Receivables Lending In Canada : Stealth Financing Via Factoring Companies And A/R Finance Solutions

Receivables Lending In Canada : Stealth Financing Via Factoring Companies And A/R Finance Solutions`


OVERVIEW – Information on receivables lending in Canada . Factoring companies in Canada offer a unique solutions to business financing challenges





Receivables lending in Canada hardly suggests commentary by ‘The Bard ' - aka Will Shakespeare.

But when we discovered that some classic commentary of his might well relate to Canadian business financing alternatives we couldn't resist. Could Shakespeare really have been talking about Receivable factoring companies in Canada? We're not sure, but let's dig in!


"Mum's the word" - Henry VI, Part II- Alternative financing solutions such as CONFIDENTIAL RECEIVABLE FINANCE are still relatively unknown to thousands of firms that require working capital and cash flow financing .
Business owners and financial managers in Canada recognize that the ability to finance current assets such as A/R and inventory is key to overall success. But getting it right is always a challenge .While a solid cash flow plan or forecast is all about ensuring you have contingencies in place Murphy’s law often sets in and creates ' bulges' in your cash flow needs . That’s when factoring companies can provide you with a solution that works.



"A wild goose chase" - Romeo and Juliet - Business owners/ managers are often a little too close to the action and miss some of the warning signs in their business. Some of those include constant need to juggle payments to lenders or suppliers, declining profit margins, mounting CRA obligations, etc.

We're quite sure that the majority of Canadian business thinks of our Canadian chartered banks as the solution to the help they require financing their business. If your firm doesn't have all the requirements needed to meet bank financing then alternative financing is the key to survival and growth of your company. Note also that an asset monetization strategy such as receivables lending does not bring debt onto your balance sheet. Your A/R becomes in effect self liquidating as it turns into constant cash.

The A/R financing solutions is simply the commercial finance solution to a revolving line of credit, allowing you to monetize sales to ensure maximum availability of cash flow as you need it. And of course you only pay for what you use, which is key in understanding the costs associated with this method of finance in Canada.

The way to look at the cost of A/R financing in Canada is simply a cost of doing business that is offset by your ability to grow sales and profits , while not being ' the bank' to your clients who we are quire sure have similar problems!

"Too much of a good thing" - As You like It - A proper receivable finance solutions allows you to better manage the inflows and outflows of your business. It's that ' timing ' issue that is the key to an A/R solution, as you are able to monetize sales directly into cash flow. A proper receivable financing solution will also help you if your business is revenue or project based, allowing you to finance milestones in your work as they are performed.

"All's well that ends well" - All's Well That Ends Well - The perfect ending for any business, as it relates to financing is the owner/managers ability to be proactive in cash flow needs planning . Your ability to take discounts with suppliers and vendors and to take on large orders and contracts allow you to have a fresh outlook on your business prospects.

If you want to understand the various factoring/receivable financing options available to your firm 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 solutions provided by factoring companies in Canada.







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 RECEIVABLE 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

Fax = 905 829 2653

Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '




















Stan Prokop

Factoring Finance Companies : Cure Finance Inequality In Canada Via AR Receivables Financing

William Shakespeare weighs in on A/R Receivable Financing in Canada

OVERVIEW – Information on AR Receivables financing solutions in Canada . Reading between the lines in business financing offered by factoring finance companies for companies in search of cash flow and working capital








Factoring financing companies in Canada can help cure the ' inequality ' that Canadian business owners and financial managers face when it comes to arranging working capital and cash flow financing, specifically AR Receivables finance. Let's dig in.

Is it possible that even Will Shakespeare weighed in our subject?! We went back and found some famous sayings he made and it clearly seems to us that some of his most famous lines potentially referred to business financing and cash flow finance.


‘MUM’S THE WORD ' (From Henry V1) = the reality is that thousands of business owners and financial managers don't really know enough about alternative financial solutions such as receivable finance. The truth? Simply that it is a strong alternative to traditional bank financing when your business can't access bank financing, or enough of it. A huge part of the Canadian business sector now considers this method of cash flow financing as a quick and accessible popular choice.

'RANT' - (From Hamlet) it’s easy for many business people to ' rant' against the banks. Why is that when our banks have one of the strongest reputations in the world? Simply because many business either don't have the track record and financial strength that is mandated by the banks when borrowing for business credit. Banks in Canada are mandated by government and shareholder requirements to maintain a conservative lending policy.

And while rapid growth from the entrepreneur is desired, even dreamed about, banks typical stance is to prefer slow and steady, keeping those ratios and covenants intact. Growth drives the need for continual working capital as receivables constantly increase, along with inventories.

And if your firm doesnt have a pristine balance sheet, or has an operating loss, or perhaps the owners have some personal financial issues... well the bottom line is that those become new issues to struggle with when attempting bank financing.

“KNOCK KNOCK - WHO'S THERE' (From Macbeth) - The who's there refers to the choices you have when seeking out a financing partner for A/R RECEIVABLES finance. That includes regional firms, small boutique financiers that specialize in specific business segments and industries, as well as Canadian and U.S. owned firms of all size. Our specific recommendation here is to learn about and access CONFIDENTIAL RECEIVABLE FINANCING, allowing the business to bill and collect their own receivables without any intrusion.

If you want to maximize the availability of working capital from your asset base seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with you asset based financing 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 RECEIVABLE 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

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