Factoring Receivables ? It’s Up To You - Pick The Right Business Finance Company As Your AR Factor Partner

‘Whats best type of business financing company for my firm' often ask our clients when they consider AR (A/R) financing and factoring of receivables. We believe strongly its all about the partner, as much as the facility arrangements and we think we can show you why.

A/R (AR) financing companies in Canada tend to be specialized focused niche lenders in the Canadian business landscape. Unlike our friends in the U.S. these firms tend to be non bank independent finance firms, Canadian, U.S, or U.K. based with respect to ownership.

This type of business finance company has one focus, advancing you cash and working capital on your AR (A/R) similar to a line of credit. The funds you can obtain are unlimited based on all your eligible receivables. ( In general receivable financing works for all receivables under 90 days old, as many clients think they are able to finance a receivable only immediately after it is generated , which is not the case by the way.

So could the right business finance company for the factoring of receivables actually be a bank. There are 1 or 2 players in the Canadian banking landscape that do in fact offer receivable finance, similar to a factoring model, however on a broadly speaking basis we can categorically state that banks don't finance receivables under the invoice discounting model that you are probably looking for .

We guess that anything is possible and one day we might see the banks gravitating to this type of finance... It certainly might be good from a rate and competition basis.

So we have determined that your search for the right firm re factoring receivables should focus on a specialist firm offering the type of facility you are looking for. But do you as a Canadian business owner or financial manager actually know the best facility when you meet it?!

Let's walk you through what we consider the key issues in finding the ' perfect ‘AR financing facility in Canada. First of all you want to ensure your partner firm can satisfy your facility size - some firms are very small and have limited capital themselves! which we think is something clients don’t often consider. Other key issues are as follow: facility limit, your ability to finance all your receivables, as certain companies impose restrictions on either the total amount for any one of your customers, and believe it or not some firms actually don't like government receivables for some legal and technical issues around their security.

Two other factors to consider is how clearly you understand the advance formula under which you will draw on the facility... and oh yes, did we forget to mention pricing ? That's a tongue in cheek comment of course as the majority of clients we speak to seem totally focused only on pricing, and not the ten or so other issues they should be considering.

Pricing varies significantly in Canada... anywhere from 1-3% of each invoice for a 30 day period. Rates are determined by overall facility size, the quality of your A/R and the number of days it takes your clients to pay.

Whats the optimal facility in Canada for factoring receivables? For us its 'C I D’, confidential invoice discounting or financing. This allows you to bill and collect your funds without any notice to your customer. This type of facility is perfect for your day to day operations.

In summary, of course you're the one that will make the final call on the type of facility that makes sense for your firm when it comes to cash flowing your A/R.

Consider also speaking to a trusted, credible and experienced Canadian business financing advisor who can navigate the waters of receivable financing for you on issues such as borrowing formulas, rates, terms and conditions, and your ability to improve on these factors.






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/factoring_receivables_business_finance_company_ar.html

Simple Question – Is the Canadian SBL Government Small Business Loan Financing Right For You?

Could our question on the Canadian government small business loan (commonly called ' The SBL ‘) be any more simple? Is this specialized Canadian lending program right for your company? If you are a Canadian business with fewer than 5 Million dollars in actual or projected revenue we categorically think it is - as always though we'll let clients decide for themselves!

Business loan financing in Canada varies greatly. Structures, documentation on the loan, and guarantees or collateral required vary widely, and we can assure you with certainty that’s an understatement!

The Canadian government, specifically the good folks at Industry Canada (they sure seem nice when they call us at least ...?) sponsor this loan program . The technical name of the program is BIL/CSBF... but we're never one to get too technical.

This type of financing in general serves the lower end of the Canadian business financing scene, and does at a great job of financing business in Canada who otherwise might not be able to qualify. And do you know what the difference is? The rates, terms and structures of this program, compared to almost all other type of financing are... are you ready? better!

What are some of the reasons then that we can say with assurance that this financing is of the best in Canada, whether you are a start up, a franchise, or a established company with sales and profits .

What most Canadian business owners and financial managers don’t immediately realize is that while everyone thinks of this as a government loan the program is actually run on a daily business by Canada’s chartered banks. The challenge in many cases that we've seen with clients is they are unable to find a banker as bullish and excited about the program as we are. (We guess filling out forms is somehow not appealing to all ...?)

Why the program should appeal to banks more, in our opinion, is simply the fact that if a loan is unable to be repaid the government reimburses the bank for 90% of your firm’s loan. So banks are therefore only partially at risk, and that risk is often taken care of nicely by a combination of your 25% personal guarantee, as well as security over the assets financed.

That’s why we are always surprised that the appetite for this type of financing is rarely as large as we think it should be. The program is in place all the time, and is never under any form of suspension, as has happened in the U.S. on occasion.

So why don’t more businesses use the program. We can only offer up a few basic reasons - they don’t know about it, they find filling out forms cumbersome (we’ll fill out a form all day to get the 350,000$ that is in fact the loan maximum!!) or they don’t qualify.

But are those qualifications stringent? Hardly - Business owners need only to have a reasonable personal credit history, they must be willing to guarantee 25% of the loan, and the financing capabilities of the loan are limited to equipment, leasehold and real estate.

We're not telling you to get a government small business loan... we're simply asking you to consider it as one solid mechanism for obtaining the financing you need when other alternatives might not be available .

7441 of your competitors and peers in Canada used the program last year. Maybe you should?

Speak to a trusted, credible and experienced Canadian business financing advisor on why SBL financing just might be right for 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.7parkavenuefinancial.com/sbl_government_small_business_loan_financing.html

Sasquatch ? UFO’s ? Great Asset finance and Equipment leasing Companies in Ontario ? – Myth or Reality ?

We'll go with reality with respect to great asset finance and equipment leasing options in Ontario. With the economy generally improving leasing continues to be a popular and successful method of acquiring the use of assets for your business. And the reality is that this method of asset financing has been in place for hundreds, some say thousands of years, so there is a lot to be said for a proven formula.

There are several key factors that drive the reality success of equipment financing in Canada - they revolve around tax benefits, conservation of capital, and quite simply a solid alternative to ownership. As a Canadian business owner or financial manager you want alternatives to ownership of assets that more often than not depreciate in value. That clearly is the chief advantage of the great asset finance and equipment leasing availability in Ontario.

At the end of the day it’s simply an alternative to ownership, while at the same time you are able to reap all the benefits of the assets without having had the need to put significant capital outlay at the outset. That’s a great option and business financing strategy. There is an age old saying in the lease financing industry which is that you benefit through use, not ownership.

And that additional cash flow allows you to invest in other resources and assets to make your business more profitable and competitive.

Obsolescence is always a concern for business owners who with to acquire new assets, whether they be for production in the plant or technology and computers in the back office. Leasing allows you to battle head on with the obscelescence factor given that you don’t want to outlay significant amounts of capital into assets that might have limited long term use. We continually advise clients to think of their computer needs and purchases in the past, and the constant need to upgrade technology while addressing your current and future needs. Can you even imagine in today’s times owning a computer for 3 to 5 years, it’s very doubtful!

Cash flow and buying power are often quoted in connection with great asset finance and equipment leasing strategies. The reality is that you can buy more if you have a financial strategy in place. Let's look at a simple example - and we will use our old friend computing technology as our poster boy for the example.

Lets say you need a new computer system for 250,000$ and the reality is that an alternate vendor has a better solution for 350,000$. If you were purchasing you have to wrestle down two key issues, laying out 250k , or alternatively coming up with an additional 100k of real cash to complete the second alternative purchase . The monthly lease payment on a 250k 3 year lease would be approx 7700 dollars, and on a 350k deal it would be approx 10 600 dollars . So as a business owner which solution do you want to wrestle with - paying either 250k or 350k out of working capital, or working an additional 3k into your operating budget?

Want to see some real magic? You could actually acquire the 350k system under an operating lease and bring that payment very close to the 250k system, but that’s a technical subject for discussion on another day.

So whats out bottom line, you are welcome to hop on the leasing industry train and take advantage of some great rates, terms, and structures via one of the most comprehensive and flexible asset finance strategies available to business.

So, Sasquatch, Ufo's? We're not sure, but Speak to a trusted, credible and experienced equpment leasing advisor who will help you maximize the benefits of this Canadian business financing proven strategy.



Stan Prokop is www.7parkavenuefinancial.com

Canadian Business Financing

Invest In Your Personal Future - Franchisee Loans & Financing Rates From Canadian Lenders

We're the first to admit that your decision to take a personal or business loan for a franchise purchase is a major life decision. So franchisee loans that make sense, from lenders that offer solid rates and financing are key to your future success in the Canadian franchise industry.

And by the way, by all accounts that business is booming, so we immediately recognize the appeal and economic opportunities to your desire to entire into a franchise business.

That’s the dream part of the equation - but what about the reality part?! That reality often revolves around getting approved for franchisee loans at financing and rates that suit your personal and business goals.

When you are properly armed with the tools to complete a successful financing you are in a position to have a much larger chance of success in your new business. Solid information, planning and a mini strategy around your franchise makes the odds of securing franchise finance approval significantly greater.

If you do want to win the battle, and yes, we think that based on hearing what some of our clients have gone through that it is a ' battle' you need to ensure you have a plan . Can you count on your franchisor to assist you with financing or direct interaction with lenders? In most cases absolutely, positively..... not. They sell franchises, they don’t finance them.

We don’t want to undermine the benefits of knowing that you'll be affiliated with a solid franchisor who hopefully has a respected name, but at the end of the day its you that has to take charge of your financing plan.

Lets examine some of the key issues your should be thinking about when you start your search for franchisee loans. It's actually a limited market in this specialized niche of Canadian financing, as you will soon find out, so we'll also share who the participants are from the point of view of lenders you can work with.

Track record. Two points here, first of all you want to ensure that you have some semblance of both experiences and past success in your work, business or career history. Many times general business skills can translate directly into strong points, allowing you to create a solid perception you can run and grow a business.

Growing your business, understanding its financials, and ensuring you have a strong handle on ongoing finance operations are critical keys to success. Those key issues should be covered in your business plan, which is a key requirement in your financing. Elements of that plan should include info on yourself, your franchisor, your profit and cash projections, and info your industry. A business plan can either be prepared by you or very economically by a Canadian business financing advisor who is an expert in franchise finance in Canada.

So, personal loan or business loan? Because most franchises are essentially a small business your franchise lender places significant emphasis on your personal credit history - key elements are a decent credit bureau report and some net worth based on your personal savings, home , etc . Your personal assets aren’t collateralized, but they play a role in ensuring you have some staying power.

The majority of franchises in Canada are financed through the BIL/CSBF program, which is a generic financing program sponsored by the government that fits very nicely into franchisee loans that makes sense. Rates are attractive, terms and structures are great, and your personal guarantees are limited significantly. (That’s a good thing!) The majority of franchises in Canada are financing under this program.

Only one other major finance firm specializes in franchise finance in Canada , independent of the banks, however these financings are of a program nature and generally much larger in size from a single transaction point of view . Various niche players such as equipment leasing companies can round out your financing plan.

Want to ensure you have a better chance of full approval for the financing you need, with good terms, amortizations that make sense, and some working capital ' wiggle room ‘? Want to make things happen quickly, with the emphasis on a business financing, not a personal loan? Speak to an experienced, trusted and credible Canadian business financing advisor with franchise finance experience today. It makes sense to work with an expert to ensure your investment in your personal future makes solid 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.7parkavenuefinancial.com/franchisee_loans_lenders_personal_loan_financing.html

Are ABL Business Collateral Loans The Future Of Canadian Financing – Why An Asset Based Loan Works

Every once in awhile something comes along in business that is a bit ' disruptive ' to how things are currently done. We think that ABL business collateral loans for working capital and operating financing is clearly the new ' disruptive' in business financing in Canada - an asset based loan that makes sense, and works!

Inevitably we spent large amounts of time with clients reviewing the differences between ABL (asset based lending) lines of credit and bank operating facilities. There are huge differences.

In ABL finance its all about cash flow and working capital. Your current assets, primarily receivables and inventory are monetized, pretty well to the max. Clients tend to think of this as a ' loan ', and they can be forgiven for that for we often use that terminology also , but its not a loan, term debt per se, simply the cash flowing and monetization of your assets, converting those asset values into a long term daily operating line of credit .

Borrowing capacity on business collateral loans, i.e. your ABL revolving line of credit is determine primarily, with major emphasis on you r assets. Those amounts are determine up front - we can typically say that receivables are financing at 90% of your total a/r, and inventory typically comes in at the 40-70% range , depending on the nature of your product.

We can also safely say that you can increase these percentages with your asset based loan lender after some solid historical experience on the facility is in place. Surprising as it may seem in some cases you can actually achieve an over advance on assets, either on a bulge or seasonal basis, or simply on an ongoing permanent basis. When was the last time you got more that the asset was worth in any other type of Canadian business financing?!

ABL business collateral loans are managed very similarly to a bank facility in Canada. Monthly borrowing base certificates are in place, and this pertains to both inventory and receivables. It’s a question of ' eligibility ' and a lot of discussion takes place up front on the general nature and quality of the assets that underpin your facility.

In certain cases companies who do progress type billings are also in a position to have these receivables monetized under the same facility... its been our experience that many companies have had numerous challenges when they sell and bill via contract, progess payments, final acceptances scenarios, etc.

If we had to sum up why ABL asset based lines of credit as a ' disruptive' form of business financing we would simply safely say that it maximizes business credit, is generally easier to obtain, and provides long term working capita growth as your asset base grows .

Picking and structuring the right facility can be a challenge for novices to ' ABL ' business collateral loans. Speak to a trusted, credible an experienced business financing advisor who can help you achieve the facility you need.


7 PARK AVENUE FINANCIAL

CANADIAN BUSINESS FINANCING

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

Heavyweight Canadian Invoice Finance Funding – C I D Credit Financing & Factoring For Your Firm

Thousands of small and medium sized businesses in Canada have gravitated to invoice finance funding as a solid alternative to their needs for working capital credit and financing. But what if, just if you had access to a facility that was a notch above those thousands of firms who use traditional factoring?

Conceptually factoring credit and financing is immediately attractive to Canadian business owners and financial managers. It provides an immediate line of credit based solely on a percentage of your receivables. Solid facilities will usually advance 90% of the total of your receivable based... most business owners are aware that banks advance against a 75% under 90 day formula .

Reporting and qualifying for your draws on receivables couldn’t be much easier - it involves simply submitting an aged A/R listing which allows for your drawdown and credit financing availability.

Since the majority , ( about 99% ) of companies and firms providing invoice finance funding are not banks clients are always asking us how facilities work, if its not a bank arrangement . It's actually quite simple. Your funds and draws against your receivables are deposited by your funding and factoring firm into your regular bank account. Payments received by your firm, from your clients, are put into a separate account in the name of your finance partner. These funds, when received from your clients, reduce the amount you have drawn/borrowed on a daily basis. The bottom line, it’s your revolving business line of credit.

Now, let's get into C I D. That's the term we use to demonstrate how you can be a winner in one of the key issues around factoring and receivables credit financing in Canada. This is the practice surrounding the key issue in standard (dare we say ' old school') invoice finance funding that came to Canada with a wave of U.S. and U.K. firms that dominate the industry.

If your competitors or peers in your industry are using this traditional method here’s what happens... your end user cusotmer is notified that you have entered in a factoring arrangment - this allows the finance firm to somehow feel safer they will get paid we guess, which is understandable .

But our choice or recommended solution for firms such as yours considering this type of financing is C I D - confidential invoice discounting. Your clients aren’t notified of your financing arrangement and there is no extra charge for this method of financing.

There are of course other key issues around understanding this type of financing - the advance rate on your receivables ( i.e. how much you get .. 80-90% is standard) , actual discount fee of financing charge on your entire facility, and our desire to ensure you understand how any miscellaneous items are charged .


So whets our bottom line then? Simply that there are some true ' heavyweight' alternatives that give you both advantage and comfort when you're considering invoice finance funding and credit financing for your receivables . Speak to a trusted, credible and experienced Canadian business financing advisor in this niche area of working capital finance.




7 PARK AVENUE FINANCIAL
CANADIAN BUSINESS FINANCING !

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

12 Types of Business Financing in Canada - Which Do You Need? Commercial Loans & Cash Flow Finance

Are you serious? We can hear clients asking that already. Can there really be 12 different BUSINESS financing alternatives in Canada available to business owners and financial managers? And are they finance alternatives that make sense.

Actually we're not serious, there are actually more than 12 different alternatives, some are just a bit more rare or esoteric we could say, and not applicable on a daily basis to your company relative to its finance and growth needs.

For small and medium sized businesses in Canada the ability to develop an overall long term strategy and plan is key of course. At the end of the day you want to optimize business assets for borrowing and determine which type of financing works best for your firm .That type of financing is going to come from two areas , clients and suppliers, and of course external finance sources.

When addressing where your business financing is going to come from in Canada you need to determine your optimal level of debt - many business owners don't always realize that certain forms of financing actually don’t bring debt on to your balance sheet, they simply monetize assets.

So, on to what you have been waiting for! Let's do a short highlighting of commercial loans and cash flow facilities that make up our 12 sources of external business financing. (Your profits and suppliers and customers are your other source of cash flow by the way).

12 potential sources of financing in Canada are as follows - confidential invoice discounting , inventory financing, sale and leaseback strategies, equipment financing, purchase order financing, credit card receivable financing, micro loans, working capital lines of credit, bank operating lines, asset based lending, government small business loans, mezzanine and subordinated debt finance.

That's a handful for sure What it really comes down to is determine which type of financing is available to your firms overall credit quality . Often that is tied to what stage of life your company is in - we've referred to that in the past as which stage of life cycle your firm is in. That could be start up, high growth, maturity, and yes, ' distress'.

Unfortunately the larger your company is often plays into the fact that you might have more flexibility and ' wiggle room ' in Canadian business financing alternatives.

Is there a formula or roadmap for that is perfect for any one firm? Unfortunately not, each firm and industry is different. Seek a trusted, credible and experienced Canadian business financing advisor who can ensure you are aware of various solutions that are most applicable to your company... today!




7 PARK AVENUE FINANCIAL
Canadian Business Financing

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