Warning! Are Traditional Factoring Program Companies In Canada Right For Your AR Finance Challenge?

What Type Of A/R Financing Best Suits Your Firm ?


Information on factoring companies in Canada . What type of AR Finance program best suits your firm when it comes to receivable finance?


There's nothing like a ' Danger Ahead' sign up the road to catch a Canadian business owners attention. That's why we're pointing out a number of things today with respect to factoring companies in Canada, how they work, and why ar (accounts receivable) finance may be the best thing that ever happened to you... or the worst. Talk about a balanced perspective.

More often than not when Canadian firms look to AR Finance as an alternative it’s out of an immediate need, often almost survival. They might be finding themselves in a number of positions, including having to restructure their firm or the debt, downsizing, or addressing the worst and best problem of all - Hyper growth with strong revenue increases.

From our vantage point factoring companies in Canada are often addressing ' the short term fix' stage. The 3 most common situations that caused these challenges often are poor management (that might be you unfortunately) being undercapitalized, and finally, over leveraged.

So how does a traditional factoring program work - and what’s the good and bad in all that?

Simply speaking it’s an immediate solution that makes cash available for your firm - at a time when pretty well no one else will give you the amount you need, if they'll give you any at all

When you implement the solution you're in a positional albeit at a cost, to grow your business again, pay and hire people, and take supplier discounts and price advantages. And all of this is done without debt, and diluting the ownership in your firm.

So, lets recap how things work with an emphasis on pointing out the good and somewhat ' unfavorably viewed ' aspects of this method of Canadian business financing.

Here's how it works: You typically receive approx 90% of all invoices you submit, and you can submit pretty well as often as you like, even daily. Bottom line, as you sell you get cash. Same day.

So what could possibly be the downside of this ' traditional' factoring? The daily mechanics are not always viewed positively by the business owner; in some cases credit limits are set on your accounts, and in the majority of cases collection services are provided by the factoring firm. Generally the cost of the financing is in the 2% range, meaning that if you finance a $ 10,000.00 invoice for 30 days you have a financing charge of $ 200.00. Is that a lot? We’ll let you decide once you benchmark it against the advantages of your AR Program.

Is there a better way to enter into the right program with factoring companies in Canada? One method is the confidential invoice financing facility. Here you get all the benefits of AR Finance, but at the same time you are billing and collecting your own receivables.

How do you know when you're ready to consider such a program? A few basic ongoing calculations of your sales to receivables, collections and inventory turnover analysis should allow you to determine whether you have a financing need that might not be served by the traditional chartered bank solution.

And remember this type of financing can often be bundled together in an asset based line of credit that margins both receivables and inventory.

Speak to a trusted, credible and experienced Canadian business financing advisor - get the straight goods on those warning signs.







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/factoring_companies_in_canada_program_ar_finance.html

Considered A Canadian Business Advisor For Specialized Access To Financing Funds And Lenders In Canada?

Best Way To Explore Traditional & Alternative Canadian Business Finance ?


Information on benefits of utilizing a Canadian Business Financing advisor to access traditional and alternative lenders for financing and funds for your business .

Yes, of course it’s ultimately up to you but have you considered a Canadian business financing advisor for your specialized access to funds, financing and traditional and alternative lenders in Canada?

As we said it’s you the Canadian business owner or financial manager that has to both recognize the need for and make the call when it comes to your company financial needs. Whether your firm is in some type of financial distress, or if you have the double edged sword challenge of growing sales (how do you finance them).

The fundamental concept of business finance ( and unfortunately many don’t know or recognize this ) is that as you grow your sales you must invest more in business assets such as inventory, receivables, and even equipment under your fixed assets category on your balance sheet.

In a perfect world (guess what, it's not) you want to be able to be in a position to generate and have access to financing almost ' spontaneously ', as you grow. And we forgot to mention that that higher investment in A/R, inventory, etc also leads to higher obligations when it comes to payables from suppliers, wages, and government super priority payments such as HST, employee source deductions, etc.

Yes, actual profits (when collected, by the way!) provide additional financing for your firm, but ultimately you will need access to lenders and financing sources to compliment your business finance needs.

When you consider assistance outside of your firm, such as a business advisor it might even be at a time when serious challenges have set in. Those challenges may be diverse, such as suppliers freezing credit, or your institutional lender such as a Canadian chartered bank being in a position to tighten, suspend or freeze your credit access.

Canadian business financing advisor can assist you in getting back the confidence of suppliers and lenders at a time when you need it most. That comes by providing solutions, both traditional and alternative, to the current problem.

We all know the expression ' you can't see the forest from the trees ' and most business owners / managers would admit they are sometimes to close to the problem, or, alternatively don’t have the expertise and access to outside financing sources. In essence you have just received access to corrective financing actions, at a time when you need it most!

So how in fact does a trusted, credible and experienced Canadian business financing advisor ' fix ' things? One way is to focus on the balance sheet and increase cash flow monetization when it comes to sales to inventory and sales to A/R ratios. This can be accomplished through working capital facilities that are non bank in nature, asset based lines of credit, monetizing your tax credit, securitizing receivables, and in some cases bringing a new chartered bank on board that is comfortable with your management and long term success.

So, need that specialized access to traditional and alternative funding sources. Who you gonna call ?!





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/canadian_business_advisor_lenders_funds_financing.html

Avoiding Canadian Business Credit Nightmares. Banking And Bank Loans For Business In Canada

Ready For A Solid Banking Relationship ?


Information on how Canadian business can access credit , banking, and bank loans in Canada




When it comes to Canadian business credit and banking in Canada (loans, credit lines, etc) it's more than a bit unfortunate that many business owners and financial managers view the process and the challenge as somewhat of a nightmare or at the very least a negative process.

Let's examine how you can turnaround that process with a viewpoint towards success. And let's hope we can get rid of some of that negativity also.

Secret # 1 - Choose a banker, not a bank. We don't think there is one important thing we could share on our subject other than that statement. A good (hopefully great) banker will become a great source of financial and business assistance.

So you've made your pick?! Now what? It’s critical that over time you gain the confidence and respect of that person, whether it’s a he or she. This can be achieved in a number of ways. Banks in Canada are focused on ' cash ' and ' cash flow ', so just supplying your banker with reasonable cash flow projections goes a long way to instilling confidence of the bank in your business.

That ' cash plan ' is simply a solid estimate of incoming and outgoing cash needs, with hopefully the bank bridging the gap.

A huge issue in Canadian banking (it’s not huge for the banks, but it sure is huge for our clients) is the whole area of personal guarantees. While the majority, if not all of bank credit in Canada for privately owned corporations mandates a guarantee we would point out that we see numerous cases of flexibility when in fact none seemed apparent.

That flexibility comes in the form of limiting the personal guarantee, or in some cases securing outside assets in lieu of the guarantee. We have seen cases where the bank waived the entire need for a ' PG ' (personal guarantee)... in general this is the exception, not the norm.

A simple summary of the entire PG situation is that assets and your personal credit history and situation will drive the final decision here. As Canada goes through different economic cycles banks seem to be either pulling in the reins or making an all our effort to make personal and business credit available. So it’s important for you to judge where the banks are in the cycle!

One way in which you can maximize the benefits of a solid bank relationship is to continually explore the ability of your banker to introduce you to other professionals that might assist your business. These might include lawyers, accountants, and Canadian business financing advisors.

Those intro's are worth their weight in gold in many cases, as these external advisors have not doubt proved themselves many times before as they established their own relationship with the bank.

What are bankers in Canada looking for when they look to extend Canadian business credit? It's not rocket science - they look for management depth, a solid busines model, what financing you have in place via debt or equity , as well has how you market and price your services or product.

A final note on bank loans in Canada? Unlike the U.S. which has hundreds, even thousands of different banks and even more independent non bank finance firms Canada's banking system is smaller. Clients who are bankable often focus on ' rates ' - in our opinion the rates will vary no more than some basis points from bank to bank.

Your focus should be on the banker, and the structure, terms, and guarantees surrounding your bank loans or credit lines. That saving of a couple basis points will be non existent in your mind when you get locked into a structure or guarantee or ratio and covenant scenario that you can't get out of.

Can you avoid business credit nightmares in Canadian banking? We sure think so... consider talking to a trusted, credible and experienced Canadian business financing advisor on achieving some of the best business banking in Canada.








Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com


Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . 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/canadian_business_credit_banking_bank_loans_canada.html

Lost ! Your Canadian Franchise Opportunities. Issues You Can’t Not Consider Re: Your Franchising Finance Loan

Considered These Other Issues In Canadian Franchise Financing?


Information on important aspects of a finance loan for Canadian franchise opportunities



Feeling like you may have missed out, or perhaps simply overwhelmed with the ability to a finance Canadian franchise opportunities. There are a lot of issues to consider when contemplating a franchising loan, some of which you may not have even considered or be aware of. Oh, and by the way, some of these pertain to those of you who are already franchisees and have even more unique issues to address.

Let's examine some key concepts in franchise financing. Although things have certainly gotten a lot better in the last year or so we are clearly not 100% out of the rough when it comes to the economy and lending perceptions for new and small businesses. Unless you're a master franchisee with the rights to a number of franchises then clearly you are essentially a ' Small Business '. So not withstanding the great strengths of a proven franchise business model you still face the same issues and challenges of an SME owner in Canada.

Although many current franchisees want to make some changes in their business, as well having access to the finance required it’s still difficult to achieve that flexibility.

The majority of franchises in Canada are in the ' B TO C ' (business to consumer) model. That is of course heavily dependent on the economy s a whole, and access to the financing you need. If you are a current franchisee you perhaps are in a position to simply tighten up on expenses to meet your overall working capital needs - especially if your business is suffering from a less than adequate location. In some cities in Canada demographics change, and that can drastically affect your revenues over time. Location is still critical to franchise success if you are in a business to consumer model that we spoke of.

Sometimes the solution to franchise success if you are a current franchisee is to ' upgrade ‘and revitalize your location. But what type of financing can in fact help you finance things such as leasehold improvements? The good news is that the same financing program that probably helped you acquire the business is also available for ongoing financing needs. We’re of course referring to the government business loan, aka the ' SBL '. Financing up to 350K can be accessed for things such as leaseholds, new equipment, architectural drawings, etc.

We would caution franchisees that they need to be able to sufficiently prove that any refinancing of the business must make sense in the terms of cash flow repayment. That can be accomplished by a simple cash flow plan with a focus to additional revenues achieved through your revitalization. Don't let lack of capital make you miss Canadian franchise opportunities for new and existing franchises. Ensure that you demonstrate though that you can handle the additional debt service.

There are a lot of issues to consider in financing a new or existing franchise .In some cases you might even be considering the purchase of an existing busines from another franchisee.

Speak to a trusted, credible and experienced Canadian business financing advisor for help with the issues surrounding a successful end to your franchising finance loan.





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/canadian_franchise_opportunities_finance_loan.html

Canadian Business Financing: Achieve the Impossible With ABL ? How The Asset Based Line Of Credit Facility Creates Financing

Canadian Business Financing: Achieve the Impossible With ABL ? How The Asset Based Line Of Credit Facility Creates Financing

Achieve the Impossible With ABL ? How The Asset Based Line Of Credit Facility Creates Financing

This Day In Canadian Business History : April 5, 1966 - Canada signs three-year deal to sell $550 million worth of wheat to China.



Our Comment : ‘ Fast Forward To 2012 – China deciding to just buy Canada via an all cash sale’ – Stan Prokop



Need Financing For Any One Of These 5 Situations?


Information on the abl asset based line of credit facility . Why this facility works for Canadian business in a wide variety of circumstances .




Why do we maintain ABL financing achieves the impossible? For us, it seems pretty simple. It's that just one type of Canadian business financing, the asset based line of credit facility, can successfully address, and answer ' YES ' to the following questions:

Is Your Firm viewed as high risk by other more traditional institutions such as Canadian chartered banks?

Do you wish to acquire a competitor or another firm?

Do you need interim financing while in the stages of a ' turnaround'?

Are you experiencing ' hyper growth ' without the necessary financing to handle that growth?

Are you considering a bankruptcy/ receivership or in one now?


Doesn't it seems incredible that one unique method of financing can address those 5 issues, or is it just us that's impressed? Hopefully not.

ABL finance has gradually grown in popularity in Canada; we're often surprised why it has not grown faster. The reality is that some of the largest companies in Canada, both public and private now utilize this type of financing. Even more interesting, and somewhat ironic is that Canadian banks have boutique divisions that are also offering this method of finance.

We have often felt though that in the case of the banks there aren't to many differences in some of the credit criteria, which is great for pricing and size of the facility, but less so for approval!

So how do asset based financings in fact address the 5 business concerns we profiled earlier. It's actually pretty simple as a concept. In essence it's a line of credit facility that bundles all your assets into one revolving line of credit. We can't over emphasize the word ' assets ' - that’s the strength of the financing. In the case of ABL its not about ratios, covenants, outside collateral, high emphasis on personal guarantees... its just about... you guessed it .. ‘Assets’!

As the levels of your financing expand you are in a position to borrow against these rising assets due to sales expansion, etc. Naturally it goes without saying that the margining of these assets is what your new found liquidity is all about. For a starter A/R and inventory is margined at typically 90% and 30-70% respectively. That liquidity is further enhanced by allowing you to borrow against equipment and real estate within that same facility.

In Canada facilities such as this typically start at 250k and go to tens of millions of dollars. And they do address all of the 5 situations we have mentioned.

Speak to a trusted, credible and experienced Canadian business financing advisor on how an ABL asset based line of credit facility just might be what you need ... today!



Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . 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_asset_based_line_of_credit_facility.html

Therapy For Business Cash Flow Problems ? Working Capital Financing Solutions And Alternatives

THIS DAY IN CANADIAN BUSINESS HISTORY :
April 4, 1896 - News of the Yukon's Klondike gold strike reaches the outside world. Vancouver, BC

Our Comment : 'Thousands of stockbrokers descend on Canada with a viewpoint to providing valuable ' tips ' to clients '- STAN PROKOP





Looking Inside the Cash Flow Conundrum

Information on solutions and alternatives for business cash flow problems in Canada . Working capital financing when Canadian business needs it most .



Business Cash Flow Problems? Maybe some working capital therapy in order. Therapy - it's what they call a ' curative power ' , so let's examine some curative powers around one of the biggest challenges Canadian business financing, working capital and cash flow needs.

We're all familiar with the old phrase ' you need money to make money ‘; well scratch that, we have re-written that one for today and we'll offer up ' you need working capital to make more money '!

The unfortunate part of talking to many entrepreneur and business owners in many cases is that there seems to be a common belief that sales growth will take care of all your business problems ; the reality is that it will take care of things for awhile, but trust us, not for long.

Profits do fund growth for an interim period, but in the end you need to address some very basic issues. An example? Your valued vendors and suppliers want to be paid before you get paid from your own customers!

So what’s the solution? Most business owners and financial managers would offer up ' go to the bank ' or ' put in some more owner equity ‘. That's works of course, if that’s in fact possible - key word ' IF '!

What those sales have done is create a gap... for some clients we meet it’s a rather big chasm or canyon!

Naturally some firms need more working capital than others to address the business cash flow problems we are talking about. That’s because something known as the ' cash conversion cycle ' varies from industry to industry and probably even business to business within that industry.

The cash conversion cycle can be easily calculated by any business owner. The formula? Take your days sales outstanding, add your inventory on hand days, and subtract your payables. That number essentially gives you a very basic ' known ‘. It tells you how long it takes a dollar to travel through your company. And trust us, sometimes that ' travel ' seems to look like a slow meander!

As we said some firms require more cash flow than others - an example might be a large pharma firm who invests tons of money in advance of even bringing a product to market - assuming it’s approved by the government for use! On the other hand a large retailer doesnt sell on credit, they only take cash and credit cards, so their conversion cycle might be a lot less.

So, our take away today? The shorter you can control you cash conversion cycle, the better! And you can accelerate cash flow by bank lines of credit, receivable financing, and inventory financing, monetizing tax credits, or securitizing your receivables if you're a larger firm.

Speak to a trusted, credible and experienced Canadian business financing advisor to assist you with your business cash flow problems and working capital solutions to accelerate your cycle of cash.









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_cash_flow_problems_working_capital.html