Village Elder Advice On Receivable Finance . How Is Business Invoice Financing Positioned In Canada ?

Canadian A/R Financing

Information on receivable finance in Canada . Business Invoice Financing Works if you know how it’s priced and why it works.



Receivable Finance in Canada. Wouldn't it be refreshing to get some of that ' VILLAGE ELDER ' advice on the subject of business invoice financing in Canada. We're told that type of advice has a connotation of authority and wisdom from someone qualified to provide such counsel.


There are a number of significant benefits when it domes to receivables financing in Canada. It certainly is becoming more of a main stream alternative everyday in Canada, with thousands of firms considering and using this type of business finance.

A/R financing is the ultimate in what we could call ' short term financing’. And what do we mean by ' short term '. Well it pretty well means ' daily ' as funds are typically advance the day that you generate an invoice. As we have stated in the past a properly constructed facility gives you the option of submitting invoice sales, or not submitting them. Its classic ' pay for what you use ' financing. The bottom line, you're satisfying any immediate needs of your business, which includes of course payroll, supplier obligations, term loan payments, etc.

Most factoring or invoice financing firms tout the fact that you also don't have to make a significant investment in accounts receivable credit and collection given that the financing firm takes over the collection of the account. That allows you to focus on running and growing your company of course.

In our opinion that probably is a good thing, but truth be told our recommended facility is one in which you retain control over your invoices, and your clients. We think, if they had the choice, that the majority of clients in Canada would say that want to be front and center in front of their customers, without a third party . That’s why time and time again we find ourselves recommending confidential receivable finance, allowing you the business owner and managers to bill and collect your own A/R.

If there is one obstacle to customers embracing business invoice financing it's definitely a lack of understanding around cost and mechanics. What the business owner has to understand is how to be able to properly assess the cost of borrowing.

Let’s use a quick example; let’s say you're a mfr. and that typically A/R in your industry is collected din 50 days. Let's further assume that your firms days sales outstanding is closer to 65 days .That of course means that you're typically carrying 15 days of excess receivable investment. Let's use approximately 100k as the firm’s daily sales. That means that you have over 1 and 1/2 Million dollars in what we could call excess A/R - even at bank rates of say 5% that means you have a total annual extra financing costs of over $ 80,000. That, on top of the 1.5 Million $ you are already over invested in makes almost 1.5Million in lost opportunity cost!

Our example dramatizes the healthy impact your A/R has on your cash flow if you're not focusing and financing it properly. A/R, next to any cash you have in the bank for your business is your closest liquid asset. Consider receivable finance as an effective way to monetize that asset. Speak to a trusted, credible and experienced Canadian business financing advisor on how to properly monetize business invoice financing.




7 PARK AVENUE FINANCIAL
IS AN EXPERT IN RECEIVABLE FINANCE
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.

The SBL Government Loan. Financing Your Company Thru Canadian Small Business Loans

The SBL Government Small Business Loans Help You Launch Or Grow Your Business

Information on the SBL Government loan in Canada. Canadian small business loans can be used for a variety , but not all, financing needs.


The SBL Government Loan in Canada. This is the government’s way, via INDUSTRY CANADA, to help small businesses in Canada obtain the financing they need to start or grow their business. Last year probably close to 8000 businesses in Canada used Canadian small business loans to get the financing they needed.

And you can be forgiven for asking ' well, what’s SMALL’ ... ‘because we get that one a lot. In the context of the SBL loan it covers new and existing business which have up to 5 Million in revenue, or who project less than 5 Million dollars in revenue.

As we have said, the loans provide crucial financing to help Canadian business secure the financing it needs through guaranteed underwriting by the federal government.

What can be confusing to the business owner or financial manager is in the fact that the government is not a ' direct lender' per se when it comes to the program. In fact it’s in essence a co signor to your financial institution, guaranteeing to that institution a very substantial amount of your borrowing. Typical institutions who offer the program are Canada's chartered banks and numerous miscellaneous organizations, commercial credit unions on occasion, as an example.

Naturally the government guarantee clearly enhances your chance of approval, while at the same time working as a ' risk reducer ' from the viewpoint of your chosen financial institution.

What you need to understand when you apply for the loan is 5 critical things. They are:

- Eligibility

- Amount of financing available

- Repayment and amortization terms

- Restrictions

- Process - for approval that is!


You or your firm must be eligible to borrow legally in Canada. Also, since it’s a gov’t loan per se can we safely assume you should have your federal taxes paid and up to date? Yes we can assume that!!

The loan typically maxes out at $ 350,000 under the program, although many business owners don't know that you can also finance real estate up to $ 500,000 under the program. So it’s actually an alternative to a commercial mortgage in some cases.

Repayment terms for the SBL government loan typically is 5 years, although 7-10 year amortizations in fact are theoretically available. And by the way, penalty for early prepayment...? None!

Funds typically are used for equipment and leasehold improvements, and by the way that includes computers, software, etc. It's a fallacy that Canadian small business loans are cash and working capital and inventory focused. They are not - that is not how the program works.

Many business owners/manager might view any approval process via a government program as cumbersome e. Its not, if, and only if, you know what you are doing. In fact it just requires a business plan, some financial projections, and typical info you would associate with ANY OTHER business loan.

Speak to a trusted, credible and experienced Canadian business financing advisor on how you can fast track SBL government loans for business prospering.




7 PARK AVENUE FINANCIAL
IS AN EXPERT IN SBL CANADIAN SMALL BUSINESS LOANS




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/sbl_government_loan_canadian_small_business_loans.html

Lawyers Guns And Money . Acquisition And Merger Financing And Business Lending In Canada

Buying and Financing A Business In Canada


Information on business lending strategies and solutions for merger and acquisition financing




Acquisition financing in Canada. Lawyers, Guns and Money?! Do we really need all three of those? Of course not, in fact Money and probably some measure of ' lawyers' should do.

Warren Zevon's rock classic of the same name ‘... send lawyers guns and money ‘didnt include unfortunately any merger busines lending advice for business owners and managers in the SME sector who contemplate properly completing an M&A transaction.

Let's examine some key strategies and tips around your consideration of an acquisition financing or merger. There are different reasons for buying a business, and at the same time numerous financial strategies exist to achieve the final goal. Proper merger and acquisition financing compliments the final exit strategy of both the founders of the firm being acquired, as well as for the owners of the newly created firm .

Today we're talking mostly about what's known as the ' forward merger' wherein your company survives by acquiring the other.

To say you need a team of experts in a successful transaction is a major understatement. That team will allow you to properly position both companies and ensuring proper valuations are in place prior to and post M&A.

Its human nature for buyers to bid low and sellers to ask high, so solid analysis of current financing structures is critical.

Leverage is a key concept in pre merger and acquisition financing analysis. And we're talking two kinds of leverage - both financial and operating g. Transactions often don’t make sense if the financial leverage is more than 3:1 from a debt to equity perspective, and the operating leverage analysis includes fixed and variable cost analysis.

The amount of leverage you will ultimately have will often determine what type of financing and what lender will successfully complete your deal.

The concept of ' friendly debt ‘, which can be a vendor take back is a great place to focus , and transaction that include a healthy ' VTB' are generally viewed as favorable . Of course if your lender for the acquisition financing considers the VTB as pure debt that's a different story.

But, as we said, generally speaking a solid VTB component of your transaction leads to a good deal. It's a great way of buying a business, especially if you view the financing of the transaction as a challenge. The reality is that a solid VTV plus the potential for profit in a business has the makings of a solid M&A deal. Quite often of course the VTB structure is much more favorable than traditional bank or commercial finance firm debt, and it gives all parties a reason to succeed, even the seller holding the VTB.

A solid down payment of equity in your own current business, proper M&A financing, and a solid VTB from the current owner or owners simply make for a probably successful acquisition financing win.

There are numerous financial considerations and analysis required for a solid M&A deal that represents a win/ win. They include our previously mentioned debt to equity, as well as other concepts such as cash flow servicing.

In the end result the amount of debt you take on in a merger via a business lending vehicle can make your firm more conservative in nature as you're focused more on servicing the debt than focusing on new opportunities

Talk about some complex scenario - identifying the opportunity, value and pricing your target, and, oh yes financing via a proper business lending strategy. So, as our friend Warren Zevon sang ' send ' lawyers, guns and money ‘, but our recommendation is to focus on # 3 - Money for your merger and acquisition financing in Canada.
Speak to a trusted, credible and experienced Canadian business financing advisor for assistance on your SME M&A financing needs




7 PARK AVENUE FINANCIAL
IS AN EXPERT IN ACQUISITION FINANCING



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/merger_acquisition_financing_business_lending.html

Police Arrest Batman! Franchise Loans In Canada @ 0% Interest . Financing Your Franchising Cost - Realistically!

Canadian Franchise Finance



Information on franchise loans in Canada . How do franchisees realistically approach the franchising cost of financing their entrepreneurial purchase .



Franchise Loans in Canada. At 0% financing? Financing franchising cost at that rate would be great? Hardly realistic, right? And we won't even weigh in on why the police would even consider arresting a great superhero such as Batman who protects the city from evil.

So if those two things don't exist, what is in fact the real scoop on franchisee finance in Canada? Let's examine some more realistic issues around the purchase of your business, either existing, or new, in the franchise industry.

A common misconception exists that potentially you might be able to in fact finance 100% of your purchase via some sort of loan vehicle. Unless you've got some special relationship with a lender in Canada that we're not aware of that’s clearly not going to happen.

Typically anywhere from 10-40% of a final purchase price has to be financed by you the owner. And while all of these funds might not necessarily be a permanent investment, they are still needed to demonstrate some working capital conditions that must be met by traditional financial loan criteria. The financial term for this is of course the proverbial ' skin in the game '!

Can you purchase a franchise without a solid personal credit rating and net worth? The short answer, in general, is ' NO '. Whether you're financing franchise cost of purchasing any other business in another industry the reality is that a solid emphasis is based on the way you have managed your personal financial life which lenders use as a barometer as to how you'll manage your business affairs . So credit score, beware!

Is collateral required when financing a franchise? A general comment we can make is that it is not. Typically external collateral is not really a part of any franchise finance decision. Many clients we speak to feel they might have to put their home at risk, and we can commiserate with that thought, but if your franchise is ' PROPERLY ' financed then typically just your owner equity component is required.

Can you get away with getting approved for franchise loans without a business plan? We certainly say ' no you can't ' to that one, and in fact if you're smart the business plan will be a great measurement stick for how you understand the financials around your business, and a great way to ensure you reach some of those sales, cash flow, and profit metrics down the road ,

A business plan should not be as daunting a task as you might think just because you might not have experience in this area. Essentially it's a recap of your business experience, the franchisor and industry you're going to participate in, as well as a financial plan around sales, profits and cash flow and loan repayment. Not that difficult, right?

So, superhero arrests by the cops? 0% non subsidized financing? Doubtful. But if you want to get some realistic financing advice around franchise loans and franchising cost financing in Canada speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your entrepreneurial purchase.






7 Park Avenue Financial is an Expert in Canadian Franchising Cost Financing



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_loans_franchising_cost_financing.html

Need Help Identifying Commercial Business Loans And Financing In Canada ? Sources Of Finance For Canadian Business

Canadian Business Financing – When .. Now… Maybe


Information on identifying business financing sources in Canada . What you need to know regarding commercial loans and finance opportunities for your company




When, and how. Do you have a handle on what business financing you need when seeking finance and commercial loans in Canada? Let's review some of those timing issues, as well as sources and solutions.



Plan A (which often quickly becomes PLAN B) for many business owners and financial managers in Canada is to highlight a Canadian chartered bank as their main option. And truth be told, commercial banking is quite competitive these days; especially from a perspective of rates, etc. (Approval is a different story!)

It's a hard core reality that you in fact, due to the above competitiveness, as well as your firms own credit quality could in fact get a better deal , structure , and rate simply by ... ' changing banks '. Is that recommended? Certainly not always, more so when it comes to evaluating the cost of a relationship.

Are there alternatives to Canadian chartered banks when it comes to commercial loans and financing in Canada? There sure are - they include pension funds, insurance companies, and commercial independent finance companies. The latter group consists of specialized small firms, niche firms, and larger Canadian and international finance corporations.

Clients ask us, when they are looking to finance externally what they need to look out for. It's a question of looking at what type of firm and financing vehicle is in fact best suited for your needs. And the factors that determine that?

They include:

Term of amortization of your financing

Why you are financing

Cost

The upside / downside of that type of finance

Short term business financing transactions in Canada tend to be 1- 3 years in length. We're often approached for very short term needs and these are difficult, but not impossible to accomplish.

Naturally longer term financing tend to be anywhere from years onward. When you consider the period or term of the loan the business owner focuses on the overall financial position of the company. The lender however focuses pretty well solely on risk and collateral.

Businesses in Canada finance for many reasons. They include expansion and growth, new markets, probably the best advice we can give a business owner, and it’s certainly the view of many lenders, that areas such as product development and working capital should be financed internally through profits and operating cash flow.

If you can’t generate enough cash internally probably one of two situations exists - your profit model is (hopefully temporarily) broken or you can't really afford the financing you think you need. Our point is simply that it’s not always external debt that is the fix to a problem . Physician, heal thyself comes to mind!

In Canada sources of financing include securitization of assets, export finance, sale leaseback of assets, working capital term loans, and monetization of assets via bank credit facilities; asset based lending agreements, and monetization of assets such as receivables or inventory on their own.

If you need assistance in identifying the why and how of business financing and commercial loans in Canada speak to a trusted, credible and experienced Canadian business financing advisor.




7 PARK AVENUE FINANCIAL
Is An Expert In Business Financing
And Commercial Loans




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_financing_commercial_loans_canada_finance.html

What’s The Difference Between Not Having A Cash Flow Financing And Having A Business Finance Management Strategy?

Effective Working Capital and Cash Flow Solutions and Management

Information on business finance and cash flow financing management . Implications of a losing strategy.

Cash flow financing. The potential failure of your business... that’s most likely the final result of not have a business finance cash flow strategy with appropriate solutions and financing in place .

So what are some of those solutions; but even more importantly can you recognize when cash flow is decelerating, and can you accelerate it via internal and external means. That's the conundrum facing Canadian business owners and financial managers today.

We're often surprised , even shocked when we meet clients to have a great business and entrepreneurial sense, have great services and products, yet at the same time have no real focus on cash management and working capital solutions.

They seem to have a solid plan for their company's future, but no real plan on the cash flow. So, yes, they are growing, but also heading into cash flow crisis 101!

Hindsight is great in business, however when the business financing challenges get to big in the present it’s because they quite often weren’t addressed, right about now.

In general the SME (small to medium enterprise) in Canada fails to recognize that growth is bad. Of course it's great also, but its ' bad ' only because you're now using and requiring more cash than you ever did. So all of a sudden that need for working capital, coupled with slower receivables or bulging inventories are moving you to crisis mode.

Naturally your failure to address these issues then enters you into a world where you're potentially unable to pay existing lenders, and the last thing you’re
able to focus on is expansion capital. So being smart on growth and dumb on cash flow and working capital is... you guessed it, not a good thing.

Cash comes into your company via product and service sales and the accounts receivable that result. The outflows are as tough to manage - they include salaries, a/p, fixed asset additions, lease and loan payments, etc.

The key factors that result in a cash flow crisis are numerous - they might include overextending sales to poor credit risks, slow collections with no key focus on a/r management , financial losses to due low or negative margins, or serious declines in sales .

Can the Canadian business owner accelerate cash? Yes, he or she can. Along with solutions such as receivable financing, asset based lines of credit, bank credit facilities, and inventory financing and tax credit monetization you can monetize your balance sheet without additional debt.

Even smarter solutions exist within your company walls, they include managing A/R better, invoicing promptly, slowing a/p to maximum extent possible without offending key suppliers, or encouraging pre payment on larger orders or contracts.

You can also set up very simple data points to measure your progress or problem areas. That includes monitoring cash to sales ratios, cash on hand to ending receivables, etc

So, growth? We're all or it. Just remember though that hand in hand should come a solid cash flow financing and business finance management strategy that you can work internally and externally.

Speak to a trusted, credible and experienced Canadian business financing advisor for solutions to your firms finance needs.



7 Park Avenue Financial
Canadian Business Financing Expertise




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/cash_flow_financing_business_finance_management.html

Leasing Rates . What’s The Trick To Getting Best Lease Pricing In Equipment Finance In Canada?

CANADIAN BUSINESS FINANCING
WITH THE INTELLIGENT USE OF EXPERIENCE!


STAN PROKOP
7 PARK AVENUE FINANCIAL



Canadian Lease Finance Pricing – Rocket Science Degree Not Required!



Information on understanding leasing rates and equipment lease pricing for asset finance in Canada .





Leasing rates for equipment lease pricing and finance in Canada. Abracadabra! We wish it were as easy as that one word magic phrase to get the best rate for your equipment finance transaction!

But in reality its not that hard to ensure you have the best financing rates if you understand the basic underpinnings of a lease price and how certain obvious ( and not so obvious ) lessor strategies work for your favor , and what factors you can affect directly.

What isn’t hard, or magical, is why Canadian business owners and financial managers continue to embrace lease finance for the assets they need for their business.

It's simply a cost effective Canadian business financing strategy that allows your company to acquire virtually every asset your firm needs - that includes plant equipment, rolling stock, computer and telecom equipment , software, even that corporate jet ... We thought of that last one while waiting in line at the airport the other day .

Other benefits we focused on in the past in order to educate clients include cash flow management, taxation benefits, and the general ease of doing business. Oh and by the way, numerous smaller costs associated with asset acquisition can be financed also.

So what does in fact affect your leasing rates? It's a number of things, so we forgive clients for meekly asking ' whats my rate '.

Factors that affect your lease pricing at a macro level include perceptions by the lessor of your industry, your current financial strength (That’s very important) and the general asset value and remarketability of the new or used equipment that you need. All of these play a key role in lease pricing.

Is the actual pricing of a lease a disadvantage? Possibly, we certainly don’t think that’s anywhere in the majority of cases, but a careful lease buy analysis with a focus on your overall condition is highly recommended. While this can be done on the back of a napkin, numerous spreadsheet templates can get you to the goal line quickly. Even your lessor can provide you with one, but we'd suggest you ask for the formulas in the cells... just kidding.... well maybe not!

Various finance nuances exist in lease pricing. Ask your lessor if your payments are calculated in advance or arrears. The 5 elements of all lease prices are:

Term
Rate
Value of Asset Financed
Payment
End of Term Value

If you know any 4 of those you can actually calculate the last one very easily, or call us if you don’t have a lease finance calculator!

We tell every customer they get to pick their own lease rates! When the shock finally lifts of their faces we explain that your current overall financial risk profile in your financials really has determined to a large degree your current lease prices. In Canada rates range from 4-24% per annum on leases based on overall credit quality.

As a quick example, using a 100k asset over, say a 4 year term your monthly payment could vary between 2250$ and 3196$ using the above data. How important that monthly payment amount is to you based on the critical need of the asset to your company will be a final key decision driver.

One other area you need to investigate is the residuals and purchase options. They clearly define the two basic differences in operating and capital leases and can significantly affect your monthly payment.

Think we've covered it all? Well threes actually a whole litany of other things that will ultimately affect that lease price. They include prepayment penalties, upgrade formulas, commitment fees and down payments, and a handful others.

So how can Canadian business ' stay in the game' when it comes to both understanding and achieving best leasing rates and lease pricing in Canada. One option is to seek an expert, so consider talking to a trusted, credible and experienced Canadian business financing advisor who can assist you in the lease finance jungle. BE CAREFUL OUT THERE!






7 PARK AVENUE FINANCIAL
IS A CANADIAN LEASE FINANCING EXPERT





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/leasing_rates_equipment_lease_pricing_finance.html