Inventory Financing & P O Factoring Solutions In Canada : Your Ship Just Came In

A Business Nightmare Come True ?

You Just Got The Order/Contract! Now What

OVERVIEW – Information on inventory financing lenders in Canada. Solutions such as P O Factoring and other asset based sales financing techniques help grow your business

P O financing via inventory financing and other asset based lender solutions bring to mind the best and worst of running a business. It's the ultimate irony - Your worst business nightmare has just come true - you got the order and contract! Now what though?

How can Canadian business survive financing adversity when your firm is unable to traditionally finance large new orders and ongoing growth? We've got some answers. Let's dig in.


Let's look at real world examples of how our clients achieve business financing success, getting the type of financing need to acquire new orders and the products to fulfill them.

Here's your best solution - call your banker and let him know you need immediate bulge financing that quadruples your current financing requirements, because you have to satisfy new large orders .

Ok... we'll give you time to pick yourself up off the chair and stop laughing.

Seriously though...we all know that the majority of small and medium sized corporations in Canada can't access the business credit they need to solve the dilemma of acquiring and financing inventory to fulfill customer demand. For companies with strong financials, a long history, and profits and cash flow now and in the past there's no questions Canadian chartered banks fit the bill. But what about the thousands of companies in Canada that can't access all (or any?) of the traditional financing and great interest rates provided by the banks?

Bottom line - All is not lost. You can access purchase order financing through independent finance firms in Canada - you just need to get some assistance in navigating the minefield of whom, how, where, and when.


Large new orders challenge your ability to satisfy them based on how your company is financed. That's why P O factoring is a probably solution. It's a transaction solution that can be one time or ongoing, allowing you to finance purchase orders for large or sudden sales opportunities. Funds are used to finance the cost of buying or manufacturing inventory until you can generate product and invoice your clients.

Are inventory financing lenders the perfect solution for every firm. No financing ever is, but more often than not it will get you the cash flow and working capital you need.

P O factoring is a very stand alone and defined process. Let's examine how it works and how you can take advantage of it.
The key aspects of such a financing are a clean defined purchase order from your customer who must be a credit worthy type customer. P O Factoring can be done with your Canadian customers, U.S. customers, or foreign customers.

PO financing has your supplier being paid in advance for the product you need. The inventory and receivable that comes out of that transaction are collateralized by the finance firm. When your invoice is generated the invoice is financed, thereby clearing the transaction. So you have essentially had your inventory paid for, billed your product, and when your customer pays, the transaction is closed. Mission accomplished.

P O factoring and inventory financing in Canada is a more expensive form of financing. You need to demonstrate that you have solid gross margins that will absorb an additional 2-3% per month of financing costs. If your cost structure allows you to do that and you have good marketable product and good orders you're a perfect candidate for p o factoring from inventory financing lenders in Canada.

We point out to our clients that Purchase Order / Contract financing can also be combined with a fully operational asset based line of credit - this will often substantially lower the overall cost of your borrowing - it’s based on 2 key things which you probably already have - sales... and assets!
Don't want to navigate that maze by yourself? Speak to a trusted, credible and experienced Canadian business financing advisor who can ensure you maximize the benefits of this growing and more popular business credit financing model.

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 13 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

Factoring and Accounts Receivable Financing Expert Tips

Information, tips and advice on factoring and accounts receivable financing and factoring in Canada. Information focus on the importance of choosing the right firm and understanding the intricacies of this financing alternative and what pitfalls to avoid.

There probably isn't a day when Canadian business owners and financial managers don't hear about factoring and accounts receivable financing as a method of financing their business in Canada. Despite its growing popularity and, we can say, relative importance in the Canadian business financing marketplace this financing mechanism is still somewhat understood.

What information do business owners need to know in order to assess if factoring, also known as invoice discounting, is a viable transaction? Also, are there mistakes and pitfalls to be avoided when considering this financing strategy?

Let's examine the answers to some of those questions. You can be forgiven for trying to figure out why factoring has increased in prominence from a time when no one had almost ever heard of it! The answer to that popularity is more simply and obvious than you might think, and its simply that Canadian chartered banks are finding it increasingly more difficult to fund accounts receivable (and inventory of course) to the extent that their customers need this financing.

When you have a situation where the actual need for financing is acute, and the benefits and flexibility seems significant it is not hard to see the rise in popularity of such a financing mechanism.

First of all, 99% of the time, factoring provides your firm with a greater level of borrowing based on your accounts receivable levels. Quite of 90-100% of you're A/R under 90 days can be financed.

So is it all good news? Not necessarily, as we are always meeting with clients that have chosen the wrong type of funding or factoring, and, even worse, find them locked into contracts they cannot get out of. That is uncomfortable for any size firm as you can imagine.

As with any newer type of financing the playing field is complex. You can be forgiven for not knowing how many factor firms are out there, how they run, what their own limitations are, and, even to a certain extent, do they in fact themselves have the funding to survive, let along finance your firm. For that reason we cannot over emphasize the need to work with a credible, experienced and trusted professional in this area.

Lets talk about some of the nuances, we can call them potential 'pitfalls 'also, of picking the wrong factoring partner. For a starter if you choose a firm who itself is not well capitalized, as we said, you might find that the financing commitments made to you cannot be honored. Canadian business has never had to think that the Canadian chartered banks could be 'out of money 'but the Canadian landscape is somewhat littered with small and medium sized factor firms that do not have the financial wherewithal to support their funding commitments in all places. That just re - enforces our idea that a trusted industry expert will guide you to the best partner for your firm.

Other issues, again, we can call them pitfalls, to look for include:

- being locked into a contract

- having the total factoring cost, or pricing, not reflected properly in your term sheet

- advance rates which don't make sense relative to the price you are paying for discounting invoices

- excessive notification and intrusion with your customers, which is very prevalent in the U.S. model of factoring (Many Canadian factor firms are branches of U.S. firms)

So let's recap. It's simply that factoring is growing in popularity. It works because it is providing funding where banks often cannot. If you don't understand who you are dealing with and the various nuances of this type of financing it becomes a burden, not a solution. Investigate this great financing mechanism, but ensure you know what you are getting into. Talking to an expert always helps - that's just common sense


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 13 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
















Article Source: http://EzineArticles.com/expert/Stan_Prokop/432698

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Business Financing & Working Capital Solutions : Found !

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Does Your Business Have A Solid Financing Foundation In Place ?

If Not Here’s Some Solutions

OVERVIEW – Information on Canadian business financing solutions . The ability to access the right type of working capital or loan facility makes or breaks a company

Business financing in Canada these days, in many cases, is ' beyond the banks '. That was the catchy title of an old Canadian Business Magazine article. It actually profiled 15 (yes 15!) alternate methods of financing your business, from both a working capital and loan perspective. We've got some thoughts on that... so let's dig in.

So what is and isn't working these days in business financing. Thankfully, as has been pointed out, there are a lot of new solutions and methods to finance your growth and operations.

We have rarely met clients who have successfully arranged angel financing - at the end of the day this is simply equity and ownership dilution and is often solely focused on high growth scenarios, which may or may not include your firm. The concept of another owner or board member within your company may not be palatable to many business owners.

ABL - asset based lending is one of the best ways in which to achieve unlimited working capital vis a vis your growth prospects. Investigate asset based lines of credit, they are viable and they work. They finance inventory, receivables and equipment all under one revolving business credit line. We rarely see a client not receiving 100-300 per cent more finance liquidity once these assets are combined and margined properly.

Bridge financing is another working capital solution and is often used for firms that are either experiencing ' hyper growth ' or in some cases exhibiting financial distress. Talk about a broad spectrum!!It's a short to intermediate term for temporary working capital bulge needs.Canada’s Crown corporation bank is another solution provider that in most cases is very complimentary to any existing financing you have in place - even senior credit facilities. It's a solid way to access a working capital term loan, equipment loan, or real estate finance.

Some business owners we meet are often a little too focused on ' big boy ' financing - also known as private equity and venture capital. The reality? Only a small sector of the market can access this finance and its very un apropos from most of Canadian business.

We're from the govt and we're here to help! Heard that one? Actually in one instance we heartily agree when it comes to the Canada Small Business Financing program - the acronyms for this program vary, and they include BIL, CSBF, and ' SBL ‘. We believe strongly, and are always advising clients, that this is by far the best program for business financing of assets and real estate and property in Canada. Investigate this program, take advantage of it if you can, it does not get any better! It's most applicable for new and expanding businesses, including start ups and franchises.

You by now have probably heard a fair bit about ' Factoring ' these days .Virtually unheard of some years ago it is fast becoming the hottest method of financing working capital in Canada. Complexity in this form of financing comes in the form of how it works, what it costs, and selecting the right partner firm that matches your overall needs. Our recommendation to our clients in this area: Confidential Receivable Financing - allowing you to bill and collect your own receivables while you finance them at the same time. Your sales become a cash flow machine.

We strongly believe that the majority of firms in Canada currently don’t have a handle of their business financing options. We can of course forgive business owners and financial managers as they are caught up in the day to day running of their businesses and the financial challenges that come with that.

When addressing working capital challenges look for options that will help you speed up asset conversion - speak to a trusted, credible and experienced business financing advisor.

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 13 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

The Asset Based Line Of Credit In Canada : The Business Credit Cash Flow Solution You Need To Know About

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Are You On Board With One Of Canada’s Most Innovative & New Business Credit Solution?

Your Competitors Are!

OVERVIEW – Information on the asset based line of credit financing solution in Canada. Access to business credit and cash flow solutions is key to long term growth and survival

Business credit and cash flow solution challenges abound in Canada. That challenge requires that you ' get on board ‘; the alternative is of course falling off the track ... i...e business failure . One commonly used and relatively newer for of company financing is the asset based line of Credit. We think you need to know about it... so... let's dig in.


Let's review exactly what this type of business financing is, why is it different from what you may have come to expect, and what are the benefits for your business when you consider this type of financing.
We can even sum it up in one word. That word? ‘Assets’ - if you have them, you qualify, if you don't have them, well, let’s not go there...


Just to clear the air, an asset based line of credit loan in fact is not a ' loan' per se, that's where we spend a lot of time talking to clients about what this type of financing really is - because they view it as borrowing, or adding debt to the balance sheet. Bottom line - this isn't a loan per se.


In reality the asset based financing we are talking about is simply a revolving line of credit that is tied very specifically to the value of your assets - the most common asset categories under this line of credit are inventory and receivables. The other assets that can be thrown into the mix are unencumbered equipment, tax credits, real estate, etc.
At the risk of over repeating, we are not talking about loans, we are talking mainly about borrowing on a daily basis, as you need it, and using these assets as collateral .


We have seen with our clients countless examples of how this type of Canadian business financing has increased a company's borrowing ability by 100-200% or more.


How can that possibly be, asks the client? It is simply because the borrowing you are used to, if you have been able to achieve it, is based on ratios and covenants and credit limits, and your ability to achieve forecasts for institutions such as the Chartered banks. When you aren't able to achieve that we will call traditional cash flow financing in Canada via a business line of credit the asset based facility is a solid solution.


Clients invariably ask ' How do we get approved - do we qualify?' - We have already talked about your qualifications and the ability to answer this question. Got assets? You're approved!

That's a simplistic answer, so let's explain in more detail. Typically in Canada these types of financings work best for facilities in the 250k+ range. There is no real maximum on the amount you can monetize/borrow. Facilities smaller than that tend to be receivable based financings only. In general the asset based lender prefers a higher ratio of receivables to inventory, but that is not always the case, depending on your industry and your asset categories.


Most Canadian business owners and financial mangers know the general cost of bank financing - asset based financing is more expensive, but offers you unlimited liquidity without the shackles of ratios, covenants, outside collateral, emphasis on personal guarantees.


By the way, many of the largest corporations in Canada use this type of financing, but it also covers what we call ' story credits '. These are cases where your firm is in a turnaround, perhaps it has new contracts, perhaps you are coming off a less than satisfactory year, etc. There are a multitude of reasons for choosing this type of financing.


So if cash flow finance is your challenge and you think the asset based line of credit is your solution then seek out and speak to a trusted, credible and experience Canadian business financing advisor who can demonstrate to you the benefits of this innovative form of a new breed of cash flow finance for your ongoing growth needs.




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 13 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

Solving Cash Flow & Working Capital Finance Challenges In Canada ! SME Commercial Financing Solutions

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You Don’t Need A Fortune Teller To Predict Business Cash Flow Challenges Ahead

OVERVIEW – Information on cash flow challenges faced by small and medium business owners in Canada. Solving the working capital finance challenges creates a path for sales and profit growth

Working capital finance challenges in Canada don't require a fortune teller to know that cash flow challenges exist or will exist in your company.

It would be great to hear our clients say they have no problems in this area of Canadian business financing. Unfortunately that's rarely the case. Let's dig in.

Let's look at the root of some of those working capital challenges; what are the real issues, and what's really causing the problems? Next step after that? Solutions!

It's of course great to have sales - and sales and profits are even better. In general when you have those you have the essence of a healthy business. But those are in effect what we could call paper transactions and it always comes back to 100 year old clichés such as ' cash is king ' and 'the sale isn't made until you're paid '.

That cash is required for all those boring things, paying suppliers, paying employees, and meeting your obligations on loans and leases and other business commitments.

Your challenge is typical - how then do you create a flow of cash in the long term, as well as addressing short term bulges to ensure you have liquidity.

Naturally when you have a good handle on cash flow everyone views you in a positive light, most importantly your suppliers and lenders.

The solutions to cash flow challenges often come out of inability to plan or address the right type of cash flow solution. You run the risk of liquidity problems when you current assets aren't able to be converted in a timely manner into cash - those assets are typically receivables and inventory.

There isn't a day when we don't run into a textbook type of working capital finance challenge - it's as simple as requiring product to satisfy regular or new large orders, generating invoicing, and then waiting 30, 60 or 90 days for payment. That is the textbook challenge when we talk to clients asking us for assistance in solving cash flow problems.

So hopefully we have done a pretty good job of telling you what your problems and challenges are - let's address some real world solutions!

At the core of working capital finance challenges are you inability to access business credit. We encourage all customers to seek Canadian chartered bank business credit when they are in a position to do so.

The problem though? Unfortunately many clients can't meet business net worth, personal net worth, and liquidity ratios and covenants your bank might require. Also we strongly believe that inventory financing by banks in Canada is increasingly more difficult to achieve.

Our recommended solution? Don't borrow - monetize. That's the best advice and plan we set out with clients in order to solve cash flow problems. You could get a working capital cash flow term loan, but that just creates additional debt on your balance sheet. Instead, take those assets you already have on your books and monetize them - those assets are the previously mentioned inventory, A/R, and in some cases tax credits due your firm as well as unencumbered equipment.


Liquidity for those assets can be achieved by a receivable financing program, an asset based line of credit, or a short term bridge loan on an asset such as a tax credit or paid for fixed asset such as equipment.


Many of these solutions are outside the chartered bank system in Canada - they are the new world of alternative finance ‘and can be accessed by talking to a trusted, credible and experience Canadian business financing advisor.
Your ability to monetize your assets, keep suppliers paid and current as well as having the ability to grow your business is key to long term business success.


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 13 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 Software Be Leased and Financed?

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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 13 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








Article Source: http://EzineArticles.com/expert/Stan_Prokop/432698

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