Business Funding Seem Like Molasses Speed ? Let AR Financing Via Receivable Funding Reverse Your Cash Flood Positively

Not Happy With Business Financing Choices? That’s Predictable




OVERVIEW – Information on account receivable business funding in Canada . How does A/R financing work , and when could it be appropriate for your company . What is the best method of utilizing this financing tool




Business funding in Canada. Who is surprised whenever we read a large percentage of Canadian business owners and financial managers are not happy with their financing choices. And when it comes to the speed at which they can access working capital , let's just say it seems like Boston, 1919 all over again. (A major flood of molasses swept through the streets of Boston worse than a Tsunami - we're not kidding, check it out!)

Could AR financing via account receivable finance reverse your cash flow fortunes? We know it does for thousands of firms just like yours and here's how and why. Let's dig in.

There is no greater form of quick financing today that AR financing. It's valuable, easy to achieve, and has many similarities (and some differences) to the traditional bank line of credit. Because on balance this method of financing your sales is more expensive than bank finance companies that tend to utilize it don’t have the balance sheets, profits, and outside collateral needed to access Canadian chartered bank financing.

Many companies that have vendors / suppliers that offer payment terms take advantage of AR financing to take those discounts for prompt payment that are offered. As you can imagine, this offsets a huge part of the cost of account receivable finance.

There's always a debate in business as to whether ' size' is important. The reality around A/R financing is that it allows you to take on sales opportunities and new contracts etc that are much larger in nature that could otherwise not be considered. Bottom line on that one - A/R finance has made your firm a player! That's because there is no upper limit, per se on the financing you can achieve via this method of sales finance.

When does this method of financing not work? That’s the question clients ask us when we're walking them through the process. The answer? If your firm doesn't have some respectable gross margins and your sales are going down not up... well let's just say this method is no longer optimal. The perfect A/R finance client in Canada has good sales opportunities, is pricing their products and services properly, and understands the cost of this method of growth financing is easily offset by good asset turnover and strong sales growth leading to more profits.

Where business funding via account receivable finance falls apart is when the Canadian business owner or financial manager fails to understand some key terms and falls head first into a facility that doesn't make sense for their firm. So it's our job we suppose to warn of those dangers.

Looking for an optimal way to achieve the benefits of this method of financing your sales? Our recommendation is to consider CONFIDENTIAL A/R FINANCING. When properly structured it allows you to bill and collect your own receivables, finance them when YOU want, and still reap the benefits of same day cash flow on sales generation.

Is AR Financing for your firm? Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your cash flow needs and clarifying the process around this valuable method of working capital 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 :

7 Park Avenue Financial = Account Receivable Business Funding Solution Expertise



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

Commercial Lending In Canada. Discomfort With Bank Financing. The Asset Lender Is Your Alternative

Non Bank Financing Is Not Near Mythical ! Here’s Why


OVERVIEW – Information on commercial lending alternatives in Canada. What role does the asset lender play in Canadian business financing






Commercial lending by banks in Canada is not the only way in which Canadian business finances itself. When we talk to clients about non bank solutions there sometimes exists a certain level of ' discomfort'.

Where it comes from we don't know, as thousands of firms in Canada are financing by non bank methods. That’s the role of what we call the ' Asset lender ' - who comes in all shapes and sizes! Let's dig in.

Generally speaking asset based lending is simply a broad term for non bank commercial finance firms that provide a variety of business lending solutions to the Canadian business owner/manager. These companies have carved out their own ' niche' when it comes to specialty lending in areas of equipment, current assets, tax credits, etc.

Why then are commercial asset lenders successful in Canada, and growing in size and scope of solution? The reality is that they aren't regulated like the Canadian banking system requires of our banks. So like your teenagers they (try to) do what they want! And pretty well all of them do that well.


Commercial lending solutions for the asset lender come in a variety of solutions - they include term loans, leases, and asset monetization for working capital and cash flow. The loans are almost always focused on... you guessed it... assets! Asset based financing often has less of a regard for the overall credit quality of your company or its past or current situation - however don't think that because your company is in a death spiral you will still qualify . The patient must show signs of life!

Certain types of asset finance focus on particular industries. Non bank asset based lines of credit offer revolving credit facilities for al most every type of company in Canada that can offer up some for of collateral in inventory, receivables, fixed assets, tax credits, etc.

Many solutions offered by the ' ABL' (ASSET BASED LENDING) lender can be of a ' hybrid ' nature- financing different assets of your firm in a similar manner, all under the same credit facility.

Many Canadian business owners and financial managers in Canada seek asset finance solutions because they are an alternative to equity financing. In certain larger transactions an asset or mezzanine lender might in fact though ask for a small equity ownership or option in your firm - but this is generally very rare. The appeal of asset lenders is that as your business and assets grow so does your financing capability with your chosen lender.

We mentioned previously here that if your firm is in a death spiral your hopes should not be high for asset financing success. But if you are in legitimate turnaround mode you are absolutely a candidate for this financing which otherwise could not be achieved through a bank.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in structuring an asset lender solutions that meets your needs when it come to commercial lending in Canada.




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 = Asset Financing Solutions





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

Management Buyout Financing Needed. Here’s Some James Bond Like Advice On Canadian Mgmt Buy Out Strategies

Are You Ready To Ace Buyout Financing ?



OVERVIEW – Information on successful management buyout strategies . How does the mgmt buy out work best?


Management Buyout . It's been going on for a very long time in business. In effect you are acquiring the company for which you are a current employee or perhaps minority owner.

How then does this financing technique work and how you make a Mgmt buy out seem like a deft James Bond maneuver? Let's dig in.


Managers and partial owners consider the strategy for a wide variety of reasons. Practically speaking managers and current partial owners know the company, and its potential, referring mostly of course to the financial potential of future profits. Current owners often want to see the legacy of their company continue, as well as addressing employee issues and needs.

Numerous financing vehicles are available to properly execute a buyout. They include debt options, external private equity , as well as monetizing the assets of the company to a degree that still allows it to remain hopefully profitable , cash flow positive and without an onerous debt load.

We're mostly talking here about private transactions. Publicly listed companies can of course be acquired in much the same manner - but that’s a different kettle of fish for another day.

There are some solid tax advantages for a management buy out, and obviously the appeal to the current owners is that they have finally reached the ' liquidity event ' they had envisioned. While private equity firms and low interest rate environments dominate a lot of transactions it’s really the strong growth or turnaround prospects that drive a lot of ' MBO ' (management buyout) deals in Canada. And when you have good managers and new committed owners all sorts of great financial results are possible.

Great financial results happen when you have a proper mix of debt and equity in the final transaction. It's really the same concept as a home mortgage, where we as home owner’s manager our personal financial situation properly when our homes have the right amount of equity as well as the right debt / interest rate on our homes.

Debt however is the proverbial two edged sword.

Using other peoples money has a lot of upside, as well as... you guessed it, downside! When using a lot of debt to finance a transaction the risk of default on a deal rises significantly. . However, with properly structured debt owners can realize the benefits of downsizing, cutting costs, investment in new fixed assets, etc.

Management buyouts can be financed by non bank asset based lending facilities, Canadian chartered bank term loans and revolving credits, and even unsecured debt in the form of mezzanine and sub debt cash flow loans. Small transactions in Canada can even be fully financing via the SBL Govt business loan.

All of the above financing vehicles have different levels of risk and structure. It goes hopefully without saying (we’ll say it anyway!) that a part of your transaction must include your own owner equity component... Deals on Mgmt buy outs can be simple or complex - depending more often than not on the size of the deal. Key issues include secured assets, repayment terms, equity components, and cash flow coverage.

Don't forget also that often the current owner’s willingness to help finance the buyout via a partial vendor take back ' VTB' can often make a deal happen more quickly and successfully.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in developing a management buy out strategy that reaps advantages and minimizes risk to all parties.




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 = MANAGEMENT BUYOUT FINANCING EXPERTISE





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

Canadian Business Credit And Finance Solutions And Alternatives

Business Financing Challenges Giving Your Sleep Deprivation?







OVERVIEW – Information on canadian business finance alternatives . Credit solutions come in both traditional and alternative vehicles





Business finance in Canada. We recently (yesterday) read that 73% of all businesses in the U.S. were generally ' optimistic ‘about their business and the economy. These types of articles often mirror the Canadian situation. When it comes to us though it seems we're more often than not meeting the other 27% , who are somewhat less optimistic and , in the case of our article, find themselves in ' stall '

mode when it comes to access to traditional lending solutions.


The irony though is that the demand for financing seems there all the time when it comes to businesses in the SME sector, and alternatives to any sort of traditional lending are being more and more welcomed by Canadian business. As we have often said to clients ' alternative is the new traditional'.

In that same article it indicated 36% of all businesses applying for some for of financing in fact were declined by the banking system. The harsh reality in Canada is that if you are unable to meet fairly straight forward requirements of our banks (profits, clean balance sheets, outside collateral, etc) you are often not in a position to get any or all of the financing you need to grow revenues.

And talk about being negative, but 2/3 of business owners who didn’t bother to apply for financing behaved that way simply because they were sure they were going to get declined!

The majority of businesses that try to access debt or working capital do so for the right reason, they wish to grow their business, expand facilities or upgrade assets either technological in nature or in the shop/plant. As they are successful in doing that they traditionally then have more working capital and cash flow needs.

So if you the Canadian business owner of financial manager are looking to grow sales and access forms of capital what then are the options?

In Canada they include:

Receivable financing

Equipment financing / sale leasebacks

Working capital and cash flow loans - Secured and Unsecured

Non bank asset based lines of credit

SR&ED tax credit financing

Securitization

Purchase order/ Contract financing


Being successful in any aspect of business finance includes the following -

Knowing the type and amount of financing you require

Being able to predict and assess your real cash flow

Understanding the benefits, risks, and implications of any type of access to capital that you're considering

There is no one specific ' how to ' when it comes to the various complexities of growing your business when it comes to choosing the right financial solution at the right time. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in navigating the frothy seas of cash flow, debt, and working capital finance in Canada.



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 = BUSINESS FINANCE ALTERNATIVES





























Stan Prokop

Credit Line For Business ? Actually You Have 2 Choices – Bank Or ABL

An Update From The Holy Cow Department On Business Credit Choices

OVERVIEW – Information on the credit line for business. Two alternatives exist for revolving credit , bank line or ABL asset based lines of credit . Here’s the differences



A Credit Line for Business . Occasionally a client will say to us ' Holy Cow ' I didn’t know that! It turns out ' that ' refers to the fact that it turns out a number of business owners/ financial managers don't know they have two choices in revolving credit facilities for their daily operations. One is the Canadian chartered bank solution; the other is the Asset Based Credit solution, known simply by the term ' ABL'. Let's dig in.

Canadian businesses use credit lines for working capital and cash flow. This types of borrowing in effect funds your ' current assets ', typically A/R and inventory. Because no business in Canada runs on a straight line when it comes to the ups and downs of sales, collections, etc credit lines address those ' bulges' in our businesses.

Two solutions, as we have noted becomes your ' choice' for the business credit line. The first is the Canadian chartered bank, the other is a non bank commercial financing facility known as ' asset based credit ‘.

How do these facilities compare in price, which most clients focus in on immediately? The reality - if your company is established, growing, has profits and a clean balance sheet and is of a decent size the costs of these two facilities are in effect ' neck in neck '. At this point everyone wants your banking business and you're in charge of who gets it. Not a bad situation to be in.

Unfortunately we very rarely meet clients in the Canadian business financing landscape that have the ability to be 'driving the bus'

when it comes to addressing financing needs. Of course large private corporations, public companies and subsidiaries of multi nationals have the option to demand the most facilities at the lowest cost. It just turns out that in Canada that seems to only cover 5% of the companies who need financing.

Because of that ' size' breakdown ABL asset based credit facilities tend to cost more. The reason couldn’t be simpler - it’s that the commercial finance firms offering this credit are in fact borrowing from banks... to lend to your firm!

While any business can theoretically ( key word = theoretically '!) obtain a bank business credit line, secured or unsecured , the ABL credit line typically works best for facilities in excess of at least 250k . Upper limits can of course range into the millions and tens of millions.

One key point in the choosing of which facility makes sense for your firm is the fact that ABL facilities tend to, 99.9% of the time, create more borrowing power for your firm. Simply speaking receivables and inventory are margined higher, and you have the ability to throw your fixed assets into the mix, borrowing against their value when you need it.

When your firm is banked by a Canadian chartered bank a strong element of trust exists between your company and the bank. You’ve passed with flying colors the key requisites of a good commercial bank facility - profits, clean financials, good cash flow, and the ability to meet ratios and covenants required by our regulated bank system in Canada.

Many clients for whom we originate bank financing simply have to report annually, or in some cases monthly on their borrowing needs and financial results. The ABL lender is more generous, and, no surprise, more cautious.

So while your borrowing ability increases you tend to be reporting more often on asset values of your firm. In our experience this just makes your firm a better ' manager of assets ' so that's hardly a bad thing.

If you're uncertain about which business credit line works for your company seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with a credit line for business that makes sense for your company's borrowing 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 Credit Line Expertise






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

Vendor Finance In Canada . Can A Customer Financing Program Take Your Company Behind Frenemy Lines

You Didn’t Know Why Customer Financing Programs Work?


Vendor Finance In Canada . Can A Customer Financing Program Take Your Company Behind Frenemy Lines




Vendor finance in Canada. It's of course the financial term for providing or assisting your customers with a financing program that allows them to purchase your products and services without many concerns arising such as budgets, total overall cost, cash flow depletion , etc. It's our version of taking you ' BEHIND FRENEMY LINES ', as those issues can make our break your sales goals and competitive success. Let's dig in.

We are always reminding our clients that in order to provide effective customer financing you need not be a finance firm yourself. You just need to align yourself with a partner that will do all the work for your firm, and that's not a bad thing. In reality this method of customer financing exists everyday.

Major retailers use credit card and finance companies to allow you to charge their product, car makers practically invented the model with the low down payment and fixed cost obligation of acquiring a car instead of writing a cheque for one. So why shouldn't your firm be the one participating in all this sales and revenue success?

One of the key basics of a client finance program is that it takes your clients mind off the ball - and that ball is of course PRICE/COST of your products or services. You're often no longer debating clients on margins, total acquisition costs, etc - you're instead offering them with a simple method of acquisition that removes some of that OBSTACLES TO INNOVATION we mentioned - i.e. Sticker shock of total of cost, price, budget timing, cash flow, etc.

Very few firms in Canada have the combination of financial wherewithal and skills to start their own internal client finance program. The capital and skill required in this industry make it a business for specialists only. So while your firm could benefit from increased profits of financing your products the technical expertise, management focus, etc required to run this business make it one for no participation from lightweights! Bottom line, leaves it to the experts, but still reap all the benefits of increased sales, profits and cash flow.

A client financing program simply allows your sales team to close transactions quickly and remove client objections when it comes to price, timing of delivery, competitor issues, etc. If your competitors already offer customer financing you're behind the 8 ball

already and didn't even know it - if they don't you're suddenly the front runner!

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in offering a client finance solution that meets your sales 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 = CUSTOMER FINANCING PROGRAM EXPERTISE






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

Receivable Funding In Canada . High Noon Issues In Business Financing For A/R

One Of The Greatest Business Financing Inventions ?

OVERVIEW – .Information on receivable funding and A/R management in Canada. Business financing works when you’ve properly addressed this important current asset of your business




Receivable funding in Canada. While A/R business financing may perhaps not be the all time greatest invention ever in business in certain ranks up there. But when it comes to the finance of receivables, or even just its management, are there some ' HIGH NOON '

issues you need to both know and keep top of mind. We think so, let's dig in!

The essence of A/R finance couldn’t be simpler. It's simply a bridge to allow you to receive cash/working capital prior to payment from clients. The world of accounting allows you to classify this as a ' current asset ' , which simply means you have to collect it within a year, which, unfortunately is the same timeframe that your clients seem hell bent on paying you in!!


When you're financing your accounts one of the key factors to keep in mind in discussions with your banker or your commercial finance firm is the idea of revenue recognition. You need to remember that you must be able to clearly demonstrate that the product or service you have delivered is in fact ' recognized' and that there is an assurance that the customer has an obligation to pay you. So selling on consignment or on a contract type basis with milestone payments presents real problems when it comes to financing your accounts.

We do work with many businesses who do in fact sell on a ' contract ' type basis, and we would add that if the milestones are clearly defined. And that you've delivered on your commitment to the client, you are still in a position
to finance AR.

Receivable financing fast become one of the most popular methods of business finance. Using a 10k invoice as an example the Canadian business owner / manager receives approx 9.8k immediately on invoicing, with the 200 dollars considered a discounting or carrying charge. It's as simple as that if you're dealing with the right party.

Whether you finance your A/R or you don’t the issues of cash discounts is an important one. They are not a reduction of your price offered to your clients; they are simply an incentive for the client to pay you earlier. If you are financing your A/R a huge amount, if not all of the cost of financing your business can be reduced by using cash flow from AR financing to take discounts with your own key suppliers.

Understandably, (because it’s a cruel world)

many of your clients will try and take as long to pay as possible. Major corporations in Canada use their size and buying power clout to their advantage by paying smaller firms in either 60 to 90 days. That enhances their own cash flow in a big way. The financing of your A/R via a bank facility, or a commercial invoice discounting facility allows you to fight that battle, and if you have priced your products and service with that delay in mind you'll be a strong competitor in your marketplace and industry.

These then are some key issues that affect your management and financing of A/R. There are others which we will cover off in the future, but seek the advice and services of a trusted, credible and experienced Canadian business financing advisor who can assist you with your business funding needs. You’ll then be a formidable competitor when HIGH NOON rolls around.





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 Receivable Funding Expertise



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