Accounts Receivable Credit Financing . The Non Bank Financing Difference ! How Receivables Funding Works .. and Doesn’t Work

No Need to Be Naïve About The Difference Between Accounts Receivable Finance and Invoice Discounting And Bank Financing



OVERVIEW – Information on how an accounts receivable finance solution works in Canada . This type of receivables funding is dramatically different from bank financing and being adopted by firms of all size



Accounts Receivable Credit Financing . For the majority of Canadian business owners and financial managers that are considering receivables funding as a finance strategy the main question seems to be:

What is the difference between A/R finance and bank financing for their company? It's a legitimate question, so let’s dig in!

One of the main reasons in fact that many companies choose an A/R receivable credit solution is that is simply doesn't involve new long term financing for your company. The most simple explanation of that difference between a commercial finance solution vs. a bank scenario simply involves understand that the receivables factoring / discounting solution is simply the sale of your receivables, as opposed to the financing of them. Both get you immediate cash flow - they just work a little differently.

On a daily basis the sale of a receivable generates cash flow for your firm. In Canada you typically get 90% of all your invoice the same day you instigate the A/R discounting process. The other 10%, less financing costs of approx 2% is remitted to you as soon as you client pays. Simple so far, right?

That 2% fee in fact becomes larger, commensurate with the time your A/R is outstanding. So don’t be prepared to lull yourself into a fall sense of security on your new cash flow tool, because whether you are holding receivables and waiting, or financing them in an accounts receivable credit factoring situation is still going to cost you money . Carrying balance sheet accounts such as A/R and inventory are a hidden but very real cost of doing business - and the faster you turn over balance sheet accounts leads to great profits and operating efficiencies.

The key advantages of a factoring solution are:

Immediate on going cash flow

Funding as needed for your business if you have seasonality or bulge requirements

A more solid balance sheet that reflects cash, not A/R

It's important to us when we’re in front of clients to maintain a balanced position when it comes to explaining receivables funding. So we do point out that if you enter into the wrong facility (and Canadian companies do that everyday) the actual optics of how people thing you are financing your company can be perceived as negative. It should not be that way, but it is.

Remember also that this method of financing doesn't take away the risk of carrying A/R, unless you have a receivables funding insurance program, which most companies don't. So making proper credit decisions around your clients needs should still be top of mind.

One of the key things to understand in a/r financing is simply that the cost of using this method of cash flow and working capital is a rising and falling process, depending on how much you are drawing down, what that final approximate 90% advance rate is, and the administrative costs you need to run an a/r finance program.

So , no need to be naïve when you weigh the costs of receivables funding vs. bank financing consider seeking and speaking to a trusted, credible and experienced Canadian business financing advisor who can help you set the record straight on those pros and cons of each method of 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 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 :


ACCOUNTS RECEIVABLE CREDIT AND RECEIVABLES FUNDING





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

Business Financial Strategies . Pros And Cons For Your Funding And Lending Needs In Canada

Top Methods For Financing Your Company In Canada - No Plan And No Objective Equals No Results



OVERVIEW – Information on business financial strategies for funding the Canadian business . Knowing what type of finance solutions works when is key to operating and growth success




Business financial strategies in Canada.When it comes to funding and achieving lending success for your business it’s always important to understand the pros and cons of various financial solutions that will work for your company.

Some of those methods will work, some won’t... and if you don't have a game plan we can assure you your chances of wasting time, and failing are... well lets say .. excellent! But spending management business time and not achieving your financing goals isn’t our recommendation, so let's discuss the fixes.

A large part of the fix is understanding the need and having a plan. No secret there. The need is often very clear - your objectives might be to increase sales revenues, introduce new products, become technologically more competitive, etc

It's also critical to understand your current financial strength. Knowing how well your business is operating is key, and there are many basic analysis tools you can use to get a sense of:

1. How well your business is doing from an operational financial perspective

2. How bank and the many other commercial lenders will perceive your firm from a funding perspective.

Is there in fact a plan and process that allows you to successfully achieve external financing? We think there is and that process revolves around some key planning basics:

Ensuring you have a solid package of information that your proposed lender will need - those key basics includes interim financials, year end financials, a cash flow forecast , and a management and company bio . And if you don't have the time or expertise to put that together (a good package of info is a winning package) then there is a lot of expertise via your accountant or an experienced business financing advisor who can assist.

In some cases the winning business financial strategies revolve around cobbling together a number of financing sources - in many cases there is no one ' catch all ' that will solve different types of financing needs. Oh and by the way, a lot of the financing you think you might need in fact isn’t not required if you are turning over your assets properly (inventory, receivables, etc), allowing you to turn paper profits on your income statement into cash flow on your balance sheet.

Corporate finance text books talk about ' capital structure '. That's simply getting a handle on balance your debt and owner equity in a manner that reduces taxes but still allows you to fund your company daily and grow. Simply said, but hard to achieve! But truth be told your ability to find the right amount of debt to balance against the high cost of giving up equity ownership is a winning final strategy and should be your goal.

Business financial strategies for your funding needs will always revolve around what stage of life your company is in, i.e. start up, high growth, mature, turnaround, etc.

Some of those lending solutions:

Receivable financing / invoice discounting
Inventory and PO finance
Sale leasebacks of owned assets
Equipment financing via capital or operating leases
Bank lines of credit & Non bank asset based lines of credit
Working capital term loans - secured/unsecured

Other less well known solutions includes:

Confidential invoice financing
Tax credit monetization - SRED, etc
Royalty financing
Government SBL loans
Securitization
Mezzanine finance

Knowing which finance solution works for your firm is part of the ' no plan, no objective = no results' we have talked about. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can ensure that business lending is a success for your funding needs.





7 PARK AVENUE FINANCIAL
CANADIAN BUSINESS FINANCING EXPERTISE

















Stan Prokop

A Government Loan For Small Business? From Start Up Financing To New Finance Needs

Recognize These Symptoms? Fear ? Rejection? Here Your RX for Successful Business Financing


OVERVIEW – . Information on the government loan for small business . The ‘ SBL LOAN’ works whether you are a start up or an established business ! Here’s why and how!



A government loan for small business . Nothing seems to bring a look of rejection, fear and confusion on some of our client’s faces when we discuss this method of financing their business. That can range from start up financing to an established business with revenues fewer than 5 Million dollars. (5 M$ is the cap on revenues for this loan)

So does it all have to be about that confusion and fear of not being approved? We don’t think so if you've got the basics tied down, which is not as hard as you think. Let's explain and let's dig in!

It's important to understand the mandate and nature of this type of financing. While the common term is ' government loan' in fact you never deal with the government. So how's that for clearing up some confusion right away. The program is sponsored and administered by INDUSTRY CANADA, those great folks in Ottawa. But here's the rub! You never meet or speak to those folks, as SBL loans (That’s the nickname for the program) are actually managed and funded by the Canadian banking system. It's our chartered banks that are managing the actual funding and daily mechanics of your loan.

So where does the government fit in? Simply that they guarantee the loans, or a large part of them, to the banks. So if you are lucky enough to find a banker that has the knowledge and time to process your SBL loan ( yes, that really is a challenge believe it or not ) you're on the track for some great financing, whether you're starting a business, buying a franchise, or looking for financing for equipment and leaseholds for your business .

Is there a quick way to summarize the major benefits of the program? We simply advise clients as follows:

Loan rates of 3% over prime rate in Canada
25% only personal guarantee (tries and get that anywhere else)
5-7 year terms
Repayable without penalty
Assets financed include equipment and leaseholds

It doesn't get anymore basic than that!


Over the years there have been some nuances in the program, but the reality is that billions of dollars are advanced under the Government loan for small business every year, to thousands of firms in Canada just like yours.
In fact it might come as a surprise that the only recent major change was several years ago when the loan cap was increased to 350k from 250k. So it was actually a great change when it comes to Canadian business financing.

So what does the SBL loan require in the form of an application and process. It's more basic than you think. It’s a business plan/exec summary, description of the assets you are going to finance, and personal info on yourself re your business experience and personal financial affairs. You categorically do have to have a good personal credit history - this is not a ' bad credit financing program '!

Oh, by the way, your company must be private, not public (not a big challenge there, right?!) and you require a business location with a premises lease.

If you're looking for a prescription for success in Government loans for small business in Canada seek out and speak to a trusted, credible and experienced Canadian business financing advisorwho can assist you with your financing needs. You just might find that he or she has the banking relationships and expertise required to get you the funding you need under Canada’s, bar none, best program for small business.


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 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 :


GOVERNMENT LOAN FOR SMALL BUSINESS / START UP 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












Stan Prokop

Confidential Invoice Factoring & AR Discounting In Canada

Taking The Controversy Out Of Receivable Financing ?

Information on how confidential invoice factoring and AR Discounting programs work in Canada



Confidential Invoice Factoring & AR Discounting in Canada. The whole issue of receivable finance is always a bit controversial. That is whether it is part of the debate of whether it’s a non- traditional type of financing, or often the issue simple revolves around the cost and day to day dynamics of this method of financing your business.

Let's take a step back for a minute. Every business owner and financial manager recognizes the constant battle between sales growth and their cash flow challenges. It's essentially a constant battle for supremacy almost, don’t you think?

Canadian businesses have been intuitively addressing our Canadian chartered banks as ' the' solution to their financing needs. However experts tell us that a large majority of Canadian business does not have the access they need to ongoing working and or long term capital.

That lack of capital essentially becomes an ' obstacle to growth, often being a larger challenge than growing your revenues, beating your competition and managing your assets


We maintain that using what we term a ' confidential’ receivable finance program is one way to ' diffuse ' the whole issue. How? Simply by providing you with a method of financing your business through the growth in A/R that comes from sales in a manner that lets you be totally in charge of your billing, collecting, client relationships... all the while having total access to cash flow for every sale you make . All the time, or some of the time!

Confidential invoice factoring and discounting is fast becoming a preferred solution for funding Canadian business. While cost is often a factor in the decision to finance your company in this manner the ability to get all the cash you need all of a sudden becomes a very acceptable option.

AR Discounting facilities, on a confidential basis, work the same way as traditional asset factoring. It simply a process in which a charge, similar to the Canadian bank agreements is place against your receivables. The application process is always significantly faster than a bank type financing.

In cases where it makes sense to all parties the Canadian business owner and financial manager might be surprised to know that the Confidential facility can co-exist with your bank arrangement if you have one, if, and its a big if, it makes sense to all parties : your firm, your bank, and your Confidential AR finance provider . That's probably more of a subject for another day.

Part of the attraction of a confidential facility is that there is no relationship interference between your company, your clients, or vendors. A lot of the controversy around traditional factoring and invoice discounting in Canada arises from the concern of client perception, especially if you're dealing with larger companies. That becomes a non issue with your confidential AR facility allowing you to bill and collect your own receivables, all he while generating cash on a regular basis consistent with your sales.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor on this unique method of cash flowing your sales, without the controversy!






Stan Prokop - founder of 7 Park Avenue Financial –

CANADIAN BUSINESS FINANCING

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 :

CONFIDENTIAL INVOICE FACTORING AND A/R DISCOUNTING








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

The ABL Line Of Credit . You Need This Info On The Asset Based Lending Business Facility

A Business Speed Dating Overview! But Wait – There’s More ! What You Need To Know About The ABL Credit Facility In Canada


OVERVIEW – . Information on asset based lending in Canada . What the business owner wants to know about the ABL business line of credit for working capital and cash flow needs




The ABL line of credit in Canada. It's the product of a Canadian business financing tool that is a replacement for what business owners and managers know as the revolving business line of credit. What that is typically offered by ' the bank ' in the case of ABL it's a product offered by commercial finance companies. Unknown to most, it's also available at the bank, but we digress.

Today we're in SPEED DATING mode , from a business perspective !It's that process of sitting down , learning some key information on someone ( in our case ' something ' ) , moving on, learning more, and then .. making a decision. Strap yourself in and hang on! , as a lot of info is going to come at you pretty fast.

- The ABL facility is a revolving business line of credit that uses all your business assets to secure the line of credit ' loan ' - it’s actually not a loan, but a monetization of your assets

- Assets financed in you line of credit are typically receivables and inventory and equipment, but can also include real state, your ' rolling stock ' etc

- Asset based business line of credit are getting more popular everyday they are the bank alternative

- Who uses ABL facilities? Glad you asked -! Start ups, some of the largest corporations in Canada, high growth companies, public firms, private companies, and companies in SPECIAL LOANS at their bank, companies in turnaround mode. Bottom line - we can’t think of a firm that isn’t eligible in some manner

- Key advantages of the ABL business credit line include ability to borrow much more - we often see 100% increases in borrowing power. It works if you have business assets and don’t want to, or can’t add long term equity capital or debt

- Reporting on your business credit facility is more stringent - so you need to be able to prepare ongoing reports on your receivables, payables, inventories, and monthly financial stats, etc. If you can't do that already we suggest you have some other problems

- Asset based lending typically monetizes receivables at 90%, inventory between 25-75%, and current values of your equipment and other assets - Expect an appraisal when it comes to other assets

That's our business ' speed dating' recap on the ABL business line of credit. It's up to you, the business owner or financial manager to now ' pick your partner ' when it comes to choosing the right type of business line of credit for your firm.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor, who can assist you with your business credit needs,





Stan Prokop - founder of 7 Park Avenue Financial –

CANADIAN BUSINESS FINANCING

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 :

CANADIAN ASSET BASED BUSINESS CREDIT LINES





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

Business Cash Flow Management And Working Capital Solutions and Tools

Cash Flow 911 ! Avoid Business Financing Challenges



Information on business cash flow management in Canada . Resource monitoring tools and working capital solutions can provide the Canadian business owner with a ‘ win ‘ when it comes to financing your company




Business cash flow management .When it gets to the stage where you're ready to call 911 Working Capital things are usually getting pretty tough. Let's examine some key tools, and, more importantly, solutions around what experts tell us is a constant challenge for the Canadian business owner and financial manager. Let's dig in.

Even understanding some of the real basics will always help your firm out, and when you know where to go and what Canadian business financing solutions are available you're certainly in a position to maximize the finances you need to run / grow your business. When you understand liquidity issues that's often a first step in avoiding the proverbial cash crunch.


As one of our favorite business finance pundits put it , its the balance sheet that shows where the bodies are buried ' and I guess we are saying that when you solve the puzzle of how your assets are operating within your balance sheet you're in a strong position to put ' the fix' , or ' the fixes ' in place.

We often meet clients who somehow are a bit more surprised than we think they should be when that cash flow crunch occurs. It's as if it just happened. While we suppose there are some events that can very quickly precipitate a working capital shortage (perhaps the quick loss of a very large client, etc) the reality is that these sort of issues are probably a bit more in what we could call ' creep mode ‘.

So what are those issues? They include slow moving or inventory that’s obsolescent , accounts receivable that are being collected to slowly ( or not at all ?) , and prepaid accounts and fixed asset balances that are bulking up your balance sheet but doing nothing for cash flow . When you can successfully talk to and address the balance sheet asset accounts that will or can convert into operating capital you're in a position to survive, grow, and even get big fast!

Don't forget also that the whole concept of cash flow (it’s actually a complex concept and a simple one!) revolves around tying your income statement into the balance sheet when you're looking at your overall financial position. It goes without say that and term or asset monetization lender is going to be looking at how you manage the dynamics of those cash flows.

What are then some sources of cash flow financing? They include:

Chartered bank operating lines of credit

Receivables financing/discounting

Working capital term loans

Non bank asset based lines of credit

Sale leaseback of owned fixed assets

Tax credit monetization

Purchase order/supply chain finance

One of the best ways to analyze and manage business cash flow is to constantly monitor the changes in your sales as they relate to your operating expenses , and , as important , or more so the increases in your accounts receivable and inventory levels . Keeping it simple - we're saying that if your sales are growing at 25% make sure inventory and A/R levels arent growing at 40%!

If you run your company incredible efficiently when it comes to asset turnover and management, and arent in high growth mode you will actually need little cash flow finance. However, if you’re growing, investing in fixed assets and have significant increases in A/R and inventory you're approaching CASH FLOW 911 modes!

If you want to win the cash flow battle consider some of the monitoring solutions we've provided here seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your finance needs via solutions that work... for your company .





Stan Prokop - founder of 7 Park Avenue Financial

http://www.7parkavenuefinancial.com

CANADIAN BUSINESS FINANCING

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 :


BUSINESS CASH FLOW MANAGEMENT & WORKING CAPITAL





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

Equipment Financing Companies In Canada . Asset Leasing Works When You‘re Plugged In To The Right Info!

Debunking 7 Misconceptions On Financing Assets In Canada . Myth Vs. Reality



OVERVIEW – Information on equipment financing companies in Canada . Demystifying asset leasing in Canada with information the Canadian business owner and manager needs to know when assessing solutions for acquisition of assets




Asset Leasing In Canada. Equipment Finance Companies have, for whatever reason some myths and plain old bad information associated with who they are, what they do, and what benefits the Canadian business owner and financial manager derive from the use of equipt. financing. Let's dig in.

Myth # 1 - Everyone's doing it! Actually that one is close to 80% correct because experts tell us that over 80% of businesses in North America (hey that's us also!) utilize business leasing to achieve asset acquisition. We can't speak for the other 20% - hopefully they are your mis-informed competitors.

Myth # 2 - A lease is kind of like a loan right? Not really, although bridge loans, term loans, conditional sales agreements, etc are asset finance transactions a lease is not a loan. Accounting, tax and other issues make lease finance a uniquely special proposition when you're acquiring assets.

Myth # 3 - Only certain assets can be financed. That’s definitely not the case, as almost any asset, tangible or intangible (software is a good example) can be financed. The flexibility and creativity that goes into non standard asset financing is significant.

Myth # 4- There is only one type of business lease. That one is definitely not true, as in Canada the business owner/financial manager has the option to utilize a ' capital' lease to own strategy, or alternately, an 'operating ' lease to use finance choice. It really depends on the type of asset you are financing, its long term use to your firm, and its value. Oh and by the way, within those two basic lease option structures your company has the ability to structure payments that make the transaction more beneficial to your firm.

Myth # 5 - A lease company is a lease company, right. Not so fast! There are all types of lease companies in Canada - while they are segregated generally into small, medium and large ticket lessors they in fact range in size and geographical focus. The industry is made up of independent commercial lease companies, bank entities, and insurance companies. And ownership can be Canadian or U.S. based. Just knowing what leasing company to deal with for the assets your are financing is worth its weight in gold when you factor in time spent, interest rates, structures offered, and credit approval criteria .

Myth # 6 - The main benefit to asset financing via a lease is the 100% financing and fixed monthly payment. While that is of course true, there are numerous other benefits to asset financing under a lease structure - they include hedges against asset obsolescence, the ability to upgrade assets, tax and accounting benefits, cash flow management, etc .

Myth # 7- There are no risks in leasing. We wish we could say that is true, but in reality any aspect of business always has risk and some of the potential risks in lease finance include loss of asset values, repossession for non payment /default , risk of asset loss, insurance obligations,etc. The good news is that a properly structured lease, with the right partner firm or advisor can mitigate significantly, or entirely all those risks.

There you have it. Our debunking is complete. Seek out and speak to trusted, credible and experienced Canadian business financing advisor who assist you in setting the record straight on equipment finance companies and asset leasing in Canada.



7 PARK AVENUE FINANCIAL
CANADIAN ASSET 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 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 :


Canadian Business 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
















Stan Prokop