Contract Payment Financing . Understanding The Science Of Contracts Finance In Canada

Shocking News Sales Does Not Equal Cash !


OVERVIEW – .Information on contact payment financing in Canada . How to address contracts finance in terms of needs and mechanisms




Contract payment financing in Canada . Here's a shocker for you (not!) Generating sales revenue does not equal cash! And if you're in the contracts finance business there's an even longer lag than usual. Can this be addressed? Yes, in a number of manners, both internally at your firm, and externally through proper financing. Let's dig in.

If you're fortunate enough to be in an ' all cash ' business your investment requirement in accounts receivable is... Nil. Businesses selling on standard commercial credit terms typically have 30 days terms, and receivables tend to be collected usually within 30-60 days. Businesses selling under contracts with clients find themselves in a unique position; they are required to pay for materials, wages, and other goods and services while waiting for payment under the terms of their longer contracts with clients.

If proper contracts and contract financing is not put in place those businesses are challenged to create additional revenues, let alone maintain their commitments to suppliers, banks and commercial lenders.

Businesses that have proper contracts in place with reputable clients are actually in a better position than they might think. The trick is to ensure that your lender understands the nature of your payment structure and that your payment rights are properly assigned in order that they can be financed.

Monetizing your contracts, if done successfully allows you to finance contracts properly and invest in more projects. The key to proper financing of your contracts is not necessarily your balance sheet - rather it’s your credibility and expertise to complete your contracts, bill them properly,

Typical reasons for contract/PO financing are as follows:

Your traditional lender/bank is unable to accommodate financing of this type

Suppliers insist on some level of pre payment

Large contracts are being turned down by your company due simply to lack of financing

Additional debt and equity financing are either not available or not desirable

Your firm’s invoices to your clients can be monetized directly into cash in one of two ways. They can be cash flowed with immediate funding via an asset based line of credit, or alternatively, suppliers can be paid directly via a PO FINANCE/SUPPLY CHAIN facility.

The benefits of a properly structured CONTRACT FINANCE facility are key. They include:

Vendor and Supplier Satisfaction

Ability to take on significant revenue projects not previously considered
Pricing power via supplier discounts

Properly structured financing wont be prejudicial to the type of industry your firm is in. Unfortunately many firms find themselves out of favor when it comes to their search for traditional contract finance. That shouldn’t be the case if done properly. In some cases the easiest way to resolve contract funding is to simply have your client acknowledge that the work you have billed for has been performed/received. What could be easier than that?



By the way, in the technology industry many contracts can also be financed under recurring revenue streams your firm bills - that might be software as a service, long term service contracts, etc.

Bottom line, don’t let the inability to finance contracts hinder your sales growth and financial progress. Seek and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with contract payment financing 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 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 = Contract Payment Financing In Canada






CONTACT:

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

Asset Finance Is All About Turnover And Canadian Business Financing Solutions Geared Specifically To Your Firms Needs

A Surprising Way To Measure Your Business Financing Needs – The GANG OF FOUR!



Information on asset finance solutions in Canada and why Canadian business financing is complemented by solid understanding of turnover of assets



Asset finance . When it comes to Canadian business financing there some surprising simply , yet powerful , shall we call them ..' tricks' when the business owner or financial manager needs to measure current and future financing needs . And those ' tricks ‘? They’re really just simple tools to measure ASSET TURNOVER. Let's dig in.

Speed counts in a lot of aspects of business - not all the times, but often. So the speed at which you turn assets into cash will often ultimately dictate the type of finance your firms needs to make it to the goal line.

It's important though to look at the trends in those numbers over time, not just on any one day. Let's take inventory as an example. Yes of course you want to know how many times your inventory turns ( Sales / Cost of Sales ) - It's important, but wont on it's own dictate the over all health of your company.

The GANG OF FOUR, as we'll nickname them, dictates how you are using those assets. They are:

A/R
INVENTORY
FIXED ASSETS/EQUIPMENT
TOTAL ASSETS

Knowing your DSO, ' day’s sales outstanding “simply tells your company how long it takes to turn over your accounts. Because you are selling on credit you need financing to support the sales growth in your A/R levels. Companies can address receivable financing via:

Factoring (Traditional)

Confidential Receivables Finance

Commercial bank lines from Canadian chartered banks

Non bank asset based lines of credit that are individual or combos of A/R and inventory margining

When you do a good job of granting credit, and collecting A/R even more expensive alternative finance solutions such as factoring make strong sense. Many clients we meet are in the business of PROGRESS PAYMENTS. Here's where things get a bit tricky, but they don't have to be. If you're able to get a down payment that helps - many firms do that. And, guess what? Progress payments can be financed if you've got the right financing partner.

We've touched on inventory finance already a bit, so let’s look at Asset turnover in general. You use your non current assets to typically operate your company and generate revenues. This is particularly important if you are in a capital intensive business. We meet with many clients who are service based and have little need for asset finance. At the other end of the spectrum are companies who need to utilize:

EQUIPMENT FINANCE
SALE LEASEBACKS
BRIDGE LOANS
ASSET BASED LINES OF CREDIT THAT INCLUDE FIXED ASSETS

as methods of Canadian business financing.

As we have said there are numerous ways to measure how much financing you need, and what type of financing works best for your particular situation. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your capital needs.


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 = CANADIAN BUSINESS FINANCING AND ASSET FINANCE







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 Finance . Ready For The Unexpected Arrival Of Some Real World Financing Solutions

You Have The Right To Remain Silent On Business Financing .. But You Shouldn’t


OVERVIEW – Information on business cash flow finance in Canada . Integrate the cash is king philosophy into real world financing solutions




Business cash flow finance in Canada . When it comes to financing we are the first to admit (with some level of guilt) that the term ' cash flow is king ' is a tad... shall we say ' over used '.

But it's not a perfect world as we know, so simple spreadsheets and heavy duty analysis will not always deliver the financing you need. Real world solutions will, and we've got them. So let's dig in!

Not everyone is always going to agree with you, the business owner/ manager as to what cash flow financing solution is optimal for your firm. We think we simplify that a lot by talking with clients in terms of either asset monetization or debt financing.

Also, if your company has any level of financial distress, serious or otherwise some solutions are going to always be more readily available and meaningful and accessible than others. Typically here's where non bank solutions are going to work best. They include:

Sale leaseback strategies
Tax credit monetization
Non bank operation lines of credit (ABL’S)
Receivable and Inventory financing strategies
PO / Supply Chain finance

When you're capital constrained the challenges of growing a business seem even more severe. Even investing in R&D can seem like a really tough call at that point. One innovate solution to R&D investment and cash flow saving is by utilizing an ' A S P '. It's our acronym for a R&D Sred accrual line of credit - reimbursing you immediately for research expenses as you spend. Now that's innovative!

We're often asked if there is a difference between public company and private company cash flow solutions. Other than the disclosures required by firms that are public the solutions quite often are the same.

Asset acquisition and replacement is a big part of any finance challenge for businesses of all size. Whether you're constrained by cash flow, budgets, technology issues, etc the business owner/manager should always consider effect forms of lease financing for new or to be replaced assets. Don't forget also that used equipment can easily be financed these days, as the proliferation of things such as the internet allow lessors to easily determine market values of many types of assets, technology included .

So , in summary , yes you do have the ‘ right to remain silent ‘ about business financing possibilities revolving around growth, alternative forms of debt financing, and monetizing existing assets into business finance cash flow . A better choice? Seek out and speak to a
trusted, credible and experienced Canadian business financing advisor who can assist you with your financing needs .



Stan Prokop - founder of 7 Park Avenue Financial –



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 = BUSINESS CASH FLOW FINANCING SOLUTIONS







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 Commercial Equipment Finance Company In Canada. Asset Finance Should Not Be A Chore

Bringing You In On A ‘ Need To Know ‘ Basis For Equipment Leasing in Canada

What does the Canadian firm looking for asset financing need to know about the commercial equipment finance company solutions that are available




The Commercial equipment finance company in Canada. When it comes to asset financing we sometimes get the sense that some of our clients feel like it’s almost a big ' chore ' so to speak. Does it have to be? Absolutely not of course, and we're going to bring you in strictly on a ' need to know ' basis to hopefully make those asset acquisitions more successful.

While some businesses might think they need to be somewhat ' cash strapped ' before considering lease financing that is also not the case. The largest and most successful corporations in Canada, even our chartered banks utilize this method of asset acquisition.

No one would every accuse our banks of having difficulty to finance themselves; the reality ??? .... They simply see the benefits also ! These include tax advantages, ease of acquisition, ongoing replacement of technology, etc. All the same issues that your firm faces. (Just on a bigger scale!)

Relationships with vendors is often a key part of dealing with the commercial lease company in Canada. In many cases your suppliers or vendors might have preferred programs in place which pass finance savings on to you. And here's somewhat of a secret... (Don’t forget you're in on our ' need to know' basis!) quite often vendors and suppliers ' buy down ' your financing costs by ponying up a portion of the finance charges. They, including the captive finance companies in Canada want your business!

Many clients also view the credit approval and documentation issues surrounding leasing as another part of their ' chores '. While they are entitled to think that way the reality is that properly positioned financing applications can in most cases these days be approved in a matter of a day or two. (Large complex deals take a bit more time). Additionally, investing a bit of time in understanding and negotiation lease terms can save you thousands of dollars in areas such as end of term obligations, down payments, structuring, etc.

Two! Can you remember that number - its only 2 choices you can make in the type of lease you are entering? Focus simply on ' owning ' the asset, or ' using ' the asset. It's one or the other and we're referring to Capital leases (own) or Operating Leases (use).



Dealing with the right lease company is half the battle when it comes to asset financing for your firm. Your key ' need to knows' in this regards are issue such as:

Geographies they serve
Type of Assets they finance
Transaction limits - small, large, in between (The industry itself calls these small, mid and large ticket)
Do they finance technology? (Yes, software can be financed!)

If you want to eliminate the chores associated with financing your assets consider seeking and speaking to a trusted, credible and experienced Canadian business financing advisor who can help you navigate the asset financing challenge many firms face today.


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 = COMMERCIAL EQUIPMENT FINANCE








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 A Franchise? Looking For Peak Performance Financing When It Comes To A Franchising Loan In Canada .

Feeling Lost When It Comes To Franchise Financing In Canada ? You Shouldn’t



OVERVIEW – .Information on financing a franchise in Canada . Why are prospective franchisees feeling bewildered about successfully completing the franchising loan process for their new business



Financing a franchise in Canada. Does the Canadian entrepreneur have to necessarily feel ' lost ' when it comes to a franchising loan in Canada? We can understand why, but that doesn't have to be the case. Let's dig in.

Right out of the gate it’s important to know what type of financing you need to look for, and what's available. At the end of the day typically it’s a combination a finance that will include both a term loan and some sort of working capital facility unless you're in an ' all cash ' business, which is often the case in many service and hospitality type franchises.


Question 1 from clients we talk to is the issue of addressing how much they are required to invest in the new business. It goes without saying that your investment is both a must and critical. It shows your commitment to both the franchisor as well as the commercial lender.

Building your equity investment into your initial cash flow forecast is important. It's the combination of owner equity plus financing obtained that allow you to create the all important opening balance sheet and cash flow. This is a document that your bank or commercial finance firm will look at to see how repayment is going to be made.

The franchisee (that’s you!) need not feel lost or bewildered when it comes to preparing the financial part of your application. If you don’t have expertise in this area the basics can easily be prepared for you by an accountant, business financing advisor, and on some occasion’s assistance and input from your franchisor.

Typical franchise term loans are 5-7 years in length. At that time you should typically be in a position to have retired all the debt you've borrowed to buy the business. But don't forget also that along the way you may well be required, or need to, replace assets in your business or generate some level of working capital to cover your cost for inventory, carrying receivables, and normal sale growth scenarios .

Always be prepared to address issues in your financial forecasts. These are sometimes referred to as ' assumptions ‘. We all of course remember the dangers of ' assuming ' things in business. So be prepared to talk about issues around timing of revenues, profits, costs of assets, growth trajectories, etc.

We hate to drag clients ( kicking and screaming ?) into the world of accounting and finance - but clearly understanding how your repayment , breakeven, profits and cash flow and fixed costs work are somewhat key to your overall success . It's never just ' all about sales’.

Remember also that the majority of franchises you will look at purchasing don't require outside collateral from yourself as the owner that even offering that up to the lender won't make sense if your financial forecasts arent reasonable.

We maintain you don’t have to feel lost when it comes to a franchising loan in Canada. That peak performance we have talked about can come about even easier when you seek the services of a trusted, credible and experienced Canadian business financing advisor who can assist you with your franchise financing needs.





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 = FRANCHISING LOANS IN CANADA






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

Asset Based Lending . It’s the Superman of Business Financing In Canada When It Comes To Business Credit Lines

Debunking the 1 Business Credit Line Myth


OVERVIEW – .Information on asset based lending as a component of business financing in Canada . What type of business revolving credit line would your firm like?



Asset Based Lending – ( ‘ ABL ‘ ) There is one overriding reason why it might be your best choice for business financing in Canada. It’s kind our version of the ‘ Superman’ of business financing solution ! What is that reason? Simply that it works when other types of financing are not available or don’t fit your current financial status. Let’s dig in!

The reality is that asset based lending works for all firms in all types of industries, and is not dependent on your overall financial performance that might be the focus of a more traditional based financing. That’s a powerful statement, so let’s examine what the financing is, how it works, and answer some key questions that might help business owners and financial managers determine if this financing is the solution to many, or all of their financing challenges.

So let’s back step a bit. What is asset based financing. Focus on one key word in that phrase - assets! This method of financing simply allows you to monetize and draw on the market value of the assets of your firm. Those assets are in very predictable categories, they are receivables, inventory, equipment and real estate. If you have one or all of those your firm is a prime candidate!

In some cases this method of financing is confused with factoring. Factoring is the sale of one of those asset categories – your receivables. An asset based line of credit lends against receivables, but also includes, inventory, equipment, etc. That is the difference!

The prime difference in qualifying for such a facility is really the difference that exists when you compare this type of financing to a Canadian chartered banking relationship. That banking relationship comes with a number of requirements that are often not needed when an asset based line of credit is in fact your real and best solution. Some of those traditional requirements might be profitability, years in business, the type of industry you are in, guarantees of shareholders and owners, etc. Those qualifications are not the focus of asset based lending. However the assets are.

On a day to day basis how does this type of business financing work. It’s quite simply. You and your asset based lender determine on a regular basis, i.e. weekly, monthly, etc what your asset categories total - a borrowing based is then developed on those categories and funds are depositing into your bank account for use as working capital by your firm. In Canada a 250k facility is more or less the bottom level of this type of financing, and facilities can be arranged into the many millions of dollars.

So if you want an easy way to remember the difference between this type of financing and a bank revolving line of credit simply remember that the bank focuses on overall financial strength and cash flow, our facility focuses on assets!

Because your assets are being financing as the primary focus of this type of facility you will have to report on those assets probably on a much more regular basis , so your firm should be in a position to prepare regular reports on receivables, inventory turnover, etc. When fixed assets are being financing, i.e. unencumbered equipment you own, etc then in many cases an initial appraisal will be required. This small dollar investment though can generate thousands or hundreds of thousands of dollars in working capital. Don't Let lack of business financing in Canada be your ' KRYPTONITE'.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can help you facilitate the type of asset based lending that meets your needs in the Canadian business financing environment.





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/asset-based-lending-business-financing.html





CONTACT:
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


.

Small Business Finance Vs Corporate Financing . Fundamentals And Advantages In Canada

Why Big Isn’t Always Better In Canadian Business Financing


OVERVIEW – . Information on small business finance in Canada . How does it differ from corporate financing based on company size and types of solutions available ?


Small business finance in Canada . Whets the difference, asks our clients between their capital needs and corporate financing in Canada. We work with both types of firms and there is a case to be made that ' SIZE COUNTS ‘, but you might be surprised at how. Let' dig in!

Business owners often hear the business fact that small and medium enterprises are in fact the largest employer and the true 'engine 'of the Canadian economy. It is also reasonable to assume that many business owners and the management of smaller and medium size firms worry about competing against the big global giants.

These larger competitors in many cases have 'brands ', as well as unlimited financial strength.

However, do business owners really know what those competing challenges are and how they can focus in on addressing them in some manner? In many cases (not always) they also have access to finance solutions available to larger corporations. They just didn’t know it!

As mentioned previously financial strength of big firms and financial limitations of smaller firms is certainly a key area. Small and medium sized firms continually focus on cash flow and are challenged by working capital. The banks and larger financial institutions can be forgiven for wanting to lend more to larger corporations, since their loans are safer and more collateralized.

The small firm can’t finance their customers in the manner that larger corporations can. The large corporations even usual financial strength to further compete against product and price by offering financing arrangements via their captive finance companies - think IBM CREDIT CORP as an example, or Caterpillar Finance. Just some examples.

Smaller firms are also challenged by personnel issues; they have trouble retaining key successful employees around issues such as compensation and benefits. Owners are focusing on day to day problems and challenges, and can't always think long term in areas of employee development, etc.

Naturally smaller firms pay more in direct costs because they don't have buying power; as well they are often focused on a couple core products and competencies. Larger corporations can diversify geographically and product wise as we know. Financing costs and interest rates in general have always favored the larger companies who borrow.


Intuitively the consumer or business customer gravitates towards a larger corporation for products and services, if only for the perceived safety and warranty issues.

Well, we have seen areas where the big guys clobber the small guy. Let's turn the boat around!

Service/Service/Service - have we made out point?! Value add in smaller firms is often service and support. Customers want the personal touch and they clearly get that from a smaller firm.

Also, in a smaller firm, in general the business owner is very focused on working harder and longer with their customers - big corporations tend to favor broad stockholder approval.

The smaller firm is also more adept, and can move more quickly to adapt to market needs. Big companies can take a long time to react to competitive change. Communication and market needs are much focused in a small company - it might take days, weeks, and years for larger corporations to implement major market changes.

Customers and consumers hate bureaucracy, and smaller firms certainly have less of that - decisions are made easier, customer situations are rectified more quickly.

In summary, business owners often have a fear of the 'gorilla ' in their industry - the big corporate giant with brand and financial clout. Instead they should focus on specialized market segments, localization of their services, personal service, etc.

It doesn't hurt to be a small /medium sized firm if we do it right! While larger corporate borrowers have access to low rates and flexibility and unlimited capital offer by Canadian chartered banks, insurance companies, capital markets, etc the reality is that many of these solutions, sometimes downsized and costing more, are still available to the SME sector.

Solutions include:

A/R Financing
Vendor financing
Equipment finance
Non bank asset based lines of credit
Inventory financing
PO/SUPPLY Chain financing
Monetization of SRED or Film tax Credits

Whether you're in the SME sector in Canada or a mid market borrower seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your cash flow and asset financing needs.



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 = ‘ ALL SIZE ‘ Business Financing In Canada







CONTACT:
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