Afraid Of Debt Factoring? Business Factor Companies Actually Offer You A Lifeline On Cash Flow And Working Capital !

Something Different in Cash Flow Financing ?


OVERVIEW – Information on debt factoring in Canada . How business factor companies work . Which one is best for your firm?




Debt factoring is a bit of a misnomer here because when you deal with a business factor company you are actually not incurring any debt... but we can't stop clients from calling things what they want to!


Business factor companies in Canada often maintain they offer your firm a ‘lifeline '

when it comes to cash flow generation. Does debt factoring, aka ' receivable financing ' really work, and if so... how!

Any company that sells on credit and has receivables can generation faster cash flow via factoring. The actual process could not be simpler - it's either a one time or ongoing sale of your A/R as you generate sales. Some advantages are that you can finance what you what, and when you want. If you have signed up for the right facility you are under no obligation to finance all your sales, just the amounts you need under your facility.

As we said, factoring is not a ' loan ' per se. That's where the misnomer lies, in that you are not creating or adding any debt to the balance sheet, you are simply monetizing sales, as you make them!

In general most facilities of this type in Canada are on a recourse basis, simply meaning that your firm is still responsible for the overall risks in collecting the receivable, and collecting it in a timely fashion. Since the main component of factoring pricing is ' time ' you benefit significantly by financing and then focusing on collecting those receivables. Large corporations maintain that focus... you should also.

Factoring pricing is widely misunderstood in Canada. The three parts of the pricing of receivable finance are as follows -

The advance rate
The fee
Time

If you're dealing with the right firm you usually are able to obtain 90% advances on your receivables. The ten per cent becomes a hold back that is remitted to you promptly after your client pays. Discount rates are 1.5-2% on financing. That means that the finance firm will deduct that fee as their profit on every invoice based on a typical 30 day collection period.

And as we said that final component is simply how long the receivable is outstanding? So focus on collecting those sales!

Do we have a recommended type of facility? In general the best suited facility for your firm is a confidential A/R finance facility. Here you are financing your sales and at the same time maintaining the right to bill and collect our own A/R.

Speak to a trusted, credible and experienced Canadian business financing advisor who can ensure you are getting proper debt factoring finance.






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/debt-factoring-business_factor_companies.html



7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653
Email = sprokop@7parkavenuefinancial.com

Purchasing A Company . Buying A Business In Canada Without Overpaying With These Tools !

Quality Decision Making When Financing And Buying a A business In Canada


OVERVIEW – Information on purchasing a company in Canada . When buying a business you need a solid level of acquisition analysis .. and financing



Purchasing a business in Canada - along with financing it, always makes more sense when you feel you have paid the right price! One of the biggest business news stories in the world in the last couple days was the discovery, apparently, that one of the largest technology firms in the world had (massively) overpaid for the business. That story seemed even more interesting to us because I toiled in that Tech giant for ten years . What a story!

Accusations from both sides, not surprisingly, abound. And much of those accusations are pointed at the legal and accounting firms that helped with the transaction. And we have met our share of clients who are struggling and wrestling with the financing they need based on having purchased a company at the wrong price, thereby incurring a lot of debt in the process... unnecessary debt!

As we can imagine, it's safe to say the ' financial fur ' is flying!

How then can Canadian business owners and financial managers protect themselves from these types of valuation mistakes when buying a business? Especially when they don't have access to all those high prices lawyers, accountants and valuation consultants.

The reality is that there are a number of common sense financial tools that you can in fact use when buying business and arranging acquisition finance. And they come at almost no cost! It's all about examining some very basic relationships around how a company operates, and these techniques could save you thousands/ millions.

A large part of the financing you need to purchase a business revolves around the relationship of accounts receivable and inventory to sales. When you learn to interpret these properly you are well ahead of the game, and hopefully your valuation and financing will make a lot more sense.

When you have a strong handle on the size of A/R and inventory to sales the financing you may need to finance the acquisition will simply make a lot more sense.

Let's take a look at A/R first. Most business owners know that they can measure the general health and quality of their receivables via a calculation known as DSO - Days sales outstanding. This measurement will basically tell you two things - the quality of credit that you are extending to clients and the difficulty or mismanagement that you are experiencing in collecting that sale. Pretty important stuff from a basic calculation, and as far as we have read that’s one of the key issues in that breaking news story we talked about vis a vis out tech giant’s acquisition.

Taking a hard look at the inventory situation simply allows you to determine if inventory is in fact being moved out of your current assets into the sales and receivables accounts.

How does the business acquirer then use this information to get a strong handle on sales , collections and inventory management . It's a lot simpler than you think, and the reality is that you can even use this simple calculation to monitor your own management effectiveness. Simply construct a basic chart that shows over any specific period of time your sales, A/R and inventory amounts. Monitor and analyze the relationships of these balances.

Example? No problem. Let's say sales go up 17% and you notice that A/R has now gone up 35%... with inventory going down by 5%. Is this bad, good, or who cares? The reality is that when you spend some time and also track the data you will see that in certain cases the numbers are out of whack, thereby identifying potential problems in A/R and inventory valuation.
It's up to you as the buyer to ask the right questions at that point!

In the case of our recent major news story the accusation seems to revolve around exactly the example we have provided - i.e. the cash conversion cycle slowing down because of sales behavior as it relates to A/R and inventory.

Is our calculation the be all and end all? Definitely not, but it also seems like it could have worked quite well of our Tech giants analysis team, as that seems to have been the problem.

Finally, all sorts of other issues need to be looked at also, they might include revenue recognition, expenses, accounting policy changes... and on it goes.

Bottom line - spending some time on the numbers will help you make a better decision when purchasing a company and financing any acquisition, large or small.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in acquisition finance.


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/purchasing-company-buying-business-acquisition.html

7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653
Email = sprokop@7parkavenuefinancial.com

7 PARK AVENUE FINANCIAL
CANADIAN ACQUISITION FINANCE EXPERTISE

Alternative Finance Solutions? Why Non Traditional Financing Alternatives Just Might Work For Your Canadian Business

OVERVIEW – Information on alternative financing solutions for Canadian business. Non traditional financing provides significant financing opportunities




Not every one these days is totally clear on the term of alternative finance , so lets recap some non traditional financing alternatives that just might make sense for your business financing needs. And to quote ourselves you just might find that alternative, in some cases, is the ' new traditional '!

First thought that comes into a clients mind when they think of the need for business capital? Of course it’s the Canadian chartered banking system. But thousands of business owners and financial managers quickly find that while somebody seems to be qualifying for those loans and other bank facilities it isn’t them!

We don’t want to weigh in too heavily on why the banking solution isn’t always totally available for your business - it’s just a fact that the Canadian banks manage risk very well! But when you qualify boy are those rates attractive!

We will add one more point about the banking system in Canada, which is simply that while you might in fact qualify your needs, ironically may be deemed too small or too large. How ironic.

So that allows us to move on to a discussion on alternative financing vehicles that might just work for your firm. One of those is in fact a bank alternative that is non bank nature. It's the government guaranteed SBL loan program. Although it’s facilitated by a bank the majority of the loan is guaranteed under the INDUSTRY CANADA loan program, allowing you to tap into rates, terms and structures that are attractive.

To access the SBL program you need to seek a bank employee who is aware and comfortable with the program. And the other qualification is simply a loan package that covers off the basics, which isn’t hard as you might think. Your financials, a business plan, and some back up documentation and you are off to the races.

Another solid form of alternative financing is Asset based lending. These are non bank commercial credit facilities that secure, into a business line of credit your A/R, inventory, equipment, and real estate if applicable.

Almost any firm (with assets!) qualifies for ABL lines of credit - including manufacturing firms, service companies, technology companies, etc. Most facilities start at the 250k range and there is pretty well no limit on the upper end of an asset based deal. Oh, and by the way, some of the largest corporations in Canada use this ' alternative ' finance vehicle to run their business. Apparently (to quote us!) alternative is the new traditional for them.

Other forms of alternative finance? You just might be surprised. They include"

Receivable finance/factoring
Supply chain PO finance
Tax Credit Financing
Securitization of A/R


Seek out and speak to a trusted credible and experienced Canadian business financing advisor on how alternative finance can work for your firm... and you just might find that alternative is the new traditional!


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/alternative-finance-non-traditional-financing.html

7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653
Email = sprokop@7parkavenuefinancial.com

Can Leasing Companies Solve All Your Asset Finance Needs ? Making The Right Equipment Financing Choices In Canada

Canadian Equipment Financing


OVERVIEW – Information on leasing companies in Canada . How asset finance solutions for equipment assist Canadian businesses .



Absolutely not. That's the short answer to the question of leasing companies in Canada solving ' all ' your equipment asset finance challenges. But we're pretty sure that 90% of the time they can, and those aren't bad odds, right?

In Canada there are currently hundreds of providers of equipment financing for asset acquisition needs of Canadian business. In a way that’s one of the challenges for the business owner / financial manager - namely who exactly do you turn to? The industry is certainly robust these days with larger corporations, brokerages, and small niche firms providing lease finance solutions from items we could call ' micro ticket ' to multi million dollar acquisitions of technology, airplanes, heavy equipment ... well .. you get the picture!

Many manufactures and distributors have formal or informal relationships with firms that will help you get the financing you need. Major players in a number of industries actually have full blown captive finance firms that are strongly incented and chartered with providing you with flexible financial solutions.

One of the advantages of dealing with a captive finance firm ( i.e. one that is related to the manufacturer ) is that your flexibility typically increases substantially, with various lease schemes ( schemes ?) offering your firm lease to own, lease to use, rental, or short term financing . Typically the shortest lease term in Canada tends to be 24 months, and longest terms are in the 5-7year range. That's of course unless you require a lower monthly payment for your new corporate jet!

If there is one key advantage of equipment asset finance in Canada it’s simply that the emphasis on the ' collateral ' to your transaction is, more often than not, just the equipment you are financing.

One of the alternatives to using leasing companies for financing needs is of course Canadian chartered banks. However here is where credit criteria are somewhat higher when it comes to balance sheets, income statements, and cash flows that meet bank requirements. We don’t mean to infer that the Canadian leasing industry is populated by drunken cowboys!

But we are definitely saying that overall credit flexibility is significantly greater when you use a non bank commercial leasing entity.

Also, most leasing companies will entertain the refinancing of an asset you already own to generate additional cash flow for your firm. This is of course the ' sale leaseback'. After you have reconciled with the fact that you might have to pay the sales tax twice this option still makes a lot of sense.

We encourage business owners to understand the key differences between lease to own and lease to use. That’s the capital lease and operating lease respectively, and there are significant differences to each of those lease solutions.

When cash flow and financial flexibility are important to Canadian business working with the right leasing companies can solve, not all, but a lot of your problems! Speak to a trusted, credible and experienced Canadian business financing advisor for assistance in asset finance solutions.


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_companies_equipment_asset_finance.html

7 PARK AVENUE FINANCIAL
CANADIAN LEASE FINANCE EXPERTISE

Key Issues In Factoring And Receivable Financing . Bringing Clarity To Solutions For Funding Receivables In Canada.

Clearing The Air On Canada’s Most Misunderstood Business Financing Solution



Information on factoring in Canada . How receivable financing differs from a bank borrowing solution and why funding receivables is becoming more of a proven successful strategy for the Canadian business owner




Key differences in banking and receivable financing have the ability to get the Canadian business owner and financial manager confused. Let's try and UN - confuse some of that information to provide some clarity as to why thousands of firms are gravitating to receivable factoring in Canada.

The core differences are in fact quite clear... how they are interpreted and what sort of solution you ultimately choose is where things get exciting! And those key difference - they arent as complex as you might thing. Simply speaking they are that the ability to borrow in this method of Canadian business finance revolves solely around the size and quality and value of your sales. Point number two is that this is not, we repeat ' not debt ' financing - so you are in effect just monetizing assets for cash flow. And that’s a good thing.

And our third difference - simply that the type of facility that you undertake when choose the strategy of finance via funding receivables is critical. That’s because your firm is not a borrower per se, you are a party to a 3 way business transaction involving your firm, your factoring partner and your client.

Quite frankly though it’s our recommendation to leave your client out of it! Is that possible? It absolutely is if you choose a confidential receivable financing facility that allows you to bill and collect your own A/R without notice to any other party - i.e. your client! And this can be easily accomplished if you have the right assistance and guidance from receivables professional.

We always point out to clients that although our focus today is discussing the financing of a business A/R the reality is that this type of facility can be nicely combined into a comprehensive working capital solution that bundles up your receivables, inventory, and even unencumbered equipment into one borrowing facility. That's supercharging your borrowing ability, and often delivers additional financing anywhere from 50 -100%, or more of cash flow power.

The general consensus is that receivable financing is expensive. While some may argue strongly that it is it is important to understand that the way the industry delivers pricing is not in the form of an interest rate per se. It’s in actuality a discounted amount based on receivables covered under the financing arrangement.

What's more important than rate in actuality, we feel is your ability to now borrow as much as you need to based on sales revenue, new contracts, large orders, etc . And if you're on top of your receivables and inventory turns all we are saying is that you're turning over more assets... more often, and that equates to... you guessed it... more profits.

Speak to a trusted, credible and experienced Canadian business financing advisor on what makes sense for your firm when it comes to a receivable financing program that best suits your needs. Finally... clarity!

7 PARK AVENUE FINANCIAL
CANADIAN RECEIVABLE FUNDING 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/factoring_receivable_financing_funding_receivables.html

How To Increase The Odds Of Successful Business Financing In Canada. Funding Your Company With Credit And Loan Solutions

Solving Business Credit Challenges In Canada

Information on business financing in Canada. Funding solutions for loan and asset monetization via commercial credit .


We're sticking our necks out a bit by saying that in general gambling is not a good thing but when it comes to business financing there are a lot of ways the business owner / financial manager can increase the odds

of funding their business with proper business credit and loan solutions.

It's a question of maximizing relationships and knowing at what point in time you need to seek debt or equity options. Most business owners would agree that finding the right solution is hard enough then comes the challenge of ensuring in a step by step basis that you can successfully complete that financing. In Canada some forms of business funding can be completed in hours ( example - leases for assets under 50k) while at the other end of the spectrum larger more complex solutions can take days, weeks, and unfortunately even months . Being unprepared for such timelines as is needed often leads to serious problems.

Knowing what those sources of financing are in Canada is half the battle - there typically is more than you think, and when you are focused on the right solution you have probably already increased your odds.

If we had to summarize in a fairly concise form the major sources of business financing, from a debt and asset monetization point of view (not equity) they would be as follows:

Receivable finance
Inventory Financing
Equipment Financing
Asset based lending
Traditional bank lines
Term Loans
Unsecured cash flow loans / securitization
Supply chain / Purchase order funding
Tax Credit Monetization

How then do you decide what fits when? We won’t weigh into the debate f whether there is too little or too much capital around these days, but we can guarantee the business owner/manager there somewhere out there is a solution that works for them. The business owner often focuses on Canadian chartered banks for many of the solutions we have noted above. We've done that for hundreds of years, so why change things, right?

The reality though is that many non bank commercial entities - i.e. leasing companies, non bank asset based lenders, niche players in PO finance and Tax Credits etc provide billions of dollars of financing and funding solutions for business everyday . How to get those solutions to trickle down into exactly what your business needs is the challenge.

If you feel that your total knowledge of business funding solutions is limited and have a real desire to expand the range of solutions available for your challenges seek out and speak to a trusted , credible and experienced Canadian business financing advisor who can assist you with your commercial credit and loan needs. Doing that increases ... the odds!

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_financing_funding_credit_loan.html

Government Business Loans . How The SBL Loan Program Can Help Your Company

What’s The Noise And Commotion Around Government Loans?


OVERVIEW – Information on who can use and apply for government business loans and why the SBL loan program helps thousands of Canadian businesses every year .



Canadian business owners / managers might just get some valuable financing assistance from the 800 lb. gorilla of government business loans - we're referring of course to the SBL loan program in Canada.

When it comes to accessing up to 350k of new capital for your business it pretty well is the only game in town when other forms of traditional financing just seem a bit of a stretch... for the lender. For a qualifying business these loans offer solid rates, terms and structures. The bottom line... affordable and great access to capital!

Most Canadian business arent really aware that the government department known as INDUSTRY CANADA has this loan program in place to help you success in business. And that can be from a start up right up to when you achieve your first 5 Million dollars in revenue. (The 5M is the revenue cap your company or business must be under to qualify for the loan).

Quite frankly the program is one of your best friends for financing items such as equipment, leasehold improvements, computers and application software, and even real estate if that’s applicable.

The first thing you need to understand is that INDUSTRY CANADA itself, the ' sponsor ' of the program does not make the actual loans. They charter our Canadian banks to make these loans, and the government underwrites or guarantees most of the loan. As we have said in the past - ‘Talk about a great co signer ‘! Since the banks are assured of payment they of course become much more flexible when it comes to amortizations of the loan, credit approval, and other ratios such as debt to equity.

Naturally this program is geared to supporting business development in Canada - it's no secret that the majority of growth and employment these days comes from the SME sector... That’s where start ups evolve, business grows into corporations and people get hired. That’s economics 101 we guess.

So what do you have to do to qualify for this the SBL loan program? That's the most often asked question from clients inquiring about government business loans. The basics are a decent personal credit history, a minimum equity down payment of 10 per cent, and the ability to demonstrate your business has the working capital to get out of the start up phase.

The problem arises when the business owner/applicant things the SBL loan program is ' easy ' to get. We're a bit biased - we don’t think it's hard, but you do in fact have to have some fundamentals in place. Oh and by the way, many bankers either aren't familiar with the program, or are incapable of putting together the application, only because of their lack of interest or experience. So, point taken, seek out a banker or, even better, an independent Canadian business financing advisor who can get you fast tracked to financing success.

To recap, over 8000 business every year are approved under the program. All you need is a business plan and some typical back up information that you would have to supply for any type of financing whatsoever. And don't forget, outside collateral is not required- and you'll be more successful if you demonstrate you have the character and experience to make your business successful.

So, what is all the noise about?

It's the fact that financing you need just might be around the corner.





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/government-business-loans-sbl-loan-program.html