Is Business Receivable Invoice Finance your Guaranteed Cash Flow solution ? What Factoring Costs

The ups and downs of business often relate directly to those same ups and downs in business financing - let's examine why invoice finance , i.e. the financing of your business receivable is a guaranteed solution to solve some of those ups and downs.

We're the first to admit that any Canadian business owner or financial manager can be skeptical about the word guaranteed - so we'll offer up the basic facts and let you determine the validity of that ' guarantee '.

Business receivable finance, commonly called factoring is the immediate hard core alternative to monetize your business cycle. Your firm typically is finding cash flow and working capital finance harder to manage, and most probably you have discovered you can access the business financing you need.

To feel better about that ' guarantee ' we mentioned clients want to know what the cost of this type of financing is, and is it easy or cumbersome to use on a day to day basis.

The cost of invoice finance in Canada is widely mis understood. Let's look at a few facts around this issue, which tends to be often the most worrisome part of any clients decision to enter into this type of business receivable financing. First of all the cost of invoice financing is always viewed by customers as an interest rate - the actual lender, who is not financing your receivable (like the bank) is buying your receivable. It's purchased at a discount to yourself, and that discount in Canada can be anywhere from 1-3%. So in determining your interest in factor financing make sure you are singing from the same hymn book as the factoring firm,

Want an easy way to look at the cost of invoice finance? Think of it this way - if you were able to increase your prices by 1-3% , or take the cash you achieve from this type of financing and utilize it for supplier discounts from your vendors you have pretty well just broken even on your business financing . That’s powerful! You have turned your company into an automatic cash flow machine with unlimited credit, without the banks help and all that comes with bank financing.

Let's turn again to our ' guarantee ‘. We can categorically say that if your business is new or a start up, or if you are experiencing high growth, or is unable to access bank financing because of financial challenges you've faced or are facing then business receivable factoring is the guaranteed solution to those challenges . We repeat, none of these 4 issues affects your ability to turn your company into the cash flow machine we describe - that’s the guarantee.

So why aren’t hundreds or thousands of Canadian businesses taking us up on our ' guaranteed financing ' concept? Guess what, they are - everyday hundreds of firms turn to or start exploring this valuable type of business financing.

In summary, determine if your firm fits into the challenged businesses we spoke of. Make sure you understand the real true cost of this financing, which can in many cases increase your access to credit by 100% or more. Speak to a trusted, credible and experienced Canadian business financing advisor and turn that ' guarantee ' we spoke of into successful business receivable financing.

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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/invoice_finance_business_receivable_factoring.html

How Merchant Advance Capital Works in Canada And Why Retail Merchant Financing Produces Cash Flow Today

Numerous small businesses in Canada are investigating merchant advance capital and want to know how this type of retail merchant financing can help solve their cash flow challenges.
We have come to think of it as another version of cash flow financing, also called factoring. Under that type of financing you receive cash immediately for sales as you generate them, less a discount fee. In the case of merchant advance capital financing it’s somewhat similar in that you receive cash flow and working capital financing immediately, but you are pledging a portion of your future credit sales and revenue.
One of the key advantages of this type of financing is that there is no additional debt on your balance sheet - as we noted, there is no fixed payment by our firm - instead a portion or percentage of future sales is used to pay down the loan you receive. You continue paying down the merchant advance capital loan until the loan is totally retired.
In actuality though you are also in a position to renew or increase the loan even during the duration of the initial repayment - in effect it becomes a ' top up ' to your loan. Clients often ask how long the loan can be for - and typically the answer is one year or less.

So why is this type of financing attractive to many Canadian businesses? The reality that most business owners and managers realize is that cash flow fluctuates, as of course do sales. On occasion there are what we can call ' bulges' of activity that require you to purchase more inventory, and, conversely, there are always periods of slowness due to seasonality, etc. So business owners can take solace in the fact that as sales slow down so does the payments on their retail merchant financing loan, since, as we stated, you only pay back the financing from future sales.
Are there alternatives to this type of financing? Of course there are, and typically many clients we speak to have attempted to obtain cash flow financing from their Canadian chartered bank. If your firm is viewed by the bank as retail, or cash business, and you have an inventory component to your business you have of course discovered the general reluctance of banks to participate in this type of financing. Certainly that is the case without you providing additional personal collateral and equity in your business, which many business owners simply cant or don’t want to do.

Speak to a trusted, credible and experienced Canadian business financing advisor as to how merchant advance capital can grow your business and smooth out those cash flow challenges.
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http://www.7parkavenuefinancial.com/retail_merchant_financing_merchant_advance_capital.html

Don't Let ' Good Enough' Be Acceptable In Canadian Equipment Leasing When Structuring A Business Equipment Loan or Lease

Is ' good enough ' acceptable to your firm when you are looking at equipment leasing and arranging a business equipment loan or lease in Canada. We don’t think so and we'll share some fundamental info and strategies that take your business financing to the next level when it comes to benefits.

You have arrived at the lease or buy decision base on your need for new fixed assets for your business. Financing those assets out of regular cash flow, or entering into cumbersome bank loan arrangements isn’t an option.

The use of the asset over the long term should be what drives your financing decisions. Longer term assets require long term financing, and that's what equipment leasing is all about - matching the useful economic life of your asset to your cash flow and financing structure.

We encourage clients to take a hard look at lease term. Don’t let our ' good enough ' statement overtake your decision to properly match he asset term. Many lease firms that are focused on offering one type of term, or one type of lease (there are two types) are going to try and sway you towards their product or service offering. If there were only one lease company in Canada that would be problematic - fortunately there are hundreds!

Business owners and financial managers need to separate. What do we mean by that ?W mean that you must separate the manufacturer and the price of the equipment from the financing . If you are dealing with a mfr that is also the financier of your asset make sure you maximize the benefits of that type of financing, known as ' captive financing ' as its often the best available in terms of rate term , an structure .

The lease financing industry preaches ' 100% ' financing for your business equipment lease and loan needs. The reality is though that often times a down payment of security deposit is required. Make sure that request is reasonable, and competitive, don’t fall into our ' good enough ' scenario of having to accept every term or down payment that is specified in your finance offer.

Structuring is what lease financing is all about. Be armed with a cash flow analysis that makes sense for the type of asset you are acquiring. Remember, if you don’t ask or request a ' vanilla ' or typical lease solution will be offered up - you don’t have to accept that if your cash flow needs, business seasonality, or term of the lease are particular to how you want to benefit from lease financing.

Let's take a quick example - let’s say you are leasing a 100k computer system. The lessor offers you a 5 year lease based on your firms overall credit quality, and requests a 20% down payment. and specifies payments of 1685/mo . Did you know that in many cases you could get the same lease payment for a 3 year term, saving you two years in payments? That’s by utilizing an operating lease and shortening the term. Again, back to our point, don’t let ' good enough ' be your only choice in asset financing.

In summary, every firm in Canada has unique financial needs, and you need lease financing payments, terms, and structures that work for you. Don’t accept ' good enough ' in business financing. Speak to a trusted, credible and experienced Canadian business financing advisor on how you can truly maximize financial benefits of a business equipment loan or lease.

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

Can You Afford Not To Use Film Tax Credits When Financing a Film In Canada - An Investor Primer

Whether it’s a 1 Million dollar independent production, or a 10 Million (or more) project how can you possibly overlook financing a film via film tax credits in the Canadian marketplace? It's no secret if you are ' in the know ' that the utilization of tax credit financing for Canadian film, television and animation projects is often a ' make it , or break it ' component of ultimate success for the financing of your project

The financing of film, TV and digital media productions has radically changed going back to the 1970's. There is even a school of thought that the independent or ‘indie’ projects are in effect impossible to finance. We'll admit that the challenge is significant , but we don’t buy into the ' indie movies are dead' school of thought , especially when you can utilize Canadian film tax credits for a huge ( often 30- 45%) of your production budget . And your ability to arrange independent financing for the tax credit just adds cash flow and working capital to your venture.

The other components of the producers total finance plan of course involve other elements such as foreign pre sales, completion bonds, and the debt and equity component of your project.

So is there a fool proof method to arrange, certify and finance tax credits in Canada in order to appease and satisfy your project investors. In Canada there is only a very small handful of banks which participate in film financing - therefore access to the key players and being able to satisfy their financial requirements is critical.

In Canada there are a number of film tax credits that are spread over Canada's ten provinces. The reality is that sometimes the nature of your project makes it more sensible to focus on a specific province based on your filming or production needs.

The Canadian government, similar to other world geographies, takes a bullish stance on the film, TV an animation industry. Their focus is jobs, tax revenue, and nationalism. Your focus is on getting your project financed.

Let's assume you have a solid finance plan, you have arranged the various components of your equity and debt... how can you now take advantage of financing a film via the tax credit component. It's simple if you have a solid team and advisor in place. By selling and or assigning your tax credits to an independent finance firm or bank you can monetize the credits for cash flow and working capital.

Solid detail in your production budget, a qualified opinion by a film tax accountant, and your experience in completing a project allow you to now monetize your tax credit either on completion of your project, or, if you prefer, on an accrual basis as you start spending on the production.


Financing film tax credits is done by structuring what in effect is a bridge loan based on the collateral of the tax credit . Your ability to provide investors with a solid return on investment through the utilization of effective film tax credits and their financing will only enhance your reputation and chances of project success . Speak to a trusted, credible an experienced Canadian business financing advisor on the proper benefit and utilization of tax credit in successful film, TV an animation financing.

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

What Are The Advantages of Sale Leaseback Equipment Financing In Canada? Are There Alternatives?

Canadian business owners are looking for some information they can trust on the concept of a sale leaseback. Are there advantages to this type of financing, and more importantly, being a business owner or financial manger who likes alternatives, is there another solution to the sale leaseback of equipment cash flow dilemma.

Let’s examine the real world advantages of a sale/leaseback type strategy. When structured properly this type of business financing allows you to obtain additional cash flow and working capital while not giving up the right to the ownership of business assets.

Sale leaseback equipment financing often comes up as a profitable solution when firms are challenged by working capital and cash flow needs and requirements. The reality is that if you structure this type of financing properly it’s the ultimate business financing solution to a temporary business challenge.

It is not secret that the sale and leasing back of business assets becomes more popular when economic times are ' tight '. The strategy is many times a positive and good decision, because you are freeing up cash that is sitting in fixed assets that are not utilizing their maximum earning power for your business.

Let’s not also forget that your balance sheet also improves at the same time because your overall debt to tangible net worth improves when utilizing a sale leaseback financing, and your write off (depreciation) and financing costs are also lowered at the same time! That's a solid one two punch of good business news to any business owner.

In some ways this method of business re financing is an alternative and creative strategy. What your firm does with that additional capital is of course your decision - it can be used for general working capital purposes, a down payment on new and required assets, or to retire additional debt or loans that you might be carrying on your balance sheet. If you can use the new freed up capital to increase revenues and profits that is simply an additional benefit.

We caution clients to look at two key areas in this type of transaction. It is critical to maximize the value of the transaction, so more often than not a qualified appraisal of the asset has true value for the business owner, and should not be considered a wasted expense.

Remember also that most lenders when financing a sale leaseback transaction financing what is known as a percentage of loan to value. An example might be that if an asset is appraised at 200,000.00 the lender might as a policy loan 60% of that value, so your ability to increase the value of the asset via a qualified appraisal provides additional working capital to you and of course comfort to the lessor or lender. Rates are the second item to investigate, as you want to ensure you receive a market rate for this type of financing, which typically carries a premium to new equipment financing.

Is there an alternative to a sale leaseback equpment financing transaction? One of our favorites is a short term bridge loan on the asset. In this transaction you are not locked into a longer fixed term that often comes with sale lease back financing, and you have the option to often pre pay or temporarily renew the bridge loan on an annual basis. Bottom line, a very viable alternative.

Investigate the benefits and the alternatives to sale leaseback equipment financing if your firm has an interim cash flow or balance sheet enhancement need. Speak to a trusted, credible and experience Canadian business financing advisor who can assist you in structuring a transaction that optimizes benefits and increases cash flow.


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

Discover The Foremost Method Of How To Get Financing When You Buy a Franchise Opportunity in Canada

In business, a discovery that either makes you more competitive, or in our case ' successful ' is clearly a good thing. Let’s review the most popular method of financing a franchise opportunity and how to go about ensuring you achieve that success.

It's not secret that the franchise business has survived the economic downturn of 2008 and 2009 quite positively. Thousands of franchisees are springing up in Canada and both banks and other lenders clearly view your decision on buying a franchise as an area they are prepared to support.

The decision to buy a franchise is sometimes easier than how to arrange your financing for the business, because we think in many cases you have been able to match your skill sets and interests to a business you have probably wanted to get into for quite sometime. Financing that opportunity is probably an area that you’re not necessarily comfortable in if you don’t have a finance background.

However, don't despair, because if you are properly armed with the right strategy and info and advisory support you are in a strong position to complete your financing.

So what exactly is the foremost method of arranging finances when you buy a franchise? It comes as a shock to many that the majority of financing in Canada is done under a government loan program called the BIL/CSBF program. The government? Absolutely.

Consider this. Would you not agree that if you arrange financing for your business under a 5 or 7 year term loan, at rates that many established businesses can’t even get, and, here’s the kicker, you don’t even have to provide a 100% personal guarantee for the financing. Enough said, we think we have made our point.

Unfortunately just knowing about the program doesn’t guarantee financing your opportunity will be successful. You need to understand the parameters of the program, how to prepare a proper submission around your new business, and finally, ensure you meet some general criteria around what will constitute a solid approval.

Naturally the whole opportunity becomes even more serious based on the total cost of the franchise and the personal investment in time and funds you are prepared to make in the business. Generally in our experience you can expect to receive only minimal support or financing advice from the franchisor. In many cases that is simply because there are various legal ramifications around franchisors providing you with estimates or guarantees of profits, and success. But lets be honest also, the franchisors business is selling franchises, not financing your new business opportunity.

The key essentials of the BIL program are a solid business plan that provides a good overview of the franchise opportunity, your background, and most importantly, the numbers. Does it surprise you that the lender focuses on how they will get repaid - it shouldn’t. So your business proposal should be realistic and focus on cash flow, profits, and debt repayment.

In summary, how to pick and buy a franchise is a challenge we'll leave up to yourself. Financing a franchise is straightforward if your arm yourself with the most popular financing option, have a clear proposal, and ensure you meet very basic criteria such as an investment on your part in funds, as well as standard application paperwork .

Speak to a trusted, credible, and experience Canadian business financing advisor in the franchise area if you need assistance in how to arrange financing for your franchise opportunity.
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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/how_to_buy_franchise_opportunity_financing.html

Breakthrough Lending Discovery ! How To Triple Access To Business Financing Via An ABL Asset Based Facility

Impossible clients say. How, in the current business financing environment could any company triple their access to working capital? The answer is an ' ABL ' or asset based lending facility for cash flow needs. Lets examine what, who, and how!

As asset finance is more of a general term we find lets confirm first exactly what we are talking about. That is to say we're focusing on what we can call a comprehensive business line of credit (not through a bank by the way) for your receivable, inventory and equipment and real estate financing needs. The industry term for this credit or business financing facility is an ' ABL ' or Asset Based Line of Credit.

While this type of lending has been popular and very prevalent in the United States for years it continues to gain traction in Canada everyday. A lot of mis information exists around this type of lending and financing for a variety of reasons - those include cost of the financing, how it works, and who offers it. So you are forgiven for not fully understanding or knowing about an asset based facility for cash flow and working capital - trust us you are in good company on that one!

Cost is a factor in any financing that your firm undertakes, and when we are talking about the largest business credit facility you can have cost is important. Larger Abl facilities for medium size and larger companies are very competitive with Canadian chartered banks. Smaller firms and start ups - yes even a start up can employ this type of financing! pay a premium to access this type of credit . However that premium can be explained or covered off in a number of ways.

First of all if you could double or triple your access to working capital and cash flow business financing via an asset based facility then would that lending be worth it. We certainly think it does, and have numerous examples of firms that have just done that. Recently one firm who envisioned much stronger growth in the 2011 economic environment replaced their chartered bank facility with an asset based line of credit. The facility gave them 90% advance on receivables, as well as a 60-70% advance or borrowing base on inventory. They were previously ' capped' on inventory at an arbitrary smaller amount that had nothing to do with the true value of the inventory.


ABL asset based lending is done via highly specialized firms. Typically they are not banks, they are independent, and they are experts in only one thing - your assets! As a result the due diligence and value they place on your assets can in our experience at a minimum double you access to business credit. In some cases firms that were self financing previously and had no access to business financing now have significant borrowing facilities in place.

Interested? Want to separate the wheat from the chaff as they say, on who offers ABL business financing in Canada, how it works and what it costs. Seek out an expert, credible an experienced Canadian business financing advisor for your business lending needs.

P.S. Let us know if you were able to double or triple your working capital requirements!

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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/business_financing_abl_asset_based_facility.html