AR Finance : We’re Opening Up On What The Dickens Receivables Financing Factoring Rates Are About

Everything You Wanted To Know ( But were afraid to ask ) About A/R finance

OVERVIEW – Information on the cost and mechanics of AR finance in Canada . Receivables financing factoring rates explained relative to cost, structure, ways to minimize cost and maximize working capital financing




AR Finance considerations often force the business owner or financial manager to consider the costs of Receivables Financing Factoring Rates as compared to traditional banking, or the worst alternative, no working capital financing at all. So, everything you wanted to know, but perhaps were afraid to ask? Let's dig in.

So ' what the dickens ' is Receivable financing all about for a starter and why do top experts tell us that it's one of the fastest growing parts of the cash flow financing industry. (We’re the first to love a great expression, and not everyone knows that it was Shakespeare

that coined such terms as ' WHAT THE DICKENS, DEAD AS A DOORNAIL, in such plays as Merry Wives of Windsor and Henry V1 respectively)










A/R finance, simply speaking, is simply a method in which Canadian business owners and financial managers, predominately in the SME commercial finance needs sector can translate receivables into cash flow. The other alternative is of course the traditional bank line of credit which many firms, depending on their stage and financial status, cannot access.

We meet many clients, by the way, that actually can access bank financing, but just not enough! More often that not that's because of hyper growth which almost always wrestle with. (It throws ratios out of whack).

AR financing is a subset of asset based lending in Canada. It can be combined with a full working capital non bank revolving facility, or it can be used as a ' stand alone ' method of financing your firm. As an example service companies such as personnel agencies or software technology companies often carry no inventory, and their entire cash flow model revolves around financing customer accounts.

So what about those receivables financing factoring rates in Canada? The bottom line is that they vary, and can be anywhere from 1.25% per month all to facilities that cost 3 times as much. In all cases they are higher than bank financing, but they deliver on all the cash flow and working capital you need for your business.

While some may consider this method of cash flow financing expensive the alternative is limited or no financing which can be hazardous to (business) health. When you are unable to finance daily operations or to meet any of your term debt obligations unlocking receivables via AR Finance is a true life saver for thousands of businesses in Canada.

Remember also that you are in effect ' trading off' the cost of financing receivables and those receivables financing factoring rates versus your ability to grow your business and generate profits and solid return on investment. Remember also that you could well be eligible to consider 7 Park Avenue Financial = CANADIAN CONFIDENTIAL RECEIVABLE FINANCING Expertise allowing your company to bill and collect its own receivables, no notice required to your clients, which is often the case with old school factoring.



So if you choose not to be ' the bank' for your customers seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success
who can assist you with your AR finance needs. It’s your probable solution to everything you wanted to know but were afraid ….!



Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :


http://www.7parkavenuefinancial.com/receivables-finance-factoring-rates-ar-finance.html





Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:

7 Park Avenue Financial

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769


Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '































Stan Prokop

ABL Lending And Current Asset Based Loan Rates Make Impossible Financing Possible

Impossible Financing Made Easy Via ABL Asset Finance Solutions

OVERVIEW – Information on ABL lending in Canada . Asset based loan rates are becoming more attractive to the Canadian business borrower when it comes to working capital and business credit facilities required to grow, operate, or acquire a business







ABL lending means different things to different business people. So asset based loan rates differ, but in our context we are talking about a working capital credit facility, in effect a ' business line of credit ' that is a strong alternative to traditional Canadian chartered bank facilities. And as thousands of business owners and managers have discovered - they can often make the impossible... possible! Let's dig in.

ABL (' asset based lending’) credit lines secure the assets of your business and turn them into a working capital and cash flow facility. The most common assets financed under ABL include inventories, receivables, and fixed assets - and may also often include real estate.

(When real estate come s into lay in a business credit line it's in effect the business version of a home owner line of credit - the infamous ' HELOC’ that millions of Canadians borrow under.) But we digress, because we're talking ' BUSINESS'!

While public companies seemingly have access to more credit the SME sector in Canada often struggles with raising capital or monetizing assets. Enter ABL lending, which is the strong alternative to bank financing. By the way, the banks offer ABL lending; they're just not that big on TV commercials for this specific business borrowing product. The reasons for that we won’t explore today.

Why do companies consider borrowing under asset based loan rates and facilities? While the predominant reason seems to be the bank credit alternative its also a strong way to increase borrowing power, or financing a merger and acquisition or management buy out via monetizing assets. In some cases it is used to pay down other debt when that makes sense.

We referenced more ' borrowing power '.

That's because 99% of all ABL lending provides stronger margining of receivables and inventory, typically 90% and anywhere form 30-80% respectively. And when the business owner of financial manager throws fixed assets into the borrowing mix increased cash flow ability happens.

While we reference ABL finance as predominantly used in the SME COMMERCIAL FINANCE sector it’s also used by some of the largest successful and well known public and private corporations in Canada. Typically large retail chains use the inventory finance component of ABL as their working capital facility, given they have no receivables as retailers are an ' all cash ' business.

While Asset based non bank financing rates are almost always (but not all the time) higher current rates are coming down and provide even more consideration to consider this type of financing. So while Canadian business financing needs tend to gravitate by instinct to ' the bank’ the business owner and financial manager should not forget that the bridging of assets into cash is also provide by ABL lending.

So if you want impossible financing made ' possible ' when it comes to business credit lines seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with a finance solution that makes sense.





Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :

7 Park Avenue Financial = Canadian ABL Lending Expertise








Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:


7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '























Stan Prokop

Corporate Finance Solutions Financing : Business Funding Solved

Feeling Left Behind On Corporate Finance Solutions ?

OVERVIEW – Information on financing and business funding for Canadian business owners and managers . The implications of corporate finance vary and require an appropriate level of expertise and knowledge



Corporate finance financing solutions require an amount of expertise and knowledge that is sometimes not fully available internally at the business. Let's dig in.

Top experts tell us that having the information and assistance required to get business funding in place allows the owner to:

Manage assets

Decide where and how to raise financing

The type, amount and rate and structure of the financing you require have a significant implication on your business in many ways. Properly finance businesses maximize value of the company. Proper business funding on existing assets allows those assets to deliver on a ' return on investment '.

A good example might be EQUIPMENT FINANCING, allowing Canadian business owners and financial managers to gain the benefit of fixed assets in production and operations, while managing cash outflows at the same time.

If , as a business owner or financing manager you are not monetizing existing assets you in raising cash then you are likely exploring taking on new debt , thereby altering your overall capital and debt to equity structure. That always has operational and borrowing implications.

And that external financing, whether it is traditional or alternative in nature brings risk once improper or too costly debt financing is utilized. Many firms that require cash flow and who have assets consider ASSET BASED LENDING as a way to monetize assets without taking on extra debt.

The key in corporate financing decisions in the SME sector ( or for all firms really ) is ensuring the right type of financing solutions are in place and ensuring that debt solutions can be properly repaid and retired.

What then are the solutions

to business funding challenges? They might include:

A/R Financing

Inventory Finance

Commercial Canadian Chartered Bank Facilities

Non bank asset based lines of credit

Equipment finance

Sale Leasebacks

Purchase Order or Royalty financing

Working Capital Term Loans

Unsecured Cash Flow Loans

Revenue stream financing

Mezzanine Finance



Corporate finance solutions that you undertake will always have an impact on your firm, revolving around key issues such as risk, cash flow, return on investment, lender perception, etc.

Business funding involves the right amount of risk , and one well known expert defined financing risk as delivering both on ' danger' and ' reward'.

If you want to deliver on ' reward’ seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with solving funding challenges .




Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :



7 Park Avenue Financial = Canadian Business Funding Expertise






Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:

7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Direct Line = 416 319 5769
Office = 905 829 2653

Fax = 905 829 2653

Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '































Stan Prokop

Government Guaranteed Business Loans : Comparing SBL Canada Loans To Traditional Bank Financing In Canada

There Are No Design Flaws in the Industry Canada Gov’t Small Business Loan

OVERVIEW – . Information on ‘ SBL ‘ loans in Canada . New changes in government guaranteed business loans make this method of financing in the SME sector very attractive to business owners and entrepreneurs



Government guaranteed business loans in Canada are unique and are important from a viewpoint of providing financing to small businesses in Canada. (The program defines ' small ' as any new business with fewer than 5 Million dollars of actual or projected revenue)

Recent changes to the program are intended to ' enhance' the level of attractiveness to the program, eliminating some of the ' design flaws' that have been associated with the program in the past.

Financial assistance via an ' SBL Canada ' financing comes under the jurisdiction of INDUSTRY CANADA. Somewhat misunderstood by many potential borrowers is the fact that the program is in fact ' delivered ' by our Canadian chartered banks.

The successful funding of start up and smaller existing businesses in Canada is a cornerstone of the success of the program - with anywhere up to approximately 8000 businesses being funded annually. The government, via the Industry Canada ' CSBF ' program is a guarantor of a large part of the financing you receive under the loan proceeds.

A part of the challenge with respect to being successfully funded under the program is the fact that our banks tend to interpret the loan guidelines differently. So finding an experienced banker or Canadian business financing advisor is key to success.

Commercial loans in Canada for start up or simply smaller businesses are often difficult to obtain. So the ability to finance equipment, leaseholds, computers, software, and even real estate under the program is a tremendous boon to Canadian borrowers in the SME (small to medium enterprise) market.

SBL loans in Canada are structured as term loans. Amortizations are generous and are typically in the 3-7 year range. Rates under the program are only 3% over prime rate - which provides an attractive alternative to those firms seeking alternative financing which would come at much higher rates typically.

While government guaranteed loans (“SBL " ) are typically used for legally incorporated companies it is in fact also available for registered partnerships and proprietorships.

Given that the bank and the government share the risk of the loan the program is also very attractive to entrants into the Canadian franchise industry.

Positively approaching the loan submission helps guarantee financing success. You or your advisor should ensure a business plan or exec. summary is available, along with info on mgmt, an opening balance sheet, and a cash flow projection. (Loans are repaid from cash flow!)

Don't forget also that you may buy a complete existing business via SBL Canada loans.

When traditional bank or commercial financing is not attainable seek out and speak to a trusted , credible and experienced Canadian business financing advisor with a track record of success
who can assist you in eliminating those ' design flaws ' of financing to ensure loan success.




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 SBL Loan Expertise





7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Phone = 905 829 2653



Email = sprokop@7parkavenuefinancial.com




















Stan Prokop

The ABL Asset Based Bank Loan Facility : Your Entitlement To A New Business Line Of Credit

Is an ABL bank loan facility a kinder, gentler type of business borrowing in Canada? Why the asset based line of credit provides a solid commercial credit alternative

Information on the ‘ asset based line of credit ‘ for business borrowers in Canada. How does this revolving bank loan type facility work and why is it one of the two alternatives for revolving credit facilities in Canada.





An ABL Asset Based Line of Credit for Canadian business is in some ways a solution to the ' entitlement ' that business owners and financial managers feel around the necessity to access commercial credit. In some ways its access to a ' kinder, gentler'

method of getting approved for revolving credit to run your business. Let's explain.

When we talk to clients about their needs and challenges around accessing business credit it's surprising to hear that many owners/managers have not even heard of ABL business loans / credit facilities. Why is that? Actually one can be forgiven simply for the fact that it’s a newer method of financing in Canada that gains traction everyday.

Approval for business financing revolves of course around a companies ' credit rating ‘, not dissimilar to that same rating that follows us around as consumers. That business credit rating revolves around quality of financials, ability to meet obligations to suppliers and lenders, character and capability of management, and, more specifically cash flow and profit generation.

But what happens if the new or challenged firm can't access the tremendous rates and flexibility offered by our Canadian chartered banks? Business still needs access to credit - enter stage right

‘ABL’ business lines of credit.










Simply speaking they are revolving loans to businesses that are secured by A/R, inventories, and, uniquely, fixed assets. Thats the ' big difference ' relative to a bank business credit line - simply that the focus is on the current and fixed asset collateral, not the unique emphasis that our banks place on ratios, covenants , and secondary sources of repayment such as outside personal collateral, etc.

Because Canadian banks, and rightly so we believe, are highly regulated they can't take the additional risk that is posed by ongoing management of receivables, inventory, fixed asset valuation, etc. That’s where the ABL facility excels, simply by the fact that if you have assets and revenues those ratios become almost meaningless.

While it’s a bit of an unadvertised secret that banks in Canada, or at least most of them, offer ABL facilities the reality is that more often than not they are not unlike traditional bank borrowing - but that's a subject for another day.

The asset based credit line approval amounts fluctuate and are geared toward the constant growth and change in the sum of your A/R, inventory and fixed asset values. In almost all cases a strong assessment of these values will be made to ensure you've got maximum borrowing power.

If you want to be sure you have access to business credit that otherwise might not be attained from Canadian banks seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you in your borrowing needs.




Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :


7 Park Avenue Financial = Canadian ABL Business Line Of Credit Expertise





Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:

7 Park Avenue Financial

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '

Stan Prokop

Without Business Credit Lines Or An ABL Line Is Your Company Failure Rigged : Commercial Credit 101

Are Business Credit Lines The ‘ Secret Sauce ‘ Of Growth For Your Company

OVERVIEW – Information on business credit lines in Canada . Bank commercial credit facilities or an ABL line play an important role in the growth and financial success of any business – here is how .. and why






Business Credit Lines in Canada are often the ' secret sauce ' that helps propel a company to financial success. Whether it’s a non bank commercial credit ' ABL ' line, or a Canadian chartered bank line of credit it's a fact that financing your working capital properly is often the differentiator in success or failure. It's one of the ' Secret Sauces ' in business success. Let's dig in.

As your business invests more funds in the products and or services that you deliver the need for commercial credit financing of some type increases. The very simple reason for that is the fact that your customers don't pay you the same day you deliver products or services, and quite often the gap in even getting to your invoice stage is significant.

Revolving credit facilities in Canada can be broadly grouped into two areas: bank lines of credit and non bank commercial asset based lines of credit. (In truth there are some subsets of Asset based lines of credit - they might include A/R finance only, inventory finance, leveraging equipment assets, or combinations thereof!)

Your ability to finance your current assets properly will deliver solid cash flow as your company grows. The gap between different industries is significant. We can only envy the internet retailer who gets paid before they even deliver product! Conversely a firm in another industry might take on a project that takes a month or two to deliver on, and another month or two, or more !.. to get paid. That’s the working capital challenge.

Knowing the value and the timing of your assets is key to financing business credit lines. Once the business owner/financial manager have a handle on the working capital cycle of a company the solution becomes a lot more achievable.

Having access to business credit for cash flow allows you to constantly stay ahead- its better to be planning growth than reacting to cash flow shortages in your operations. Simple very basic trends can be determined by having regular monthly financials and charting your trends in A/R, inventory, sales, etc.

Term lenders that you might have in your business (term loans, equipment leases, etc) want to rely on the fact that your cash flow from operations can retire your monthly obligations.

It should be pointed out also that if your business is ' capital intensive ‘for fixed assets, etc you simply require more access to commercial credit business lines.

Bank or ABL lines will finance on an ongoing basis the value of your A/R and inventory. In the case of ABL your fixed assets are also thrown into the mix, allowing you to borrow on a revolving basis against the value of those assets, together with inventory and receivables.

While bank pricing is lower and more flexible companies that are growing quickly and can’t access ' traditional ' financing should consider Asset based lines of credit.

If you are looking for the ' secret sauce' deliverable in a business credit line seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in achieving working capital and cash flow success.




Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :

7 Park Avenue Financial = Canadian Business Credit Line Financing Expertise





Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:

7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Direct Line = 416 319 5769
Office = 905 829 2653

Fax = 905 829 2653

Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '

Stan Prokop

Franchise Financing In Canada : Franchising Business Loans Comes In Different Shapes And Sizes

Visualizing Franchise Loan Success In Canada ? Owning A Franchise Comes With Financing Challenges

OVERVIEW – Information on franchising business loans in Canada . Franchise financing challenges require expert navigation of different loan and finance strategies to successfully complete entrepreneurial ownership for the potential franchisee


Franchise financing success in Canada is visualized by the potential franchisee - it's the end of the road in their journey as a new franchisee. But the reality is that attaining that goal is dependent on information and experience often not fully recognized by the borrower. Let’s dig in.

Franchise opportunities in Canada are diverse, many of them offered by franchisors that are both Canadian and also U.S. origin. It's not secret that finance loans for a franchise are somewhat more plentiful in the U.S. with diverse lenders participating in this high growth economic sector.

In Canada, as we have stated, franchisee loans come in different ' shapes and sizes'. Let's explore the who and the how.

The borrower must also be prepared to spend some time to distinguish between the types of finance package he or she is looking for. That might be :

A turnkey acquisition opportunity

A re-purchase of an existing franchise ( ‘ Refranchising ‘ )

Financing for a multi - unit transaction

Master franchise scenarios

Working Capital

Asset and Leasehold improvement


The amount invested in the business by the franchisee is one of the key determinants of loan ' shape and size’. In Canada this can range anywhere from 10- 50% depending on franchise lender requirements. Franchise loans are typically secured by the assets, tangible or otherwise, of the business. It's fairly rare for franchisee personal assets to be attached to a franchise loan.

That above scenario therefore mandates that franchising business loans need to demonstrate they can be repaid out of cash flow. Here's where a solid business plan, cash flow and opening balance sheet will go a long way to reflect loan approval success. The borrower, or his advisors are well recommended to ensure some type of contingency financial modeling also occurs - if only for the reason that Murphy's law

is everywhere in all aspects of business!

Clients often ask what are the ' rates and fees' in Canadian franchise financing. Almost always these transactions are in the single digits, which also reflects the relatively low current interest rate environment.

In Canada the franchise opportunity is financed by either a specialty lender or a combo of financing derived from a bank or a commercial finance firm. This includes lease companies, merchant advance firms, working capital term loan lenders, and the Canadian SBL program. The latter is extremely popular and is suited to a number of franchise opportunities.

If you're a franchisee that can visualize the end to your acquisition journey, but don't necessarily know who to get there seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you in sorting out those different ' shapes and sizes' inside the financing puzzle .





Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :


7 Park Avenue Financial = Canadian franchise financing expertise!




Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:

7 Park Avenue Financial

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653


Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '

Stan Prokop