Is ABL Financing The Radical Change You Need In An Asset Based Credit Line For Your Business

The Canadian Asset Based Business Credit Line


Information on ABL financing in Canada . Why is the asset based business credit line a game changer for Canadian business .




ABL Financing is a ' game changer '. Let's take a look at some of the reasons why and the background around the business asset based credit facility.

If you're the financial manager or business owner of any sized business in Canada it would appear you're more often than not searching for working capital. The assets in your business can offer that flexibility when they are turned into a business line of credit facility that the financial folks term an ' ABL '.

The good news is that more and more firms in Canada, everyday, discover that the flexibility provided by this financing arrangement. When Canadian firms can't find a suitable traditional bank lending arrangement for working capital needs ABL emerges as a solid solution of choice.


All your firm needs with respect to qualifying for such a facility is any mix of accounts receivables, inventories, equipment or real estate. A typical ABL facility is a combo of 2 or more of these asset categories. The asset based credit line in fact gives the business increased borrowing flexibility versus a cash flow based solution from, for example, a bank .

Why is that? It couldn’t be simpler, in that assets such as receivable and inventory are margined at higher values than they are with the Canadian chartered bank offering. Again, its collateral, not ratios and covenants that count when it comes to an asset based credit line.

Is there a quick way for the Canadian business owner to rationalize a move to ABL? While no financing methods is always perfect , all the time the appeal of ABL is that it does not really focus on covenants - really the only thing that drives borrowing is the overall liquidity of your assets, whether you are growing or not.

Another key positive is that an asset based line of credit can pretty well increase automatically as your business grows - That’s because your assets would tend to grow at the same time.

We've said no single method of business working capital financing is the panacea of perfection. So business owners should realize that Asset based credit typically involves more month end reporting on those assets.

And while most asset based credit lines cost more than bank financing they can, on occasion be actually cheaper.

The ABL market in Canada consists of a fragmented bunch of firms, some niche based and Canadian owned, while others are divisions or subsidiaries of U.S. banks and mega corporations. The industry services companies of all size, from start ups to major corporations. It should come as no surprise that some of the largest and well known corporations in Canada and the U.S. use ABL financing so don't feel you are doing missionary work in business financing! ABL is here and it just might be the radical ' game changer ' when it comes to financing your firm.

Speak to a trusted, credible and experienced Canadian business financing advisor on how asset based credit lines can fund your daily operations, acquisitions, and growth.







7 PARK AVENUE FINANCIAL
IS AN EXPERT IN CANADIAN ASSET BASED
LINES OF CREDIT




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_financing_asset_based_credit_line_business.html

Is This The Golden Age Of Business Capital In Canada? Financing And Funding Your Company Credit Needs

Canadian Business Financing


Information on accessing business capital in Canada . What types of credit financing and funding does your firm need and where do you find solutions that work .




Business capital in Canada. Is this in fact the ' GOLDEN AGE ' for Canadian companies seeking business credit and funding. We're not 100% sure ourselves ; we read that rates are low and capital is abundant - while at the same time clients tell us it's never been as tough to satisfy lender criteria or access innovative capital solutions.

The reality is that many business owners who arent in the Financial Post top 1000 in Canada spend a lot of their time ' finding ' financing .The goal seems kind of easy - find enough financing for your business at a cost that makes sense and gives you the amount of risk that the Canadian business owner and financial manager are prepared to live with.

That ' risk ' of course comes with the fact that too much debt, and might we add the wrong kind of debt and cripple a firm.

At the end of the day we can maintain there are essentially 5 ways to finance your firm - two of them, raising equity and issuing a bond or debenture are NOT the subject today. What we're talking about is innovative ways of supplier financing, lease and asset financing, and business lines of credit from banks or independent commercial finance companies.

Many businesses don’t fully realize of focus on the fact that supplier credit is in fact a key driver of your firm’s cash flow. Just negotiating long terms with your key vendors allows you to generate positive cash flow - That’s a fine line though as you ultimately need the support of suppliers. The last thing you want is for them to turn the ' credit tap ' off.

Yes, you can buy the fixed assets you need for your firm - but over 80% of companies in Canada in fact lease their assets. Whether its trucks, cars, computers, telecom equipt and heavy machinery the business owner has the option of leasing assets for anywhere from, typically, 2-5 years. That allows you to use up the ' useful life' of your equipment and match it to cash outflow vis a vis the payments.

Accounting has specific rules around the type of leasing arrangements that you enter into, primarily revolving around whether you are entering into a capital lease ' to own', or an operating lease ' to use '.

Bank and commercial credit business capital in Canada supply businesses with revolving lines of business credit and funding. They allow your firm to draw down and pay back up, based on pre set limits, the amount of funding you need for your business. The security of course is the assets of the business.

As a business owner you have to choose the right amount of debt and equity. The finance guys call that your ' capital structure’. Is there a perfect mix or ratio for that? The answer is... not really; it depends on the risk, flexibility, and amount of control you have in any particular financing.

So, is it the Golden Age of business borrowing. Our opinion is... not really. But you do have options and there are probably many innovative ways to finance your firm you have not contemplated. These include receivable finance, inventory financing, and asset based lines of credit, securitization, lease financing, and tax credit monetization. Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in your business capital and funding needs in Canada.



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/business_capital_credit_funding_canada.html

Be An Unlearner ! Lease Finance Sources In Canada . Choosing Equipment Leasing Companies

Equipment Leasing In Canada


Information on finding lease finance solutions in Canada . Which equipment leasing companies suit your needs?




Lease finance in Canada. Isn't it perhaps time to become an ' Unlearner '? That's the term one American icon once used to reiterate the fact that maybe we need to change the way we're thinking; and when it comes to what you know or might not know about equipment leasing companies in the Canadian marketplace that just might be some sound advice.

Your firms ability to identify who to deal with and when , depending on your leasing needs will ultimately make it a winning scenario for your asset acquisitions via Canada's most popular method of equipment finance.

While the ' lay of the land ' might in fact seem complicated the reality is that you simply need to focus on the fact that its all about getting the right lease structure, ensuring that the rates and payments meet your overall needs based on cash flow and your firms credit quality .

The old term ' size counts ' is somewhat still appropriate in lease finance in Canada. By that we simply mean that ultimately both the type of asset and size of your transaction will really chart the course for which lessor makes the most sense for your transaction.

We can say in a very straightforward manner that the overall ' story ' your company presents relative to financial strength, the quality of your balance sheet and your years in business are really the key drivers in any lease approval .

However, that eliminates thousands of firms in Canada who might not necessarily have those pristine balance sheets and income statements we've just referred to. Then what?

Well, don’t despair , because the reality is that the term ' structuring ' comes in play at this point, and those thousands of firms who might think they cant get financed in fact are solid candidates from certain firms in the Canadian lease finance industry . Yes there might be less interest in your deal from certain firms, but many others are eager to step to the table and structure a transaction that's a win for both parties.

But how do you in fact find equipment leasing companies in Canada - and we mean the right ones, not the wrong ones. Of course larger corporations who are better known can issues tenders and RFP’s, but that doesnt make sense for the SME sector in Canada.

This then is the time to get a short education on the make up of the lease industry in Canada. Essentially it's broken down into three segments, small, mid and big ticket. We advise clients they can spend a lot of time soliciting lease financing in the wrong market segment. And within that market each lessor has their own views on credit quality and the type of asset they will finance.

Small ticket transactions in Canada, as well as the U.S. typically are under 25k and at this point it’s all about quick credit approval, simple documentation, (often a one page lease) and a rate that commensurate with your credit quality.

Independent finance firms make up the majority of the lease financing market in Canada, but there are many captive finance firms that provide financing for their parent companies products. Banks have again resumed their strong interest in lease financing - rates are low but required deal sizes are much larger ; and when it comes to credit quality with a bank lessor lets just say ' you better have it '!

An easy way to match your needs with the perfect lessor is to solicit the help of a trusted, credible and experienced Canadian business financing advisor who understands the players, the market, and, most importantly , your needs.




7 PARK AVENUE FINANCIAL
EXPERT CANADIAN LEASE 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/lease_finance_equipment_leasing_companies_canada.html

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