Simplifying The Business Credit Revolving Credit Line Funding Decision

Feel Like You’re Flying Blind On Business Credit Lines And Alternatives?

OVERVIEW – Information on business credit line funding in Canada. Revolving facilities such as asset based lending and traditional bank credit round out the solution you’re looking for . Which works for your business?

Business revolving credit line funding
has many Canadian business owners and financial managers feeling like they are ' flying blind '. At the heart of the matter are really only two basic funding decisions - A Canadian chartered bank credit line or an alternative Asset Based facility offered by a non bank commercial lender. Which one works, or won't work for your business? Let's dig in.

The actual financial strength of your company will often drive the decision for which type of business credit lines make sense for your firm. In certain case a bank or an asset based lender will have certain industry expertise that will be invaluable to your firm.

Businesses that are currently financially challenged in some manner or in some sort of temporary downturn will almost always be unable to attain ' conventional bank financing ‘. That then gravitates your business to an asset based lender.

One area that comes under some interesting discussion around bank vs. asset credit lines is the reporting requirements. Typically bank credit lines require monthly and annual reporting at a minimum - Asset based lenders certainly mirror this policy but reporting requirements actually might be on a weekly basis. Typically asset classes that are financed under revolving credit lines are:

Receivables

Inventory

Equipment

The proper way to look at this as maintained by most experts is that banks lending on business credit lines are ' cash flow ' focused - the downside here is that numerous covenants are put in place by the bank and must be maintained at all times . If they are not companies are put in SPECIAL LOAN portfolios and find themselves at significant risk. The other side of the coin is that asset lenders focus on assets only, not covenants or cash flow per se

Many firms we meet qualify for some bank financing - but not all the capital they need to run/grow business. As a result they have a low cost of borrowing but are constantly constrained by lack of liquidity. In many cases asset based credit lines can immediately double your borrowing power.

Double your borrowing power? Yes, simply because receivables are typically financed at 90% (versus bank 75%), inventories are margined to actual collateral value, and, unlike bank lines, equipment/fixed assets can be a part of any asset based credit line.

We always like to point out to clients that the most efficient turnovers you can attain in receivables and inventory turns will eliminate that much more the need to borrow. Its internal financing 101.

If you're looking to simplify your business credit needs , understand alternatives, and wish to avoid that uneasy feeling in business of flying blind 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 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
http://www.7parkavenuefinancial.com/business-revolving-credit-line-funding.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

Account Receivable Credit Can Eliminate Your Bleak Cash Flow Future Via Factoring Receivables Funding

Account Receivable Credit Solutions : Do You Know Them All?

OVERVIEW – Information on account receivable credit solutions in Canada. How does bank financing and factoring receivables differ in benefits, cost, and methodology .One recommendation offered works best

Account receivable credit solutions simply enhance the ability of Canadian business to facilitate business credit sales to customers. Whether its bank financing or commercial factoring receivables solutions these offerings put you in a position to eliminate what must sometimes seem like a ' bleak future '

when it comes to accessing business funding. Let's dig in.





Novice entrepreneurs up to experienced savvy business finance folks are keenly aware of ' the gap '. It's simply the time in between shipment or delivery of your product or service to the time you get paid - with 60 days feeling very much like the norm these days. A further complication? Traditional bank financing for revolving facilities is worth a million, but unfortunately no accessible by all.

Enter various forms of ' factoring receivables ' one of which might just be perfect for your business. We say ' one of ' because there are numerous offerings in the marketplace, making it easily confusing for the owner/financial manager.

The paperwork around various forms of factoring essentially does one thing - it identifies that receivables are being ' sold' as they are financed, unlike the bank which simply takes the A/R as collateral. More often than not business factoring mirrors bank financing in your obligations - that is to say that you are still responsible for any bad debt.

The key benefit of a commercial non bank A/R financing solution often boils down to:

Speed

Amount of capital you can access


While bank credit lines typically have a ' cap ' a solid non bank facility will often have unlimited upside financing capability. Simply speaking - if you have sales and A/R you will have full funding.

Spoiler alert! Factoring receivables will always be more expensive than bank financing with a typical fee on each receivable being in the 1.5 - 2% range. Simply speaking, on a 10k sale to a client you will receive same day funding and can expect to pay 150-200$. Clients we have worked with have been able to significantly reduce that cost by taking similar discounts with their new found cash, or in some cases negotiating better pricing with their vendors. Clients also forget that it costs money to carry A/R.

Many clients we speak to have heard of, or wish to avoid the involvement of a Commercial factoring company in their business model and client relationship. Can that be achieved? It can, via the use of CONFIDENTIAL A/R RECEIVABLES factoring, allowing you to bill and collect all your accounts with no notice or involvement to your clients or suppliers.

If you're not sure you understand all the benefits and mechanics of good and bad A/R financing offerings 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 turning that ' bleak' cash flow future into a positive financial growth opportunity for your business.



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 RECEIVABLES FINANCING SOLUTIONS





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

SRED Tax Credits : Let Calm Prevail By Financing Your SR ED Refund Claim

How To Survive The SR&ED Refund Waiting Game

OVERVIEW – Information on the benefits and advantages of financing SRED Tax Credits In Canada. A Bridge Loan for your SR ED Refund Claim monetizes your refundable tax credit and provides valuable cash flow .. today

SRED (SR&ED) tax credits have the ability to create a certain amount of anxiety in Canadian business owners who utilize the program, if only for the fact that from the time you start your annual claim (many businesses file year after year successfully) a major waiting game starts! The way to eliminate that wait and shorten the cycle? Finance your SR ED refund claim. Let's dig in.


For the thousands of firms that successfully claim their share of billions of dollars funded annually by the fed/prov got vis a vis the SR&ED program the cash flow derived from those ' refundable tax credits' place a huge role in the ongoing financing of their company. It's interesting to note that many firms that file claims are actually in start up mode or pre-revenue/early stage revenue.

These tax credits come in the form of a cash refund. The problem? Time! Many, many months, in some cases a year, can transpire before your R&D is completed. Along the way you've worked with your SR&ED consultant to prepare and document the claim, ensuring it will pass the proper tests for expenditures under the spirit of the program.

The whole issue of financing your claim revolves around the fact that you are able to monetize an intangible asset for cash flow/working capital needs today! As an example typical reviews of your claim after submission may take 3-4 months. Naturally any follow up on the claim for clarification of issues simply... you guessed it... adds more time/waiting!

Recent changes to the program force business owners/managers and their Sred consultants to fit a years work of research into a very tight technical narrative. For example you're only allowed 350 words to describe the technical nature overview of your annual claim, which can often be in the hundreds of thousands of dollars.

When you finance a SR&ED claim its a very basic process - reduced to a simple business application, a copy of your claim and who prepared it , and potentially some other financial info around your business . Here it's important to stress that the real collateral of your claim is simply the SR ED refund itself. One can see therefore the important of eligibility and the credibility attached to your SRED consultant. These folks work on contingency and are specialized in the industries they do claims in.

What does the structure of a SR&ED bridge loan look like? It clearly maximizes the total benefits of your refundable tax credit, in that the financing is structured as a bridge loan with no payments made during the duration of your wait for the refund. The most typical advance under the financing is 70% of the total value of the claim. The other 30%? You receive that as soon as your claim is approved by the govt, less financing costs.

If you're looking for some ' calm ' to prevail in your waiting game for SR&ED refundable tax credits consider financing your claim. 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 funding your claim.

P.S.

Claims can be financed prior to filing, and consideration can also be given to funding the start of next years claim. Waiting be gone!




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 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

Tried & Tested Working Capital Funding & Business Cash Flow Solutions

You’re In The Right Place For Cash Flow Information & Solutions

OVERVIEW – Information on working capital funding and business cash flow solutions for Canadian business

Business cash flow solutions are sought by thousands of Canadian businesses everyday. Which solutions are ' tried and tested' and will work for your firm? Let's dig in.

It's the finance function and structure of your business that will drive your need for working capital funding. Here we're talking about short term financing needs, not debt or equity capital. (Some businesses do take on working capital term loans if they can demonstrate solid cash flows) The type of industry you are in, as well as how you compete is also a key factor to consider.

Companies that aren't growing sufficiently or are operating at a loss have even more of a challenge of course - the question becomes clear - how does the owner/ manager transform this loser into a winner?

The management of your working capital revolves around 2 key issues:

Ensuring you have the right financing mix in place for inventory, receivables,

Ensuring your finance solutions come at a cost that makes sense relative to your overall credit quality

We find that many companies get caught up in the technical definition of working capital - defined simply as the relationship of current assets on your balance sheet to current liabilities. That definition is fine but doesn't take into account the movement of those assets and liabilities, especially when it comes to turnover of receivables and inventory. Bottom line?

Focus on mgmt and financing of your current assets, not the ratios!









For businesses that sell on credit the management of accounts receivable is where it's at. Financing of receivables can be achieved in a number of ways, foremost of which is simply collecting your A/R to your terms or even sooner. When external financing is needed your solutions include:

Bank revolving credit lines

Non bank A/R Financing (our recommended solutions is Confidential Receivable Finance)

Asset based lines of credit which consolidate your A/R and inventory assets into one borrowing facility. These are predominantly non bank solutions offered by commercial finance firms

It's important to note that while cash flow

comes out of the management of your current assets it also comes out of delaying payables to the extent that your firm can still maintain it's relationships with suppliers as well as staying solvent.

The type of financing you need for working capital and cash flow solutions also depends on the industry you are in, your cash conversion cycle, and the amount of gross margin your firm commands on product and services you offer.

If you're looking to maximize financing for your cash flow and working capital needs 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 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 BUSINESS CASH FLOW 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

Business Finance Search In Canada Via SME Commercial Lenders & Banks

Here’s The Myth Vs. Reality Of Financing Small & Medium Sized Businesses In Canada

OVERVIEW – Information of business finance options in Canada for the SME segment . Commercial lenders and banks offer a variety of solutions - which solutions does your company need and how do you qualify

Business finance in Canada, when it comes to the SME ( small to medium enterprise) market leaves business owners / managers wondering how much they need to know or are missing when it comes to commercial lenders and the bank lending landscape. Here's a good shot of myth vs. reality. Let's dig in.

Confusion reigns supreme when it comes to Canadian business facing the challenges of financing their businesses. The two step process of understanding their options and then clearing the hurdles needed for approval sometimes feels like a full time job.

In fact top experts tell us that a majority of businesses don't fully understand bank offerings, they also most certainly from our experience don't understand alternate options, and finally misunderstanding exists around qualification for business finance.

One myth that exists out there is that little or no help is available from the Govt, or when it is the word ' cumbersome' comes to mind. The reality? In fact two very solid govt programs deliver almost 10 Billions dollars of financing every year to the SME sector.

Those programs? They are the Government Guaranteed Small Loan Program, as well as the SR&ED program which refunds a substantial portion of any R&D your company spends. Conservative estimates are that over 11,000 businesses just like yours take advantage of these programs.

Top of mind for any business owner/manager when it comes to financing is the fact that the only solution is ' THE BANK '. They are clearly one source, providing inexpensive capital for a variety of term loan and working capital needs.

That brings us to the point of alternate financing sources. Frankly there have never been more alternative finance solutions for your business. These solutions either provide new capital, or monetize your current and future assets, providing cash flow and working capital solutions.

They include:

A/R Financing/ Factoring/ Confidential Receivable Financing

Inventory Finance

SR&ED Tax Credit Bridge Loans

Equipment Finance/ Sale Leasebacks

Non bank asset based lines of revolving credit in Canada

Franchise Loans

Purchase Order Financing

Sales/Royalty finance

Alternate finance solutions are often more expensive, but will provide all the capital you need.

It's also critical to understand whether you're looking for debt, which must be repaid, or whether you simply need to monetize assets and sales. It's all about repayment terms, collateral, and the amount of a personal guarantee that might be required.


In summary, it’s important to assess your needs and to understand where you qualify for financing. And as we've shown commercial lenders, coupled with Canadian banks offer a variety of options that will make sense for your business. 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 help you sift thru that myth vs. reality! You're now in a position to get educated about your options, understand your needs vs. debt and working capital, and get help in successfully applying. A classic case of knowledge vs. power.


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 FINANCE 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

Turnaround Financing : Spring Forward With A Restructuring Expert & Specialist

Now More Than Ever You Need Turnaround Financing




OVERVIEW – Information on restructuring finance in Canada and the uses and role of a turnaround financing specialist to help ensure business survival and future return to growth and profits

Turnaround financing in Canada is a restructuring of your finance arrangements. This might come out of a fall in fortunes or even a crisis of sorts. Knowing what steps to take at that time is key , including expert help of a specialist . Let's dig in.

Naturally the goal of any business owner / financial manager in a turnaround situation is to ensure stability in the business while at the same time ensuring there are possibilities for survival, and yes... growth again. Unfortunately at this time the confidence of any existing lenders is at an all time low and must be dealt with.

One basic formula for such a change in finances is simply to assess your funding possibilities from two sources - internal, plus of course focusing on new external lenders who more often than not at this point will be focusing on the actual value of your business assets. In certain cases this might be a prudent time to consider the sale of certain assets, or, if they are critical to the business and unencumbered, a sale leaseback might be appropriate.

While equity capital from owners or an outside investor might also do the trick your business none the less will still no doubt require some fundamental changes. Suffice to say that owner or outside equity chances are also at an all time low during this period of transition.

The issue of personal guarantees is always a thorny one with the owners of the business - whether guarantees were in place prior it's safe to say they will probably be a part of any new financing to some or all extent.

The question any asset or non asset based lender will ask during this period is pretty simple - You cannot ' PROCEED TO GO ‘without some solid proof of the company's ability to generate or have cash in the future. One of the key areas lenders will also focus on at this time is to ensure all arrangements with CRA / REVENUE CANADA are brought up to date, have a pay down arrangement in place, or most likely, will be taken out with new financing.

If you thought a CASH FLOW FORECAST was a textbook item in the past welcome to the real world, at this point it's key to be able to present a realistic sales and cash flow forecast for the business. This should be utterly realistic at this point and reflect the real sales and cash inflows and outflows of the business.

The combination of a realistic turnaround plan, your cash flow forecast, as well as how you are going to handle and refinance existing assets helps guarantee a successful turnaround. Many types of financing can address the turnaround of your business - they include Asset based lending, receivable financing, equipment/sale leaseback scenarios, etc.

If you're looking to 'spring forward' and not look back on a successful restructuring seek out and speak to a specialist in this area , a trusted, credible and experienced Canadian business Financing Advisor with a track record of success
who can assist you with your 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 TURNAROUND FINANCING AND RESTRUCTURING 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 A Business Purchase In Canada : Calling All Buyers

Financing A Business Purchase In Canada Is Easier Using This Information

OVERVIEW – Information on methods of financing a business purchase in Canada . Numerous options exist to buy and existing business or franchise based on amt. of financing required and the nature of uses of that finance

Financing a business purchase in Canada arises out of the strong appeal of buying an existing company that is either a turnaround prospect or simply a great investment from a profit, cash flow and growth perspective. It's important to consider some key issues in the finance of your purchase. Let's dig in.

Unlike the challenge of start up financing Canadian chartered banks are generally amenable to financing a business acquisition. By the way this includes the high growth and desirable franchise industry also. Even more desirable from a bank perspective is when a current management team wishes to execute a business purchase from the owner - given they know the daily operations and are most familiar with product, pricing, financial management etc.

The type and amount of financing you require to finance a business purchase depends on how the business is being sold, as well as the ultimate purchase price. Businesses are sold on either an ' asset ' or a ' share ' basis. It is extremely difficult to finance a share purchase in the SME Commercial environment as there is no liquidity for such a transaction for companies that are not public.

The Govt guaranteed business loan is a great vehicle to finance smaller business acquisitions up to the 350k range. A larger amount could be financed with the help of a seller take back or some new owner equity. Govt small business loans are very attractive from a rate and term perspective, but it's critical to note that only finance assets and leaseholds, not working capital.

Some basic knowledge of business valuation will aid in helping you finance the purchase. Current values of the assets must be carefully reviewed to reflect the current value of the business. At the time of acquisition it's important to know how receivables and inventories will be financed on a going forward basis.

Businesses that have a lot of goodwill attached to the purchase price will also be harder to finance. The only real way this can be achieved is through a cash flow loan, so you need to e able to demonstrate historical, present and future cash flow that is realistic to the financier of your purchase.

In many cases no single one type of financing will always complete a purchase. In those cases it will be a combination of working capital loans, term loans, cash flow loans, or real estate financing that works to complete a transaction. At the heart of any of these financings is the key point that you need to consider all the 'cash flow'

considerations related to any type of combination of financing that is employed to complete a purchase.

The one type of financing that does work to often complete an entire business purchase is an Asset Based Loan. This financing, commonly known as ABL can finance working capital, equipment and real estate all at the same time.

Successful business purchases are completed everyday in Canada. If you're looking for effective business financing to complete a business purchase seek out and speak out to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with the acquisition financing that makes sense for your 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 BUSINESS PURCHASE 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