Factoring Account Receivable Cash Flow Advantages

ROLL CALL ! Who’s Up To Explain A/R Financing Benefits?



OVERVIEW – Information on factoring account receivable advantages in Canada . Cash flow financing is effective when the business owner/manager understands costs and benefits




Feel totally familiar with factoring account receivable advantages in the Canadian landscape? We think its time for a ' cash flow ' roll call!

One method in which Canadian business owners and financial managers can fix the proverbial ' cash flow is tight ‘problem is to enter into an agreement with a finance firm to sell receivables. It's a more simple process than you think. You are advanced 90% of your sales, as you generate them, and the 10%, a ' holdback ' of sorts is remitted to you promptly, less financing costs, once your clients have paid the invoice. Pretty simple, right?

Some of the advantages of this type of business financing seem more obvious than others, the most obvious being that you are no longer in ' wait ' mode, you're in ' cash flow' mode! With technology and banking systems as sophisticated as they are today you typically get your funds the same day!

Broadly speaking factoring account receivable finance is available to every type of firm, from start up to Major Corporation. We certainly can't make that statement about all other types of Canadian business financing.

The actual cost of invoice financing tends to be the most, shall we say ' controversial ‘subject when we sit down and talk to clients. Like many other types of alternative finance we maintain that cash flow financing using factoring is about as mainstream as you can get these days. And that cost of financing, typically in the 1.5-2% per month range is offset when business owners consider that they are not taking on debt, they don’t need to sell equity or give up ownership, or , in many cases , find themselves being unable to achieve traditional financing through our Chartered bank system .

In receivable finance you are only paying for facilities you have drawn down on - that's important.

One other advantage of using this method of financing is the comfort that it brings knowing Canadian firms can utilize the financing for their Canadian and U.S. clients - currencies and geography are not an issue. If your firm in fact has foreign receivables they typically need to have some credit insurance in place - but that’s also the case if you were able to secure commercial bank financing for those same sales.

There are of course other alternatives to factoring - they might include business credit cards, working capital term loans, external collateral, but when you consider the ease and simplicity of the factoring process the other solutions often pale in comparison. You in effect are able to turn your company into a cash flow machine. generating sales and cash at the same time.

It's not a perfect world of course, so your firm has to have some decent gross margin to absorb the 1-2% finance charges, and you have to spend some time understanding the approval, process, and types of factoring available.

Do we have one favorite recommended solution? We do. It’s a type of factoring known as ' confidential invoice finance ' - allowing you to bill and collect your own A/R, retaining total control of the client relationship. Not all facilities offer you that, so seek out a trusted, credible and experienced Canadian business financing advisor who can assist you in maximizing the factoring account receivable advantages you have been looking for to enhance your cash flow prospects.

7 PARK AVENUE FINANCIAL
CANADIAN RECEIVABLE FACTORING 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 10 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-account-receivable-advantages-cash-flow.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





















Stan Prokop

Financing Tips For Entrepreneurs

Here's and interview we did on Financing Tips For Entrepreneurs :


http://www.evancarmichael.com/blog/2013/02/02/stan-prokops-1-tip-for-entrepreneurs/

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 10 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.


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

Business Financing Options In Canada . Don’t Make These Mistakes!

Don’t get us wrong, but we don’t believe in Angels !

OVERVIEW – Information on business financing options in Canada . Sources of financing and alternatives just might be more plentiful than the business owner or manager might think!




Business finance options in Canada. And oh yes, we don’t believe in angels! We’re not talking about those heavenly ones, just primarily VC’s and angel investors.

Truth be told we acknowledge and respect them of course, it’s just that we cringe when we talk to many clients who focus on these two sources of capital when the reality is that 98% of the funding your firm needs is probably only available from debt financing, and asset monetization for working capital or cash flow. That ' equity capital' search unless for firm simply wastes valuable time – unless you’re ready. Many are not!

While the sources of funding for the Canadian business owner and financial manager might seem plentiful in the TV commercials or newspaper, the real world tells us that there are a lot of trick obstacles facing the owner /manager looking for financing options.

Is there a way to change all that and make ensure that the odds aren' so stacked against you. We think there is and it comes down to simply knowing what business finance options are available to you and picking the one ( or ones ) that suits your operational or growth needs,

So how do you analyze and choose debt or asset monetization options. Our clients think it has to be a Canadian chartered bank solution. And we're the first to start working on that , provided you have cash flow , collateral, profits, a clean balance sheet, and solid owner personal credit histories. That's tough to achieve these days for many, which still leaves a number of financing solutions on the table.

They include:

Asset based lending

Receivable /Invoice Cash Financing

Government guaranteed SBL loans

Equipment finance /leasing

Non bank asset lines of revolving credit

Tax Credit Monetization

PO/ Supply chain financing

Sale leasebacks

Securitization/mezzanine financing

P.S. We’re e not fans of ' friends and family loans' as they make those warm family gatherings somewhat uncomfortable!!

You might not know it but in a lot of cases your borrowing power is already pre-determined if you're already in business and have assets. Receivables can be financed up to 90%, inventory financing ranges from 25-60%, and appraised assets can be financed anywhere from 50- 80% of their true value. Many clients we work with consider refinancing their buildings and assets as a great source of working capital when the rate and structure is suitable.


The goods news about these solutions, again with apologies to all those great angel investors and venture capitalists in Canada, is that you aren't required to give up equity ownership when you source any one of these options.



So , yes you can consider those angels and VC's with the searching and managing that comes with that journey, but remember that there are a lot of straightforward financing options readily available for your firm if you have growth prospects and assets .

So, cancel that IPO (really, what were you thinking?!) and seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your financing needs. Eliminate the complications and the risk, and get the business financing options you need.

7 PARK AVENUE FINANCIAL
CANADIAN BUSINESS FINANCING OPTIONS 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 10 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 :


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













Stan Prokop

Will The Small Business Financing Loan Still Work ? The Status Of SBL Loans In Canada

How Will Changes In The SBL Loan Program Affect Canadian Business Financing


OVERVIEW – Information on sbl loans and the government small business financing loan in Canada . Will changes in pricing and approvals affect borrowing ability and success ?

Heard the news?

Those drums are rumbling in the distance. The small business financing loan, aka ' SBL LOANS ‘may be getting a bit more expensive. We're pretty old ourselves and we actually can't remember when there has been a change in pricing to the ' SBL ‘- Canada's revered government guaranteed loan.

So is the program working ? Naturally the press and all the financial pundits (We suppose that includes us!) are weighing in on bank profits on this program, higher costs to the borrower, and the overall merits of the program.

Current interest rates under the program are 3% over prime and the scuttlebutt seems to be that the loan pricing might increase by 3/4 of 1%. It's probably just us because we ourselves don’t borrow a lot, but with rates an all time historic lows in Canada we're not quite sure everyone should be gnashing those teeth.

The program rate increase under this loan will supposedly over a multi-year period cost borrowers hundreds of millions more. That math should be quite acceptable though, given the program puts out Billions of dollars every year in loans to the SME sector in Canada.

When we talk to our clients about the program we focus on common sense, so let’s look at a real world example. The current borrowing cap under the program is $350,000.00. The most typical amortization or ‘loan term’ that we seek and recommend for our own clients tends to be 5 years.

So SBL loans on a 5 year term, for 350k of financing would currently cost you: $ 6766/m0
Using the new proposed pricing the loan payment would be: $ 6889/mo
We’ll let you mull over difference ! So whets our point here - lets not beat around the bush. It's simply that if the SME sector in Canada can achieve financing at 3 3/4% over prime for equipment and leasehold financing they might not be able to achieve otherwise is that really a bad thing.


Consider that the programs other features include:


A low personal guarantee

Repayable without penalty

Terms from 2-7 years

The ability to actually finance real estate under the program

A 10% only down payment /permanent equity requirement

Do we need to go on? We think you get the point, which is that at any interest rate SBL financing is a great deal when all terms and conditions are considered.

We hear often that the banks don’t make a lot of money on the program and that there is what one writer recently termed ' an administrative burden '.
So where does the business owner /manager fit in. They simply want access to financing that they might not otherwise be able to achieve. That's still a tough haul if you're a service business because the program only finances assets and leaseholds and real estate.

The bottom line? We think the Small Business Financing Loan, on balance, is still a great deal for those firms who have less than 5 Million dollars in annual or budgeted revenue, which is a qualifier under the program. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with SBL loans to start or grow your business.

P.S. The program is perfectly suited for the franchise industry also.

7 PARK AVENUE FINANCIAL
CANADIAN SBL LOANS 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 10 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/small-business-financing-loan-sbl-loans.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















Stan Prokop

Should A Corporate Line Of Credit Be So Hatke?

Business Credit Line Solutions


OVERVIEW – Information on a corporate line of credit in Canada . Business banking has its challenges and here are some ideas on overcoming them and achieving financing success .





A corporate line of credit in Canada. And what in fact does ‘ HATKE ‘ mean . It’s actually a Hindu term for ‘ different ‘ , so why do firms, including your competitors by the way! seem to get commercial banking facilities in place in a timely fashion, and with amounts and terms and conditions and covenants that suits their needs. At the same time your firm struggles to achieve the senior financing you need to grow... or survive.

We think its all about strategy smarts and attitude, we'll share with you how we do it and we'll let you decide. Let's dig in!

There are different circumstances surrounding your need for a corporate credit facility - i.e. a revolving line of business credit. In some cases you have a longstanding relationship with the bank already - it’s just that you need more funding. In some cases you're up for renewal.

In a perfect world you want to achieve agreement with the bank that you're in a position to meet covenants, grow your business reasonably, and that you have the ability to produce regular financial statements and reports that back up your facility. In the case of the majority of bank lines today in Canada for private firms in the SME /middle market sector owners also have to be prepared to address the personal guarantee issue. They never like doing that! Who does?

Another solid way to address why a corporate line of credit can’t be achieved is to put yourself in the shoes of the other party, i.e. the bank. Ask yourself or your financial management team why in fact the bank would decline a facility, not renew it, or decide not to increase it. In other words, to use a term the financial folks use - why aren't you ' bankable '?

One basic reasons, aside from some of the required fundamentals, is that reality that your business is not easily ' understood ‘. So if you don’t demonstrate how your business works (typically its called the 'operating cycle’) and why you need cash flow and when you need it you are in fact somewhat doomed

to failure in your search for financing. Technology type businesses might be a great example of a challenge in financing - at the opposite end of the spectrum if you are manufacturing nails then the business model is somewhat clear!

A strong executive summary or business plan is critical. We favor concise overviews that identify succinctly what industry you are in, a financial recap of recent sales and profits, an overview of the supplier and client base, and a positive spin on the factors that affect your industry

What does the banker do with that information? The put it into the context of the fundamentals we have spoken about. The majority of credit approval decisions in banks today, in fact all decisions when it comes to corporate credit are made by a man or women that you'll never meet. That is the underwriter -

They are in the bowels of the bank and are trained to assess risk and evaluate financials. They in fact will focus on cash flow, collateral, historical and projected profits, and ratios and covenants. Could anything be more exciting than those? We're financial types ourselves, so we actually do get excited about those, but we digress...

So our key point today. It’s all about understanding the process and doing it right. Be in a position to create a finance proposal that will get your company the corporate line of credit that you in fact need. Need some help? Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your finance needs.

7 PARK AVENUE FINANCIAL
CANADIAN CORPORATE 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 10 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 :


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


















Stan Prokop

Canadian Business Financing

We think we are being followed !

As our Business Financing Canada Blog hits 3000 page views per month and approaches 50,000 we want to thank the people
from Canada and all around the world who take the time to read it and call re: their financing needs.

Here's the data from that GOOGLE guy :



CLICK ON THE PIC

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 10 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.

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

An Asset Based Lending Loan Via An ABL Lender ? Things You’re Not Being Told!

A Conspiracy Theory In Business Credit Lines? !

OVERVIEW – Information on accessing the right debt capital and asset based financing choices in Canada via an ABL lender. The Asset based lending loan is a solid alternative to a bank credit line




An Asset Based Lending Loan. When it comes to a business line of credit via an ABL lender we sometimes think that there is a bit of a conspiracy theory when it comes to information the Canadian business owner or manager has when it comes to Canadian business financing.

Why is that ?Well we certainly didn’t read it in the National Enquirer, so we I suppose its just a notional feeling in talking to clients that they have been misinformed when it comes to alternatives in a commercial business credit facility . Let's explain.

In the U.S., and certainly less in Canada! asset based credit lines are an absolute cornerstone in commercial borrowing. They in effect replace Canadian chartered bank lines of credit and are essentially ' non bank' in nature. There's an interesting sidebar to our information we're sharing in that the banks are actually in the ABL business also, but it's a bit of stealth marketing we feel given that none of our clients certainly seem to know that! But we digress..!

These commercial credit facilities are conceptually the same as the bank credit lines, except that they often collateralize more assets, and, here's the kicker, they provide more working capital, cash flow and liquidity pretty well 99.999% of the time. In fact we personally with clients have never NOT seen the ABL loan provide the same or less business cash flow, it's always been more! Intrigued?

The cornerstone of the ABL credit is the flexibility it provides, as you are simply, under one umbrella, monetizing all your business assets. We were thinking about this the other day and perhaps another way to explain it is that this type of commercial borrowing is similar to the home equity credit line, where under one security agreement you can draw your funds for any purpose.

The assets that are monetized under an Asset Based credit are:

Receivables
Inventory
Equipment
Real Estate - if applicable

The equipment must of course be unencumbered, and the real estate, if it’s applicable in your firm’s situation uses the equity that's left in your real estate, i.e. the un-mortgaged amount.

Some readers might think that all of this might sound a little complex, but the reality is that the ABL line operates 100% in the same manner as a bank line of credit, i.e. the same security agreements, and the same daily method of usage as you draw down on the facility as you sell and collect for your products and services. That differences again - more liquidity, as A/R is typically margined at 90%, inventory in the 25-75% range, plus the added bonus of throwing your fixed assets into the borrowing mix.

We've talked a lot about similarities in the facility. but are there some differences? Two major differences are pricing and reporting. Briefly speaking pricing can vary. While it can be the same or less expensive thank bank financing in most cases it’s more expensive, but the benefit is the additional cash flow it brings into your company. And secondly there is more monthly reporting on the assets that fall under the credit facility. In our experience that additional reporting often makes your company a much sharper run machine as you understand your business a lot better. Trust us!

So, back to that conspiracy theory! We're still not sure we can prove it, so can we just leave it that it’s up to you to investigate an asset based lending loan via an ABL lender. Discover the difference in commercial borrowing in a manner you just may have never been told about. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor.

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-lending-loan.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


















Stan Prokop