Imagine! Canadian Accounts Receivable Loans That Work – Financing Receivables The Right Way

Anyone who knows about the challenges of business financing in Canada knows that capital is harder to obtain these days, recession over notwithstanding! So when clients hear about accounts receivable loans and financing receivables strategies that seem to work for others, including their competitors, well... naturally they want to know more.

Let's share some basics around A/R loans (they are not really loans per se) and what the best method of financing receivables is in Canada.


Cash flow shortages. Sounds like a common challenge you face almost all the time these days. But when solutions to those shortages seem limited then a financing receivables strategy just might be your optimal solution.

In order to embrace a new finance strategy you have to know what it is, and what it costs, and even as important, how does it work. At its most simplest this type of business financing can best be explained as the selling of your A/R as you generate sales, getting cash in return. Naturally there has to be a focus on the quality of the receivable, and its age. (Generally receivables are sold when they are current).

Many clients always ask if they need to sell receivables as soon as they generate them, as in some cases they just might not need the cash flow and additional working capital at that moment. The answer is that you can sell your A/R anytime you want, typically as long as the receivable is less than 90 days. (If your A/R is older than 90 days there is somewhat of an assumption that it is uncollectible, unless you have given special terms to your clients.

So why do firms in Canada embrace this new form of financing more and more every day. Simply because it frees up the capital that you have tied up in inventory and A/R, your current assets. Financing receivables can be implemented more much quickly than any other type of loan or financing.

And, oh yes, getting back to that word ' loan ' - we mentioned that many clients refer to this strategy as ' accounts receivables loans '.

The last thing you want to do when you are short of working capital is to take on debt, so its very important to understand that this type of financing, also called ' invoice discounting ‘.. or ' factoring’ does not, we repeat ' does not ‘! bring any debt to your balance sheet. The world loan is a misnomer here, as all you are doing is monetizing or cash flowing your assets, making them immediately liquid.

Any Canadian business owner or financial manager would prefer to take on a new solution to their business in the right way. That means from a viewpoint of both cost and methodology.

Many clients view the cost of financing receivables as a setback. In Canada depending on the size of your A/R and some other factors the costs run between 1-3% per month. What business owners forget is that they can offset those costs in a number of different ways... they could increase their prices nominally, they can take discounts with their suppliers with their new found cash, and, if applicable, they can ' purchase ' smarter and harder. further reducing their cost of financing .

Our favorite and most recommended accounts receivable loans is a strategy called C I D. It stands for confidential invoice discounting, whereby you bill and collect your own receivables during the entire financing receivables process. Unlike your competitors, who are forced into rigorous notification of their financing with their clients or suppliers?

In summary, not all business financing strategies work for all firms. But firms of all size in Canada, even large corporations are looking at A/R strategies. Make sure you get a facility that works for your firm, both from a cost and daily procedural basis. When in doubt, or if you need more info, seek a trusted Canadian business financing advisor who can make sure the ' right way ' is your way!



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/financing_receivables_account_receivable_loans.html

The Real Truth On Canadian Film Tax Credit – Let Movie & Animation Financing Refund Loans Enhance Your Project

You already have the financing in place that it takes to make a winning film, animation, and TV project successful - you just might not know it.

We're talking about the Canadian film tax credit system, and why movie and animation refund financing of your tax credit can be the last piece of the puzzle in your Canadian production, or U.S./Canadian co -production.

The reality is, and of course we're sorry (kind of ...) that more and more U.S. regions are eliminating or downsizing the film and animation tax credits that can often make or break your projects final success. In fact, using Hollywood California as an example, as at June 2011 the state has in fact used up all their tax credits for the remainder of the year! No wonder why U.S. and of course Canadian producers and owners realize the Canadian system is still committed to job creation and support of the industry.

Ours has never been to debate the merits of the Canadian film tax credit (animation and TV included of course)... Ours has been to promote it and ensure our clients are using it. In Canada , aka Hollywood North the tax credits are viewed in all provinces as great economic and tourism development, and, as we said , we're not arguing!

In Canada the film, TV, movie and animation credits can generally get up to 40% of your project financed. That of course leaves the other 60% up to you, but what a great head start!

Although most producers and owners think of the Canadian film tax credit in terms of movies/ film etc. the Digital media area is probably growing the quickest. 6 of Canada's ten provinces already have a separate special digital media tax credit in place.

B.C. has a very strong and growing animation environment (could that be because of its proximity to California?!) and provides 17 1/2% credit to your total labour cost on any project.

While most U.S. and Canadian producers always tend to think in terms of Toronto, Montreal and Vancouver as major film and production and animation centres the reality is currently that the most lucrative digital tax credit is out of Nova Scotia. They have a very simple formula, 50% of expenditures that qualify under the legislation, or 25% of your total budget. Your tax credit accountant and Canadian business financing advisor can assist you in maximizing what works best for your project.

Quebec also increased and broadened its tax credits, with 25% of all expenditures qualifying for a Canadian film tax credit refund. When you compliment this with the federal Productions Services tax credit an additional 16% of financing becomes available.

Naturally there are all sorts of nuances in maximizing and qualifying for your tax credits. Producers should in general always set up a special purpose entity and typically should own the copyright or content.

Your tax credits in Canada can be financed, either through traditional sources, or independent firms specializing in this type of financing, also at the same time usually helping you maximize the credits. Financing is available on a ‘when completed ' basis, or, often more desirable, on an accrual basis as you start to spend on your project. Bottom line: Cash flow and working capital for your project.

So, as we said your challenge is equity, debt, gap pre -sales, etc. But let tax credits be the final component to your projects success.

If you choose you could creatively carve out the tax credit from your overall finance plan and enhance the equity position, of simply finance the credit refund on its own. Use your tax credit to either attract an investor, or as a stand alone component.

When you want the real truth and current dynamics of the Canadian film tax credit and refinancing strategies speak to a trusted, credible and experienced Canadian business financing advisor.

P.S. Mr. Demille - we're ready for our (tax credit) close up!





Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.comOriginating 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/canadian_film_tax_credit_movie_animation_refund.html

Unlimited Time Offer – The Canada Small Business Loan – Government SBL Loans For Financing Success

You're in for a pleasant surprise. Why? Because the information we're sharing should absolutely convince you that the ' SBL ‘, the Canada small business loan , aka ' the government loan' is by far the best amongst loans for small and medium sized businesses in Canada .

Let’s get that ' medium' size out of the way quickly before we begin. To qualify and receive the Canada SBL loan you must have actual or projected revenues less than 5 Million dollars per annum. That covers a lot of our clients, so it is easy to see why they are genuinely excited about this often misunderstood part of the Canadian business financing landscape.

Let's set some groundwork here. We're going to cover off whats important to you - so pardon us for paraphrasing typical questions we receive everyday on this program. What are those questions -? They are as follows: Why have we not heard about this program, who manages the program, how much can we get, and what do we need to do to qualify.

We think you'll agree that if we cover off all those bases you'll be well grounded in determining if the Canadian small business loan, aka the ' government SBL ' is right for you.

So, first question. Why haven’t you heard about the program? Quick answer - we're not sure, because 7441 of your peers and, worse yet, your competitors took advantage of the program in 2010. Oh and by the way, they got loans totaling $ 957,000,000.00. That’s an average of about 128k per loan, but most of the requests we see tend to be in the 200-300k range.

You also may not have heard about the program because of its unique structure. It's sponsored and mandated by the folks at INDUSTRY CANADA in Ottawa... but you don’t need to drive there to get the loan. The government has mandated Canadian banks to offer the loan under the terms and conditions of the program.

Which brings us to a side point which is that we're often asked why many small business and commercial bankers don't talk up or offer or recommend this great financing strategy for business loans. We suspect, and surely they can’t be proud of it, that many bankers either haven’t taken the time or have had the training to facilitate this loan properly... we suspect they would prefer to sell us a mutual fund or mortgage. Anyway, we'll weigh in on that one another day.

So, how much financing can you get under the program. The program actually goes to $ 500,000 but that is if it is a real estate type deal. Typically the program caps out at $ 350,000.00 for 99% of business owners.

Many clients are disheartened to hear the loan is not a ' cash loan ' or a revolving line of credit. It isn’t - it’s a term loan with very attractive rates, and can be used for equipment, leasehold improvements, software, etc.

If we had to identify two quick qualifiers for the Canada Small business loan it would be a reasonable credit history of the business owner, as well as a properly prepared package.

The 'package ' i.e. your proposal, has been the downfall of many clients we have spoken to who have ventured on their own to get the SBL loan approved. They simply aren’t prepared on some key basis, such as a executive summary, business plan, cash flow, etc. ( Banks for whatever reason love to see hwo they will get repaid!)

Well... there you have it. Want to fast track the best business financing in town? Speak to an expert, a trusted credible and experienced Canadian business financing advisor who will assist you in your approval and funding.

PS. Government loans don't even require a full personal guarantee, another great reason to consider the program.




Information by Stan Prokop - 7 Park Avenue Financial
http://www.7parkavenuefinancial.com/canada_small_business_loan_government_loans_sbl.html

We finance the little guy . P.S. We finance the big guys also!

Are You Interested In Achieving Best Leasing Rates & Financing With Canadian Lease Companies?

It may seem difficult for Canadian business owners and financial managers to think they can achieve the best leasing rates and business financing with lease companies in Canada.

It's not as hard as you think, and we're going to demonstrate to you some key methods to ensure you understand, and can achieve prompt credit approval and solid lease pricing.

And oh yes, some extra tips on ensuring some additional benefits not readily known to everyone would help also, and we’ll be sharing those also.

Most business owners know intuitively that they should be leasing - one simply reason is that millions of other firms are also .They simply are looking for a better or easier way to understand what makes a ' perfect ' lease financing transaction .

Ways in which you can determine what level of pricing and prompt credit approval you can achieve focus around some very basic issue - for example, do you want to own the asset, or use it. Just that decision alone will save you thousands of dollars and significantly impact working capital. Lets use a ' real world ' (that’s where we work every day) example.

Let’s say your company requires some significant plant equipment as an example. The cost is, say $300,000.00. You're not entirely sure you can afford the asset; you simply know you need it, and you are perfectly sure you can't afford to pay cash for it. Imagine what that would do to your bank line of credit or cash on hand!

Using our example the monthly payment on a 3 year lease would be 9338$ approximately. We estimated an interest rate of 8% on the transaction. Let's say you determine that you can afford $7000/ mo, but not $9338. Does leasing provide a solution? ... It sure does?

Ask you lessor to determine the term you need to change the lease to, allowing you to fit your payment. We've done the calc for you, and its 51 months. And, guess what, by committing to a longer term you can usually get a lower interest rate. Lessors like when they can guarantee their yield for a longer period. No surprise here, as that’s how they make money.

We don’t necessarily agree, but most clients we talk to are ' only ' focused on the lowest pricing or monthly payment in trying to achieve those best leasing rates. Lease financing companies consider a number of factors when offering you those rates.

So what are the key issues in lease pricing, and, more importantly, which of those can you as a Canadian business owner and lessee impact upon?

All assets can be financed, subject to credit worthiness. However, some assets depreciate slowly, some very quickly (think computers!), and some assets both hold their value, or even appreciate in price. Asset class plays a big factor in lease pricing, so be prepared to position and defend your asset quality.

Useful life of the asset is somewhat the same; don’t expect to get a 5 year lease at great rates on state of the art computers or telecom unless your firm has a stellar credit rating.

If your firm is entering into an operating lease it is highly recommended that you arm yourself with the best possible date on residual values of the asset at any future point in time. That will allow you to negotiate a higher residual, and achieve best leasing rates and financing.

We noted there are some aspects of leasing rates and pricing you simply won’t have an effect on. It should come as no surprise that leasing companies borrow money also. Their cost of funds and their required ' yields ' determine... your lease pricing. (As well as your credit quality of course)

So we can make a broad general statement that best leasing rates are achieved by dealing with larger more well capitalized lease companies in Canada.

In many case small admin and processing fees can add up and drive up your leasing rates. Negotiate hard and determine if these additional add on type charges are really necessary and if you can avoid them your pricing will improve.

Simple, perhaps not, but you can see that many factors determine lease pricing. Determine which ones make the most impact on your firm, and which factors you can influence. Speak to a trusted, credible and experienced Canadian business financing and leasing advisor for assistance in achieving best financing and lease pricing in Canada.


7 Park Avenue Financial - Financing for the little guy - P.S. We finance the big guys too!

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

End Your Canadian Franchise Lending Worries – Financing & Funding Lenders & Solutions For You !

Will you be ready with financing for your franchise when your franchise application is approved? Are you fully up to speed with how franchise lending and financing works in Canada. And finally, how exactly does the funding of your franchise business work and who are the lenders that participate in this area of Canadian business.

Wow... that’s a good solid handful of questions, so let’s explore the answers to stage 2 of your current predicament. Stage 1 is of course the thought and time that you put into selecting your franchise business to ensure you were on the right track to entrepreneurial freedom.

We wont be exploring the reasons why you picked any certain franchise, that’s your decision, motivated no doubt by opportunity and the ability to create personal wealth. But we do recognize that franchise lending might be a challenge to yourself, and the financing and funding of your business has left you a bit worried, to say the lease. So let’s end those worries.

In preparation for the financing of your new business there are a couple of pre-requisites that have the ability to stop you right out of the gate. Let’s make sure you know what those are and how to address them.

One of those key issues is your ability to demonstrate two things, a reasonable personal credit history and some business experience. Naturally it helps if you have some industry experience, but it’s not critical. By industry experience we mean, as an example, that if you are buying a QSR (QUICK SERVICE RESTAURANT) that you have some expertise in that area. But do you know what, if you can prove you can translate other business skills into the management of this business we're pretty sure that’s a big plus.

The other key element that will eliminate your worries about getting approved by franchise lenders is what your proposal looks like. Proposal? Whats that we can hear clients say?

Well you can call it what you want, a ‘proposal ‘, ' business plan '... ‘Executive summary '... etc. Bottom line is that this document, when properly presented, has the ability to again eliminate a huge amount of the worries you have had on achieving the financing you need.

Whats in that document? It’s not as bad as you think, it’s simply a profile of yourself, the new business you're buying, info on the franchisor, and a financial plan. No surprise there on the financial plan, lenders seem to want to know how they will be repaid!

Oh yes, those ' lenders ‘. Who are they in the Canadian franchising marketplace? Actually we're not betting people, but we would wager that you won’t guess that the government is probably one of the largest franchise lending and financing partners in Canada. How is that ?It's because they sponsor the BIL /CSBF program, which underwrites most Canadian franchises that are under 350k or so in purchase price .

Other lenders include one or two major independent finance companies, as well as numerous equipt financing firms that have specialization in areas of franchise equipment finance.

So is there a way to pull it altogether, i.e. eliminate those worries about franchise financing approval, and focusing in on who can help fund your business. One solid recommendation is to seek and speak to a trusted, credible and experienced Canadian business financing advisor who can ensure your business is financed properly , at the same time eliminating those worries you had about who, and how ?

P.S. We can't overemphasize the need to work with an expert in this area.






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_lending_financing_funding_lenders.html

Worth Considering – Why A Canadian ABL Lending Facility & Asset Based Loan Is Unique

It's no secret to any Canadian business owner or financial manager that business financing, specifically operating lines of credit have been difficult to achieve over the last several years.

Let us ask you a simply question - Do you think an ABL lending facility is worth considering for your firm, and why is this type of asset based loan ( its not a loan per se ) working for thousands of firms in Canada .

We're the first to forgive clients who either are confused about what an ABL revolver is, or, better yet, haven’t even heard of this type of business financing. We'll clear that up for you in short order.

Confusion partly exists because there are some different, let us call them ' versions ' of an asset based loan and abl lending facility. They also go by some different names, such as working capital facility, abl revolver, asset based lending... and on it goes. Could one of these versions be the right type of financing for your firm? We think it could!

So let’s get back to defining those different solutions, or ' versions. In its purest form asset based financing is a credit facility which is collateral based line of credit based on underlying assets - those assets typically being receivables and inventory. Typically a true asset based lender will also let that same facility margin equpment and real estate if that fits into your mix.

So whats all the ' hub bub ' about that, clients ask, doesn’t Canadian chartered banks offer that same thing? Not really and here's why!

ABL financiers use a borrowing base formula of those assets we just mentioned and use a much higher advance or margining rate. What's the bottom line on all that? ... Simply that you have just achieved a much higher business line of credit.

So how do abl lending and asset based loan granters do it? It's simpler than you think. They simply tend to have a greater expertise in certain industries, but moreso exert strict controls and reporting on you the client.

And don't get us wrong; those ' controls ' aren't all the ratio, covenants, and personal guarantee and outside collateral that are required from those great folks at our chartered banks. In the case of an abl lending facility those controls are a requirement for regular reporting by you of those assets being financed, and occasional operational audits. We advise clients that those two items are well worth the significant increase in working capital and cash flow they will obtain from an asset based loan.

Oh, and by the way, you will note we said the facility is not a loan; it’s simply a monetization of those assets that can drive working capital your way much sooner and in a bigger way.

So, in summary, is an ABL lending facility worth considering. If you have all the business financing you need and you have no need for additional cash flow and capital then guess what... it’s not for your firm. But, on the other hand... if.....!

P.S. Trust us. check it out.




Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.comOriginating 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_lending_facility_asset_based_loan.html

Back By Popular Demand ! Canadian Working Capital Cash Flow Financing And Loan Alternatives

‘Focus On Growth ‘- That was the heading in a June 2011 business article in one of Canada's two leading business newspapers. We try as often as we can to translate their interpretations of whats happening back to where we work every day, which is the real world!

So, working capital and cash flow financing, whether through a loan or other facilities. That’s our focus today. A key point made in the article focused on the fact that so many firms had cut costs or held back that they missed, or are missing major growth opportunities to grow both sales and profits . The focus of the Canadian business owner and financial manager was ' cash shortages ‘, said the article, thereby impacting growth.

‘Make better use of your cash ‘said the article, and encouraged you to maximize supplier credit, and at the same time work the other end of the spectrum, which is your own receivables policy.

A constant comment we hear from clients is that they not only don’t know ' the fix ' to a working capital and cash flow problem, they often actually don’t understand what the problem is or how to measure it. Let's look at some of those measurement tools, and more importantly, ' the fixes'!

As business owners ourselves we can relate to the fact that every time a business feels some sort of cash shortage you might feel your business is ' in trouble '.

Businesses finance working capital through the current asset accounts, namely receivables and inventory. In Canada those assets are financed either through a bank line of credit, or various types of working capital facilities that are more alternative in nature. They include asset based lines of credit, receivables financing facilities, and purchase order financing.

The latter three solutions tend to be more expensive for Canadian business, but in our experience provide you with much more cash flow and working capital. Important also to remember this type of solution is not a loan alternative, you are simply monetizing or cash flowing your assets, and that’s a good thing.

We spoke of ways to measure the strain you have on working capital. Business owners need to realize that only efficiently moving receivables and inventory can be financed. If you are financing through a bank then not only is your margining limited but you more often than not have a borrowing limit. That can really impact growth ability.

It’s also important for Canadian businesses to understand that access to more working capital shouldn’t make them lose their focus on losses and unprofitability.

Let's look at a quick example - let’s say a business has an operating line of credit of 1.2 Million as an example. The firm borrows to the maximum but then sales drop off significantly. Your bank reduces the credit line because your borrowing and margining power just is not there due to those slow sales. This then puts tremendous pressures on those supplier payables resulting in both loss of credibility with suppliers and operating losses due to those lower sales. It's a vicious circle.

The bottom line is of course that lack of working capital and cash flow financing can kill your business - short term losses aren’t great, but they are manageable. But insolvency due to real cash flow challenges is very real and deadly

And back to our article that we mentioned on growth. Small and medium sized business in Canada has the ability to access traditional credit, as well as numerous other ' growth' working capital alternatives. A loan or debt is typically not the answer to growth.

So investigate cash flow financing alternatives such as tax credit financing, working capital facilities that are non bank in nature and margin A/R and inventory, as well as more esoteric financing such as purchase order finance and specialized inventory finance. Want more info... seek a trusted, credible and experienced Canadian business financing advisor who can put you on track to ' growth ‘!


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/working_capital_cash_flow_loan_financing.html