Why Postpone Business Success? Investigate ABL Lines Of Credit & Asset Based Lending In Canada

Sure you could wait. Maybe later this year... next year, or several years down the road..? We're talking about getting all the business financing you need and why ABL lines of revolving credit via asset based lending can work for your firm... today!

We think all our clients agree that in today’s competitive environment ' waiting ' for things to change is not going to work! So let’s consider a type of financing that will work, today, and for the future.

Hard hit. That's how many businesses, small, medium, and yes, large... feel about being caught in the downdraft of the difficulty to obtain the proper amount o fbusiness financing they need. The 2008 - 2009 recessions didn’t help, and even our world wide admired Canadian banks had to hunker down, which in your case meant less access to capital as if you didn’t know already. The bottom line, it was simply business credit was, and to some extent is, tougher to obtain.

The above conditions and the ever changing Canadian business financing landscape has made it a ' perfect storm ' for ABL lines of credit and asset based lending . Businesses who have been forced, or who finally realize they had non-bank business financing options are exploring ABL (the acronym for asset based lending) every day in Canada these days, with thousands of companies having ' signed up for the program '.

Canadian businesses of all types are investigating ABL. It’s very simple really, they either have no access to traditional funding, or if they do, it’s not for the amount of capital they need. Others simply adopt the Boy Scout motto - BE PREPARED ‘! and are proactively seeking alternative operating line of credit solutions. The bottom line - working capital and cash flow has become ' job #1' for Canadian business.

Want a simple, basic reason why companies are looking for a financing alternative. It’s just that firms have more debt, accounts payable days have risen, and, no surprise, clients are waiting much longer to get paid by their own customers.

Many Canadian business owners and financial managers haven’t even heard of ABL, much less embrace it. A lot of the new interest is in the SME marketplace, but many of Canada's largest corporations utilize this financing also.

It is no longer ' financing of last resort '... in fact it’s become an unbelievable tool to grow your business. expand into new markets, acquire a competitor, or even just survive after some challenging years or special circumstances your company may have encountered.

ABL lines of revolving credit, just a basic term for asst based lending is simply a business revolving line of credit that allows you to borrow against all your assets - those being receivables, inventory, and fixed assets and real estate, if that comes into play. The difference? You can borrow significantly more, because the total focus is on assets.

In Canada ABL lines go from 250k and up, with really no upper limit on the amount of your facility, we're talking millions of course. Your credit availability increases very significantly based on the elimination of the traditional Canadian chartered bank issues of rations, covenants, outside collateral, personal net worth, etc, etc. The bottom line, you are borrowing on your assets!

There are some different, lets call them ' flavors ' in the Canadian ABL asset based lending marketplace. The facilities come in different shapes and sizes; can be just receivable based, or a full service solution delivering extra capital against all your assets.

So, can you afford to wait or postpone business financing success? If you do, we're jealous of course. If you can’t wait, speak to a trusted, credible, and experienced Canadian business financing advisor on achieving benefits of ABL finance... today!





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_lines_of_revolving_credit_asset_based_lending.html

5 Guaranteed Business Working Capital & Cash Management Solutions For Liquidity - Canada

Are there any ' guarantees' in Canadian business financing? A guarantee is something that ' assures a particular outcome ' . So we're not 101% sure we can give you that iron clad guarantee , but we will show you 5 proven methods of enhancing cash management and working capital solutions in Canada .

Strategy # 1 - Not optimal, but again it's all about choices. So our tip/strategy is to consider sale of fixed assets you own but might not be getting full use of in your day to day operations. Naturally you would not consider selling assets you need on a day to day basis, but are there some unproductive assets around? There just might well be.

You naturally want to ensure that these assets are fully owned by your firm and not encumbered by any liens or bank security agreements. In some cases a reasonable strategy might be to replace e the asset with a less costly one, or used perhaps?

Strategy #2 - The sale - leaseback. This strategy, as we have noted before is just the opposite of acquiring and financing new assets. You already own the asset and it should be free and clear of any security arrangements. By working with a Canadian lease financing company you would enter into an arrangement whereby you sell the equipment back to the lessor and lease it back.

These transactions are generally done at what is known as fair market value, so you expect to not be able to get all the money you paid for the asset of course. In some cases an actual appraisal might be required, which typically would be in the 1-2k range depending on the size of the asset.

Generally speaking, the sale leaseback or a bridge loan on an already owned asset is a strategy worth considering when it makes sense.

Strategy 3- Inventory. That’s always a tough one for Canadian business owners and financial mangers to wrestle with. Financing inventory is a challenge and although there are some specific financiers able to monetize your inventory generally this is in connection with a total financing of your business. Financing and monetizing inventory works best, in Canada, in our opinion, when its part of an asset based lending arrangement or working capital facility.

It only makes common sense also that you could consider selling off any obsolete or slow moving inventory, again, if that makes sense and is possible.

Strategy # 4- Other assets. There are sometimes other hidden assets, in that business owners might no typically consider such items as patents, or tax credits as financeable items. But they are and can be monetized for their true value.

Well, we're here, last but not least, Strategy # 5. And to be honest it’s our most recommended one for small and medium business in Canada. It’s simply the monetization of your receivables via a receivable finance facility.

Why is this favorite strategy? Simply because for a starter you are not taking on any additional debt, you are just ' cash flowing ' assets that are already there. And these sort of facilities allow you to grow your business lock step with your sales. So working capital and cash management grow as you grow your revenues.

Our recommended facility is C I D - Confidential invoice discounting, allowing you to bill and collect your own receivables, unlike you competitors who are using this strategy and having to involve their client base re notification, etc.

Well, there you have it. 5 methods or solutions to cash management and working capital. Are they guaranteed? We are saying they work, and that’s all. Will all of them work and be appropriate for your firm. Doubtful, but we are pretty confident that somewhere in our toolkit of solutions is a working capital mechanism just for your firm. Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in evaluating options.



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_management_solutions.html

Capture 3 Benefits Of Lease Financing – With Canadian Finance And Leasing Companies

If we gave you 3 , among many, solid reasons to consider lease financing with finance and leasing companies in Canada , don't you think that just a couple of them would work for you, for sure? Maybe all 3 would?

If your company would like to become part of the successful majority of Canadian business in Canada it’s about time you understood and considered lease finance.

What then are some key reasons why business in Canada utilizes lease finance? There are other options of course, and it's up to you the business owner to determine which one works best for you, carefully analyzing whether debt or equity makes the most sense for your firm. It all comes down to whats important to your company and where you are heading with asset acquisition.

Reason #1 - Yes, there may be a down payment sometimes or a nominal security deposit but in general lease financing provides you with the ability to finance the entire asset. The asset is of course the ' hard cost ' of your acquisition, but many Canadian business owners and financial managers are pleased to know that there are numerous add ons let us call them, that can be , yes, ' added on' to the lease. They are items such as delivery, installation, warranty, training, service, etc.

Reason # 2- We hate to sound like economists here but the reality is that lease financing is a solid hedge against inflation. You in effect slow down the use of your funds, and at the same time can use cash flow and working capital you otherwise might have spent on the asset. That’s just common sense right?


Reason # 3- Term. One of the smartest things you can do when working with finance and leasing companies is to match the term of the lease with your best business estimate on the useful life the of asset . You're matching cash outflows to the benefits you receive from the asset, bringing those two together as much as you possible can.

Naturally we all realize that some assets depreciate quickly, some less so, and in a few cases (aircraft as an example ... or very heavy production equipment) the deprecation and obsolescence aspect is less of a concern.

In Canada lease terms can theoretically go to ten years in some cases, however the real world out there tends to favor 3-5 year lease terms. Many clients often are looking for a shorter term for specific project or asset type reasons - The shortest term we tend to recommend is 24 months - anything less than that doesn’t make real sense for the lessor, or yourself.


This then is your firms moment. Consider the 3 tips and benefits we have provided .You of course have everything to gain and nothing to lose. Want more info, or even help ?Speak to a trusted, credible and experienced Canadian business financing advisor who can maximize , for your company , these and other benefits of lease financing in Canada .





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/finance_and_leasing_companies_lease_financing.html

Canada’s Newest Biz Financing – Receivable Financing Companies and Providers Of A/R Loan Plans

New. Improved. Are we talking about laundry detergent? Not really, instead let’s take a look at Canada’s newest and growing in popularity, form of business financing, A/R loan plans. Can receivable financing companies be the solution to your business challenges? We think so and so let’s show you how the providers of this type of financing work.

Clients always tend to ask us simply why they should be looking at receivable financing .That’s one of the easier questions we get these days.

There are some very strong fundamental reasons why you should be looking at this type of financing for your business, not the least of which is acceleration of cash flow. Receivable finance allows your company to receive cash flow and working capital the day you generate an invoice. Practically speaking you could draw on your invoices every day, but reality shows that most firms borrow on a weekly or monthly basis. Bottom line, it’s your call.

Another key reason that provides of a receivable loan plan work is simply that they have become the de fact alternative to bank financing in Canada. That’s predominantly for small and medium sized business, but you’d be surprised to know that many of Canada’s largest corporations use a flavor of this type of financing also.

In today’s competitive environment your ability to be cash flow positive allows you to enhance your relationship with customers and your valued suppliers. It’s simply a case of what you could call ' professional visibility ‘... and that’s a good thing!

If you are in fact utilizing receivable financing companies for your A/R finance you also are able to leverage at the same time other aspects of Canadian business financing, this includes equipment financing, tax credit financing, term loans, etc. The bottom line is that the providers of an A/R loan are solely interested in collateralizing your receivables, not all your other assets.

Is there one final reason perhaps to consider a provider of A/R loan plan financing? We'll give you a great one, there is essentially no funding limit, in that as your A/R grows so can your facility. Is it just us or have you turned your firm into an ATM machine. That’s cash flow 101 for sure.

The attraction to invoice financing, aka factoring, is just simply that it’s a solution to the ongoing struggle of businesses requiring working capital. And as biz financing tightened up in the last few years Canadian business owners and financial managers looked for alternatives.

That alternative quickly emerged as accounts receivable financing. It’s the selling of your receivables at a discount, as you generate them. The challenge in Canada is picking the right type of facility - our recommended solution to clients is called C I D , confidential invoice discounting, allowing you to bill and collect your own a/r without the notification that is required by your clients for other types of facilities that predominate the marketplace.

So, bottom line? If you are looking for either business survival, or business growth take advantage of the service offered by receivable financing companies. If other sources are limited, and you require capital for expanding your business the solution lies right in front of you, and is being embraced by thousands of other Canadian business owners.

Speak to a trusted, credible and experienced Canadian business financing advisor on why receivable financing companies and providers of A/R loans can help your firm, today.



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/receivable_financing_companies_providers_loan_plan.html

7 Reasons Why Lease Financing Companies Offer Advantages Of Leasing Equipment In Canada

It isn't enough to be only a ' little' in the know when it comes to business financing and your Canadian firms overall growth and success. Let's examine 7 solid and beneficial reasons how lease financing companies can demonstrate the advantages of leasing equipment for your company.

Its a simple question really. ‘Why Do Lessees Lease'? There are a variety of solid reasons and advantages and benefits to equpment financing in Canada.

We're isolated 7 of those reasons (lucky # 7?) to demonstrate the general financing power of this Canadian business financing strategy.

Reason #1 - 80% of all companies in North America lease equipment at one time or another. Not a great reason you say? We at least hope that you'll agree that if your competition is doing something you should at least be aware or analyze why that the case. As you will see your competition has focused on issues such as working capital preservation, accounting benefits, and plain old convenience.

Reason #2 - Tax benefits. The last thing we want clients to do is get caught up in the whole issue of tax treatment of leases, let’s leave that to your accountants and business advisors. But the reality is that there are significant benefits that are tax oriented when it comes to the product offering of lease financing companies in Canada. They include such critical factors as depreciation, off balance sheet financing, etc. Again, leave it to the experts, but it’s a solid aspect of equipment finance in Canada.

Reason # 3 - Matching financing to useful economic life. What are we talking about? Just common sense really, which is simply the fact that one of the advantages of leasing equpment in Canada is that you can match the estimated useful economic life of any asset you purchase (from a photocopier to an airplane!) to your lease term. Technology is a great example of this, in that it depreciates quickly, has a huge obsolescence issue attached to it, and your ability to craft lease financing that matches the tech asset is huge. At the other ends of the spectrum, lease that corporate jet for 10, 15 or 20 years, there's an asset that hangs around for a long time!

Reason #4 - Solid lease rates. The great news is that Canadian equpment leasing and financing is on a total upswing as we head thru 2011. The industry has revitalized, recapitalized, and is very competitive. A lot of the lease finance pricing you obtain will be competitive to bank rates and other forms of finance such as term loans for assets.

Unfortunately many clients we speak to for the first time on asset finance are overly focused on rate. Our point is that it’s a competitive environment, and your current credit quality will get you a good rate in the current finance environment, so you'd do a lot better, we feel, if you focused on some of those other advantages we're talking about.

Reason #5 - Assets. They come in all shapes and sizes for your firm and industry. Tech assets, production assets, etc. The only bottom line... simple... any asset can be financed using a lease strategy. So if the cost and turnover of assets is a constant consideration utilize lease financing as a regular ' refresh ' strategy.

Reason # 6- Measurements. Measurements? What we're talking about is simply that how your business owners, investors, or shareholders are measure can sometimes be significantly impacted by the assets you acquire. Return on assets, return on equity, ebitda, are key ways to measure whether your company is winning and losing. Lease financing can often impact all of these measurements, and depending on what your ' business scorecard ' is, can help you manage capital and assets.

Reason # 7- Last, but not least, isn’t it always about Cash flow. It sure is, and if your company is either as start up or a Canadian Financial Post 100 firm you have cash flow challenges, issues, and measurements around that term. Lease financing allows you to eliminate a lot of those working capital worries, it minimizes or gets rid of down payment issues, pays the supplier and vendor promptly, and can provide 100% financing for your asset. Very simply, it conserves cash.


Well, that’s it. Are the advantages of leasing equipment better than other capital asset strategies? We think so, but that’s for you to decide. And getting back to the competition, they're doing it, so why not speak to a trusted, credible and experienced Canadian business financing and leasing advisor who can assist you to maximize these benefits.



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/lease_financing_companies_advantages_of_leasing.html

Does Your Firm Need Bank Lines Of Credit ? Ready For Canadian Business To Business Financing ?

For every complaint you hear about Canadian business to business financing and our chartered banks (Trust us, we hear a few!) there are still some great things happening in commercial business banking in Canada . Let's examine bank lines of credit, and your need for such a facility to grow your sales and profits.

Canadian businesses use operating lines of credit to finance current assets. Typically those asset categories are predominantly accounts receivable and inventory.

So how do banks facilitate this borrowing arrangement? The typical manner in which this is done is to simply have a document executed that provides the bank with a conditional assignment of accounts receivable, your inventories, and any other current assets.

Canadian bank operating facilities are also called demand loans, because they are typically secured by another document called a GSA, which stands for Genera Security Agreement. This document, as you can imagine, allows the bank to ' call ' your firms loan at any time .It's just common sense that Canadian banks do never with to ' call ' those loans, its simply their protection if and when things go awry.

Clients are sometimes under the mistaken impression that bank lines of credit are good for an indefinite amount of time. Typically however they are renewed annually - which requires a review by your account manager.

If there is one other very common question asked by clients it revolves around how exactly the banks calculate lines of credit. The formula is not as complicated as you think! A typical business to business financing on a Canadian chartered bank line of credit margins your accounts receivable at 75% or their value. Its critical here to note that the bank uses 90 days as a measurement tool - no receivables over 90d days can be margined, or in effect ' borrowed against ‘. Why is that? Again, common sense prevails, in that the bank, (and us too by the way!) makes an assumption that the receivables over 90 days are uncollectible to a certain extent. Your firm might think differently, but that’s how it’s done.

Inventory. Wow! What a different kettle of fish this is! If we had to generalize, but be as specific as we can be for info purposes we can say that in general banks really wrestle with inventory financing. Margining and inventory percentages are very different based on your industry, as well as the composition of your inventory. (Inventory typically comes in three categories: raw materials, work in process, and finished goods)

Typical bank financing of inventory usually never exceeds 50% and at the same time usually has a cap on the facility, meaning that even if your inventory is growing it still might be subject to a maximum of financeability.

The take away here is that banks aren’t in the inventory business, these assets are much harder to liquidate than receivables, and rarely does a lender ' win ' in an inventory liquidation!

So let’s get back to the security the bank takes on bank lines of credit. Do your clients find out about this? In Canada they would normally never be notified unless there is a default by your firm on the line of credit facility. In that case you clients would receive a notification of assignment, in which the bank would direct your clients to pay them directly, reducing the loan of course.

Banks register their security with the appropriate provincial and federal authorities, further protecting their position.

There is a great tendency in Canada to ' blame ' our conservative banks for limiting lending possibilities for commercial business to business financing. (We love our banks by the way).

Consider the reality though, that we entrust them to protect our savings and deposits, and its Canadian business owners and financial mangers that run their businesses into problems.

Clients are encouraged to maintain solid relations and seek out great commercial business bankers. (Not all are great unfortunately). If you're looking for a banking facility that works, for both you and the bank seek to speak to a trusted, credible and experienced Canadian business financing advisor who will assist you in managing your bank as a partner, not an adversary, thereby maximizing your bank line of credit for your firms sales and profit 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/bank_lines_of_credit_business_to_financing.html

Delve Into Canadian Sale and Lease Back Financing – Benefits Of This Type Of Leasing Of Equipment

Is a sale and lease back leasing of equipment you own already a good financial strategy? We get that question from a lot of clients so let’s clarify some key issues around this type of equipment finance.

Equipment leasing in Canada seems to be on a tremendous upswing again, having been hit fairly severely in recent years. As a result the sale leaseback strategy we can say was somewhat out of favor in the last couple years, but the good news is, as we said, that times are changing and this finance strategy is back.

In a sales lease back scenario it’s all about the asset and various issues come into play.

Exactly what is the strategy itself though - it’s important for Canadian business owners and financial managers to ensure they understand the benefits of the transaction, how it works, and most importantly, how to get it done effectively.

The sale and lease back strategy is just a twist on normal leasing of equipment. That should be no surprise. Typically either you or the leasing company would purchase or order equipment, which is paid for by the lease finance firm and then leased back to yourself. That’s business equipment financing 101 right? and there's a lot of benefits to doing that .

However in our sale and lease back strategy you are already of course the owner of the equipment. So you are in a dual role of the seller of the asset, as well as the new potential lessee.

Let's utilize a short example. Let’s say you are a manufacturer and you have an unencumbered asset, typically perhaps production equipment valued at $ 300,000.00. You may have purchased the asset for significantly more, but the current value for our example discussion is 300k. You then enter into a lease back situation - you ' sell ' the equipment to your lessor and then lease it back.

So what just happened here? Let’s see. First of all, the equipment you already own never leaves your production floor. You also just got a cheque for $ 300,000.00 to be used for whatever corporate purpose you wish. The monthly payments on the lease would typically be in the 7000/mo range, using a 48 month term as an example.

Let's examine why a business would use this strategy. The right reasons are typically for additional working capital and the ability to grow the business further. In effect you have monetized valuable assets and are using them to grow sales and profits.

Are rates higher on sale and leaseback transactions? They might be a bit higher, but at the end of the day quite frankly its our experience that they will be commensurate with your overall credit quality of your company , as well as of course the intrinsic or appraised asset value of what is being re financed.

Lessees and business owners opting for a sale lease back strategy should ensure lease terms are kept realistic. If possible we try to ensure that clients aren’t required to also commit further collateral to the transaction if it isn’t required. Lease companies have a habit of trying to over collateralize on occasion!

In summary, as a source of working capital and cash flow for the right reasons the sale and lease back leasing of equipment is a solid financial strategy. Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in maximizing the benefits and avoiding the pitfalls of this strategy.




Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 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/sale_and_lease_back_leasing_of_equipment.html