can assist you in putting together a facility that works.
--
Stan Prokop - founder of 7 Park Avenue Financial -
http://www.7parkavenuefinancial.com
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/financing_factoring_factoring_firms_canada_factor.html
Sunday, January 9, 2011
How To Raise Money For Film Financing via Ontario and BC film grants and Tax Credits
Can your film financing (television and animation also by the way) via Ontario and BC film grants and tax credits be the final piece of your project financing puzzle. We'll let you decide but we can’t imagine you not entertaining any financing, that is non repayable, that might cover 30 -45% of your entire project budget.
In order to achieve financing success you need expert help and information on how the tax credit and film financing area works in Canada. Two of the most common regions for film, production, and therefore tax credits are Ontario and BC ( British Columbia ) , but not everyone is aware that pretty well every Canadian province, in conjunction with Revenue Canada ( for you Americans that’s our version of the IRS !) has a robust film tax credit program.
Only when you master the techniques and processes around film financing and the use of the generous tax credits will your project be properly financed - That’s of course unless you're a major studio, but that’s not the clients we're addressing here.
We should note also that once you develop a process, and have a proper team around that typically an entertainment accountant, a lawyer, and a production accountant) then you can pursue and replicate the same process of funding your projects via Ontario and BC film grants and tax credits for all future projects.
The film tax credits in effect ' bridge the gap ' between your vision of the project, its potential financial success, and your ability to fund and complete the project.
Film tax credits and film financing happens of course everywhere in the world. Where Canada excels is the fact that you have generally uniform process for the entire country and the program is well funded and generally very efficiently administered. It's one of the few times in our business careers where the line ' I'm from the government and here to help ‘makes actual sense!
Lets use Ontario as a quick example of how to raise the tax credit financing you need. The Ontario program is so efficient these days that the applications for financing are actually done online via the government body that administers and approves the tax credit certificates. However, before you get to that stage, as we noted earlier, you need to be in a position to have a proper budget in place that will reflect what the eligible spend is on the items that are being funded by the tax credit.
As a quick rule of thumb you can generally expect your budget to return approximately 35% of your labour expenditures for a production filmed or produced here in Ontario. The reality is that if you film outside of the Greater Toronto Area formulas are in place that further enhances the credits by an additional 10 per cent.
The additional great news we share with clients is that your tax credits are financeable. That dramatically changes a good deal into a great deal because you can receive loan financing on the tax credit either during production as you spend, or when completed and you have your final certificates in place . Naturally for your film tax credit to be financed you need to have a proper legal entity in place (commonly known as special purpose vehicles - SPV) and your tax returns and filings must be up to date.
Raising money for film financing involves 3 components, equity, debt and mezzanine, and tax credit financing. Let Ontario and BC film grants and tax credits be the final piece of your financing puzzle for your project in film, TV, and animation. Speak to a trusted, credible and experience Canadian business financing advisor in the film tax credit area to ensure you maximize this great finance strategy for your project.
--
Stan Prokop - founder of 7 Park Avenue Financial -
http://www.7parkavenuefinancial.com
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.parkavenuefinancial.com/film_financing_ontario_bc_film_grants_tax_credits.html
In order to achieve financing success you need expert help and information on how the tax credit and film financing area works in Canada. Two of the most common regions for film, production, and therefore tax credits are Ontario and BC ( British Columbia ) , but not everyone is aware that pretty well every Canadian province, in conjunction with Revenue Canada ( for you Americans that’s our version of the IRS !) has a robust film tax credit program.
Only when you master the techniques and processes around film financing and the use of the generous tax credits will your project be properly financed - That’s of course unless you're a major studio, but that’s not the clients we're addressing here.
We should note also that once you develop a process, and have a proper team around that typically an entertainment accountant, a lawyer, and a production accountant) then you can pursue and replicate the same process of funding your projects via Ontario and BC film grants and tax credits for all future projects.
The film tax credits in effect ' bridge the gap ' between your vision of the project, its potential financial success, and your ability to fund and complete the project.
Film tax credits and film financing happens of course everywhere in the world. Where Canada excels is the fact that you have generally uniform process for the entire country and the program is well funded and generally very efficiently administered. It's one of the few times in our business careers where the line ' I'm from the government and here to help ‘makes actual sense!
Lets use Ontario as a quick example of how to raise the tax credit financing you need. The Ontario program is so efficient these days that the applications for financing are actually done online via the government body that administers and approves the tax credit certificates. However, before you get to that stage, as we noted earlier, you need to be in a position to have a proper budget in place that will reflect what the eligible spend is on the items that are being funded by the tax credit.
As a quick rule of thumb you can generally expect your budget to return approximately 35% of your labour expenditures for a production filmed or produced here in Ontario. The reality is that if you film outside of the Greater Toronto Area formulas are in place that further enhances the credits by an additional 10 per cent.
The additional great news we share with clients is that your tax credits are financeable. That dramatically changes a good deal into a great deal because you can receive loan financing on the tax credit either during production as you spend, or when completed and you have your final certificates in place . Naturally for your film tax credit to be financed you need to have a proper legal entity in place (commonly known as special purpose vehicles - SPV) and your tax returns and filings must be up to date.
Raising money for film financing involves 3 components, equity, debt and mezzanine, and tax credit financing. Let Ontario and BC film grants and tax credits be the final piece of your financing puzzle for your project in film, TV, and animation. Speak to a trusted, credible and experience Canadian business financing advisor in the film tax credit area to ensure you maximize this great finance strategy for your project.
--
Stan Prokop - founder of 7 Park Avenue Financial -
http://www.7parkavenuefinancial.com
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.parkavenuefinancial.com/film_financing_ontario_bc_film_grants_tax_credits.html
Saturday, January 8, 2011
Your Company Qualifies For A sr ed tax credit financing - Can you factor sred? Yes you can!
Many companies in Canada taking advantage of the sred program (formally called the Scientific Research and Experimental Development) are surprised to find that they can in effect ' cash flow ' or 'monetize' that claim into the liquid gold business calls cash flow.
So, does sred financing make sense for your firm - by the way, we think it does... and how can you ensure you qualify? Let's ensure we cover off some of the basics around those issues in order for you to determine if sred finance makes sense for you.
If we go back to square one it all comes down to knowing what the program is, ensuring you qualify, and then having a claim to submit. SRED claims are submitted when you file your year end tax return.
If you have never filed a sred claim 2 key points immediately are a focus of discussion when we meet with clients - first of all you have to have the technical expertise to prepare a claim. Secondly, in the last year or so the government has altered the program in order to make submission more expeditious. You of course need to be aware of the new format guidelines, which in effect simplify your preparation and filing process.
In our opinion, and most agree we are quite sure, you want a sred consultant to prepare your claim. These are folks in private industry who specialize in preparing claims, and more often than not they have done work in your industry. We are quite sure we have your agreement than an expert in any industry is better than a rookie.
Technically your accountant could prepare you claim, but we're often surprised to hear clients tell us that their accountant was not even aware of the program!
In order to receive funds for your sred credit - and by the way these funds are non - repayable (yes you heard us correctly) you simply need to file a qualified claim.
Waiting for your refund is what sr Ed tax credit finance is all about. Sred financing is based on the premise that your firm could use the cash flow today, instead of waiting for weeks, months, or even a year in some cases.
So how do you factor, or discount, or cash flow, or monetize that sred claim. (All those terms mean the same thing). It’s a simply process; locate a specialist in Canadian business financing who can assist you in preparing a simply application that includes your sred claim and basic financial application info. Claims are generally financed at 70% loan to value, meaning the 30% is held back as a buffer. No payments are made on the financing and the final cheque from the government is netted against your advance.
In the meantime you can make use of those funds for any general corporate purpose.
So - do you qualify for a sred tax credit financing - if you have a claim you do? Should you consider a factor or finance scenario around your claim - that’s for you to decide and for us to suggest. And by the way, if you don’t need cash or working capital, then don’t finance the claim - but who is in that position these days?
--
Stan Prokop - founder of 7 Park Avenue Financial -
http://www.7parkavenuefinancial.com
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/sr_ed_tax_credit_sred_financing_factor_sred.html
So, does sred financing make sense for your firm - by the way, we think it does... and how can you ensure you qualify? Let's ensure we cover off some of the basics around those issues in order for you to determine if sred finance makes sense for you.
If we go back to square one it all comes down to knowing what the program is, ensuring you qualify, and then having a claim to submit. SRED claims are submitted when you file your year end tax return.
If you have never filed a sred claim 2 key points immediately are a focus of discussion when we meet with clients - first of all you have to have the technical expertise to prepare a claim. Secondly, in the last year or so the government has altered the program in order to make submission more expeditious. You of course need to be aware of the new format guidelines, which in effect simplify your preparation and filing process.
In our opinion, and most agree we are quite sure, you want a sred consultant to prepare your claim. These are folks in private industry who specialize in preparing claims, and more often than not they have done work in your industry. We are quite sure we have your agreement than an expert in any industry is better than a rookie.
Technically your accountant could prepare you claim, but we're often surprised to hear clients tell us that their accountant was not even aware of the program!
In order to receive funds for your sred credit - and by the way these funds are non - repayable (yes you heard us correctly) you simply need to file a qualified claim.
Waiting for your refund is what sr Ed tax credit finance is all about. Sred financing is based on the premise that your firm could use the cash flow today, instead of waiting for weeks, months, or even a year in some cases.
So how do you factor, or discount, or cash flow, or monetize that sred claim. (All those terms mean the same thing). It’s a simply process; locate a specialist in Canadian business financing who can assist you in preparing a simply application that includes your sred claim and basic financial application info. Claims are generally financed at 70% loan to value, meaning the 30% is held back as a buffer. No payments are made on the financing and the final cheque from the government is netted against your advance.
In the meantime you can make use of those funds for any general corporate purpose.
So - do you qualify for a sred tax credit financing - if you have a claim you do? Should you consider a factor or finance scenario around your claim - that’s for you to decide and for us to suggest. And by the way, if you don’t need cash or working capital, then don’t finance the claim - but who is in that position these days?
--
Stan Prokop - founder of 7 Park Avenue Financial -
http://www.7parkavenuefinancial.com
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/sr_ed_tax_credit_sred_financing_factor_sred.html
Friday, January 7, 2011
Franchise Funding and Financing Options for Franchisees In Canada
As a new potential franchisee in the Canadian franchise industry you want, and need! … some basic info around how franchise funding works in Canada. Those financing options may be critical to your overall success as a new entrepreneur in your chosen industry.
Ironically experts tell us that one of the main reasons that people don’t go into the franchise arena as independent business owners and entrepreneurs is because they feel they either did not have or could not raise the funding for the business.
Naturally in the current tough ( but getting better!) economic environment start up capital for any business is a challenge - so having access to the best information and resources around franchise funding is clearly a major key to success .
It kind of all starts with a business plan , we meet with many clients who have initially been refused for franchisee financing for the very simply reason they weren’t prepared and the reality is you don’t get a lot of chances in financing a new business when you are unprepared .
If you aren’t able to prepare a proper plan yourself you can speak to a trusted advisor in Canadian business franchise financing and one can easily be prepared for you - it’s all about working with an expert. The key part of any business plan is that you can present your financials properly - which simply means what sales you feel you can achieve, what your expenses will be, and what projected profits will be . A key element of all that is your ability to generate cash flow to repay your franchise funding loans - which makes perfect sense - from the lenders perspective of course!
Your plan has to be presented properly and you should be able to anticipate any questions the lender will have about your experience, how you will run your business, what other resources you can bring to the table, etc.
It’s not always about size in life, but in this case we do advise clients that the larger your franchise financing requirement is - well you should be expected to have a more detailed proposal and plan.
Franchisees in Canada may not be aware that their biggest ally Vis a Vis a financing option for their new business is the Canadian government! That tends to floor our clients when we share that info with them - but the reality is that the majority of the financing in Canada for franchisees revolves around a government sponsored loan that is formally called the BIL or CSBF loan program. It is underwritten by he government, but administered by the banks in Canada
Rates for the above mentioned franchise funding and loan program are very competitive and there are some key requirements you should have ready when you submit your proposal for consideration. And by the way, OPM does not work in franchise financing in Canada - that being the acronym for other peoples money! We are always explaining to clients that the funding of their business comes from two sources, the loan or loans, and their own personal equity injection - so you must absolutely be prepared to make a personal equity investment in the business.
How much of your own equity is required - that can be calculated by simple formulas pertaining to the amount you have to borrow and your ability to meet debt to equity ratios and working capital solvency .
There are some great franchise opportunities in Canada. Investigate your financing options with a trusted, credible, and experienced Canadian business financing advisor who will work wit you as a potential franchisee to achieve business financing success.
---
Stan Prokop - founder of 7 Park Avenue Financial -
http://www.7parkavenuefinancial.com
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/franchise_funding_financing_options_franchisees.html
Ironically experts tell us that one of the main reasons that people don’t go into the franchise arena as independent business owners and entrepreneurs is because they feel they either did not have or could not raise the funding for the business.
Naturally in the current tough ( but getting better!) economic environment start up capital for any business is a challenge - so having access to the best information and resources around franchise funding is clearly a major key to success .
It kind of all starts with a business plan , we meet with many clients who have initially been refused for franchisee financing for the very simply reason they weren’t prepared and the reality is you don’t get a lot of chances in financing a new business when you are unprepared .
If you aren’t able to prepare a proper plan yourself you can speak to a trusted advisor in Canadian business franchise financing and one can easily be prepared for you - it’s all about working with an expert. The key part of any business plan is that you can present your financials properly - which simply means what sales you feel you can achieve, what your expenses will be, and what projected profits will be . A key element of all that is your ability to generate cash flow to repay your franchise funding loans - which makes perfect sense - from the lenders perspective of course!
Your plan has to be presented properly and you should be able to anticipate any questions the lender will have about your experience, how you will run your business, what other resources you can bring to the table, etc.
It’s not always about size in life, but in this case we do advise clients that the larger your franchise financing requirement is - well you should be expected to have a more detailed proposal and plan.
Franchisees in Canada may not be aware that their biggest ally Vis a Vis a financing option for their new business is the Canadian government! That tends to floor our clients when we share that info with them - but the reality is that the majority of the financing in Canada for franchisees revolves around a government sponsored loan that is formally called the BIL or CSBF loan program. It is underwritten by he government, but administered by the banks in Canada
Rates for the above mentioned franchise funding and loan program are very competitive and there are some key requirements you should have ready when you submit your proposal for consideration. And by the way, OPM does not work in franchise financing in Canada - that being the acronym for other peoples money! We are always explaining to clients that the funding of their business comes from two sources, the loan or loans, and their own personal equity injection - so you must absolutely be prepared to make a personal equity investment in the business.
How much of your own equity is required - that can be calculated by simple formulas pertaining to the amount you have to borrow and your ability to meet debt to equity ratios and working capital solvency .
There are some great franchise opportunities in Canada. Investigate your financing options with a trusted, credible, and experienced Canadian business financing advisor who will work wit you as a potential franchisee to achieve business financing success.
---
Stan Prokop - founder of 7 Park Avenue Financial -
http://www.7parkavenuefinancial.com
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/franchise_funding_financing_options_franchisees.html
Thursday, January 6, 2011
Keep Your Company Moving With An Asset Based Lending Operating Line Of Credit - Your Competitors Do !
You've been watching them and it’s quite disturbing. Every business keeps an eye on its competitors - that's what business is about. So why does the competition seem to enjoy what seems like unlimited cash flow for their sales and growth and expansion.
We think we know the reason why, and its called asset based lending. This type of business financing, relatively speaking is new to Canada and supercharges cash flow and liquidity.
Naturally our clients , being the conservative types they are wonder aloud about several key issues - what are the qualifications for this type of financing, what is the min and max deal size, and what are some of the costs of this type of financing .
Let’s cover those issues off in an effort to ensure you understand the power of asset based lending and why this type of operating line of credit could be your savior in business financing.
Qualifications? There is basically one! You need assets - otherwise asset based lending doesn’t work. The asset based line of credit competes with the operating line of credit offered by Canadian chartered banks . It is provided by non bank institutions that are specialized in asset based lending. Banks, on the other hand are specialized in financial statements we can add facetiously. What we mean by that of course is simply that charted bank business lines of credit in Canada focus on overall financial statement quality - the key underpinnings are solid financial statements reflecting profit, equity, liquidity, and overall solid cash flow.
On the other hand the asset based lender only wants to know one thing - well two actually, do you have assets and are they managed well. What are those assets - they tend to be receivables, inventory, and in some cases equipment and real estate.
These assets mentioned above secured an operating line of credit which is margined on a regular basis. What interests our clients is of course the margining of those assets, and asset based lending does that very well. Typical structures are 90% of receivables, 50-75% advances on inventory (yes you heard us correctly) and working capital financing provided on the appraised value of hard assets that are unencumbered - i.e. the real estate and equipment if you have them and need financing for them.
The ABL (that’s the acronym for this type of financing) gives you cash flow to meet payroll, build inventory, and basically grow your company.
Facility sizes for asset based lending tend to start at 250k and above - otherwise the facility , if under that amount, tends to be a receivable financing facility , which by the way works quite nicely also .
Circling back to our final client question - cost. We can make a general statement that if your deal size is significant, i.e. over 5m you can generally achieve rates that are comparable with the bank. Facilities under that amount are more expensive than bank financing - but , guess what ,you get all the liquidity you need, which has its benefits re growing your business, turning your assets faster, enhancing relationships with suppliers, and taking on more business than you ever could before .
Looking for an operating line of credit - ABL could be your solution - Speak to a trusted, credible and experienced Canadian business financing advisor today on this new form of financing your working capital.
--
Stan Prokop - founder of 7 Park Avenue Financial -
http://www.7parkavenuefinancial.com
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/asset_based_lending_operating_line_of_credit.html
We think we know the reason why, and its called asset based lending. This type of business financing, relatively speaking is new to Canada and supercharges cash flow and liquidity.
Naturally our clients , being the conservative types they are wonder aloud about several key issues - what are the qualifications for this type of financing, what is the min and max deal size, and what are some of the costs of this type of financing .
Let’s cover those issues off in an effort to ensure you understand the power of asset based lending and why this type of operating line of credit could be your savior in business financing.
Qualifications? There is basically one! You need assets - otherwise asset based lending doesn’t work. The asset based line of credit competes with the operating line of credit offered by Canadian chartered banks . It is provided by non bank institutions that are specialized in asset based lending. Banks, on the other hand are specialized in financial statements we can add facetiously. What we mean by that of course is simply that charted bank business lines of credit in Canada focus on overall financial statement quality - the key underpinnings are solid financial statements reflecting profit, equity, liquidity, and overall solid cash flow.
On the other hand the asset based lender only wants to know one thing - well two actually, do you have assets and are they managed well. What are those assets - they tend to be receivables, inventory, and in some cases equipment and real estate.
These assets mentioned above secured an operating line of credit which is margined on a regular basis. What interests our clients is of course the margining of those assets, and asset based lending does that very well. Typical structures are 90% of receivables, 50-75% advances on inventory (yes you heard us correctly) and working capital financing provided on the appraised value of hard assets that are unencumbered - i.e. the real estate and equipment if you have them and need financing for them.
The ABL (that’s the acronym for this type of financing) gives you cash flow to meet payroll, build inventory, and basically grow your company.
Facility sizes for asset based lending tend to start at 250k and above - otherwise the facility , if under that amount, tends to be a receivable financing facility , which by the way works quite nicely also .
Circling back to our final client question - cost. We can make a general statement that if your deal size is significant, i.e. over 5m you can generally achieve rates that are comparable with the bank. Facilities under that amount are more expensive than bank financing - but , guess what ,you get all the liquidity you need, which has its benefits re growing your business, turning your assets faster, enhancing relationships with suppliers, and taking on more business than you ever could before .
Looking for an operating line of credit - ABL could be your solution - Speak to a trusted, credible and experienced Canadian business financing advisor today on this new form of financing your working capital.
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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 7 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/asset_based_lending_operating_line_of_credit.html
Wednesday, January 5, 2011
Your Executive Decision in 2011 - Working Capital Cash Flow! Working Capital Finance Is Easier Than You Think!
It’s resolved, all those in favor say aye! Doesn’t the timing to reassess your working capital cash flow needs heading into 2011 seem perfect? Working capital finance solutions are available, and they are not always what you thought they might be.
Let’s try and be realistic and positive here. The recession (we read this in the newspaper today, so it must be true) is over, your business is on the rebound, but, those same cash flow challenges still haunt your ownership and management on a daily basis.
Your ability to put together effective techniques and solutions around working capital financing always goes back o the management of your short term assets such as cash, receivables, and inventories. And yes, it’s always a balancing act that challenges you everyday, we know that. The cash requirements come out of the need to meet your day to day expenses, pay employees, and make payments on any debt obligations you have
In talking to clients inventory levels that allow you to run your business, minimize constant re ordering, and taking advantage of price and volume discounts continue to be a main challenge.
Can this challenge be addressed? It sure can, and in a number of ways. You can arrange a long term unsecured working capital loan to address product needs - alternatively you can blend the borrowing power of your receivables and inventory on a combo basis via a working capital facility that margins receivables and inventory. This facility, called an asset based line of credit when it’s for a larger amount will turn your company into a constant cash flow machine if you manage it properly. We point out to clients that this type of working capital cash flow facility we just described is offered by a non bank private finance firm, so we encourage clients to speak to a Canadian business financing advisor as to how these facilities work.
Working capital finance inevitably focuses on the management of your receivables. You can amend credit policies, shorter your payment terms, extend those terms, or simply collect your receivables more efficiently and aggressively. Those are all measures of how you identify your credit policy. The other side of that coin is how you finance that huge investment you more than likely have in a.r.
In Canada several clear options are available, for smaller firms you have the ability to generate an unsecured business merchant cash advance against your future sales and receivables, credit card sales included! Medium sized firms in Canada can access the aforementioned working capital facility, aka the asset based line of credit. Larger corporations can entertain the securitization of their receivables via an off balance sheet financing.
There is only one bottom line in working capital cash flow - its simply that you need to understand your cash flow challenge, and then investigate the proper options to remedy that challenge, allowing you to fuel long term growth and profits .
In some cases traditional bank financing, via the right bank and banker will work. When it doesn’t consult a credible, experienced and trusted Canadian business financing advisor who will help you identify real world solutions for cash flow success.
--
Stan Prokop - founder of 7 Park Avenue Financial -
http://www.7parkavenuefinancial.com
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/working_capital_cash_flow_working_capital_finance.html
Let’s try and be realistic and positive here. The recession (we read this in the newspaper today, so it must be true) is over, your business is on the rebound, but, those same cash flow challenges still haunt your ownership and management on a daily basis.
Your ability to put together effective techniques and solutions around working capital financing always goes back o the management of your short term assets such as cash, receivables, and inventories. And yes, it’s always a balancing act that challenges you everyday, we know that. The cash requirements come out of the need to meet your day to day expenses, pay employees, and make payments on any debt obligations you have
In talking to clients inventory levels that allow you to run your business, minimize constant re ordering, and taking advantage of price and volume discounts continue to be a main challenge.
Can this challenge be addressed? It sure can, and in a number of ways. You can arrange a long term unsecured working capital loan to address product needs - alternatively you can blend the borrowing power of your receivables and inventory on a combo basis via a working capital facility that margins receivables and inventory. This facility, called an asset based line of credit when it’s for a larger amount will turn your company into a constant cash flow machine if you manage it properly. We point out to clients that this type of working capital cash flow facility we just described is offered by a non bank private finance firm, so we encourage clients to speak to a Canadian business financing advisor as to how these facilities work.
Working capital finance inevitably focuses on the management of your receivables. You can amend credit policies, shorter your payment terms, extend those terms, or simply collect your receivables more efficiently and aggressively. Those are all measures of how you identify your credit policy. The other side of that coin is how you finance that huge investment you more than likely have in a.r.
In Canada several clear options are available, for smaller firms you have the ability to generate an unsecured business merchant cash advance against your future sales and receivables, credit card sales included! Medium sized firms in Canada can access the aforementioned working capital facility, aka the asset based line of credit. Larger corporations can entertain the securitization of their receivables via an off balance sheet financing.
There is only one bottom line in working capital cash flow - its simply that you need to understand your cash flow challenge, and then investigate the proper options to remedy that challenge, allowing you to fuel long term growth and profits .
In some cases traditional bank financing, via the right bank and banker will work. When it doesn’t consult a credible, experienced and trusted Canadian business financing advisor who will help you identify real world solutions for cash flow success.
--
Stan Prokop - founder of 7 Park Avenue Financial -
http://www.7parkavenuefinancial.com
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/working_capital_cash_flow_working_capital_finance.html
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