Canadian Asset Based Finance Has All The Best Ingredients For A Business Line Of Credit – Business Receivables Financing

A winning strategy for business lines of credit in Canada


Information on asset based finance facilities in Canada – Why ABL working capital facilities are a solid line of credit solution for business receivables, inventory and equipment finance.



Asset based finance is a solid working capital solution for a business line of credit as an alternative to bank financing. An ABL (asset based lending) line of credit provides an operating line of credit facility for a combination of both receivables and inventory. This can be achieved in Canada via a traditional receivable financing facility for firms that have both domestic and out of country receivables.

Often times this type of facility provides cash flow when your company is growing, or perhaps wants to acquire another firm... even a competitor. If we had to label many clients that are searching for the right asset based finance facility we would quite frankly put them in the category of being in a turnaround or restructuring situation.

Proceeds from this facility can be viewed in many positive ways, one of which is to simply give you leverage and negotiating power with suppliers for pricing and discounts ... and why? Because you now have cash flow that allows you to buy smarter, purchase larger quantities of materials - all of which are on top of your new found ability to feel more comfortable about day to day financial burdens such as payables, salaries/wages , etc.

Many Canadian companies that approached asset based finance solutions have often exhausted traditional financial solutions. We stress to clients that asset based finance solutions are the last thing from ' lending of last resort '. In fact they in some cases can be more cost effective, and almost 99% of the time, in our experience, provides clients with more liquidity and access to capital.

And don’t forget also that when you approach asset based finance from a business receivables or inventory financing point of view you are no longer forced to consider scenarios such as raising additional equity and diluting ownership .. and that’s a good thing if you're a business owner in Canada.

So how exactly do asset based finance solutions provide that much more liquidity, than say... a traditional Canadian chartered bank line of credit. They do that by margining you receivables at higher levels, or margin rates that banks, and also include additional borrowing on that same facility based on inventory, equipment and real estate, all of which are rolled into one day today borrowing facility.

In order to qualify for this type of financing it becomes a question of controls and reporting. Your firm should be in a position to report on an on going basis on aged receivables, payables, inventory counts, etc. It's that level of business control that will get your firm the highest asset based finance facility.

Look at business receivables financing via an ABL facility as a type of financing that becomes the bridge for your firm to either move to a Canadian chartered bank facility or a true tier one ABL facility with comparable bank rates and structures.

When you are not aware of all the possibilities available to your firm for a business line of credit option speak to a trusted, credible and experienced Canadian business financing advisor who can help you reach the higher ground in asset based financing in Canada.



7 PARK AVENUE FINANCIAL

Canadian Business Financing

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

What They Don’t Tell You About Lease Interest Rates and Leasing Costs for Equipment Finance in Canada

Follow this formula for understand equipment lease interest rates in Leasing Finance in Canada

Information on lease interest rates in Canada . What are some key factors in leasing costs and asset finance that allow your firm to win the equipment finance game.




Is it wrong for Canadian business owners and financial managers to want the lowest interest rate and best overall leasing costs and rates in asset finance in Canada? We've never been convinced that a ' low rate' per se is absolutely the only way you should be looking at an asset finance acquisition, but it is certainly one major factor in your overall decision.

Let’s examine what factors are critical in assessing a ' best rate ' on a deal and how your lessor actually calculates finance rates in leases and equipment loans. Times change in business, Canadian business owners and financial managers are currently right where they need to be when it comes to asset finance. The industry (equipment lease financing) is currently on a roll. And what does that mean to you, the business owner or finance manager. Simply that the best competitive rates, terms and structures are available.

There are a solid handful of key issues that reflect what determines your final lease pricing. One of these is simply the asset you are financing - assets that depreciate less quickly than others can often command a lower lease rate. Extreme example of this might be computers and aircraft. Computers, from a hardware perspective, depreciate quickly, if only for the good reason that technology changes quickly and hardware offerings get better than ever. On the other hand aircraft terms can be anywhere from 5- 20 years (try obtaining lease financing on a 20 year amortization on your next laptop acquisition!), simply because the asset still has significant value over a long period of time.

Credit quality also of course plays a key role in determining leasing costs in asset finance. Lessors determine your final pricing with significant emphasis on credit criteria. Companies that receive the best pricing and lease interest rates typically they have cash flows that historically, current, and in the future have the ability to make lease payments.

In reality it’s a simple mechanical calculation - take your company’s annual current cash flow (income plus deprecation is the quick calc on this one) and factor in the amount of debt that a years lease payments might add on to that. If your cash flow is still positive then you have met a key requirement of obtaining financing leasing costs that many other firms might not be able to achieve.

Naturally the type of lease you enter into (capital or operating are the two main ones) also affects lease pricing. Either you or the lessor might have a secret plan to sell or remarket the equipment at the end of the term of the lease. That affects your pricing naturally!

The last thing we consider ourselves is tax experts, but issues such as taxes and timing of cash flows have a significant impact on lease interest rates.

Oh, and by the way, your lease company borrowed money in order to lend you money. They all have different costs of funds depending on who owns them, the amount of equity they have in their firm, and the types of losses they experience in their own portfolios. So who can you turn to in trying to understand credit criteria and which firms are the best to work with in Canada? Working with a trusted Canadian business financing advisor can help you sort through a myriad of issues that affect lease costs and asset financing.





Stan Prokop is founder of 7 Park Avenue Financial
Canadian Business Financing



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

Analyze This! What Exactly is “ Factoring” In Canada ? Business Financing Canada Options & Cost & How To!

Be your own ‘Analyst ‘ and challenge yourself to figure out the best type of a/r finance for your firm.

Information on factoring as a business financing Canada Option . What this financing costs and how it works.



It's hard enough to worry about business financing...Canada has numerous options - receivable financing... aka: “factoring" is one of them that Canadian business owners and financial managers keep hearing about. But, and its a big but, how does this type of financing work, what are the costs involved , and what type of factoring is the right one for my firm.

It kind of seems simple when you're first told about it... your company ' sells ' its receivables to a third party finance firm - you get cash ( the same day, by the way !).

The common questions asked by clients are very predicable to us - what is the collateral for the financing, how does it work, what does it cost, and perhaps most importantly, what is the key difference between this type of financing and a bank business loan.

The clearest way to explain factoring, (also often called ' invoice discounting 'and' receivable financing ' is that you should view your receivables as the essential collateral for financing of this type.

When you sell something you of course have agreed on a ' price ' with the buyer. In Canada the ' price ' of this sale is very predictable; it ranges between 1-3% per month. Your ability to have the receivable collected in a more timely fashion therefore reduces your cost of financing.

A good way to think of how this financing works is simply to think of it as a way to ' assign’ the rights you have in that A/R to the buyer, the finance firm.
Since you have received the funds for the sale immediately on invoicing your client the right to all the funds of course belongs to the buyer of your A/R.

So all of that is pretty basic, right? Where then are some of the... lets call them ' confusion points ' in factoring and business financing Canada A/R finance. A couple of key issues come immediately to mind - the finance firm holds back on each advance a certain portion of the funds - this is called the ' holdback'. If you are working with the right firm, and believe us there are some wrong ones! then the holdback will be refunded to you as soon as your client pays. The holdback you can typically expect to receive is in the 10 per cent range ... any more than that should be a strong negotiating point on the overall facility you set up.

Oh yes, what about the cost of the financing itself. Can that be negotiated? There are some quick ways to determine if you can negotiate better pricing on your facility. In factoring and A/R finance the cost often depends on a couple basics - the size of your monthly A/R, the general quality of your accounts receivable, and your own firm’s general financial condition.

The good news is that if your company is experiencing financial challenges of any sort you probably still quality for business financing Canada factoring. However, the better you are perceived as doing will often affect your ability to negotiate a better rate.

However you might perceive the cost of factoring, you need to always remember that the use of immediate fund allows you to grow your business - in other words you're finally not the bank for your clients, and that’s a good thing. S

So view factoring and its cost in the context of the tradeoff between growing and expanding your firm with benefits that exceed the cost of this type of financing. Naturally you can choose to simply self finance your firm, but why not grow your business y using external working capital financing generated by factoring. It's easier to obtain than bank financing, and can be viewed as a long term or a temporary strategy.

Speak to a trusted, credible and experienced Canadian business financing advisor who can steer you in the right direction on this valuable type of financing in Canada.


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

What’s So Little About the Small Business Government Loan In Canada ! SBL Guaranteed Financing

Repeat The Benefits SBL Loan Financing Today

Information on the Canadian small business government loan program. Why ‘ SBL ‘ guaranteed funding is right for your firm .



Ever wondered how your company never managed to hear about the Canadian small business government loan program? The everyday term for this financing is the ' SBL ' - the ' small business loan that’s guaranteed by the government of Canada. And another thing is it really ' small'? Everything’s relative, but we certainly don't think so, and here’s why!

Industry Canada is the sponsor and governing body of the Canadian government with responsibility for the SBL loan program in Canada. As government folks are wanted to do, they have a couple more formal names for the program, it’s called by them the ' BIL ‘, or ' CSBF' program. Whats our point with all these acronyms? I guess you could say ' call me anything, but call me!"

The SBL loan provides financial assistances to thousands (almost 7500 loans were done in Canada in 2010) of Canadian small businesses. And lets get the word ' Small ' out of the way quickly, the program actually goes to $ 500,00.00 if you want to use it for real estate, in the majority of cases the program caps out at 350,00.00$ . Is that 350k small to your firm ?We've never felt a 350k financing is small, but as always, we'll let you decide, we just clarify and educate !

So whats the eligibility of the program? There are some really basic criteria for SBL guaranteed financing. Your firm can be a start up, or already established. Your actual or projected revenues have to be under 5,000,000.00 per annum.

Although 7500 business took advantage of the program last year can you imagine how many companies like yours there are in Canada with revenues fewer than 5 Million dollars? We can only imagine why the thousands of other eligible firms aren’t taking advantage of this financing. Is it perhaps because they haven’t heard about the program - well they can’t say that now.

Small business government loan financing is great for start up and growing small businesses in Canada. The government guarantees the loan to a significant portion, which is why thousands of businesses utilize this financing when they can get traditional Canadian chartered bank financing in Canada.

Borrowing for the program is focused on equipment, leaseholds and real estate. Software is also covered under the category of equipment.

Other great benefits of the program are that you as a business owner do not have to personally guarantee all of the loan, which in many, if not all! other Canadian business financing is a requirement. Oh, and by the way, rates, terms and structure for the loan, including no penalty for prepayment are additional great reasons to consider this type of financing in Canada.

Want to fast track your SBL small business government loan? Speak to a credible, experienced and trusted Canadian business financing advisor on how you can fast track an SBL financing 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 . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing .Info re: Canadian business financing & contact details :

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

Don’t Let Business Franchise Financing Approval Stop your Start Up Or Restaurant Dream In Canada

The Secret To Business Franchise Start Up Loans For Canadian Entrepreneurs



Information on business franchise financing in Canada . Whether it’s a restaurant or other type of business, start up, or established you have financing options to ensure success.



You're there... almost. You've made the decision to buy a business - it could be a restaurant or any other business for that matter. So let’s make sure franchise financing is not going to hold you back on realization of your dream and vision as a Canadian entrepreneur.

So how exactly do you find the funds you need. It's actually a process of careful planning around the type of financing that suits your purchase, and finding and working with the right lender to ensure the business is finance properly. Naturally planning and demonstrating you have thought out the financing is key also.

In terms of franchise financing your business - again it could be a restaurant, or one of the hundreds of other franchising opportunities out there in the Canadian marketplace... its important to break down the total financing need into categories, because in most cases each ' category' of your requirement is financed a bit differently . As an example the working capital component, what you need to run the business on an on going basis is usually financed by a traditional offering such as a business line of credit, or business credit cards if it’s a smaller business.

We encourage clients to cover the actual franchise fee out of their own equity contribution to the business, as it's challenging, if not impossible in the Canadian marketplace to finance your actually franchise fees. Items such as equipment, leasehold improvements, software, point of sale systems, etc are very financeable. And truth to be told these items make up the bulk of your financing needs more often than not.

Franchise financing around your business is in fact a 'niche ' or specialized sector in Canada. But the reality is that many of the same principles apply to financing your start up, restaurant purchase, or any other business for that manner.

What then are some of the basics around the process that allow you to get to the financing goal line... successfully! Items such as having a handle on your personal net worth and knowing what you maximum equity contribution to the business will be in terms of your personal financial situation are important.

We won’t say it's impossible, but the reali8ty is that you must have a decent personal credit score and history to be considered for franchise financing for your chosen business. The entire credit history of every Canadian is actually based on one number called a beacon score, and you require a certain ' beacon ' to be approved for business or for that matter any other type of financing. Bottom line, obtain your score and understand how it fits into the big picture.

In your business plan or executive summary ensure you focus on key items such as the following - info on your own experience, information on the industry and type of business you re purchasing, and finally . Perhaps most important, a financial projection.

Ensure that financial projection makes sense from a viewpoint of reasonable profit expectations - with a focus also on how your loan financing will be paid back. The reality is that this document and how it is presented can make or break your financing approval.

While financing in some form could be provided by your franchisor, this in our experience is very rare - they are selling franchises, not borrowing funds to allow you to borrow from them. So review carefully, with professional assistance, your key financing options - these include the specialized BIL/CSBF loan, equipment financing tailored to your asset needs, and working capital options that might come in a variety of financing ' flavours'.

You have a good chance of accelerating your approval by working with an expert - that works in all manners of business. So seek a trusted, credible and experienced Canadian business financing advisor who can assist you in turning the business ownership dream into financial reality.



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_franchise_financing_restaurant_start_up.html

ABL Commercial Credit Lines Work - Why Asset Based Lenders Are Your Business FInancing Choice

Climb Aboard A New Way To Finance Your Business


Information on asset based lenders in Canada . Why are ABL commercial credit lines what you have been looking for in Canadian Business Financing .


ABL (Asset Based Lending) commercial credit lines from asset based lenders in Canada are providing tangible proof everyday that they are both an alternative or a first choice for Canadian companies seeking operating and working capital financing.

Let’s look at a documented example of how this facility helped one company. Although our example profiled is a U.S. firm we can assure readers that all comments and data apply to the Canadian business environment.

In our example the company was an importer and distributor, but the reality is that ABL commercial credit lines financing applies to numerous industries, in fact any industry that has receivables, inventories and assets.

So what did the ABL facility in fact do for this firm? It became a business line of credit that was able to ensure the company could grow outside of its sustainable growth rate (the growth rate at which a firm can expand without borrowing based on its current cash operating cycle).

Funds from the asset based line of credit were used, in our example to also reduce long term debt. Simply speaking the company was able to monetize current assets, get more liquidity by doing this, and reduce long term debt - enhancing their balance sheet ratios at the same time.

Many companies in Canada find themselves in the unfortunate position of being delinquent or behind on government source deductions. These arrears are viewed seriously by any lending institution, and in Canada place a severe responsibility on the owners and directors of a company. In many cases, including our example the additional liquidity you get from asset based lenders is used to pay off those government arrears and source deductions which have built up.

Naturally in any company supplier relations and the amount of your payables play a key role in your firms viability. Borrowing facilities from asset based lenders allow you to reduce payables and maintain better supplier relations.

ABL is the therefore the new alternative and are commercial credit lines of choice by Canadian firms of all sizes. Speak to a trusted, credible and experienced Canadian business financing advisor in this area of business financing to ensure the benefits of this financing can pay off 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/abl_commercial_credit_lines_asset_based_lenders.html

Understanding Canadian Working Capital Finance – Cash Flow and Institutional Loans & Private Lenders

Commercial Business Cash Flow Financing In Canada

Information on working capital finance options in Canada . What offerings are available from banks and private lenders when you need business loans or cash flow financing.



Having the right information simply becomes a small investment of your time and can turn into tremendous benefits... that are why your ability to understand working capital finance loans from both private lenders and other institutions is noteworthy.

When Canadian business owners and financial managers think in terms of capital typically Canadian chartered banks come to mind. That’s what business people tend to call traditional financing in Canada. But is it always readily available and possible to obtain? Many businesses find themselves in the position of needing to grow, or in some cases simply survive around the need for extra cash flow and liquidity.

The optimal solution is of course simple - have some sort of facility in place to access cash... when you need it! Two choices come to mind - a traditional working capital term loan from a bank - its essentially long term working capital with fixed monthly payments. Alternatively, and in many cases the better option, a non bank facility from private lenders is a better, if not more accessible solution.

And to be clear, let’s define ' private lenders' as that term is often mis understood in the context of a Canadian working capital loan. It may mean other things to you, but in our discussion today we are simply referring to a non bank entity, quite often a commercial finance firm that has a specialized niche in business lending and working capital.

What facilities are offered by these ' private lenders' if we can call them that? They include offerings such as receivables purchasing, working capital facilities that combine the borrowing ability of your inventory and receivables into one facility. Essentially a business line of credit from a non bank entity. Other offerings, somewhat more specialized include purchase order and contract financing, tax credit financing, and what we call the ' big kahuna ' of working capital cash flow financing in Canada - ABL (Asset based lending).

When we think of the facilities as describe above we're talking about the ' current assets ' part of your balance sheet - that’s where the liquidity lies.

Working capital outflows though can also be stemmed by utilizing lease financing or a sale leaseback strategy... that’s for your fixed assets of course.

Thousands of retail businesses in Canada often find themselves in the working capital finance conundrum. In recent years merchant cash advances, or loans against future sales have become a solution for the smaller retail business.

Advantages of a bank loan for working capital purposes are pretty clear - it enhances your commercial credit history, rates are the lowest and most desirable.

So the essence of your subject today is that you're in effect surrounded by working capital finance and loan options from both private lenders and Canadian chartered banks. It's a question of knowing what those sources are, and, most importantly... which one works best for your firm, whether you're a small retail business or a small to medium sized established corporations. (The big boys do quite well on their own, thank you).

Permanent or temporary solutions are available in many forms, as we have noted.Speak to an experienced, trusted, and credible Canadian business financing advisor who can ensure your working capital sources are just steps away.



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_finance_private_lenders_loans.html