Unique Canadian Cash Flow Financing & Working Capital Loans - Finance Options

The Gap. That was the essence of a recent business story in Canada's national business newspaper regarding business financing optimism in Canadian business.At the core of business finance is financing working capital, generating cash flow and being aware of loans and finance solutions that make sense for your firm from a cost and benefits manner.

The incredible part of the May 2011 article was that although Canadian business owners and financial managers were more optimistic about their business these days, dramatically so, but 70% of respondents said that access to ' cash ‘ and capital was still a challenge . Wow. do we ever envy that other 30% who seems to have all the cash flow and working capital financing they need!

There are some unique working capital loans and strategies that work for you, it’s simply a matter of understanding what your current needs are, assessing your financial position, and most importantly, understanding your financial alternatives.
When we think of financing working capital you need to focus on the following, receivables and inventory, other assets, as well as your ability to re structure and re organize your firm if in fact that’s required .

In many cases a simple re financing of existing, owned assets is a unique strategy that often makes sense. This can be done via a sale leaseback strategy, or, not as commonly used, a short or intermediate bridge loan of refinanced assets such as equipment, real estate, etc.

At the core of looking at either traditional or more alternative or unique cash flow and finance solutions is simply to understand the cost and benefits of these strategies. Those costs vary with your overall credit quality and can range from a point or two over prime to 1-2% per month, depending on your current financial position.

Many business owners wrestle with how to simply understand working capital, which allows them to then determine their needs. Unfortunately the text book or your accountant doesn’t do a great job of that... in that they tell us go to the balance sheet, subtract current liabilities from current assets, and that’s supposedly your magic number. We wish!

So we tell clients to look at some very rudimentary but useful tools and allow them to assess their cash flow and loans strategies. One is simply the metrics of the operating cycle - understanding how fast you collect your receivables, how your inventory turns, and the average number of days you take to pay your key payables. Simply tally up the total amount of days in your A/R and inventory and you will find you can’t finance that excess just by stalling suppliers/payables.

The shortfall brings us to those solutions you are looking for. You could finance all your working capital if you paid your suppliers every half year or so, but they won't really buy into that plan!

In Canada the traditional solutions for working capital are bank lines of credit - the only caveat being you have got to have decent financial strength, profitability, good owner credit and assets, etc.

Failing bank financing in Canada you have the ability to access just receivable financing - our favorite facility is called C I D - a method in which you receive cash for your receivables immediately, and bill and collect under your own control.

Other more robust solutions are what we term working capital facilities or asset based loans. These finance loans (they are not loans per se) combine your receivables, inventory and fixed assets into one revolving line of credit. The more sophisticated a facility you utilize brings you maximum margining of your assets.

Alternatively a more esoteric candidate on the horizon is purchase order financing and contract financing - your suppliers are paid by the lender. It’s more costly, but boy does it work to allow you to generate sales you may never have been able to entertain on your own.

So whats our bottom line - we guess it’s simply don't despair! Understanding your operating cycle, assessing the amount of capital you need, and then weighing those needs against the best solution, traditional or alternative, is clearly your recommended route.

More info? Questions ? Ready to begin? Simply seek the services of a trusted, credible and experienced Canadian business financing advisor who can provide you with cash flow finance solutions that make sense.



Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.parkavenuefinancial.com/cash_flow_financing_working_capital_loans_finance.html

Best Tips On Good Lease Rates , Pricing and Leasing Options in Canada

Is it possible to feel that you are getting the best lease rates and pricing with respect to equipment financing options you are considering? We think your leasing and asset financing prowess can be substantially increased with just some key basics under your belt.

Let's examine the key issues Canadian business owners and financial managers must consider in lease financing sourcing. Being well armed up front with some of those industry secrets will help you achieve those attractive rates, terms and structures we have been talking about, Just knowing some of those subtle industry differences ( dare we call them tricks ? !) can save you thousands of dollars on any asset acquisition .

Many clients tell us they receive a lease of financing quote and don't necessarily understand whether or not the financing offer is in fact competitive. All things being equal we're going to assume your firm has good credit quality. But don’t despair if you don’t because the one good thing about leasing options in Canada is that it's available for all firms, regardless of overall credit quality or financial challenges.

So a couple of key basics, here we go: First you need to understand how leasing pricing is derived. The key elements of any finance quote are: term of the lease, interest rate, present value, payment, and your end of term option. Remember also that when you know any 4 of those key elements you can always figure the last one out. We would point out that it helps to have a true ' financial calculator ' to derive exact pricing.

We cringe when we hear the phrase ' whats my rate ' from clients... simply because that isn’t always the aspect you should be focusing on in equipment financing. Want to know what leasing rates are in Canada - They range from 4 3/4% to 24% or more per annum in the current environment. In fact lease rates got a lot better in 2011 as the economy approved and Canadian leasing companies got their act in gear again.

One of the best tips we can give you is to do some real basic lease vs. buy analysis on your transaction. This of course assumes you are in a position to purchase the asset outright, because quite frankly most clients are looking at leasing options simply to conserve cash and working capital.

And oh yes, try not to view leasing as a commodity, when it facts it’s a specialized form of financing that allows you to acquire assets and finance them over their useful economic life. Think in terms of the asset you are acquiring, how it will affect your profitability, and don’t forget balance sheet and tax issues that lease financing can positively impact.

Here's a challenge. Do you think we could better any lease rate you could achieve on your own by say, 10%?! A quick way to do that is by letting us offer you an operating lease, which can significantly lower your payments, but still give you that financial flexibility. You can acquire assets without beefing up your balance sheet with debt - which is desirable for many business owners, particulary when it comes to assets that have a technological life cycle.

Remember also that by making a down payment or providing a security deposit, both of which may or may not be required also drives that pricing down.

So do we have a bottom line on the sometimes confusing aspects of lease rates, feeling you're getting a good price, and ensuring you know your leasing options when it comes to type of lease, etc? We think it simply investing some time and gathering knowledge on how the lease industry in Canada works, how it prices different leasing options.

Want a faster way to get the best deal. Simply speak to a trusted, credible and experienced Canadian business financing advisor who can ensure the reasons you are financing those assets are being back by the best and competitive pricing.

Your Choice - Right Way / Wrong way ? Canadian Accounts Receivable Financing & Business Factoring

Avoiding the wrong way to do something in business is always desirable, who wouldn’t agree on that?

So when it comes to business financing and in particular accounts receivable financing and business factoring lets examine how doing things the right way will save you time , money , and in general give you a strong sense of comfort that you have made the right business financing decision .

Canadian business owners and financial managers who have chosen a/r financing as a cash flow strategy need to understand where they can go wrong, and take that other path! You do that by making the right business finance decisions in three areas - understanding how accounts receivable pricing works, ensuring you have the best facility in place , and finally, by default , feeling confident you have picked the best business factoring partner .

Let's dig in therefore! There is no business financing that is more misunderstood that A/R factoring. And it’s actually not hard to get the basics under your belt. The concept of time and cost is critical in factor pricing. When you sell your receivables and receive cash the same day you understand of course that the longer that receivable is uncollected... well your financing costs are going up.

We recommend C I D as the most preferred type of accounts receivable financing. It's the most logical Canadian solution, or the ' right way ‘. C I D is ' confidential invoice discounting ' - it’s your version of ' mind your own business’! Under confidential invoice discounting you bill and collect your own receivables. Unlike your competitors who use this type of financing - where their clients are put on notice that your competitor has chose to finance their receivables via a non bank solution. But, remember of course that in business factoring never has ' time means money ' been so important, so even though you are billing and collecting your own receivables focus on operational collection policies that allow you to maximize cash flow and lower financing costs .

The ' right way ' around this type of business financing should focus on picking your best partner firm that suits your overall needs. The facility you pick, and the partner that finances it for your company will make or break your success in this type of Canadian business finance.

The landscape in Canada is littered with many firms who are non Canadian, charge too much, disguise their inherent financing fee with all sorts of small administrative charges that add up, and finally, as we noted, insist that they are between you and your customer with respect to collections.

So is there a simple route to taking the right way when it comes to A/R finance. Consider a simple , safe solution by simply seeking a trusted Canadian business financing advisor - someone who understands the business factoring landscape, will recommend and put you in the right facility, and ensure that the cash flow and working capital benefits associated with this type of financing are focused solely on your firm.



Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.parkavenuefinancial.com/accounts_receivable_financing_factoring_business.html

An Unequaled Equipment Leasing & Commercial Financing Option - Your Best Canadian Deal

Can we be honest with ourselves, as Canadian business owners and financial managers and all agree that when it comes to equipment leasing and financing of commercial assets we are all looking for the best deal?

It's just human nature, but the reality is that the thousands of dollars you can save in real money by obtaining a lease approval at great rates, terms and structures also keeps us competitive and ahead of the game .

Let's examine some of those methods used to fast track you to the best options available -including probably our most important tip, which is where to go to and who to talk to when looking for the best equipment leasing and financing . More on that later.

Cost savings, as well as cash flow and working capital savings. That's the essence of Canadian equipment leasing and financing we think.

Leasing has been around a lot time, some maintain thousands of years, but a couple of factors have brought it pretty well to the top of Canadian business financing these days. One reason is simply that with the recession formally over (we read it in the newspaper, must be true) that thousands of companies are again looking to expand and grow again, finally!

Also another reason is that new industries have sprung up that are tailor made for lease finance, and those industries (energy, solar, etc) are poster boys for solid lease finance strategies. Commercial lease financing adapts perfectly to technologies that change and need to be upgraded. Most business owners know you have two lease finance options, capital leasing and operating leasing. Structuring your transaction around an operating lease gives you flexibility on your ability to upgrade, return, or extend the transaction at the end of term.

When it comes to a ' pure dollar ' or ' financial' analysis of equipment leasing most Canadian business owners quickly realize that to make a project financially feasible the benefits of the asset or project have to match the cash flows . And financing your transaction via a commercial lease with fixed monthly payments matched to the economic benefits of your asset clearly does that.

Your company’s ability to conserve cash flow and working capital allows you to put that new found capital into what really counts, i.e. inventory, staffing, new systems, etc.

There isn’t a day these days when a client asks ‘Can such and such an asset be leased ' - and we think you know already our answer to that one - that almost any asset can be leased, even intangibles such as software. More often than not , depending on your overall credit quality lease financing is a 100% financing scenario - on occasion , if your lease has to be structured it might require a down payment .

So who is providing lease financing in Canada and how can you get this unequaled business flexibility in commercial finance. The reality of the Canadian market is that its very fragmented, made up of captive firms within large mfg companies, as well as independent finance firms that are both U.S. and Canadian owned.

Rates vary with asset and credit quality, and the hard reality of your transaction is that it has to fit the particular, let’s call it a ' credit box ' of the firm you are dealing with. Even some of the banks have full fledged lease companies , although the credit criteria is significantly higher as you can imagine - i.e. great rate, but significant qualifications required on your part .

So how do you wade through the mass of firms and financial offerings in the Canadian marketplace .Would that take hundreds of hours, which you don’t have. The answer, speak to a trusted, credible and experienced Canadian business financing and leasing advisor who can structure a transaction that meets your needs. Simple, fast, and allows you to benefit from those unequaled asset financing options. What are you waiting for!


Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

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

Why Canada Provides Film Production Tax Credits & SRED Tax Credits – Financing Film & SR ED Tax Credits

We don't care. How’s that for a short and concise answer as to why we think the government of Canada provides hundreds of millions of dollars in Canadian film and production tax credits, as well as the ' SRED ' (aka SR&ED) tax credit.

What we do care about is how clients can use those two great Canadian tax credits to maximize the value of their film, TV, and animation projects, or if we're referring to SRED itself, then their ability to recoup a huge amount of their research and development expenses.

Not to be so glib, but we don't think ours is to second guess or question why the government of Canada provide all this funding for these two unique non repayable tax credit grants .

In the case of the film TV and animation industry the government seems to be returning almost 25% of all the revenues that the industry spends in Canada - that’s of course a huge amount.

And the SR ED ( Scientific Research and Experimental Development ) program returns billions ( yes that’s billions with a capital B !) to privately owned Canadian firms who recoup up to 40% or more of their total r&d expenses in the form of non repayable cheques issued annually to firms such as yours, ( as well as your competitors ) .

Let's focus on the film production tax credits first a bit. There's no business more intriguing complete with stars, egos, and great stories such as the entertainment business - we're talking 3 critical aspects of that - film, televison, and animation - the latter becoming very popular . No business financing challenge is more daunting than putting together the finances for these productions.

That’s why the knowledge that Canadian productions or co - productions (isn’t Canada Hollywood North?) take advantage of the film tax credits that can fund up to 40% or more of your budget. Your ability to then monetize that credit, during, or after production) can make up for a huge amount of your working capital and cash flow needs, for this project (or your next one!).

Let's also pay due respect to the SRED (SR&ED) credit in Canada. This program is probably the largest tax credits provider in the country. Canadian firms get refunds, via a non repayable cheque for the advancement of their R&D processes and innovations.

We continually remind clients in both the Film area as well as SRED that their claims can be financed and monetized for instant cash flow and working capital. If you are not one to wait (who can in business) film production tax credits and sred credits can be financed in a variety of manners.

Whether you're in the film tv and animation industry, or your firm is a manufacturing , service or technology company in Canada take advantage of those tax credits . And if you're reading this in Hollywood, remember that we have just shown you a way to finance 30-50% of your project. You’re welcome by the way!

Want more info? Speak to a trusted, credible and experienced Canadian business financing advisor in the area of film tax credits and sr&Ed credits. Like us, don’t question the why of the program, focus on ' why not for us?!’



Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

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

Romancing The Loan – Franchise Funding Options in Canada - Franchisee Financing

Romancing the Loan. Sounds a bit exotic, does it not? But after the euphoria and celebration of making a decision to purchase a franchise is over, what next? We can tell you. You start worrying about franchise funding options and how a franchising financing loan will happen.

Don't despair though... we're going to cover off some real world and common sense solutions to franchise finance in Canada.
So where do you turn to after you realize you need assistance in financing your new business? While the logical decision is to think of ' the bank ' there are some key things you need to know.

In our experience getting a direct loan from a Canadian chartered bank to finance your franchise is generally unlikely. But, if the truth were to be told, (and we're telling it to you here) there is a way to get a Canadian chartered bank ' on side ' with what you want to achieve. But you need a guys help, and that guy is Bill. Bill who? We're actually referring to BIL, (that’s one L folks), which is a specialized government loan program that the banks use to fund most franchises in Canada.

So the simple explanation for our purposes is simply that while the folks at Industry Canada in Ottawa guarantee and organize the program parameters, they in fact charter the banks to administer the program on a daily basis. And the beneficiary that program is you, the new franchisee!

Are there some key factors that will allow you to immediately determine if you can successfully access this program? There sure are. One is of course you r ability to demonstrate you have a clean personal credit history. This is done by simply checking your credit bureau report and being able to produce your tax returns if and when required. (The government for whatever reason likes to know you are paying and filing taxes!) If they are going to give you a loan. Makes sense though.

Clients are always asking if the type of business they purchase when looking for franchise funding options makes a difference. In our opinion, generally no, it does not. With a couple comments though, in that of course a recognized brand is better than an unrecognized brand (think McDonalds as opposed to Joes Burger Joint). And in our experience a service non asset type of business is a bit more challenging to finance that a bricks and mortars franchise requiring financing for equipment, leasehold improvements, etc.

When you consider a franchising loan for the purposes of financing your business remember that any business in Canada is financed in two parts, one part debt, and other part owner equity. So be prepared to put a ' reasonable ' amount of funds down as your personal commitment to the business.

What's that? You have a question. We know your questions and also we've got your answer. An immediate client question almost all the time is ' so how much do we have to put into the business '. The answer is a bit general but anywhere from 10- 40% might be expected, it really varies, and there are some creative ways in which your owner equity or deposit can be validated.
Two considerations you should always make when looking at a personal life commitment such as purchasing as business is how much you should risk, and how you will access personal funds.

The great news about risk is that our aforementioned government BIL loan only requires a nominal 25% guarantee from you the owner. That low of a guarantee is generally unheard of in other forms of Canadian business financing. Also, as a second point, we don’t necessarily recommend you collapse secured savings such as RRSP's given the tax hit you will take with that strategy.

Other options in franchise funding in Canada involve specialized equipment financing and working capital loans, and even the ability access highly specialized franchise finance firms that only do this type of financing, but not on our govt program that we have highlighted.

Bottom line? You do have franchise funding options in sourcing capital for your entrepreneurial dream. Loan financing is available in a number of creative ways. Speak to a trusted, credible and experienced Canadian business financing advisor - get on the right track today re: romancing the loan!





Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

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

Trusted And Versatile – Canadian ABL Financing – Why Asset Based Finance Lending Is A Class By Itself

'Confidence in good sense ' - that’s one definition of the word trusted. And we think that’s a great way of thinking about ABL financing and asset finance in Canada. So ABL... What is it? It stands for asset based lending, and the simple definition of this new Canadian business financing facility is simply as follows.

ABL is a revolving line of credit facility whereby your assets are secured by the facility you borrow against all those assets on a daily basis.

But, and its a big but, as opposed to bank financing via a Canadian chartered bank facility you are allowed to borrow against the real world maximum liquidity of those assets . Typical assets secured under an ABL financing facility are receivables, inventory, fixed assets, and on occasion real estate if that also fits into your asset equation.

The uniqueness of Asset based lending is simply that the majority of these facilities are offered by what we call ' non - banks - given that that majority of Canadian business owners and financial managers associated ' borrowing' and lines of credit with Canadian chartered banks. Instead , the ABL community tend to be independent finance firms, some of whom are U.S. based but doing business here , who focus and have tremendous expertise in the one thing you cherish most - your business assets !

So where does the versatility com from then? That’s the great part of a line of credit via asset finance strategy. It's all about what we call ' maximization ' (is that really a word?). In ABL financing usually 90% of receivables become an immediate borrowing base, and inventory tends to be financed in the 30 -70% range. In case you haven’t figured it out yet (we’re sure you have) that’s about 30-70% more than you probably were getting before. And, under the concept of true asset finance, the appraised value of your unencumbered fixed assets also now become part of your daily borrowing ability for cash flow and working capital as you need it . Tell us that isn’t versatility!

Because ABL financing increases your ability to borrow for liquidity purposes it allows you to put aside the challenges of meeting qualifications for chartered bank lines of credit - all those things your banker loved to talk about - leverage, cash flow coverage, minimum debt to equity ratios and on it goes... you know the drill.

So, is your firm eligible? It is if you meet the sole criteria - you have assets! The beauty of asset finance is that it works for small firms, major corporations, firms that have financial challenges, and those enjoying the best of all worlds, high growth and profits and a need for constant new working capital.

So, got what it takes? If you have the need, for increased, flexible and higher lines of borrowing power then speak to a trusted, credible and experienced Canadian business financing advisor who will ensure you have a facility that meets your firms unique survival, growth, and financing needs.



Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

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