Paying Too Much For The Wrong Kind Of Factoring In Canada ? Why C I D Accounts Receivable Finance Works

Not Just Another Accounts Receivable Financing & Line Of Credit !


Information on accounts receivable finance in Canada . How to Address a/r factoring pricing to your firms advantage .


We run into far too many clients these days that are utilizing accounts receivable finance in Canada because they feel they have to... as opposed to wanting to .

Lets dispel some of the myths around factoring in Canada, additionally we'll talk about what we feel is the best type of facility (one you haven’t heard of we think!). Oh yes, and we'll address the cost of this financing also.

Most Canadian business owners and financial managers would not describe themselves as ' bankers ' if we asked them what they do for a living. However, welcome to the inner circle of Canadian banking, because when you think about it you're moonlighting as a banker . Why? ... Simply because you’re carrying a higher level of receivables than you probably want to. In effect you're the bank for your customers payables! And you don’t even get the bank pension!

It's around that concept that account receivable finance facilities are built in Canada. Your ability to convert A/R into cash flow for your own firm is critical. Naturally every firm that sells on credit has to make an investment in A/R - Factoring in Canada helps you eliminate or in effect finance that investment- Without external debt.

Although Canadian business often feels they are paying too much for factoring in Canada (rates tend to be in the 1-3% range on a 30 day basis the reality is that you are missing on the ability to take advantage of all funds that are in effect locked up in your A/R. And given that your terms are probably 30 days and most clients tend to pay between 60 and 90 days these days you're clearly tripling your inability to use cash flow to grown and run you business.

That’s where A/R finance comes in. Your ability to receive cash, the same day as you generate sales turns your firm into a commercial ATM machine. The continual flow of cash flow and working capital into your business as you finance your A/R as needed allows for more growth and more profits. Many firms miss out on the fact that a significant portion of the cost of factoring can in fact be offset, sometimes in entirety, by your ability to now purchase more effectively and take supplier discounts, thereby enhancing your relationship with key or valued suppliers.

Whats the best type of factoring in Canada .We think it's one you may not have heard of - it’s called C I D... standing for confidential invoice discounting. Under confidential invoice discounting guess who is control of the program - You!
You bill and collect your own receivables, and with the right type of facility set up you are in a position to not be locked in to any long term contract or breakage fees. That’s important, as a large part of the industry in Canada, (many of which are U.S. and U.K. players) would prefer to ' lock you in '. That’s not what the right C I D factoring in Canada facility is about.

The benefits of accounts receivable finance are significant... the weight of evidence in the constant interplay for working capital now puts you in the driver’s seat. You have total control of your cash flow, and because it’s a monetizing of your A/R you haven’t incurred one dollar of debt on your balance sheet. That’s a true business ' power punch '.

If cash flow and working capital is a constant worry for your firm speak to a trusted, credible an experienced Canadian business financing advisor about moving forward with the right a/r financing facility .. on your terms.



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_canada_accounts_receivable_finance.html

Your 2nd Best Bet in Canadian Technology & Cleantech Energy Finance

Technology Finance Solutions In Information Tech and Cleantech in Canada



Technology financing as well as ' Cleantech ' Energy Leasing and Finance is a growth sector in Canadian financing and exhibits a strong need for solid financial solutions. Let's examine what you need to know in terms of key fundamentals in acquiring tech and energy assets.

If you are a client that require constant asset acquisition in areas such as computers and peripherals, electronics, IT Services, Medical Equipment... etc you need to be aware that financing decisions you make in fact can be as important as the asset your acquire . It's obvious to many business owners and financial managers in Canada that paying cash for major projects in Cleantech and technology acquisition either doesn’t make sense or in fact is simply not possible.

The hard reality is that due to different tech and cleantech asset types no one finance firm or specific solution will suit all your needs. That's why in Canada, where the financing choices are simply less available than those in the U.S. it’s important to understand who the players are in the asset category you are choosing to finance.

Projects in IT (information technology) as well as the Cleantech area tend to require huge amounts of cash and have significant tax and tax credit implications. It's strongly predicted that energy and carbon tax credits will one day in fact become financeable themselves.

The carbon tax will are levied on all fossil fuels, including gasoline, diesel, etc... and in some progressive provinces, such as British Columbia, plans are already in place to have funds collected that will in fact be ' returned ' via tax credits.

The risk in both managing and staying on top of technology assets as well as Cleantech assets is a formidable one for Canadian business.

When you enter into a financing arrangement for either IT or Cleantech assets you clearly want to understand how they will be used by your firm, and for what duration. The proper financing of these assets in fact can become a competitive strategy.

Issue you should consider in technology finance includes your ability to upgrade during the term of the financing arrangement or lease. Proper ' cost of ownership models ' in both Cleantech and tech finance can be valuable from a viewpoint of return on investment. allowing you to also consider the implication of all those related items such as software, training and support, environmental costs, etc. Very basic lease vs. purchase analysis can often help your financing decision and aid in the proper solution. It’s a simple matter of adding up all your costs and then ensuring your cash flows and cost of capital makes sense relative to the investment you are making.

Technology financing makes sense because it addressses the issue of cost, gives your flexibility, and provides rates terms and structures that make sense to your financial situation and goals.

Whats is then your first and best bet in technology financing and Cleantech finance. Quite frankly it’s simply vendor or manufacturer financing. The ability of the manufacturer or vendor to provide financing to you cannot be overstated. But on the other hand, 2nd best is often a better solution in Canada – that is .. aligning yourself with an independent unbiased financing solution allows you to escape from the ' control' that a manufacturers financing asserts.

That is why we often recommend to clients that they consider expert business financing assistance that is unbiased relative to your tech asset pricing, allowing you to eliminate many of the limitations that are placed when you align yourself with any one specific vendor. Flexibility and added expertise can save you thousands, even hundreds of thousands of dollars depending on the size of your project.

One size fits all does not work in technology financing and cleantech energy finance. Seek a customized independent financing solution that provides a comprehensive finance solution for your tech and Cleantech asset 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/technology_financing_cleantech_energy_finance.html

Good Decisions Around A Commercial Business Financing Loan In Canada – Canadian Lending Options

Don't go on wondering if you feel you that as a business owner or financial manager you don’t understand your options around Canadian lending around a commercial business financing loan. Let's cover off some key groundwork around possibilities and the players.

In many cases certain types of business financing in Canada should be viewed as a specialty or a niche. The financial borrowings you entertain might be subsets of a certain type of financing. Some specialty areas that you might consider are of course bank debt, typically viewed as the most senior and least expensive method of borrowing if your firm qualifies.

Other more esoteric areas, but still viable, popular, and in fact growing in popularity are areas such as purchase order financing, confidential invoice discounting , asset based lending, bridge financing and mezzanine and sub debt financing . We would venture to say that in some cases you may have not even heard of some of these financing possibilities, let along of course understand the benefits of and requirement around successfully completing such financing .

The major8ty of Canadian business owners think in terms of our Chartered Banks when it comes to revolving lines of credit and term loans for equipment and working capital. However the reality is that you should be also assessing the merits of an asset based lender, a very unique and often independent commercial business financing firm that relies almost totally on your asset base of receivables, inventory and equipment and real estate (or combinations thereof) to provide you with a commercial business financing loan structured as a line of credit. Their expertise and industry and asset knowledge quite often exceeds that of many commercial bankers in Canada, if only for the fact this is their sole focus.

Term loans in Canada for either equipment or cash flow tend to b e three to five years in term duration. On occasion a firm needs what is termed a ' bulge ' or a ' bridge' loan type of lending that satisfied a unique need at a certain point in time for your firm. Typically these loans are then taken out or refinancing under better rates, terms and structures once the initial need around the bridge loan is satisfied - for example a temporary working capital bulge .

Many firms entertain cash flow, or what is known as ' mezzanine ' type financing to satisfy a lending need that can’t be arranged via your senior lender, i.e. the bank for example. Commercial mortgages are also often viewed as a financing vehicle, often in the context of a re financing of real estate for working capital purposes.

Hundreds of equipment leasing and financing companies in Canada also can solve your lending conundrum - acquiring special assets that have value and revenue generation for your firm.

Private equity in Canada has tended to be somewhat under the radar but continues to grow as a commercial lending option. In return for giving up a portion of your ownership the use of private equity allows you to focus on a variety of options, including, but not limited to: growing our business, refinancing your capital base, going private if you’re a public firm, and in many cases allowing you to work out of a distress or challenged period. Naturally a majority or minority controlling interest comes with that equity scenario.

The process involved in any significant commercial business financing loan is rarely different - you want to be in a position to highlight management capability, have reasonable financial target and goals , and willing to go through the proper level of due diligence relative to the size and type of financing you are entertaining.

Consider seeking and speaking to credible, trusted and experienced Canadian business financing advisor with the credentials to assist you in determining the right commercial business financing loan in the context of Canadian lending. The skills and expertise in business financing that an advisor brings will help position your firm for business financing success.





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/commercial_business_financing_loan_lending.html

Canadian Franchisee Financing & Getting The Right Finance For A Franchise - Possible In Today’s Economy? Here’s how!

In The Minutes It Takes to Read This You’ll Understand Franchisee Funding & Loans In Canada


Is financing or the lack of knowledge of who to turn to holding you back on completing your dream or vision of finance for a franchise you have chosen? The ' how to ' in franchisee financing in Canada is not as hard as you might think. Let's examine a solid ' battle plan ' and the ' lay of the land ' in franchisee finance with respect to opportunities in the Canadian franchise industry.

The amount of capital you need when you consider how to finance a franchise can often seem formidable. The amount you are able to finance will come from debt (your loan) and your own individual equity into the business... classically known as your ' down payment '. We quite frankly can’t remember when we have not heard the question from any client ' how much do I have to put in ‘. More about that one later.

We caution clients also to think of the financing over the intermediate and long term. By that we mean that yes, you have to have solid funding to acquire the franchise but at the same time start to think also of how any working capital needs might be solved after you have acquired the business .

But first things first, right? So back to our main point today, which is ‘In today’s tough business climate?
Is it still possible to attain the amount of franchisee financing you need?’ We hate to put on our lawyers hat and offer up the answer ' it depends ' but quite frankly we're fairly bullish on the ability for any Canadian business entrepreneur to acquire financing for a franchise.

The key elements of ' successful ' franchisee financing revolving around a small handful of key elements - they are as follows - a reasonable down payment aka ' equity investment ' by yourself as owner. Secondly, the financing must be well documented - this should be a bus. Plan or summary highlighting you yourself, your proposed acquisition, info on the franchisor, industry stats, and a financial plan that makes sense. Only one financial plan makes sense for your lender - the one that shows them how they will be repaid!

The business plan or a significant executive summary outlining what we have just discussed should not be a daunting task. While we recognize that many clients don’t have the experience, tools, (or simply the desire) to prepare such a document it in fact can be prepared efficiently and for a very low/reasonable cost... we would not recommend paying more than 1k or less for a plan that meets and exceeds expectations. Also, be prepared to provide some input into the plan, as no one should know the business and it’s potential more than you.

In Canada franchises in the 350-400k range are financing via 4 main methods. Thousands of businesses utilize the well known BIL/CSBF loan that quite frankly provides, in our opinion, the best rates, terms and structures for small to medium sized franchisees.

Additional financing comes from one or two specialty firms that tend to work only with established larger franchisors with requirements often approaching 1 Million or more per transaction. Also, is it possible just to get ' a loan ' from a Canadian bank to acquire the franchise? We would offer up that it is, if you have significant collateral to pledge, very strong net worth, and a pristine credit bureau record. We don’t see that type of transaction happening a lot, and certainly the idea of collapsing or collateralizing outside investments has all sorts of personal and financial implications.

Your ability to finance any hard assets via equpment financing can often nicely complement or round out a financing package. Again, it’s a case of making the numbers work and ensuring that you have taken some time to analyze the total financing picture. When we sit down with clients we tend to break down the financing into key areas such as ' soft costs ‘(for example your franchisee fee) equipment, leaseholds, and working capital. By identifying a source for all these you have the ability to cobble together a plan that works.

Bottom line, it’s very possible to get a solid franchisee financing package in place to complete your dream acquisition. Common sense attributes such as being prepared and doing your homework go a long way. Consider also talking tow or working with a trusted, credible and experienced Canadian business financing advisor who can help you navigate the franchise finance roadmap to entrepreneurial success.



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_financing_finance_for_a_franchise_how.html

Why Canadian ABL Asset Based Line Of Credit Clients Win ! Commercial Revolving Non Bank Facilities Work

What’s Different About Asset Based Lending Line Of Credit Capital ?


Information on the commercial revolving capital facility known as the ABL asset based line of credit . What are the advantages and differences of this facility to a bank business line of credit .


If you speak to Vince Lombardi or Charlie Sheen winning is apparently everything. We're not sure that applies in business all the time, but we think we can prove to Canadian business owners and financial managers that an ABL asset based line of credit is as close to the perfect ' winning ' commercial revolving credit facility that you can obtain. Here's why.

An ABL firm is a business to business lender - yes we know that Canadian chartered banks are also that... but they are operating under a totally different set of rules. That is why small, medium and even the largest firms in Canada utilized asset based lines of credit for working capital and cash flow financing.

The essence of an ABL is the financing, to the maximum amount possible, of your receivables and inventory. Medium and larger firms can actually include a healthy component of fixed assets and real estate into that mix.

The extra financing capability that your firm receives from an asset based line of revolving credit (versus the traditional bank facility) gives you choices. What are those choices? Mostly good things - expanding your business... acquiring a competitor or peer, working thru a turnaround scenario. or simply restructuring to get your firm where it needs to be.

But can't we get the same sort of opportunity via a Chartered bank in Canada? ask clients. In fact we agree that commercial credit and lending in Canada via our chartered banks is in fact on the rise, all recent stats back up that statement. However, 2 simple issues come to mind when we talk over these financing challenges with clients - Would you in fact be approved for a facility via a traditional commercial revolving line of credit... and, as germane, would your company get all the financing it needs.

The hard core reality is that many firms we meet actually find themselves out of favor at the bank, they are either ' capped ' to a pre set limit , or find themselves in the very ' unspecial ' feeling that comes from finding yourself in Special Loans . (Trust us on that, special is taken out of context in this financial term in Canada!)

We do agree with clients that in many cases, when all things are equal, bank facilities might seem cheaper from a short term commercial line of credit.

Actually, in numerous instances an ABL asset based line of credit can actually be cheaper than the bank, roughly the same in pricing, or in a lot of instances more expensive financing... but... and its a big but... you have to weigh the fact that ABL delivers more borrowing power allowing you to enjoy discounts with suppliers and to purchase more effectively.

Any commercial or revolving line of credit that allows you not to have to give up ownership percentage is in fact always cheaper than the reality of looking to equity financing, a partner, merger, etc.

In ABL financing your higher borrowing capability comes with only two requirements essentially, you have to have the assets to borrow against, and you must have reasonable financing and reporting controls to validate the significant amounts you are now borrowing.

If you want to explore ABL asset based lines of credit as a solid alternative to funding your company, either temporarily, or permanently speak to a credible, trusted and experienced Canadian business financing advisor who will work with you on an ABL relationship that makes 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/abl_asset_based_line_credit_commercial_revolving.html

Time Runs Out In Business Financing – Working Capital Management Analysis & Strategies

If you're like most Canadian business owners you're somewhat skeptical of either the press or perhaps the agenda's of financial institutions you deal with or borrow from .

Yesterday we got one of those newsletters from a bank - the content was mixed... We’re quoting here : ‘Automotive industry rebounds .... Business confidence down... business barometer mix down sharply...business credit trending up ...'

Talk about some mixed signals... and how do we interpret those type of messages in our own business situation and needs when it comes to working capital management and the analysis of that all important business life blood... cash flow?

How you manage your working capital, and how you borrow for it are one of the most important aspects of running and small and medium sized business in Canada. Simply things like billing and collecting your A/R promptly and matching those payables outflows make or break any business.

What are the factors that affect your need for cash flow and what are some analysis and financing techniques to accelerate working capital management. That’s effectively called the cash flow cycle. Did you know for example that many larger firms actually manage their growth, they use simple formula's that any small and medium sized business owner and financial manager can use to determine how fast they can grow based on their operating profits and their ability to manage receivables and inventories without over borrowing . Frankly, you should be doing what the big boys do also, and it’s not as hard as you think.

The three things that affect your need for working capital are your profits, how fast you collect from your customers, and the ability to control operating costs and overheads as you grow. The big corporations call this formula - the ' Sustainable Growth Rate ' - as a business owner you need to accept that growth can often mean running out of cash.

So how do business owners ' accelerate ' working capital management strategies to optimize growth. First, as we said they can use some basic formulas to determine how fast they can growth without outside financing. When outside financing is required a number of options are available - probably more than you thought.

They include receivable financing, working capital facilities that are non bank in nature and combine inventory and a/r financing , and true asset based lending which monetizes on a daily needs basis our current and fixed assets .

External cash flow can also be provided by lesser known, but very viable vehicles such as purchase order financing, securitization and even the financing of any SR&ED tax credits if you're in the manufacturing or tech space. Capital can also be conserved by effect lease financing strategies that finance assets you need on a short term or long term basis.

So, we've been told business is about a bottom line. What's ours today? Pretty simple. Use tools to measure your cash flow needs, plan for growth with working capital management and analysis in mind, and take advantage or cash flow techniques that are traditional and non traditional in nature . Speak to a trusted, credible and experienced Canadian business financing advisor on what it takes to implement strategies that work 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/working_capital_management_strategies_analysis.html

Discover Business Software Financing Options For Canadian Systems & Projects

No secret that in today's competitive environment any advantage business has over the competition is valuable - that’s an understatement. So, if you accept that software of all types’ runs grows and operates your business, doesn’t it make sense that you are up to speed on business software financing options for your systems? We think it does, so let’s explore what you might not know about software finance lease and loans in Canada.

The reality that comes as a surprise to many clients is simply the fact that technology can be leased. In today’s terms that covers hardware systems (servers, pc's, laptops) as well as software (our subject today) and the new leasing asset on the block: solar, wind and cleantech assets.

There are some key issues that differentiate software financing in Canada. Issues that you have to consider and take into account are the types of leases offered in business software financing options, the doc's that come with that lease, and probably of prime importance to our clients, how these leases are priced .

Software itself is a broad term, we refer to software you are developing (yes it can be financed) as well as the applications you purchase. Many transactions in Canada are software only leases and loans. A present surprise to our clients is often the fact that the actual software licenses can be financed also (remember, you use the software, you dont own it).

Many great technology financing occur when you utilize the concept of ' bundling ' - that is to say you acquire hardware and then bundle in numerous soft costs, including software to achieve a blending pricing and maximum financing of your transaction .

In technology finance when it comes to hardware you should often consider an operating lease for the hardware component of your transaction. The software and other soft costs (training, licenses, maintenance, install, etc) are financed at what the industry terms as ' full pay out ‘. By combining the
rates on both parts of the transactions you achieve a blended rate which makes your overall business software financing attractive from the lease and loan perspective .

Let’s use a quick example to illustrate -

You buy a 100K server and related ' hardware ' and agree to finance it a 3 year term. Additionally you require, and acquire 50k of software. What would the monthly payment be on this transaction?

We maintain it could well be in the 4.1k range per month on a 36 month term. That interest rate works out to about 1% or less, because the operating lease subsidizes the software financing.


Want this and other advice on proper tech financing and business software financing options on your systems and technology assets. Speak to a credible, experienced and trusted Canadian business financing advisor with software and tech finance experience. Options you thought you never had will become available, immediately.





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/business_software_financing_options_systems.html