Account Receivable Loans : From Big Bounce To Big Bang In Factoring Lending And A/R Financing In Canada

What If We Just Got Rid Of The Most Annoying Part Of A/R Financing In Canada?


OVERVIEW – Information on account receivable loans in Canada. Confidential receivable financing is one method of factoring lending in Canada that allows business owners to meet the challenge of cash flow





Account Receivable loans in Canada are, rightfully so, positioned as providing a ' big bounce ' to business cash flow challenges. But what if we could turn that ' bounce' into a ' big bang ' - Here's our theory -

no pun intended, so let's dig in.

There is no bigger constraint to a business than feeling the cash flow and working capital squeeze. While the business owner and financial manager often hears otherwise , access to capital and credit in the SME Commercial sector still feels like quite a challenge.

That then forces owners and management to look at new ways to address the Canadian financing challenge, and one of them is known as ' factoring lending '. It's one of those solutions that fills the gap, allowing companies to allow cash flow to move ' lock step ' with sales.

More often than not its the solution for companies that can't access bank credit and allows them to be on an equal footing with their competitors who for some reason ' seem ' to have all the financing they need ( more often than not they don't - it just seems that way )

It's that gap in the SME sector that is constantly looking for new source of finance. The difference, other than financing cost, between bank and A/R financing is not as big as most people think. When sales are financed by the bank the A/R is taken as collateral and assessed in the overall credit worthiness of your business. Factoring lending is secured differently, as the paperwork around the facility has the receivable being constantly sold to the lender and cash flowed, typically on the same day. In fact, as a surprise to some, A/R financing from a commercial finance firm actually advances more on your receivables than a bank would. Usually 15% more!

While, generally speaking a bank prefers slow steady growth factoring lending typically works optimally when a company is growing sales. In fact when sales are in a decline it's not recommended that the owner /manager consider a commercial a/r financing facility , as things tend to backfire somewhat.

So what about that ' annoying ' part of factoring financing in Canada. What we're referred to is the fact that for traditional factor financing done in this manner your clients receive a notification around the process and payment under this type of facility. Our recommended solution? It's having your facility run on a ' CONFIDENTIAL ' basis allowing you to bill and collect your own receivables without notification to any other party. It's kind of like banking but without the bank.

If you aren't aware of the key benefits of financing sales growth through factoring they include:

Short term bulge cash flow solutions

Increased flexibility

Fast approval - typically a week or two

Reasons business owners don't use this method of financing include the cost, or simply that they weren’t aware that financing of this type was available. Those living in the past

(that’s a dangerous thing to do in business by the way) even think there’s some sort of negative connotation to using alternative financing. They are wrong by the way, as some of the largest most successful firms in Canada utilize A/R financing and securitizing receivables of some sort.

So, if you want to accelerate the ' bounce ' in A/R financing into a ' bang ' consider Confidential Receivable finance as one solution to the finance challenge. 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 accounts receivable loans and facilities that make 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 A/R FINANCING AND FACTORING 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

Financing Businesses In Canada : Are Business Finance Worries Causing You To Miss Out ?

You Don’t Need a Flux Capacitor to Achieve Successful Canadian Business Financing

OVERVIEW – Information on business finance solutions and alternatives in Canada. Financing businesses involves the art and skill of searching out applicable debt / equity /traditional/alternative options






Financing businesses in Canada must often make the business owner/financial manager almost feel they need a ' FLUX CAPACITOR' to make the right decisions around business finance. Debt? Equity? Asset Monetization? Those three choices are the ongoing conundrum for the business solutions. Let's dig in.

A flux capacitor? Well, if you remember it’s the instrument used in the movie ' Back to the Future ' - allowing its stars to time travel back and forth into the past and future. That's probably not far off from how owners/managers feel about what solutions to pick for their business financing needs - there are the old traditional solutions, and in recent years numerous alternative financing solutions have become popular.

Putting ' asset monetization' aside temporarily the choice of debt or equity is an important one. Debt alters the balance sheet, and for some reason or other those lenders always wish to be repaid! Choosing the right debt term (or ' amortization') also becomes very important. Payments are fixed and rates are set.

In Canada the SME (small to medium enterprise) sector can in fact take advantage of the Canada Small Business Financing Loan - while it is ' term debt ' it has no prepayment penalty, rates are offered as ' variable ' and outside collateral is not needed. It's as safe a bet as you can pick given the choices.

No business owner wishes to give up ' equity ' when they don't need to - but when debt or asset monetization strategies don't make sense it then boils down to choosing the equity give up - that might be from as far minded a group as friends and family to those lesser than friendly VC's - nice people, its just that they love that ownership control.

Equity investor’s aren't as focused on cash flow and repayment as opposed to growing the overall value of the business. And it therefore goes without saying that outside collateral; personal guarantees and the like play very little into the equity raise.

Naturally the converse of that is the control the owner/manager gives up in the business - and reporting to or working with new owners is your new main ' to do ' task.

In practice the text books and top experts tell us that the right balance between equity and debt is in fact the right solution.

So if it isn’t debt or equity what about then those asset monetization strategies we spoke of? They include:

A/R Financing / Securitization facilities

Inventory Finance

Asset based credit lines

Revolving bank facilities

Purchase Order Financing

Tax credit loans (SR&ED)

Royalty Financing

Unsecured cash flow/mezzanine financing loans

So in fact you don't need that ' FLUX CAPACITATOR ' to gravitate back and forth between traditional or alternative financing solutions. It's a matter of picking the right financing for right now. Seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success Your business finance worries just might be over.



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 :

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

7 Park Avenue Financial IS Canadian Business Financing

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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

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


OUR ONLY COMPETITIVE EDGE IS ... EXPERIENCE!

A Canada Small Business Financing Loan ? Warning : Government Loans Work

There’s No Cover Up On Government Business Loans In Canada

OVERVIEW – Information on the Canada small business financing loan program. Government loans provide capital for start up, acquisition and expansion needs . Here is how









The Canada small business financing loan must sometimes feel like some sort of ' cover up ' when it comes to business owners /managers understanding what this financing is , how it works , and understanding how to maximize the benefits of the program. Does it have to be that way? We don't think so, so let's dig in.

Let's take a look also at some of the reasons Canadian business considers the ' SBL ' government loan. For the majority of businesses in Canada it's pretty well a focus on growing and expanding the company. That often is a challenge when over all economic growth is sometimes slow.

Financing via government business loans can be used when the desire is to add new products and or services to your current mix. These often could require new equipment or leasehold improvements.

In other cases new asses might be able to propel your business into much larger growth than it is currently attaining - that might be via new sales geographies or new vertical product or service niches.

If your business is retail oriented bank financing can often be difficult to obtain - part of the reason there is simply that banks view your company as an ' all cash ' business... so the question they ask is ' why would a cash business need credit ?".

Small business loans (they are not that small - a typical loan amt is $350,000.00 can also be used to acquire new technologies such as computers, application software, etc.

Finally, did you know that the Canada small business financing loan can be used to start a business, acquire a business, or merge with another business. Many business owners/managers view acquiring a business as a faster way to grow and expand.

CAVEAT EMPTOR? Do your due diligence on any purchase, including financial condition, growth potential, valuation, etc!

The SBL loan is sponsored by INDUSTRY CANADA, part of the Canadian federal government. It's their way of ' sponsoring ' loans (they guarantee a large part of the loan to the bank) in order to accelerate growth in the SME sector.

Rates , fees and structures under the program are excellent - Rates are at 3% over prime, which currently is some of the lowest business financing and borrowing rates in Canadian history . Structures are typically anywhere from 2-7 years, and there is even no penalty to repay the loan which is often NOT the case in other forms of business financing in Canada.

Fees associated with the program are in our opinion quite nominal, especially when the business owner considers finally being able to access the capital they need.

Industry Canada, aka ' the government ' does not directly provide the loans, they have chartered our banks to do that, so it’s critical to locate a banker that is familiar with and understands the program.

If you're looking to have government loans ' work ' for your business or opportunity 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 financing needs. And trust us, there's no cover up - government loans, properly done, work.





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 SMALL BUSINESS LOAN 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

Franchise Business Financing : Managing Headwinds In Your Franchising Finance Challenges As A Franchisee

The Best Of Times.. Or Worst Time To Finance A Franchise ?


OVERVIEW – Information on franchising finance in Canada . Franchise business financing requires a solid understanding of some key principles and facts



Franchise business financing in Canada requires solid basic knowledge around those ' headwinds '

that buffet the franchisee about when he or she is seeking a franchise solution. Without some expert help the franchisee potentially can fail in his efforts to successfully finance a business. Let's dig in.

The Canadian franchise sector as a whole couldn’t be more ' busy ' - in fact many maintain its ' hot '. A fairly solid economy, as well as the desire to become an entrepreneur of sorts makes franchising attractive. Corporate downsizing also tends to offer opportunities to experienced individuals who might otherwise view starting a business as too ' risky'.

Part of the problem we have seen in many cases revolves around the fact that some franchisors do not properly investigate or asses franchisee financial and business qualifications in their sometimes haste to ' sell ' a franchise. Remember always that franchisors ' sell' franchises, they don't ' finance' them - that’s simply not their business or best use of capital.

Does the quality or reputation make a difference in the ability to finance your franchise? While there is probably no ' bad ' list of franchisors available it's safe to say that many franchises have a reputation of being a bit more ' tried and true ' when it comes to business success. In Canada the franchisee has the option of dealing with a Canadian franchisor, or a chain that has U.S. or foreign ownership. In some cases you might be dealing with a ' MASTER FRANCHISE ' - someone or an entity that has purchased the rights to a geographical territory, such as... you guessed it... Canada.

We've observed that for whatever reason some franchise sectors tend to attract franchisees more than others - they include restaurants/hospitality , training, hair, fitness etc. It's incumbent on you the franchisee to demonstrate to your lender that you have both the right combination of passion and experience to start, run and grow a franchise.

So let's bore down into the actual financing of your franchise. That financing is achieved by either a specialty franchise lender ( they are extremely limited in Canada ) , a bank ( highly improbable ) , a bank via the SBL loan ( highly probable by the way !) , and a combination of assorted financing services such as leasing, merchant advances, working capital term loans, etc.

So, getting back to... the bank! While all our Canadian banks have franchise ' units' they are heavily focused on arrangements with only the most popular , large and successful chains .

Traditional financing for a start up is simply not available without the franchisee putting up as collateral significant personal collateral, aka the home, savings, etc. Typically that's not desirable for the franchisee! Simply speaking, you might find that the guy in the bank commercial on TV is not the lender you deal with in the branch!

We referred to the Canadian SBL loan above; it’s a solid way to finance your franchise if you meet some basic criteria. That includes a reasonable down payment, a decent business plan, good personal credit history, the loan only finances equipment and leaseholds, but more often than not that’s the bulk of the financing needed. Personal guarantees under the program are also limited, which is attractive.

Typically you want to have a ' team ' in place to ensure legal and financing issues are in place to help cement success. That might include your lawyer, an accountant, and... when it comes to financing a trusted, credible and experienced Canadian business Financing Advisor with a track record of success
. You'll be in better shape to navigate those business and financing headwinds.



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/franchise-business-financing-franchising-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

Equipment Loans And Leases : How Much Do You Know About Leasing Companies

Why Canadian Business Got Hooked On Leasing Business Equipment

OVERVIEW – Information on why leasing companies are almost always a solid bet when it comes to asset financing/refinancing . Recognizing the benefits of equipment loans and leases makes your business a winner




Equipment loans and leases in Canada, as offered by leasing companies and other commercial finance firms are at an all time high in popularity.

When the business owner/ financial manger understands why this is the case he or she can take advantage of benefits and advantages that are reserved for all. Its one time when following the crowd is a must! Let's dig in.


The acquisition of assets in business always comes down to several key decision points - the use and benefits of the asset and the cost and cash flow outflow ramifications. More and more the owner / manager is focusing on using an asset, not necessarily owning it. With all respect to those ' pride of ownership ' folks preserving cash flow is almost always king.

Equipment financing sometimes by necessity can get a little complex - more often than not it’s a simple process, but it’s critical to understand that some of the factors you must also consider in financing equipment include:

Tax ramifications

Accounting Treatment

Effects on your balance sheet / Debt load

Impact on credit line facilities

It's interesting to note that almost all the Canadian chartered banks today offer specialized leasing services via separate entities within the bank. Typically these transactions are reserved for bank clients, and those that have solid credit. Deal size is typically larger here also.

The balance of industry is covered off by independent Canadian commercial finance companies. These firms typically have set credit profiles they are looking for, as well as deal size and asset mix.

In Canada almost any asset can be financed. That includes technological needs also - such as computers, software, telecom equipment, etc

While the majority of the industry is focused on what is known as the ' Capital lease ‘, aka ' lease to own ' its important to know that another choice exists - that’s the ' Operating lease ' or ' lease to use ' so to speak.

Factors that business owners must take into account when considering leasing or the type of lease they will choose include -

Estimated life of the asset

The desire to own or return the asset

Leasing structure relative to rate, term,

Cash flow impact


Computer leases are probably the best way to describe the benefits of operating leases. That’s because the technology changes so quickly. Owners wish to often upgrade, replace or refresh, and assets can be efficiently returned with no obligation to buy.

Assets you own can also be leased by the way! That’s essentially called a sale leaseback, and allows you to keep assets in the business and take advantage of the equity in those assets. The process is relatively simple and includes ensuring the asset is lien free, has value (typically via an appraisal) and ensuring a proper lease or loan structure is in place. The lease can be in this case substituted for a ' bridge loan' of sorts.

Have we forgotten anything? Oh yes. If you business offers a product that can be leased you can benefit from offering a customer financing program. By partnering with the right firm you can offer all the benefits of equipment loans and leases to your clients. Key benefits include:

Immediate cash flow for the vendor

Removal of budget and price constraints in your products

Creating a strategic advantage via your client’s perception you offer a one stop solution


So, if 80% of Canadian business is ' HOOKED ' on solutions offered by leasing companies the choice seems pretty clear. 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 business 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 EQUIPMENT FINANCING AN LEASING 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

Filed Research And Development Credit On Hiatus ? Accelerate SR ED claims Via A SRED Financing

Looking To Side Step Waiting For Your SR&ED Claims ? Finance Them ! Here’s How


OVERVIEW – Information on SRED financing in Canada . Monetizing your SR&ED Research and Development Credit makes cash flow sense











SRED Financing in Canada is all about cash flowing/monetizing your SR&ED tax credit. It's not unusual for business owners and financial managers that access this program to get the feeling their claim is on somewhat of a ' hiatus ' after they have filed their claim. Can things be ' speeded up ' a bit? They can! Let's dig in.

While there might be some legitimate reasons for the actual time period from filing your claim to receiving your refund cheque from the government that’s little consolation to your business - a significant amount of time has lapsed since you've spent those funds, and you're looking for ' cash back' !

What are some of the reasons a claim is delayed or slowed down based on time to final approval and refund? They might include things such as the financial or technical audits done on your business and the claim. It might also simply be a ' backlog ' has occurred in volume of claims processing inside Canada Revenue Agency.

It should be no secret by now that there have been some major changes in the program. This includes a lot of scrutiny on those folks that prepare claims (aka ' SR&ED Consultants ‘) who created a feeding frenzy of sorts around the way they bill their fees on the processing of your claim. These fees typically were ' contingency fees ' meaning that the consultant bore the risk around the time and ultimate success of the claim, and for that charged a per cent age of final amount received.

SRED Financing allows for your research and development credit claim to be cash flowed, allowing you to purpose the funds for any general company purpose. This is even more critical to firms that are in development or pre revenue stages.

A handful of common sense strategies and enhance both the final approval of your claim, as well as it's financing. They include:

1. Ensuring you are taking advantage of your positive SR&ED history - while claims for first time filers can be financed it goes without saying a track record in previous years sure helps the cause and speed of your approval

2. Ensuring your claim addresses some of the key ' true requirements ' of a claim such as your firm’s efforts to address uncertainty, advancement in processes, etc

3. A copy of your SR ED claim is always a key part of the financing of the claim - remember that the claim itself is the key ' collateral ' for a SRED loan

The other parts or a SR&ED loan application are as basic as they can be - your financials , a list of any secured creditors , info on who prepared your claim, etc .

SR&ED loans are structured in a unique manner. They typically are set up as a loan with no payments made during the term. Funds are advanced at 70% loan to value - for instance a filed 200k claim would be eligible for a collateral loan of $140,000.00. Naturally when the claim is approved by CRA and funded you receive the balance of 30%, less financing costs.

Banks in Canada don't really finance a SR&ED loan. So if you want to ' side step ' the waiting line for cash flowing your R&D claim seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in monetizing your research and development credit .



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 SR&ED TAX CREDIT 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