Critical Aspects of AR Finance In Canada . Factoring Of Accounts Receivables - The Right Way!

Factoring In Canada - ‘ Doin’ It Right ‘!


Information on AR finance in Canada . 6 Critical things to consider in the factoring of accounts receivables .


AR Finance is a very valuable method of financing a company in Canada. The process goes under various names, and there are some subtle and not so subtle differences in the terminology - aka the ' factoring of accounts receivables '. Other terms are receivable finance, invoice discounting, etc.

The arrangement is pretty basic, and in fact has been around hundreds of years. In Canada we appear to be ' catching up '! The arrangement is as follows - the finance firm enters into an agreement to purchase accounts receivable from your firm. That right there is an immediate well publicized benefit - even if your firm can’t access bank financing, or is a start up, etc you immediately have found the ability to finance your firm, based solely on your sales.

Although the actual ' cost ' of AR Finance seems to be subject # 1 when it comes to discussing factoring but this cost is balanced against some pretty major benefits - your firm now has pretty well all the cash it needs, supplier discounts can be taken to reduce up to half of your financing costs, and your competitors who seemed to be taking business away from you ( perhaps they are factoring also ?!) are now in your firms rear view mirror .

Oh and by the way, all the lending covenants and restrictions that come with Canadian chartered banks simply don't exist in AR finance. Time is also critical to clients we talk to, and solid ar financing transaction can be completed in one or two weeks - if you're dealing with the right parties or advisor.

There are three drivers that pretty well secure the fact that your firm could significantly benefit from ar finance - they are your ability to demonstrate good gross margins, reasonable overheads, and the ability to potentially increase your prices a bit or take supplier discounts at the other end of the spectrum.

Perhaps your firm is having some serious financial challenges; and at the same time you just might be experiencing a solid growth period in revenues. Even more so you might be coming out of a turnaround phase in your firm and you're not quite ready for the bank yet. In those cases the cost of factoring of accounts receivables can easily be justified around the speed, flexibility, access to capital, etc.

Speak to a trusted, credible and experienced Canadian business financing advisor on how your firm can benefit from this accepted business financing strategy.

7 PARK AVENUE FINANCIAL
CANADIAN AR FINANCE 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/ar_finance_factoring_of_accounts_receivables.html

SBL Loans . Great Rates , Terms , Structures . The Canada Government Small Business Loan Ticks Off All The Boxes!

Why The Government Small Business Loan Makes Sense For Your Company Or Start UP .

Information on the Canada government small business loan . Why do SBL loans work for a solid Canadian business financing solution



The Canada government small business loan. In our opinion the Canada the SBL Loans program is, bar none, the best business financing vehicle in Canada. Why is that? As we say, it ' ticks all the boxes ' when it comes to what the Canadian SME Canadian business owner or manager is looking for. Here's why.

So why should you know about the program, how do you access it, and what is involved. Entrepreneurs and growing business are always looking for funding, and that’s what this program provides.

Can the SBL government loan program make a small company a big company? We won't weigh in on that one, we're not even sure that that’s the goal of all business owners. But small firms, restaurants, service companies and other business categories have no where to go when it comes to start up or interim financing. That's where the SBL comes in.

The program is run and administered by INDUSTRY CANADA, a branch of the Canadian federal government. It's goal, vis a vis the program is to assist business in finance loans they might otherwise not be able to obtain.

Many business owners in Canada are concerned about the ' personal guarantee ' when it comes to pledging their personal assets against loans. Here's the good news on the SBL - you are only asked to provide a 25% personal guarantee on the transaction, and that transaction can go up to a maximum of 350,000.00$ in borrowing. The limit is actually 500k if the transaction involves real estate, which is one of the asset categories that can be financed under the program.

And by the way, getting back to that personal guarantee of 25%... none of your personal assets are pledged or collateralized, it’s simply your promise to pay... in effect make good... on the portion of the loan you guarantee.

There are three parties to SBL Canada government small business loans. Your company, the bank that originates the loan, and of course INDUSTRY CANADA folks who are in the background. You actually never deal with Industry Canada on a direct basis.

As we said, size eligibility in Canada for the loan itself is 350k. As far as the size of your company, it can either be a start up or an established firm with no more than 5 Million in sales.

Maybe it's just our clients, but they seem to hate ' paperwork '. The perception that this loan is time consuming is, in our opinion, just that, a perception. All you need is some solid advice around putting together a business plan / executive summary, a proper financial forecast, and misc back up info related to any standard business loan application. Those ' misc ' items might include your lease agreement on premises, a list of the equipment or leaseholds you're financing, etc. That’s not bad, right?

So, great rates, terms and structures? You got them with SBL loans. Speak to a trusted, credible and experienced Canadian business financing advisor for up to date advice on Canada government small business loans. And check your list, because this program ticks all the boxes!

7 PARK AVENUE FINANCIAL
CANADIAN SMALL BUSINESS LOAN 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/sbl_loans_canada_government_small_business_loan.html




Stan Prokop

Secrets To Business Loan Success In Canada . Financing A Company The Right Way

A business loan when you're financing a company... your company..... can be a heck of a challenge in Canada. Let's focus in on some proven ' secrets ' to Canadian business financing success.

Loans are for different purposes, and that’s actually our first point, the ability to focus in on the differences in the type of financing you believe you need. That comes down to the differences between equity and debt.

We often talk to clients who have spent a lot of time putting together a package or business plan that feels like it is focused on equity or some sort of venture capital, when in fact its a debt financing, or ' loan ' that they are really attempting to close .

Bankers and other commercial debt lenders in Canada focus on collateral and cash flow . The private equity and angel type investors focus in on in things like product sales, customer acquisition, and exit strategies... What a difference!

So in focusing on your plan of attack, when it comes to a business loan, emphasize collateral (internal and external), some basic ' ratio' analysis, and historical financial statements or projections.

When we look at plans and packages that customers have shared with us they seem to focus on product and market ... what they really should be focusing on is management, profitability, and repayment of loans via cash flow generation.

When approaching Canadian banks for financing, either by you or with an advisor focus not on the bank, but the banker. Our experience is that good business bankers are in many ways a part of your team in the long run. Remember also that unlike 20 years ago, your banker probably does not have the authority to approve a loan, so you need their support and the ability to piggy back on their credibility with the underwriters.

Are there a couple of tried and tested rules for business loan packages -?

Here's a couple:

It's actually impossible to give a bank or another commercial lender too much info

Consider Canadian financing strategies when you don't need the capital or a loan, not when you’re in dire straits

Be prepared to answer all the gaps in your package - loan approvals flow towards zero risk

Loan packages should identify the amount of funds you need, the term, use of funds, and repayment ability. 99% of the time your repayment will come from internally generated cash flow and profits.

Canadian business owners and financial managers deserve business credit. The challenge is ensuring you know how it looks on the ' inside ' when it comes to dealing with your bank or any other commercial lender.

Extra assistance needed? Speak to a trusted, credible and experienced Canadian business financing advisor for a business loan when financing a company in Canada. A little expertise in finance goes a long way.






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_loan_financing_a_company_canada.html

Restaurant Financing In Canada. From Business Plan To Finance Approval. Franchise and Non Franchise . Here’s How!

Restaurant Financing In Canada. From Business Plan To Finance Approval. Franchise and Non Franchise . Here’s How!


Restaurant Financing In Canada. From Business Plan To Finance Approval. Franchise and Non Franchise . Here’s How!



Restaurant financing in Canada. If it's your choice to enter the hospitality industry lets examine how you can increase your chances of success, from business plan to that most important element... Approval!

Quite frankly we can' think of any industry that seems to be growing more quickly, and we're of course talking about both franchise restaurants as well as independents , both of whom seem to have a solid chance of success these days.

It's not ours to judge or offer up why this industry is growing so quickly or is so popular, - reasons in fact might be that we ' seem ' to be out of a recession ( key word = seem!), the economy is getting better, and those restaurants that didn’t make it now seem ripe for the pickings vis a vis locations, etc.

Pricing is of course critical in your overall strategy. While prices of franchise restaurants are of course fixed relative to franchise cost and turnkey cost to build many non franchise restaurants can be purchased for a great price - sometimes it’s just the cost of assuming the lease from a co operative landlord.

That of course brings into play the question of equity - just how much do you need to put together a proper financing, i.e. the classic mix of debt and equity ... more simply put ... a combination of borrowed money and your own money. In Canada that seems to range from anywhere from 10 - 50 per cent. depending on a number of factors which we will discuss.

One of the most popular methods of financing a hospitality venture is utilizing the Canada BIL/CSBF loan program. While it requires a 10 per cent permanent equity injection you must be in a position to demonstrate additional access to working capital, which just makes sense as your venture ramps up on sales and working capital needs.

It is also important to demonstrate that you have some industry experience, as that seems to be a key factor in the ' KEYS TO SUCESS ' column for this industry.

It all starts with a solid business plan of course - we tell clients not to worry if they don't feel they can complete a proper plan, as that assistance can come from a Canadian business financing advisor, their accountant, or any other qualified part. And these plans have a relatively speaking nominal cost relative to the risk and important you place on getting your venture financed properly.

Key elements of the business plan are your own bio, industry info, financial projections, and an overview of your business model, whether its franchise or independent, and some info on the local competition. It's really as simple as that. Demonstrating how you will run and grow the business is also important.

Typical restaurant financing includes the finance of equipment, leaseholds, working capital, and in some cases real estate. That brings up the point of lease negotiations, which must be completed prior to your financing ... for some reason lenders like to know you have a location!!!

The double edged sword of the hospitality industry is risk and reward, the ability to be your own master.

What you don’t want to do is to be part of the falling wounded when it comes to restaurant finance in Canada. Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in your needs.

7 PARK AVENUE FINANCIAL
CANADIAN RESTAURANT FINANCE 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/restaurant_financing_business_plan_finance_canada.html

Can An ABL Lender Get Your Business Financing House In Order ? Key Take Aways For Asset Based Financing Success

Why Asset Based Business Credit Lines Just Might Be The Right Solution

Information on asset based business financing in Canada . How the ABL lender provides the capital needed by Canadian businesses.



Business Financing in Canada. We've always felt that an ABL lender (ABL = ' Asset Based Lending’) is one way for the Canadian business owner and financial manager to get the house... i.e. your company, in order!

Larger corporations, in Canada we often refer to them to as the FP 100, or FP 500 perhaps have access to capital in a number of ways. And if they are public companies relying on equity, all the better of course.

Unfortunately if your firm is in the other hundreds of thousands group you're a victim of the changing tides of access to capital in Canada. Think back to 2008 when it could not have gotten worse. The hurdles to that access to business financing seem... high!

In Canada there is a whole spectrum of business financing available. It's a question of knowing where it’s available, and how you can access it. That’s where the ABL lender comes in - they fulfill on of those huge niches in Canadian finance... Asset Financing.

The challenge quite often is simply understanding the terminology, and the finance folks in the industry do a great job, probably (we hope!) unintentional of confusing us with various terms in Canadian business finance.

We have found there is a solid roadmap business owners/managers can use to successful complete asset based business financing. So let’s share some of the steps on that roadmap.

Many clients we talk to need business financing... yesterday. And that many times is the problem in that they are perceived as somewhat desperate and in dire straits, creating potential negative perceptions around their ability to raise, and repay financing.

Knowing how you will use asset based lending is simply a case of ensuring that your ABL lender understands a clear use of funds. More often than not its cash flow and working capital financing... ie your daily operational needs.

In many cases certain types of finance are simply not suitable for your firm. You can waste a lot of time chasing financing that will never happen, and we’ve met our share of clients doing just that.

The ABL lender has one goal, and when it works you will be in great shape. That goal is to leverage assets. That of course has to be balance with an appropriate return to the lender, as well as your company’s' ability to generate a positive return on this new capital.

The true beauty of asset based business financing in Canada is that it covers the gamut of business stages: start up and pre revenue, emerging growth, growth, and mature.

The asset based line of credit works great in certain cases - its optimal when it finances receivables, purchases inventory, etc. It doesnt work when it is used inappropriately for term debt, fixed asset purchases, or product development needs.

The ABL lender is typically non regulated, they are private firms that compete with banks and finance assets they are comfortable with. Receivables and inventories and equipment are great ABL assets. These deals have no amortizations, grow with your firm, and are ' evergreen in nature.

Can ABL get your business financing house in order? It has for hundreds / thousands of firms, so consider speaking to a Canadian business financing advisor who can assist you with finance success.

7 PARK AVENUE FINANCIAL

CANADIAN ASSET BASED LENDING 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_lender_asset_based_business_financing.html

Whats Your ‘ B A P ‘ With Cash Flow Financing ? Put In The Business Funding Fix Today

Beat these 6 Worries on Working Capital Finance In Canada


Information on cash flow financing and business funding in Canada . What solutions work best when, and why .




Cash flow financing in Canada for your business funding needs. And the B A P? I guess we'll have to confess and advise that it stands for ‘BIG A$$ PROBLEM’...!

Not sure if that’s the term we would use in talking with our bankers it’s probably a term that our cousin Frank would use if we were describing business financing challenges in Canada. ‘(Doesn’t everyone have a cousin Frank who is a bit rough around the edges?)


It is of course those cash flow problems that keep your business from moving forward and generating the sales and profits you need to. Naturally every company's situation is a bit different, but at the end of the day doesnt it boil down to these categories: Here's 6 of them -

Your growth is being penalized due to cash flow challenges

Your competitors seem to be beating you to the punch (how is it that they are doing that ... i.e. financing their growth

You're spending all your time worrying about cash flow challenges

A lot of the solutions you have heard about seem somewhat technical and hard to understand how they would work on a daily basis

You don't know where to start - it’s an overwhelming and confusing feeling

Insert your own problem here!!!!!



So where does the Canadian business owner and financial manager start. One firm calls the plan your ' growth and financing navigator ' ... its all about knowing where to start.

First things first so you need a handle on your business, and it’s not as hard as you think. Spend some time to address how your company looks from a balance sheet point of view, what amount of funds do you really think you need, and what are some specific issues around your industry or company? I guess that’s where we say ' INSERT YOUR OWN PROBLEM HERE '!

Naturally all companies are in different stages - either start up, early revenue growth, or mature with prospects of growing. In some cases your firm might be established and looking for alternative financing to enhance your growth prospects.

In many cases in the SME sector owners of the company ar also the managers, so you need to be in a position to both step back and also when it might be time to bring in a trusted business financing advisor who can objectively assess risk management and liquidity solutions.

That’s when you have to assess whether you're going the debt or equity route. Equity is a whole different kettle of fish and not our subject for today. That therefore leaves us with either new debt, or, our most favorite solution, monetizing existing assets to accelerate cash flow. Through the whole process reality checks are often needed, i.e. what is really achievable here?

There are probably at least ten, if not more solutions to cash flow financing for your firm. As we said, they are a combo of debt and monetizing assets.

They include receivable financing,
inventory financing
leasing and sale leasebacks
supply chain financing
bridge loans
bank lines of credit
non bank lines of credit
government busines loans
securitization

ETC!

So, as our rough around the edges cousin said, figure out your B A P and then also consider speaking to a Canadian business financing advisor to assist you in cash flow financing and business funding.

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_business_funding.html

Don’t Overlook These 5 ( Other ) Leasing Finance Issues On Lease Documents In Canada

Successful Equipment Leasing In Canada Depends On …


Information on leasing finance in Canada and why issues such as lease documents should not be overlooked re risk and advantages for lessees in Canada .


Leasing Financing in Canada. It could not be any more popular than it is. In fact a recent major study indicated the following:



Canadian business optimism is increasing

Canadian firms have challenges accessing certain types of finance (not leasing by the way!)

Access to asset financing was the 2nd largest concern expressed by the majority of business in Canada (No surprise that government bureaucracy was the largest concern)

Canadian Asset lenders are the largest provider of debt asset financing in Canada behind the Chartered banks in Canada

84 Billion dollars of assets are under finance in Canada by asset based lenders/lessors



Awhile ago, we wrote on 5 key documentation issues that Canadian business owners and finance managers have to ensure they address when it comes to lease documents . We pointed out that often it’s the terms, conditions and documentation around equipment financing in Canada that makes or breaks a successful vs. non successful lease transaction.

Those issues were master leases, warranties, ensuring you understand the different between capital leases and operating leases, asset registration issues, taxes, and return requirements. So that's it right?

But wait, as the fellow on TV says, ' there's more! Let’s examine some other key issues you probably need to consider to ensure that confidence that comes with knowing you have entered into a win/ win transaction with a lessor of assets.

One of those is maintenance, meaning that you need to ensure you understand your written obligations on maintaining the asset in good working order. This becomes even more important when you in fact have the intention or obligation of returning the asset in question.

Insurance becomes our 2nd issues to ensure you consider. You will often be required to produce a certificate of insurance which names your lessor partner as beneficiary in case of loss, theft, damage, etc. That’s just common sense of course, given they are financing the asset.

Thirdly, in certain cases you might want to ensure your lease specifies you have the right to assign the transaction to a third or related party. Naturally you want to ensure this right, if required, is not ‘unreasonably withheld ' as the lawyers say.

You may also wish to address the area of location to ensure you have the right to move the leased asset to another location, perhaps a branch plant or other office, etc.

Finally, in the case of say technology assets, i.e. computers, telecom assets, etc, make sure you clearly understand what can be added to or removed from the asset. In our tech example a good example might be software or additional disk drives, etc.


There you have it, 5 ' OTHER ' things to consider in the critical area of lease documents in Canada. Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in structuring a transaction that makes sense.

7 PARK AVENUE FINANCIAL

CANADIAN EQUIPMENT 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/leasing_finance_lease_documents_canada.html