Purchase Order Financing Canada : A Great Canadian Business Alternative Finance Solution To The Working Capital Challenge

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P O / Contract Financing In Canada – Use This Asset Based Lending Solution As Directed!

OVERVIEW - Information on purchase order financing in Canada. P O funding is a solid alternative business finance solution for working capital need . Here’s how your firm can access this alternative finance solution to the cash flow challenge

Purchase Order financing, as well as inventory financing are two relatively new alternative financing solutions in the Canadian business environment. These two solutions provide additional flexibility when combined with traditional financing sources provided by your Canadian chartered bank or independent finance firm. Let’s dig in.

Traditional business financing in the context of working capital and cash flow revolves of course around the traditional current assets of receivable and inventory. Even if your firm is well financed and has a traditional bank line of operating credit you may have challenges in fulfilling large orders and contracts. This challenge becomes equally daunting when you don’t have traditional financing, so the ability to generate cash to fulfill larger orders and contracts becomes seemingly impossible.

Purchase order financing can provide you with the capital to fill those large orders and contracts, and, if properly put in place; can be very complimentary to your current financing.

As we have noted the concept of purchase order financing, aka ‘P.O. Financing ‘is a relatively speaking, new phenomenon in Canada.

So how does it work? Simply speaking financing is put in place to cover your material costs and direct labor costs, which are of course a significant part of your order or contract. We can safely say in many businesses that is 60-70% of the total order or contract based on most gross margins in any industry.

Your firm therefore has the working capital to finance your production .What’s left of course is essentially the profit on your P.O. or contract.

While it sounds relatively simply and easy we would point out some key critical issues that will allow the Canadian business owner and financial manager to determine if his or her firm qualifies for such financing. We can first of all say there has to be sufficient proof that your purchase order or contract is with a valid, credit worthy party. Naturally if there is any doubt that your order might not get paid, or that the customer is not credit worthy that precludes successful completion of any purchase order financing.

You should also not view the purchase order financing as a long term financing solution, it is not that. The funds are generally repaid immediately when you have completed your order / contract.

There are also some technical issues that need to be addressed if you have secured financing arrangements in place already. For example, if your firm has a bank line of credit they would be required to acknowledge the security that is taken in the Purchase order and resulting receivables that you create out of that order.

In our own experience Purchase order financing frankly works best when there is not a secured lender in place already, but that’s just our firm’s observation. Additionally on occasion certain other collateral or personal guarantees might be required. We would hasten to add that if you have already provided guarantees to the bank or other firms it would seem logical that you would provide them on the purchase order financing, which is somewhat of a riskier transaction for the lender.

Another very critical point is the whole issue of gross margin. The issues are that you need good gross margins to complete purchase order financing! A firm that is in low margin very commodity oriented business is not a strong candidate for P.O. Financing , because the combination of cost of goods, labor, overhead costs, and financing costs of the financing leave very little for the business owner . So categorically good gross margins make a much better P.O. Financing deal.

So why has this type of financing become popular – that’s fairly easy to understand. First of all the current Canadian business financing environment is challenging – therefore any alternative financing vehicle has a strong chance of being embraced and becoming more popular . After that it simply makes sense that p.o. financing can be very successful for your firm if it gives your company working capital you didn’t have, , it allows you to grow and profit at greater levels , and overall improves your competitive positioning within your industry .

We strongly recommend that if you consider Purchase order financing that you enlist the services of a trusted, credible and experienced Canadian business Financing Advisor with a track record of success
who can assist in maximizing your cash flow and working capital with this unique innovative type of financing.




Stan Prokop - founder of 7 Park Avenue Financial –

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 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 & Contact Details :
http://www.7parkavenuefinancial.com

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 '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.


Stan Prokop

Can Business Application Software Be Financed ? Yes Software Leasing & Financing Exists !

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Did You Forget Business Software Applications Can Be Financed & Leased ?

 

Information on software leasing and financing in Canada. Business application software solutions can be easily financed as part of your overall technology finance strategy

Software Leasing and Finance ... Many businesses, both small and large do not realize that software can be leased or financed. Although software financing is unique in some manner, in general it has many similarities to equipment leasing.


It is also proper to ensure that right finance firm is utilized, as many lenders are somewhat risk averse to financing this asset. However, many others are looking for business in this area!
Contrary to popular opinion software as an asset in many cases has more value that a depreciating hard asset. It has also been confusing for lenders when it comes to the registration of collateral under Canadian PPSA (PERSONAL PROPERTY SECURITY ACT) legislation.


In its broadest term the financing or leasing of software that can't be transferred to another user. The business owner does also of course not own any development rights in the software. Software financing is treated as a financing mechanism, it is not a true lease per se.


Some additional key points around the technicality of software leasing/finance are as follows:
The right of a customer to use the software gives the company no right in the intellectual property surrounding the developers rights in the software code. The best example of this is when we look at our EXCEL spreadsheets that we use in finance and home matters. We use the software, but Microsoft of course owns it.


The problem in the past around the financing of software revolved around the fact that lenders did not know how to collateralize and register their security. Under current PPSA legislation intangibles and software can be collateralized. Therefore the software financing lender/lessor can be very confident that the software can be collateralized.


At the heart of the software financing issue is the true value of the software to the business owner. He runs his business on it, i.e CRM programs, office software, manufacturing software, etc. Software lease payments tend to be made since the asset is indispensable to the value and on going concern of the business. Unless companies are liquidated in total bankruptcy most lessors and finance firms recover fully on their software leasing - Source - Journal of Equipment Leasing

In many business bankruptcies the software lessor or lender is treated as a secured creditor.


Also key to the software financing issue is that many software firms offer maintenance, support, and updates around their product. This enhances the lenders asset as it is used for longer lengths of time, and often constantly upgraded. Quite frankly it becomes less obsolete than computer hardware!
Many software lessors and lenders also finance the service and maintenance contracts associated with their customers software acqusition.


We do acknowledge in this article that it is more difficult to finance customized software although it is possible based on the overall credit strength of the borrower. Many customized software deals are done with only investment grade borrowers where credit risk is minimal. Many smaller ticket lessors and lenders however do now lease software. In general these transactions are full payout capital leases.


In summary, software lease financing is available and should be considered by every business owner in the same context as a capital equipment finance transaction. The computer hardware industry has grown with leasing, and the software industry is doing that also. The same considerations an owner gives to lease vs buy apply to a software finance acquisition.


Stan Prokop - founder of 7 Park Avenue Financial –
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 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 & Contact Details :

http://www.7parkavenuefinancial.com

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


Stan Prokop

Article Source: http://EzineArticles.com/3441338

Are SRED ( SR&ED ) Tax Credits Are Dead ? We Hope Not! SRED Financing For Your SR ED Credit Claims Is Alive & Well !

Sweating Bullets ? SRED Loans and Financing for SR&ED Claims – Financing Today For Your Filed or Unfiled Claim!

Information on SR&ED loans in Canada. SR ED Financing via a bridge loan for your refundable tax credit is a solid way to monetize your firms investment in R&D Capital

SRED Credits ? Sweating bullets is one of our favorite expressions for some serious worrying. That surely must be the case for thousands of Canadian firms and the industry consultants who file SRED (SR&ED) claims in Canada for their non refundable tax credit monies for their R&D processes.

We're not going to weigh in on whether this tax credit program is justified, not justified, or who screwed things up in the past , but we will say one thing - Your Sred financing is still alive and well! In fact in some ways it just got better, and we'll talk about that also.

Thousands of Canadian firms receive a total of billions of dollars every year from the Government of Canada for their research and development costs. A large portion of their total costs in several categories of R&D, i.e. labor, comes back to them in the form of a refundable cheque.

Naturally getting monies back for your SRED claim is a huge and positive issue for thousands and firms who are either start up, pre revenue, or who simply... you guessed it... need the cash. Many of our clients actually book the claim they file as a receivable, in effect non refundable monies coming back into their company .The claim is, of course, a combination of funds from both the federal and provincial government. Sred claims are separate from other grants and schemes such as IRAP, etc.

So, getting back to the one thing we want to emphasize today, and that’s ' cash flow '! Naturally it’s a free country and if you want to wait to get your funds back from the government by all means do that. But consider also that you have another option, which is to finance your claim. In Canada SRED claims of almost any size can be financed. While larger claims make more economic sense claims generally in the 80k and higher range certainly are financeable.

So how does the financing work? You should consider this as quite a ' normal ' business financing. (Is any business financing normal these days?!) . The basic application involves info on your firm such as your financial, projections, etc, info on the owners, and copies of the actual claim itself.

SRED claims have tended to be prepared by a group of people in Canada who term themselves SRED consultants. They work on either a contingency basis or a fee basis. We've been watching the SRED battle from a distance and some people are making the claim that the sred consultants themselves have become a part of the problem in the industry.

Let’s use 2 Billion dollars an example. If the federal government gave out 2 Billion dollars it’s the SRED consultants who worked on contingency that receive anywhere from 15- 30% of all these funds as fees. That makes a case for not a lot of value for the country from a pure R&D perspective. Anyway, we promised not to weigh in on that one, so we won’t.

What we are saying is that if your claim is properly prepared, by either yourself or a qualified sred consultant then it’s financeable.

SRED Financing claims are financed at, in general 70% loan to value. We spoke of new developments in the industry as far as financing the sred credit .The good news is that most claims are now financeable as your spend, prior to filing, This is called Accrual sred finance, and gives you cash flow reimbursement as you spend .

Is there a bottom line today? As always, there is. It’s simply that we kind of hope the sred program stays around for all those legitimate firms and consultants who see the true value of the program. And consider financing your tax credit for increased working capital and cash flow. Speak to a trusted, credible and experienced Canadian business financing advisor on Sred Tax Credit finance today.


Stan Prokop - founder of 7 Park Avenue Financial –

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 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 & Contact Details :
http://www.7parkavenuefinancial.com

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 '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.


Stan Prokop

Business Finance Solutions In Canada : Cash Flow Financing for Working Capital Is Not Pay What You Want : Here's Why!

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The Magic Number ? What is the Right Amount of Capital For Your Business?

Information on cash flow financing solutions in Canada. Business finance success depends on the right amount of working capital to run and grow your business - here's your why and how !

Business Finance Challenges ? Every business, new or existing, is continually attempting to determine what the right mix of ' capital ' is for that particular business. New business owners, unfortunately, are often misguided by literature around ' low down payments ', or low owner equity injection.

The whole premise around the business dream is quite often pitched as putting the minimum amount down, or into the company, and thereby reaping large rewards on asset and profit appreciation in the firm. The arithmetic is appealing - the less you put in the greater will be your per centage appreciation or return on investment. Let's dig in!

Business owners either invest their own funds, or borrow from banks and other related finance firms. New business owners have additional challenges as traditionally the banks have not stepped up to the table to fund the small business environment. They of course prefer external collateral, which in most cases is unavailable, or based around the owners reluctance to pledge personal assets for a business venture.

So the crux of the matter is simple - how much to borrow, how much to put in or invest. Whats the right mix? Commonly this is known as the ' debt' or ' equity ' conundrum.

Bankers and financial personnel have addressed this business owner challenge in a number of ways. One common way is to simply compare the relationship, or ' ratio ' of debt to equity in any firm, either new or existing. If a firm has higher debt levels they are termed highly ' leveraged. Each business owner or corporation eventually determines the right mix of debt or equity. There are always extremes of course. Many large, successful, and well known corporations carry large amounts of debt but are still of course profitable and growing. Interest payments are tax deductible. On the other hand firms with little or no debt simply divide the profits up among the owners of the firm, as debt payments in their case are either non existent or nominal.

What is the right mix of total capital for the business. The answer is simply as follows: there is no right answer. Two companies or business owners can have completely different outlooks and philosophies of how to achieve the final company goals in revenues and profits. Since future results are never known it is incumbent on the business owner or their financial advisor to perform some level of proper analysis around the right ' operating leverage '., i.e. our main focus in this article: ' What is the right amount of equity and debt for my firm?'

No perfect calculation or debt to equity ratio exists. And lets be realistic, even a firm with no debt can fail if it loses market share or is in a failing industry.

There are however 4 ratios, we have called them ' relationships' calculating optimal leverage regarding debt and equity. They are as follows:

Debt/equity

Debt/total assets

Long term debt/total assets

Current assets/Current liabilities

By using the current actual numbers, and projecting what these ratios might look like in great, good, or bad times will assist any owner or financial manager in determine what the optimal relationship for debt and equity is in their firm.

In summary, any new, existing, or even public firm must continually weight the right amount of debt and equity in the company. More equity means less profits to be shared by more owners; more debt means that future alternatives have limitations and the firm can make less mistakes given its debt load. Careful analysis of the right mix of equity and debt capital is a must for all companies of any size. 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 the right business financing solution.



Stan Prokop - founder of 7 Park Avenue Financial –

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 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 & Contact Details :
http://www.7parkavenuefinancial.com

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 '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.


Stan Prokop

Equipment Financing In Canada : Your Hot Tip On Leasing Assets & Winning Lease Finance Strategies

We’ve Hacked Into The Equipment Financing Tips & Strategies Database ! Take A Look

OVERVIEW - Information on equipment financing in Canada. Leasing strategies are explored and tips are provided on lease finance and asset acquisition solutions for Canadian business owners

Equipment Financing Problems? Canadian business owners and financial managers continue to view lease equipment financing as a solid alternative for equipment and asset acquisition in Canada. Let’s dig in.


Leasing and equipment financing have been key to Canadian business for well over 60 years, if not longer. It is simply the method of acquiring assets and paying for those assets over a period of time – A current popular ‘buzzword’ on leasing is ‘profiting through use of equipment ‘. As a general rule most business owners would like to use assets, not necessarily own them. That brings us to one last buzzword, which is ‘if it appreciates buy it, if it depreciates, lease it! Let’s dig in.


When we meet with business owners they often ask us for strategies and ‘how to ‘with respect to financing their assets. If the vendor or manufacturer you are working with does NOT offer financing then your job is to simply focus on obtaining the best price and delivery date for the asset you are acquiring.


We referenced above the manufacturer not offering financing - We categorically encourage any company to take advantage of vendor financing or manufacturer financing that is available, if it is available! Why is that? Manufacturers and vendors either set up captive finance companies, or work with others to implement financing of their products for some very specific reasons. Primarily the reason is that companies do not wish to lose sales and profits by not offering a financing option.


Also, when you lease through a manufacturer you are in effect under their control for a number of years with respect to their ability to offer service, upgrades, maintenance, etc. So the bottom line is that if you can take advantage of manufacturer financing, you should!


One of the only reasons you might not be able to take advantage of manufacturer financing is that your firm does not meet the financial and credit criteria of the vendor. In that case you simply need to work with a trusted, credible and experienced leasing advisor who can source the appropriate financing for the asset with a rate, term and structure that approximates your credit quality. In general we advise customers that when a vendor or manufacturer has a financing offering the credit criteria to qualify in general is quite high.


Because leasing in Canada has the potential to be viewed as complex we try and approach working with customer in a very consultative manner.
Why can Leasing in Canada be viewed as Complex? We are of the opinion that if a lease transaction is a good transaction it creates a win win environment for both your firm and the lease company. To do that various aspects of business need to be tabled - those aspects are:

Taxes

Accounting

Credit

Rate/Term/ and Structure of the lease itself

When your firm has properly addressed all of these issues at least in a very basic manner your business will have created a proper lease transaction. When all of the above issues are addressed then your firm is in a position to benefit from a lease financing scenario. The benefits of leasing are generally well known – they are:

Flexible and lower monthly payments -in cases where you utilize an operating lease these payments would be significantly lower than a term loan

Ability to upgrade and return equipment

Maintenance and service are many times included in a lease financing

Little or no cash down payment

Discussing these issues with out customers usually brings out the clear fact that not all the benefits of leasing in general apply to every firm. Quite frankly some are more important than others to each Canadian business.

In summary, when contemplating Canadian Equipment Financing work with atrusted, credible and experienced Canadian business Financing Advisor with a track record of success
.

Determine what your financing needs are and focus in on which benefits you need to maximize to make your financing work to optimal advantage . And then, as we said, you will ‘Profit through use, not ownership’!




Stan Prokop - founder of 7 Park Avenue Financial –

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 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 & Contact Details :
http://www.7parkavenuefinancial.com

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 '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.


Stan Prokop

Securitization & Other Cash Flow & Business Financing Solutions In Canada

Here's the Good Stuff On Securitization & Other Cash Flow Solutions

Information on securitization as a cash flow financing tool in Canada . Business finance solutions can come in non traditional formats that still provide solid working capital needs for Canadian corporations

Business financing in Canada comes in many forms . Securitzation is a financing term that is not commonly used by the average finance person, let alone the average lay person who has no detailed knowledge of business financing and alternative financing. The term ' securitization' became increasingly well known during the financial and liquidity crisis that the world experienced in 2008/2009. We discovered that one of the main causes of the world wide financial collapse was, in effect, the securitization and marketing and sale of mortgages.

Securitization is an alternate form of funding for corporations. When it works well it is an excellent source of funding for many organizations. Securitization is a form of structured finance.

How does it work? A company or organization takes certain assets that are desired by various investors. These assets are most typically receivables, contracts, car loans, credit cards, mortgages, etc. The quality of these assets is key in the entire securization process. We watched the financial world fall apart when people discovered those securitized mortgages that were bundled in the United States had a very low credit quality.

One of the reasons investors like securitized assets is that the risk is spread among hundreds, probably thousands of different borrowers. This diversifies risk. We continually here how one needs to diversify to control risk, whether in business or in our personal financial affairs. The cash flows that come out of that pool of assets backs up the quality of the investment by the buyer of the securitized asset.

For a transaction to be properly securitized there has to be a strong level of predictability in the repayment of the loans, leases, mortgages, etc.

How are Securitizations structured? The assets become known as a' pool 'of assets. Financial analysts or the credit rating agencies ( Standard & Poors, etc ) assign a credit rating to this newly created SPV. ( Special Purpose Vehicle ). Investors buy this pool of assets because they theoretically understand the asset quality and the risk. There are many subsets to the risk which we wont cover in our article - for example concentrations of assets or customers, etc

The pool of assets is usually ' serviced ' by the seller. He collects and maintains the portfolio - of course it has he who also created the portfolio of assets. The ongoing collection of the portfolio flows back to the investors who purchased it.

Securitization has become more and more popular because it has provided great liquidity to the financial markets.

In summary, the securitization flow chart is as follows:

A seller creates the assets
A SPV is formed around those assets
Investors purchase the SPV
A trustee monitors the flow of cash, collections, etc.

Of course as one can imagine all sorts of lawyers, accountants and financial analysts have a healthy hand in various aspects of the above process flow!

The benefits of securitization can be summed up as follows:

* It provides cash flow to many companies who would otherwise have to wait years for customer payments, etc
* Profits from the sale of the pool of assets allow a company to grow and create more assets
* When properly structured there are certain balance sheet enhancements - i.e. the company selling the pool gets cash but does not take on debt.

If you're focused on alternative forms of business financing including :

A/R Financing

Non bank asset based lines of credit

SR&ED Tax Credit Financing

Unsecured Cash flow loans

Royalty Finance

Bridge Loans

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 innovative cash flow solutions that work for your firm.




Stan Prokop - founder of 7 Park Avenue Financial –

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 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 & Contact Details :


http://www.7parkavenuefinancial.com


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 '


ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.


Stan Prokop

Working Capital Financing In Canada : Which Cash Flow Loan Or A/R Factoring Solutions Works For Your Business?

Looking for a Laser Like Cash Flow Financing Solution?

OVERVIEW – Information on working capital financing in Canada. Whether it’s a factoring cash flow loan or other finance solution numerous options exist for the business owner/mgr

Factoring / Canada – these two words , relatively speaking , are new to each other. What is behind the sudden increase in popularity and usage of this age old financing concept which has been in place for hundreds of years around the world? Let’s get laser focused

First of all, it’s simply a new choice for Canadian business owners and financial managers – they either have been financing their receivables with their bank, or in many cases, have been unable, for a variety of reasons, to negotiate such a facility. The challenge for business financing in Canada is even more difficult based on a company’s smaller size coupled with the current challenging business environment of 2010.

Factoring in Canada, if you have the proper facility put in place, allows you to provide your firm with virtually unlimited cash flow based on your ability to generate valid receivables as you grow your business . For small and medium sized businesses this is absolutely critical – they didn’t coin the term ‘cash is king’ for nothing!

While the concept and general practice of factoring in Canada seems simple once the business owner learns about it we feel the greater challenge is simply to determine what the best factoring solution is for your firm. That is where an experienced, trusted, and credible financial advisor might be of great assistance. Factoring, if entered into in an improper fashion, can be very paper intensive, and also have significant ramifications on how you run your business, and how your business is perceived by others – by others we mean bankers, suppliers, and yes, even internal staff.

As you contemplate a Canada factoring solution it is necessary for you to ensure you have , at a minimum, covered off the basics - A good starter is simply ‘ Does my firm qualify for such a financing facility?’

Your firm clearly should be labour or product focused – very capital intensive industries sometimes are not the best candidate for a factoring facility in Canada.

While no one wants to finance a firm that is in somewhat of a ‘death spiral ‘the exact opposite of that often makes the firm a very solid factoring prospect – that is to say you are growing too quickly, with annual growth perhaps much more than the traditional 10% or so that we see in stable commodity oriented industries in Canada. High growth and factoring make the perfect marriage. Why is that? Simply because growing sales, if managed well, mean growing profits, and traditional financing strategies such as bank lines or working capital term loans are not a good fit for explosive growth firms. With explosive growth you get all the cash flow you need from factoring.

Many industries that are cash flow and labour intensive, a solid example would be freight companies or staffing / placement agencies require cash flow frequently through the month. A properly set up factor facility will allow your firm to generate cash flow from your receivables whenever you need it.

In a lot of firms there as seasonal issues, big contracts, and generally what’s known as ‘bulges ‘in normal requirements. Factoring solutions fit these sorts of bulge needs perfectly.

We meet with business owners that come to us that are start ups or relatively new – they are not aware they are often great candidates for factor financing (also sometimes called invoice discounting) but they clearly have discovered they are not candidates for traditional bank type financing that requires solid balance sheets, historical cash flow, and good operating ratios that typically the institutions such as the Canadian banks look for.

You also are a perfect candidate for Factoring in Canada if you have receivables from large slow paying customers. These larger firms might be good profitable customers for your business based on just the issue of sales volume, but they clearly tie up your working capital when your firm is not paid in 60, or sometimes even 90 days.

In summary:

Factoring is relatively new in popularity in Canada, it is gaining traction quickly. Careful analysis should be spent of whether your firm qualifies for such a facility – it has to work for you and the lender. If in doubt, and many are , because anything new can be perceived as complicated , enlist the services of a trusted, credible and experienced Canadian business Financing Advisor with a track record of success in this area of Canadian cash flow financing !
P.S. Numerous other cash flow financing solutions may also work for your firm – These include :


Asset based credit lines

SR&ED bridge loans

Unsecured cash flow loans

Sale Leasebacks

PO Financing

Royalty Finance




Stan Prokop - founder of 7 Park Avenue Financial –

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 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 & Contact Details :
http://www.7parkavenuefinancial.com

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 '


ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.


Stan Prokop