Asset Based Lending Breaks The Impossible Business Financing Barrier ? Here’s How!

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Got 5 Minutes? Here’s  Some Business Loan & Working Capital Solutions For Companies Seeking SME Commercial  Finance Solutions

 

OVERVIEW –     Information  on  traditional bank and alternative non bank financing solutions in Canada. Financing strategies such as cash flow based asset based lending provide sought after working capital and cash flow alternatives for companies seeking sme commercial finance solutions

 

Asset based lending, a term unknown to some business folks, is often a great solution to companies that are unable to access traditional bank type financing. Many new, smaller and growing companies are simply looking for additional financing these days. Owners and mgr's want... options! Let's dig in.

                                    

Those challenges tend to be painfully obvious to the Canadian business owner or financial manager that has worked to get traditional bank and equity financing. Here are typical traditional lender concerns:

 

Perceived industry or product risk

 

No collateral

 

Uncertain financial projections

 

Limited Performance history

 

How can companies overcome these very traditional roadblocks and challenges? There are a number of ways.

 

First of all, all alternative methods of financing should be pursuing. Alternative financing methods are most non dependent on the above noted risks and challenges. Those alternative methods of financing might include:

 

 

*Business Angels or strategic partners (think suppliers!) for short term arrangements

 

 

*Equipment Lease financing

 

 

 

* Sale leasebacks on equipment already purchased and paid for

 

 

*Asset based lending arrangements that provide working capital facilities against initial receivables, inventory, and purchase orders  KEY POINT : (These facilities don't have the same requirements as banks)

* Sr Ed Tax Credits - Customer who have filed claims can finance those claims for cash

 

* Invoice / Receivable Financing - Immediate cash for your firm's receivables (these facilities can be of any size). Our most recommended solution in this area is Confidential Receivable Financing. Your firms bills and collects its own receivables and creates an automatic cash flow machine from your sales revenues.

 

In summary, newer or smaller firms fall into the ' void ' area of financing, where very few traditional financing strategies can be implemented, at a time when cash flow and working capital are most critical. The above mentioned solutions fall into our general category of ‘ ASSET BASED LENDING ‘ .. so now you know!

 

Business owners should review non alternative strategies which can be of great assistance in early growth periods 

 

  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 100  Million $  of financing for Canadian corporations .

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 Leasing : The A to Z of Businesses Best Asset Finance Solution

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Equipment Leasing – Can You Imagine Financing Assets Without This Asset Finance Strategy?

OVERVIEW – Information on equipment financing solutions in Canada. The ability to finance new and used assets for your business helps companies grow while conserving cash

Equipment leasing continues to be the best way to maximize cash flow and overall cost effectiveness for new asset acquisitions. The other significant advantage of a lease equipment strategy is the ability of this type of financing to achieve financing creativity based on the needs of your Canadian firm. In Canada corporations of all size, including the government by the way, utilize leasing as a financing option.

Is there any asset that can't be financed? For years we have half jokingly told clients that anything can be financed, and quite frankly, based on your firms overall credit structure and quality, we still believe that to be very true .

Many business owners don't often realize that even 'intangible 'assets can be financed, such as software, installation costs, maintenance contracts for your financed asset, etc. Those additional charges, when not financed, can put a real dent in your cash flow!

The whole issue of equipment leasing for Canadian asset acquisitions quite frankly revolves around the ' right ' lease, and, as importantly, your leasing firm partnership. Properly structured leases create a win / win scenario for all parties to the lease - namely the equipment vendor or manufacturer, your firm, and of course the lease finance company.

We are often somewhat disappointed when clients are only focusing on 'rate ', because in a large number of cases overall lease amount approval, structure of lease, and type of lease chosen have significantly more importance that the 'rate '.

'What's my rate 'is not an effective way, we believe, to enter into a lease negotiation. Naturally having said that, a rate must be commensurate with your overall credit quality - as credit quality, combined with the asset collateral, drives the final rate decision.

A quick recap of the generic benefits of leasing should emphasize the advantages of this type of asset acquisition financing. Those benefits are:

1.Ability to acquire equipment while minimizing your cash outflow for asset purchases

2.Cash flows match the benefits and useful life of the asset you are acquiring

3.Potential tax and balance sheet advantages

4.Ability to upgrade equipment and stay ahead of the competitive curve based on your ability to acquire items that you might not necessarily be able to purchase on a cash basis

Equipment leasing often tends to also be 100% financing - that's a great way to maximize cash flow , and , as we noted, many Canadian business owners and financial managers are often surprised to know that lease financing can include tangibles, as well as those maintenance and upgrade costs depending on the asset you are financing ; Hint - Think computers!


There are a number of tools that allow you to evaluate lease financing options, one of which is a 'lease calculator 'or' lease vs. buy calculator'. These are widely found on the internet.

We strongly recommend that you utilize the services of a lease financing expert who has credibility and experience. That will translate into your firm capitalizing on one of Canada's great alternative financing strategies. Seek out and speak to a trusted, credible lease financing advisor today.




7 Park Avenue Financial :


http://www.7parkavenuefinancial.com

2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8


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 100 Million $ of financing for Canadian corporations .





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

Financial Strategies For Troubled Firms

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There are strategies that troubled companies can use to save themselves from dire straits and regain their former financial success. These same sort of strategies are valuable for business owners and financial executives to understand how their firms can avoid financial turbulence and failure.

We must first realize that business failure or bankruptcy never happens overnight. Normally there is a gradual trend of financial deterioration that is sometimes exacerbated by industry troubles. No doubt in the current 2009-2010 environment the auto industry is a poster child for a troubled industry, as an example.

Naturally firms that are on the very precipice of failure or bankruptcy do not have many options or time left. It has to fix itself, or sink. No business owners or entrepreneurs want to face bankruptcy, liquidation, and other creditor issues.

Do financially failing firms survive because of a revival in products or their services, or have they in fact executed on improved financial management. This is a challenging questions, because the very financial problems that beset a firm hinder it in getting new sales, acquiring inventory, and regaining supplier credibility.

Also, lets be realistic, banks and other finance companies do not throw themselves at failing firms with financial offers of loans, lines of credit, etc. In fact what usually happens is that the company is forced to pledge some or all assets at much higher rates, sometimes simply accentuating the financial problems that were already there.

So what are the financial strategies that a firm can undertake to avoid financial failure when it has been losing sales, not generating profits, and generally traveling down a potential death spiral?

There are three or four solid strategies that can save the firm. The first is ' assets '. The second is liabilities and debt, and the third we will simply call ' Maneuverability'.

Strategy 1:

Assets have value. They can be sold, re financed,, or pledged to secure new financing. This type of strategy works best when it works for all parties, the company and the lender, or the company and another firm. However lets be clear that this is somewhat of a one shot strategy. It either must work or it doesn't. Asset maneuvers have 3 stages of success: assets can be used to get a new loan, assets can be sold, or they can, in somewhat of a worst case scenario, be liquidated.

Strategy 2:

On the other side of assets on the balance sheet is debt and equity. Debt can be structured properly to ensure the lender gets a reasonable reward, and the company is able to both repay and survive. There are too many types of debt to consider for the purposes of this article - suffice to say that creativity in debt is somewhat unlimited. A firm could issue debt, as an example, and repay only when the company is earning profits again.This would normally entail higher rates, but again, as we have stated, the transaction has to make sense both for customer and lender. A solid alternative solution is to simply re - structure existing debt at new rates and amortizations.

Alternatively to debt a company with promise can bring in new equity or ownership. This is somewhat more risk for all as dilution of ownership is usually significant when a company is failing and bring in new equity capital.

Strategy 3: A firm sometimes has to look to the outside for help. Since the owners and managers are often too close to the problem it is somewhat of a classic case of not seeing the forest for the trees. Outside consultants and industry experts can often bring a solution to the table. They have insights that management simply did not possess. These strategies include developing new sales and product strategies, bring in new management, or considering a strategic merger.

In summary, anyone who has worked through several business cycles over a number of years knows that companies can in fact be saved. Some go on to be the new super stars of their respective industry. The company must clearly uncover what the problem is, and then adapt strategies, financial or otherwise, to fix those problems

Stan Prokop is the owner of 7 PARK AVENUE FINANCIAL, a Canadian firm which originates business financing and business bank and operating credit financing for Canadian firms. The firm is an expert of cash flow and working capital needs for their clients.

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


Article Source: http://EzineArticles.com/3503535

Recognizing and Understanding the Cash Flow Gap

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Fundamentally it seems easy - make or deliver your product and service, collect the money, and start over. Simple, right?

Well, not really, as most business owners quickly recognize. What many business owners and managers fail to recognize is what we will call the ' working capital gap '. Simply speaking it's the amount of time that it takes for a company to produce, sell, and collect on that product or service. During that period inventories and receivables and bank accounts fluctuate greatly, and deficits and surpluses are potentially significant.

Is that a bad thing.? Definitely not. Does it indicate that a company is weak or failing? Most definitely not! Strong business managers can in fact prepare to cover those temporary deficits - if they don't however the firms creditors can withdraw from support, leading to a potential failure.

Let's understand the cash flow cycle a bit more in detail. We will assume a company is in fact producing goods, although many service companies have the same challenge but in a somewhat different manner, given there is not inventory or product per se.

Back to the cash flow cycle then - the company buys raw materials and supplies. Payables are created and inventories mount. Product is produced and sales are made on credit, most normally ' 30 day terms '. (Of course most business owners quickly realize that terms are 30 days but no one pays in 30 days!).

Finally though the receivable is collected and the cycle repeats itself. However the number of days that all of this takes to transpire is of course most commonly known as the ' cash flow gap ', in our working capital cycle.

In a perfect world the company finances it's receivables with the bank, as the cash flow cycle repeats itself over and over again.But if a company relaxes its payment terms, or gives formal extended terms to customers, the time factor is significantly augmented. Companies that have strong financing in place can of course increase sales and profits by offering extended terms to their customers. They can also increase their own profits by using the cash flow financing from their bank to take supplier discounts and negotiate better pricing on materials.

Banks and finance companies are critical in this entire process. If the customer can obtain the right working capital and cash flow financing a proper balance can be achieved in sales, profits, and asset turnaround.

However if a firm cannot properly finance the working capital assets the firm experiences serious financial challenges.

In summary, business owners need to understand the ebbs and flows of the cash flow cycle as it relates specifically to their business and industry. Banks and other private finance firms are critical to the working capital cycle. Customers must have the support of the bank with respect to proper credit lines. The bank of course needs to be convinced that the customer understands it's cash flow gap, and can manage properly through the working capital cycle. If a firm cannot achieve proper bank support re their working capital requirements other alternatives will need to be assessed.



7 Park Avenue Financial :

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

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 100 Million $ of financing for Canadian corporations .







7 Park Avenue Financial

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


Article Source: http://EzineArticles.com/3497948