Understand Your Asset Finance Options. Leasing Versus Buying And Capital vs. Operating . It’s Your Call!

Making The Asset Financing Decision An Easy One

Information on asset finance and the leasing versus buying questions faced by business owners in the search for financing of capital assets via equipment finance .


Leasing versus buying. It's one of the classic questions faced by business owners and financial managers when they are looking for asset financing strategies that make sense in capital acquisition of business assets.

Let's examine how you as a business owner or finance manager can make the right decisions when you are at the proverbial fork in the road, the classic ‘ lease vs. buy ' scenario.

Part of the reason we're intrigued by this subject is simply the fact that there is so much misinformation around there, in some cases it's just an issue of not knowing what questions to ask.

Your firms ability to invest in new equipment whether its plant or office assets, or even telecom and computing needs typically brings you to the decision point to lease versus buy. You know that with these new assets your firm can most often become more productive and profitable.

The reality is, we think, is that it's as important a decision on buying and financing those assets as it probably was as to which asset to purchase, from which vendor, and at what price.

Your ability to match the right amount of financing capital with the use and term of the asset should be key to your decision.

The term lease itself, as simple as it might seem, is actually part of the confusion around the leasing versus buying decision. Many business owners think that there is always an ultimate obligation to return the asset at the end of the lease term - similar to the consumer leasing an auto. That is categorically not the case.

In reality you have the basic choice of entering into two types of leases in the Canadian business leasing industry - a capital lease or an operating lease. The capital lease is a basic lease to own scenario, no obligations there. Other than to make your payments! The operating lease gives you the right to return the asset if you choose, but it is not an obligation, it’s actually one of three choices you have under the operating ' fair market value ' lease. You can return, extend, or buy the asset.

The beauty of the operating lease is that it gives you all sorts of flexibility, has a lower monthly payment, and puts you in charge of the final asset several years down the road at the end of the lease term. This type of lease is perfectly suited for telecom and computing assets.

Many business owners and finance manager are often confused about their dealings with lease companies. We can commiserate with that , because its a question of which firm to deal with, what are their credit policies, which assets do they prefer or not prefer to finance, and are they easy to do business with when it comes to documentation and ongoing correspondence and relations during the term of the lease .

It's at this time when it might be best to focus on working with an expert who already has the knowledge and relations within the industry to best serve representing your needs.

We continually encourage clients to view a lease financing and asset finance company in the context of developing a long term relationship. The right type of firm will actually help you put together one Master lease and set up a lease line of credit, allowing you to quickly and efficiently add on assets at any time with minimum work. Bottom line, it’s not complex.

The key benefits of leasing, versus buying always stay the same. There are tax advantages, preservation of capital, and minimum down payments and certainly usually no outside collateral required. The asset being financed is the collateral!

Speak to a trusted, credible and experienced Canadian business financing advisor on the asset finance capital strategy that works best for your firm - and trust us, its not as complicated as you think!





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.webpage66.com/asset_finance_leasing_versus_buying_capital.html

Your Crash Course In Commercial Funding For Canadian Franchise Financing Loan Options

Canadian Franchise FInance



Franchise financing loan options are never as obvious as they might seem. So how about a crash course in funding your new business? We like the term ' crash course ' as it denotes ' research undertaken in an emergency '. Many entrepreneurs who are looking for the financing for their chosen franchise want to know they can count on several different avenues of assistance to complete a purchase.


Two key elements of our crash course today are the concepts of both being prepared, as well as ensuring that you can deliver on a reasonable equity component in your business.

Being prepared for franchise financing success in Canada revolves around ensuring you have a focused crisp ' package ' - key elements of that package are a succinct business plan, and a cash flow projection that reflects repayment of the loan. We meet with many clients who in some cases don’t fully understand that they need to have all their financing sewn up and properly planned for.

Franchise finance is not a staged event in Canada ; you need to ensure you a have a proper combination of equity and , as well as ensuring the early stages of the business operations reflect the proper amount of working capital to survive and grow .

The personal equity you are required to put into a franchise varies, and it varies for several reasons. The factors that affect your ' down payment ' component include the amount that might in fact be demanded by your franchisor, or on the other hand the lender. Those two requirements are not necessarily the same number all the time, so the correct combination of debt and equity that satisfies your franchisor, lender, and your own personal situation can be a tricky slope if not addressed properly, up front.


A great question we get all the time is whether it's easier for a Canadian entrepreneur to achieve franchise funding success by virtue of the franchisee model as opposed to purchasing any non - franchise business.

That's a tough one to weigh in on, but in general we think the franchise business model has more financing success probability, if only for the reason that you're purchasing a proven business model, not trying to invent one! We're told that industry stats show that approximately 5% of franchisees fail, while we suspect that amount is higher in non franchise transactions for entrepreneurs commencing the proverbial ' start up '.

One of the best options for financing your new business as a franchisee is the CSBF program. While not developed specifically for franchising over time it has evolved into the vehicle of choice for Canadian business financing success.

Why is the above noted program so successful then? The simply answer is that terms are great, they include competitive interest rates, a low personal covenant ( guarantee ) , repayment without penalty , and the ability to finance leasehold improvements which are generally very difficult to finance otherwise .

We're often asked it the franchisor will assist in your financing. Your crash course answer on that one = ' NO'. While the franchisor can assist and guide you in many ways don't count on them to provide franchise funding for your business. The simple reason - they sell franchises, they don't finance them.

Are there non- bank lenders who specialize in franchise financing loan options. In Canada they exist, but they are very small in number. Often other forms of Canadian business financing can properly compliment your required financing solution. They include equipment financing, or merchant cash advance programs. It's important to pick the right partner in this regard.

Canadian banks generally don’t lend outright on franchise financing without significant personal collateral and established banking relationships back stopped by strong personal credit ratings. Where they do participate directly it is with larger chains that are viewed as industry leaders. An example - think hockey/donuts!!

Although a crash course isn't the worst thing you can do in planning your franchise success a better alternative is to seek solid mentorship and assistance from people or firms that have solid experience in helping you make a success of your franchise.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in your franchise funding 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 . 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/franchise_financing_loan_options_funding.html

Naked Truth And Insights Into The ABL Asset Credit Line Facility . Canadian Business Financing Unexpected!

Information on the business asset credit line ABL facility . Why asset based financing gains more traction everyday.




Stripped down. An ABL facility asset credit line for your business financing needs just might be the most basic, yet perfect Canadian business financing vehicle your company needs. Oh, and by the way, that’s if you are a start up, in the SME sector, or one of Canada's largest corporations, because those three are already using this type of asset based business line of credit.

The ongoing debate of whether business credit financing in Canada is still tight rages on. One could make the case that the patient, i.e. the economy and business credit is still sick. So is there a patient cure?

Naturally it goes without saying that Canada, despite the complaints of the Canadian business owner and financial manager, is probably in better shape than many other countries.


The weaker economy h as one advantage, and that’s that many of your competitors are still struggling, downsizing, or just plain in trouble. We always never forget to mention that the asset based ABL facility is also a great strategy to purchase one of those competitors, as is makes optimum use of asset leverage.

So can you properly fund your company via the use of abl funding at a time when traditional access to funding is still perceived as having dried up? You can via asset based lines of credit, even if you don't qualify for the higher credit quality that is required by banks and insurance companies. So let's strip down and examine some of those naked truths

And by the way, why exactly have asset based lines of credit in fact grown so much in popularity in Canada. We would say the best answer to that is that in the past there was either the Canadian chartered bank solution, which had great rates, or no solution at all. The ABL facility was generally not heard of or not available in years gone by - and that has changed. That's a bit strange because over half, yes half of all asset credit line activity in the U.S. is via ABL.

So why the move to ABL ?It is simply that if your firm has fluctuating, or even negative profits you still have huge borrowing power via this method of financing .

Yes of course those same assets are being margined, just as your bank would have, but there are too major differences, we can call them the core of our ' naked truth ‘. First of all your borrowing levels are raised significantly because your assets are margined at a higher rate , and the inventory component of margining is very aggressive, where in some case a bank facility might not even address that asset at all, or at lease only nominally .

And your new business line of credit, via ABL in fact can include the appraised values of equipment and real estate, thereby increasing revolving credit borrowing power.

And what about that 2nd naked difference or truth? It's a key point, in that the focus on ABL approval is not cash flow coverage and covenants, its only assets, which has great appeal to Canadian borrowers, especially those that struggle to meet those cash flow covenants.

Quite often we see tremendous flexibility in the size of such a facility, because in many cases business has peaks and valleys and bulges in financing requirements.

Do you work harder to maintain or get such a facility? Our naked truth... yes. The one aspect of this method of financing is that you'll find yourself reporting on your assets more often than you would in a bank environment.

Thats some of the naked truth in this asset credit line .It's a part of the new reality of Canadian business financing that you should take a serious look at, especially if things are not working well now . Speak to a trusted, credible and experienced Canadian business financing advisor for the stripped down truth on the ABL advantage.







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/abl_facility_asset_credit_line_financing.html

Liquidity Problems? Cash Flow Challenges? Bank Problem? Here’s Your Next Step

Solutions To Big Financial Dilemmas

Information on solutions for Canadian firms who have cash flow challenges or a problem at the bank. Answers for liquidity problems .




Liquidity problems and cash flow challenges plague thousands of Canadian business owners and financial managers. A lot of this challenge revolves around a company's inability to properly access bank financing in Canada. If that's the case what is the next step then?

We think that next step understands your alternatives, ensuring you understand why you are in a liquidity crisis, i.e. that cash strapped feeling, and finally understanding what might get you back on the right course at the bank.

As we have stated in the past Canadian chartered banks are the first ' go to ' when it comes to securing capital and Canadian business financing. Yet many business owners often find that the bank is either not suited or pre-disposed to solving their cash flow and working capital challenges.

Is there an easy way to a business owner of finance manager to assess the overall probability of achieving bank financing? For our purposes it comes down to your ability to understand 4 key issues. What are they?

First of all, as a general rule you have to be able to show profitability. We can't count the number of firms we meet who are in either a bad year financially or in many cases in the throes of a turnaround back to profitability. Unfortunately in general that doesn’t count at the bank. Banks take the approach that you will pay the loans or working capital financing back from profits. If you can’t demonstrate that there is an immediate obstacle to bank financing success.

Your firms overall collateral position is the 2nd focus from a bank perspective. Certain types of collateral are more preferred than others. They include real estate, receivables, uncollateralized equipment, etc. In general inventory is rarely viewed as appropriate collateral by the bank.

The third focus from the bank is your overall balance sheet. Aside from ensuring it balances..!! .. you must have the right combo of debt and equity. Is there a rule of thumb in this area? Typically the answer is that you must have a dollar of equity in your firm for every 2 dollars in debt.

Finally, is there anything more uncomfortable than the issue of personal guarantees? It's all about ' putting it on the line ‘, which of course many business people are reluctant to do. Your logic is of course that you incorporated to avoid guarantees, and that there should be some risk sharing. Again, that’s your view, not the banks.

We do believe, and have seen that in many cases a strong financing proposal might eliminate all or at least part of a guarantee, so be prepared to address this issue delicately and properly.

Although Canadian chartered banks are among the absolute best in financial strength, management, services and infrastructure it's of course still easy to cast dispersion and doubt on their stated goals of helping Canadian businesses, particularly small and medium business .

So when you or the Canadian chartered banking system have lost faith in each other what’s next? The reality is that many non-bank institutions and independent commercial finance firms provide a variety of cash flow solutions to your business. They include non bank asset based lines of credit, receivable financing, equipment financing and sale leasebacks, and supply chain and tax credit financing. And these solutions work, and in many cases compete directly with bank offerings.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in identifying the next step in Canadian business financing alternatives 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/liquidity_problems_cash_flow_challenges_bank.html

Leasing IT Cloud Financing Services . Lease Your Hardware And Software Needs

Accessing the Secrets Around Cloud Leasing And Financing In Canada

Information on IT cloud financing and leasing in Canada . Lease your hardware and software services and needs .



IT cloud financing services and the leasing of such services for hardware and software needs presents new challenges for the Canadian business and financial managers looking to leverage technology via lease financing. Oh, and by the way, financing ' the cloud ' presents probably just as many challenges for lessors and finance institutions also!

Cloud technology is of course the newest kid on the block. It’s another new concept to comprehend, essentially the use of computing as resources, both hardware, and software, over a network. That network typically is of course the internet.

For the first time your firm actually is using computing power and doesnt necessarily know where those resources might be located. Naturally as in all aspects of technology and tech finance it’s a case of you using the hardware and software, not necessarily caring about where it is and who is managing or running it.

Naturally the benefits of financing and leasing cloud services are quite clear - lower costs, ease of use, and your ability to add on hardware and software when you need it.

Although cloud computing and financing are relatively new it's surprising to see statistics that indicate at least 1/3 of all businesses intend to finance their cloud services.

It's certainly a different way to structure a transaction. We've always preached the creativity and benefits of hardware, service, and software leasing and it just seems that creativity is again an understatement when you utilize this form of financing. It is clearly a new business niche in Canadian business financing.

We find some a bit of irony in the concept of IT Cloud financing. What is that irony? Simply that for those of use old enough to remember it seems like ' timesharing ' all over again! except we seemed to always know the address of our timeshare firm, and we could actually drive there and see the hardware and software!

Business owners, chief information officers and finance managers are again looking to leasing as a methodology to gain benefits and limit the risk involve in technology purchases of hardware and software.

Naturally there are risk factors in any aspect of business and Canadian leasing companies who participate in cloud financing are probably struggling to determine what that level of risk is. We would think overall credit quality is key in this new form of financing. It's difficult to structure payments and rates around IT CLOUD finance when in essence the service you are utilizing is ' metered ‘, similar to electricity we would say.

It's the ability of your lessor or computer company to measure what you are using and where that hardware and software computing power is coming from that is key. And if you don’t pay, there is certainly no ability to ' repossess' assets, that’s for sure.

Consider leveraging both the power of the internet and leasing as a method to maximize your software and hardware needs. IT Cloud finance allows you to share resources, and therefore lower your cost.

Your benefits include lower cost of ownership, the concept of paying for what you only use, and the ability, as always with lease finance, to add on to what you might need, easily... and faster.

Speak to a trusted, credible an experienced Canadian business financing advisor who can work with you to meet your IT Cloud hardware and software 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 . 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/it_cloud_financing_services_software_leasing.html

Cash On Hand! What A Concept ! Let Canadian Accounts Receivables Credit Financing Via Factoring Funding Be Your Solution

Funding Peace Of Mind With Canadian Cash Flow Financing


Information on Canadian accounts receivable credit financing . Why factoring generates ‘ cash on hand ‘ for the cash flow your firm needs.



Accounts receivable credit financing is one method in which thousands of firms in Canada generate ' cash on hand '. That phrase is of course the accounting/business term which business owners and financial managers in Canada refer to with respect to their positive cash balances.

Your ability to have cash on hand at any given time provides you of course with the sense of positive feeling that you're able to fund both operations, and hopefully growth. We've observed over the years that Canadian financial statements typically seem to reflect less cash on hand when it comes to monthly or annual financial statements .

Naturally in tougher economic times it is even hard to maintain positive cash balances, and we're quire sure most business owners would maintain that they are not 100% satisfied with their cash position over time. It is of course important to remember that too much idle cash is a negative item - large corporations even risk losing their ownership when suitors circle with the intent of leveraging the firms cash and assets to in effect take their company away from them via a buyout . But we digress...

The pressures that reduce cash flow are obvious to most business owners and managers. They are fluctuating sales, lower profit margins, and the inevitable slow paying clients which these takes take anywhere from 60 to 90 days, even though your terms are net 30. We wish!

Although management of businesses in the small and medium sized sector in Canada (SME) typically focus on survival and daily operations it's clear to all hopefully that cash flow success also translates into ability to grow your business.

So how does business increase the cash cushion. The simply answer is to lower your costs, get extended credit with key supplies, lower inventory levels, improve collections, and monetize current assets .

Factoring receivables focuses on the latter, monetizing your typically largest asset, your A/R. Accounts receivable credit financing, i.e. ' factoring ' allows you to get paid on invoicing, typically getting 90% of your funds as soon as you deliver your product or service. And by the way, that other 10 per cent isn’t the cost of financing! that balance is remitted to you as soon as your customer pays, less financing costs which are typically in the 2% range if your terms and collectability equate to 30 days. Bottom line, all of a sudden your cash cushion of cash on hand is there, and it’s positive!

The receivable financing industry in Canada is fragmented, consisting of a number of large and small players. They offer the benefit of instant cash flow for firms, allowing them to meet the obligations we spoke of, i.e. payroll, government remittances, and growth.


So when should a customer consider factoring receivables. Typically it’s when you yourself have become the financing company you never intended to be, carrying larger amounts of inventory and receivables than you desire. All of a sudden you're in a position to take supplier discounts and entertain larger orders and contracts.

Is accounts receivable credit financing and factoring for your firm. It is if you maintain proper financial records, have generally creditworthy clients, and are in a position to provide those receivables as collateral for the cash flow. Simple as that.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist your with your ' cash on hand' 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 . 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/accounts_receivable_credit_financing_factoring.html

Need Business Turnaround Financing For Your Company? Canadian Solutions For Distressed Corporate Situations

Need a Refinancing Turnaround?


Information on business turnaround financing in Canada . Recognizing corporate distressed challenges and implementing proper solutions.




Business turnaround financing for Canadian firms is clearly one of the most challenging forms of corporate finance for those firms experiencing distress from either internal or external factors, more often than not a combination of both .

You can call it crisis management, turnaround management... whatever, bottom line, your company might need it. How then does a firm recognize that need, and what tools and financial solutions are available in Canada to implement a financial reorganization that makes sense.

Without a doubt it's about understanding both the causes and implications of company financial problems, and then implementing a solution.

When Canadian business owners and financial managers of companies in need of financing changes face their ' to do ' list a number of key focuses must be forged. They include restructuring your current debt, potentially downsizing your business, and addressing various legal issues with your current lenders, which might be both operating lenders and term lenders such as lessors, senior bank facilities, etc.

A common sense way of looking at things is to address some very basic questions, in effect:

What is going wrong and how must management take responsibility?

Do we have resources (i.e. assets) and financial assistance and expertise to begin and complete the turnaround?

Naturally depending on the size of your firm the challenge has different levels of complexity. Distressed situations can be addressed in either a ' strategic ' manner, or via an operating turnaround. Our comments are more focused on the operating turnaround... it’s the basics such as increasing sales, lowering costs, and refinancing assets.

In many cases new creditors must replace your current creditors. Again we emphasize that your current firm might be a start up, or one that has experienced tremendous growth and then stalled, , or in some cases your firm has been around a long time and financial issues simply have come to ahead and need to be addressed. All these firms require external turnaround management assistance, quite frankly, someone who has been here before.

At the end of the day it's about looking at your refinancing options which might include secured debt, bank debt, and other debt with commercial finance companies.

What then are potential solutions for corporate distressed situations? In Canada those solutions are debtor in possession financing; asset based lending, monetizing current assets via working capital facilities that include A/R and inventory and equipment components. Other less widely used options include securitization of contracts, tax credit financing, and supply chain financing.

Business turnaround financing is one of the most challenging aspects of Canadian business financing. Speak to a trusted, credible and experienced Canadian business financing advisor for solutions that make sense 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/business_turnaround_financing_distressed_corporate.html