Why Is AR Finance So Inexpensive In Canada . Factor Receivable Funding For Your Business - Not What You Thought!

The Devil Is In The Details Apparently When It Comes To Financing Your A/R In Canada


Information on AR Finance in Canada . How To Truly Understand Cost Of Factor Receivable Funding For Your Business.


Are you nuts? AR Finance... inexpensive? That was the reaction of one client when it came to discussing factor receivable funding in Canada for business.

The reality is that receivable financing in Canada is probably one of the most misunderstood areas of business financing when it comes to benefits, mechanics, and, as we said, cost.

We'll come to the issue of ' cost ' in a bit - let’s make sure we have got the benefits and mechanics under our belts first! AR Finance is Canada is, simply speaking, flexibility for short term working capital financing. It's mechanics, though relatively simple, provides Canadian business owners and financial managers with a large measure of cash flow and working capital when it comes to new orders and contracts, increased need for working capital as inventories and receivables grow, and , simply speaking, keeping your daily operations running smoothly.


It's of course your A/R that provides the backbone behind the capital that you need, allowing you the leisure of actually, as they say, working on your business, not in your business... and boy is that a difference as we all know.

One key benefit either overlooked or misunderstood is simply the fact that your factor receivable funding facility has the ability to grow as your business revenues grow.

And don’t forget , the key concept of AR finance in Canada is that your company isn’t taking on debt when you finance your receivables ; you're simply monetizing one the most key assets of any business, your receivables. A good analogy is that you are basically turning a Business To Business model into a cash business. As you sell, and invoice you receive cash the same day. Your facility of course fluctuates exactly similar to a business credit line, so factor receivable funding for your business goes up and down every day, just like a bank line of credit. You are of course paying for only what you use.

Many miscellaneous benefits accrue to your firm when you consider this method of receivable financing. They include:

- Ability to only draw down the amount of financing you need - It's a pay per use method for working capital

- Same day financing of your sales revenue

- Typical advances for A/R funding are 90% of your receivables

- A good facility will have per diem pricing

- Little or no emphasis on personal guarantees

- All North American receivables can be financed, and foreign A/R is financed via credit insurance which can be easily arranged


So, back to our client who said' ARE YOU NUTS ‘? As it pertains to AR costs of course!

Your business should be focused on profit and turnover. By having a constant supply of working capital and access to cash flow you have the ability to increase sales and profits. Many firms also have the ability to achieve overhead reduction as a competent AR partner firm performs these services for you.

Many clients we have spoken to have had to turn away sales volumes and large contracts because of financing inability .We see that all the time. With AR Finance you are now in a position to basically accept unlimited orders and contracts.

Do you believe you could enhance relationships with key suppliers by paying those cash or taking their offered discount? We sure think you could, and that’s a key benefit of factor receivable funding. That type of business activity also enhances your overall firm’s commercial credit rating, which should be important to you in the long run.

Got a lot of time on your hands as you run your business? We sure don’t, and you'll find that you'll be focusing a lot less on seeking external financing if you've got a solid A/R funding business solution in place.

So expensive? We let clients decide. But if you want to see how the true cost of AR finance fits into your business speak to a trusted, credible and experienced Canadian business financing advisor today.

7 PARK AVENUE FINANCIAL
CANADIAN A/R 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.webpage66.com/ar_finance_factor_receivable_funding_business.html

A SR&ED Bridge Loan . Never Thought Financing Your SRED Tax Credit Claim In Canada Possible? Here’s How .

See How Easily Your SRED ( SR&ED) Claim Can Be Financed

Information on SRED financing in Canada. A SR&ED bridge loan for your refundable tax credit claim can be monetized for immediate cash flow and working capital .

SRED. aka ' SR&ED'. The dust seems to have finally settled on the SRED Tax credit claim program in Canada. To put it mildly it was a ‘winter of discontent ‘by all parties.

That means a couple of things of course, one of which is that it's ( more or less ) back to business as usual for the thousands of Canadian firms who utilize the SR&ED refundable tax credit program ; it also means that if you haven’t previously then you can also finance that claim . If only for one reason - immediate cash flow!

Sred financing , and yes , even the SRED program itself seemed to quietly slow down last year as the federal government took a hard look at the program . That same program was a critical part of the financing of thousands of firms in Canada who strive for innovation in their products and services.

And that’s everything, by the way, from start to up major established corporations. In fact only 20% of the users of the program were larger corporations , so we can only imagine the rumblings in ' SR&ED land ' for the 80% of firms who find themselves in either start up or early revenue mode, or perhaps they have just been in business a few years and are starting to ' ramp up ' in revenues.

While confusion seemed to reign supreme in ' SRED ' the reality is that the program took a hard hit in popularity as everyone with a vested interest made a hard stand on where they stood on the program . That included the government, of course, the SR&ED consultants that actually prepare you claim (most firms don't prepare their own claims “and industry economists and pundits who questioned the payback on the governments billions of dollars spent on these non repayable tax credits.

And for the firms who in fact finance their claims for cash flow and working capital via a SRED financing bridge loan for their claim in Canada that cash looked like it might be going away.

Nothing likes a happy ending, and there seems to be a general status quo on the program, although some changes were made to areas such as the ' CAPEX ' portion of the program.

All's well that ends well, we guess, so it’s back to ensuring that if you wish to finance your claim and accelerate working capital benefits that choice is all yours .

Claims are generally financed at 70% loan to value, and a properly structured SRED financing typically takes the form of a bridge loan collateralized by your claim. No payments are made for the duration of the loan, and your firm receives the balance of your claim, less financing costs once the good folks in Ottawa and your respective province approve and fund your claim per their guidelines.

Speak to a trusted, credible and experienced Canadian business financing advisor on a bridge loan for your SR&ED tax credit today.

P.S. Claims can also be financed today for your next years spend. Don't forget to look into that benefit also.





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/sred_financing_bridge_loan_tax_credit_claim_canada.html

Got Your Cash Flow Financing Priorities Straight? Working Capital Business Solutions

Canadian business financing solutions for growth and operations


Information on cash flow financing management in Canada. Access to business working capital comes from outside.. and within!



Do you have your cash flow financing priorities straight? Pretty simple question, right? But when we talk to clients about what's important to them when it comes to business working capital they tell us they spend a lot of time on this issue, but are concerned that they don't have the resources or information the need to get the help they desire.

And when it comes to size, it unfortunately counts; because small and medium size firms in Canada just don't have the same access to ' financing talent ' for the liquidity to fund their operations. And it’s a two edged sword, gravitating between survival and growth.

What Canadian business owners and financial managers can do is to in fact spend their time a bit more wisely on what solutions make sense for their firm. And by the way, some of those solutions, as we'll discuss, are internal, not necessarily external! The obvious ones are spending properly, trying to self finance from within (yes you can by the way) and ensuring you have got some controls and tools in place to manage your cash flow financing needs and information.

After 2008 and 2009 world wide financial debacle many Canadian firms simply hunkered down and managed their availability of business working capital credit, but boy was it tough.

Growing your business requires working capital. We (hopefully) all agree on that. You need to have solutions in place to finance inventories and convert receivables into access to cash.

As we have always maintained you don't need to be a rocket scientist to manage working capital and improvements to it. One business pundit describes it as a ' block and tackle approach '! That approach is as basic as it comes - collecting money from your suppliers, generating better terms with your vendors and key suppliers, and turning those inventories.

That's what we were talking about before when we talked about the internal solutions, as opposed to the external ones. At that point you're simply focusing on your ' day’s working capital ' and your collection period days. That A/R and inventory that you carry should be at the top of your cash flow priorities list.

One problem clients constantly talk to us about is that as a small and medium size firm you have little negotiating power, perceived or otherwise, with larger customers and vendors. The big guys tend to want better terms if they are your customer, and they want prompt payment if they are your supplier. Talk about the proverbial ' rock and hard place!

That's when external cash flow financing solutions come into play in Canada , They include bank facilities, asset based lines of credit, receivable financing, inventory finance, supply chain financing, and monetization of tax credits and unencumbered assets .

Want help with some of those cash flow priorities. Speak to a trusted, credible and experienced Canadian business financing advisor today





7 PARK AVENUE FINANCIAL

CANADIAN BUSINESS CASH FLOW 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_working_capital_business.html

Its 11 P.M. Do You Know Where Your Business and Debt Financing Is? Funding Canadian Business Via Proper Debt Finance Solutions

What Type Of Business Debt Financing & Funding Is Right For Your Company . Debt Finance 101 !

Information on business debt financing and funding in Canada. What is the right amount and type of debt finance for your company.





Business debt financing and funding for Canadian companies. When other forms of financing such as equity or more esoteric arrangements aren’t available the Canadian business owner and financial manager turns to debt funding via a number of different short or long term debt finance strategies.

There is sometimes a fair amount of pressure to take on new debt to satisfy production, sales and marketing growth. The question very simply becomes - how much debt can your firm handle, are you aware of the different debt options and which one or ones might be best for your firm?

There's a great little analogy about why those lenders you might be looking to borrow from are somewhat cautious on occasion .It's apparently rooted in the fact that when the first caveman made a loan of a spear someone it was never returned, and when it was it was broken . The reality in Canadian business financing, we feel is when both the lender and the borrower have created a solution satisfactory to both.

And sometime debt is not always the answer. We find clients gravitating to debt solutions when they start to experience serious fluctuations in cash flow. When that cash flow and working capital is properly managed, or assets are properly monetized you might find yourself thinking less of taking on debt.

It's a fundamental discussion point in business that leverage, i.e. taking on debt aggressively can either pay off or put your company out of business. Talk about two different sides to the story!

The reality also is of course, that when you take on more debt to grow or fix the company you might find in fact that opposite has occurred and you are feeling somewhat restricted in the flexibility you may have once had in growing your business.

When that debt is short term in nature any refinancing becomes a bit more of a challenge. So the challenge is very simple then - take on the right debt for the right reason. Bottom line, rethink your financial structure. Naturally with more debt you do in fact increase your Return on Equity, but at the same time your breakeven point increases because of those financing costs.

Debt that is of course structured properly, against solid assets can be a good thing. And if those assets are part of revenue generation even better.

Historically in Canada companies have relied on traditional sources of capital, i.e. ' The Bank '. What more and more business owners and managers are doing are exploring newer forms of financing that might include asset based lines of credit, tax credit monetization, receivable financing and securitization, sale leaseback scenarios, interim bridge loans, etc.

The bottom line today? Speak to a trusted, credible and experienced Canadian business financing advisor about sources of capital available to your company in good... and tough ... times!




7 PARK AVENUE FINANCIAL
Canadian Debt 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_debt_financing_funding_debt_finance.html

ABL Financing . Recognize Early Warning Signs For The Need For A Canadian Asset Based Finance Business Credit Line?

Time for a Paradigm Shift In Business Credit Line Thinking?

Information on ABL financing in Canada. How business owners can spot trends in the need for an asset based finance business credit line



ABL Financing in Canada. How do you know when it just might be time to both discover and utilize one of Canada's best financing mechanisms for a business? There are in fact some strong signals and warning signs when it comes to switching to an asset based finance business credit line.

It kind of sneaked up on us, but asset based finance is growing and becoming more popular everyday in Canada as a business finance mechanism. While banks and other lending institutions focus on cash flow and ratios and covenants the asset based line of credit lender sits quietly in the corner and focuses just on one thing- ' Assets '!

We're going to discuss how you can recognize some key early warning mechanisms around when to consider this method of finance, but the simple rule of thumb is that you have to have assets such as accounts receivables, inventories, lien free fixed assets, and even real estate... well lets just stay... you qualify! That’s why wholesalers, retail organizations, and manufacturers and service companies of all types are gravitating to ABL finance.

We're always surprised when we hear clients say they haven’t even heard of ABL. More so when you consider some of the largest companies in Canada have abandoned bank facilities and moved to ABL. While for the larger company asset based finance business credit lines can in fact cost less and be more flexible, the reality is that for the small to mid size sector the cost of such a facility will in fact be more than bank credit. But, consider this, if you don’t qualify for the amount of bank financing you need that lower interest rate doesn't mean much when you're forced to restrict growth and focus almost all day on managing cash flow in an often crisis type mode. That's when reasonable financing costs should be the least of your problems.

Let's get back to some of those early warning signs that just might signify your need to check out a new paradigm in business lines of credit. Sales revenue has a direct relationship to working capital needs. Because those higher sales and growth opportunities bring higher levels of receivables and inventory and of course higher levels of payables.

Velocity, aka ' speed'. It not becomes a greater challenge to turnover assets to generate that working capital. It's up to the Canadian business owner and financial manager to, as you're growing establish what is acceptable in inventory levels, A/R collection days, as well as, oh yes, paying those suppliers.

Two ways for you to monitor your financial cash flow and working capital needs over time are to keep a simple track of working capital to sales and working capital turnover itself. The former is calculated simply by taking your current assets and dividing them by sales for, say, an annual period. Working capital turnover is measured by taking you sales and dividing them by your working capital for any period. You then track those!

Let's say you kept track of your working capital turnover and notice the ratio is trending lower. That means poor working capital performance, and you probably are feeling this via cash flow pressures.

When you utilize an ABL Financing facility you will find those assets can be monetized faster, with more liquidity in margining, resulting in higher borrowing power for working capital needs.

Speak to a trusted, credible and experienced Canadian business financing advisor when you feel your firm just might be exhibiting signs of a need for a better way in a Canadian business credit line via asset based finance.




7 PARK AVENUE FINANCIAL

ASSET BASED LINE OF CREDIT 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/abl_financing_asset_based_finance_business_credit.html

Getting Business Working Capital Financing Right . Ideas ,Tips And Solutions For Cash Flow Finance In Canada

Addressing Cash Flow Inside and Outside Your Business!

Information on sources of working capital financing in Canada and how to measure and asses your cash flow finance needs .



Is there life after business working capital financing and cash flow runs out? It's unthinkable but the reality is that business failure looms in the horizon when companies in Canada (and everywhere else by the way)run out of cash , or improperly manage asset accounts.

So how do you cope with cash flow challenges and what does the Canadian business owner and financial manager need to do to address this financing challenge.

As a starter, whether business people like it or not (certainly owners and financial managers) you have to have a grasp on your overall liquidity situation. This essentially becomes a matter of relationships , understanding how the relation of your current assets ( receivables, inventory , cash on hand ) are relevant to your cash flow success.

Not every analysis of some of these relationships is going to be relative to your firm all the time. The reality is that different industries have different financial profiles and it becomes a case of understanding where your company fits into the industry profile. And by the way, we never met a client yet who didn't think their firm was a bit different!

When you look at cash flow solutions you're looking at really two areas of focus, one is the overall solvency of your firm, and secondly the amount of risk you're prepared to take in making investments, taking on debt, and growing their company.

That's of course the inner view. The outer view is from lenders and suppliers, who are looking inside your company relative to your debt paying capability and your overall financial health, now and somewhat into the future. They have a vested interest in doing that based on what products of services they are supplying. And lenders don't even get us started on that...! The bottom line is they are looking to get repaid!

So business working capital financing then becomes a measure of looking at your balance sheet, i.e. your company resources... and addressing the various types of assets you have and how to monetize them to meet your operational goals. Any look into your balance sheet is a 'static one’... it's where you are at one place in time .It basically reflects how you're performing today. That income and cash flow statement basically show you how you got there.

So it's therefore important to understand some of those structural relationships when addressing cash flow financing.

In Canada your choices for working capital financing are one, or a combination of the following - receivable financing, sale leaseback financing, inventory financing, cash flow term loans, and bank and asset based lines of credit.

Which one of the above makes sense for your firm and how do you satisfy those working capital objectives? Speak to a trusted, credible and experienced Canadian business financing advisor today on how to best meet your business finance needs for growth and operational survival.




7 PARK AVENUE FINANCIAL
CANADIAN WORKING CAPITAL AND CASH FLOW 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_working_capital_financing_cash_flow.html

Finance Software? Computers ? Little Known Facts on Computer And Telecom Asset Financing

Leasing and Financing Your Tech Assets


Information for Canadian firms wishing to finance software and computers . The right computer and technology financing can be critical to your firms growth and success




Finance Software? Yes you can. Financing computer and telecom assets? Yes ... you should!

Never has the challenge and importance of financing your needs for Information Technology, software services, and telecom assets been more important. Safe to say also that it's a bit of a minefield around properly acquiring those assets. One of the reasons is that quite simply those needs change over time... and, oh yes, they tend to cost a lot more often than not!

As we seem well out of the collapse of the financial markets in 2008 -2009 (we kind of hope/think!) the importance, and access to that capital and those creative solutions seem once again at the head of the table, so to speak.

More sophisticated corporations tend to call it the ' technology sales cycle ', while companies in the Small to medium Enterprise sector in Canada simply call it a ' financial need '!

As you can see, we have a theme going here, and its basically you not only have to know ' what to buy” ... that's your problem, but from who to buy it from and finance it ... and that's where we can shed some light on some of those ' little known tricks ' we've mentioned. And when you master some of those tricks you quite clearly will be achieving a better ROI, as well as the cash flow conservation and budgetary pressures that come with investment in technology assets.

The whole concept of financing tech revolves around one basic premise - you want to be able to acquire the technology you need and at the same time be able to access flexibility, because boy do things change in tech!

So why should you consider the finance of software, computers, etc. Simply because it eases cash flow going out of your business. Many new innovative solutions also revolve around ' pay per use ' program. Quite simply the computer industry has taken the photo copier model and allowed you to pay for computing, printer and telecom power when you use it.

Don't forget to also investigate CLOUD and ASP solutions which also can save you tens perhaps hundreds of thousands of dollars in computer hardware investment.

So let's get back to a couple of those tricks of the trade. Cash conservation is one of them, so don’t forget to explore all options when it comes to staggered or flexible payments, and even operating leases which years ago were the ultimate in optimal tech financing - perhaps less so now because of accounting changes, but they are still a cash flow conservations strategy.

When you're budgeting for technology assets don’t forget to keep in mind the total solution, and ensure that solution can be financed. That's when the bundling of software, installation, delivery, maintenance etc can again save you thousands of dollars in outflows of cash. And by the way, one of the premises of leasing anything is the old maxim - ' IF IT APPRECIATES, BUY IT, IF IT DEPRECIATES FINANCE IT. Could any saying be more applicable in computer financing? As a business owner you want to be able to match the productivity benefits with your payments - over time. It's as simple as that.

Canadian business owners and financial managers sometimes have a fear of being ' locked in' to a particular vendor or product. The financing of that technology allows you upgrade and change flexibility to somewhat to a certain degree eliminate the whole issue of obsolescence.

Matching your financing solution and source to computer financing needs is important. If you want to explore those ' tricks of the trade ' and little known facts on methods of financing tech assets speak to a trusted, credible and experienced Canadian business financing advisor .





7 PARK AVENUE FINANCIAL
CANADIAN TECHNOLOGY 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/finance_software_computer_financing_computers.html