Receivable Financing Problems : Here's What Really Matters

Tweet








Creative Ways to Solve Working Capital Challenge : Steps to a Successful Receivable Financing Problems

Receivable financing problems grow out of the need for a businesses inability to grow cash flow as you run and grow your business. One strategy we recommend to clients is to grow cash flow and ' lose money'. That's not a trick statement of course, and when business owners understand several forms of receivable finance
via invoice factoring can solve their challenge they want to know more. Let's dig in!

A/R financing is a source of working capital - it's not debt or a loan per se. In technical terms it's the sale, or ongoing sale of your A/R generated out of your sales. That transaction is accomplished via a ' discount' basis, typically in the 1 to 2 per cent per month basis if you're on top of your collections. That's where ' the loss' comes in - it's a financing cost but at the same time has delivered all the cash flow you need. Suffice to say your business should be able to handle that 1 or 2 per cent drop in gross margins with the result being - Cash Flow!

Invoice factoring allows you to run and grow your business, sell more by taking on being orders and contracts, and also has the unique ability to allow you to negotiate solid supplier prices . Why ? Because you have the cash!!

This form of receivable finance is used by almost every industry in Canada . Even those Bay Street boys use it also - they apply a fancier name - Securitization.

What then are two major benefits of this method of Canadian business finance. It's simply the ability to get a cash advance on your sales and of course the quick turnaround- typically 24 hours! Bottom line - pretty well same day funding

Yes factoring is more expensive than Canadian chartered bank financing = that's the perception. But that must be balance against the hard reality that thousands of businesses do not qualify for all, or even some of the cash flow financing they need. And when you're carrying a/r 60=90 days even that bank credit line doesn't help.

The best form of account receivable cash flow financing? We call it Confidential A/R Finance - You bill and collect your own receivables, reaping the benefits and eliminating disclosure.



We're open enough to say that the majority of firms who in fact entertain receivable factoring can't get financing elsewhere, particularly at their bank. But don't forget also that many instances involve firms such as yours who are growing too quickly or who have landed that ' big contract' or order.

It's at this time that business owners appreciate the fact that their net worth, profitability, debt coverage, or operating losses aren't under the microscope anymore. And your firm is free to explore other methods of debt financing outside your A/R assets.



Speak to a trusted, credible and experienced Canadian business financing advisor with a track record of success in this key area of Canadian corporate finance.





7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com

Click Here For 7 PARK AVENUE FINANCIAL website !

Commercial Equipment Loans : Financing Tips That Work Like A Charm

Tweet

Secrets You Didn't Know About commercial equipment loans

When it comes to commercial loans we're quite sure our clients agree ' good enough' is not the best attitude to take when acquiring new assets or focusing on used equipment financing. In today's competitive arena its import to acquire the best equipment financing rates and terms.

The ability of Canadian firms to acquire new assets has typically always been a challenges for small and medium enterprises in Canada. Both the pricing as well as how you finance assets on your balance sheets are key points in business finance.

80% of Canadian businesses do it right . Stats show that they employ solid equipment lease strategies as part of their overall asset strategy.

In fact the leasing marketplace is very competitive these days, and that's a good thing for Canadian business owners and financial managers. Knowing how you can save money and avoid costly mistakes is key to running and growing your business. Mistakes in poor asset acquisition can be costly.

Let's look at the example of a company that wants to acquire computer equipment and software, a 'must' for pretty well every business these days. Knowing what term to select and what type of finance lease to utilize will ultimately  reflect how much you pay both on a monthly basis and in the long term . Don't forget - computers depreciate !

Leasing companies have ' credit boxes '. That is the way that they approve your transaction when it comes to size, pricing, additional collateral, down payments, admin fees, etc. Understanding the ' credit box' is key to asset financing success.

Don't let the  benefits  of leasing financing in Canada escape your firm. Billions of assets are finance annually - your competitors finance their assets.

Commercial Equipment Loans: It's Not as Difficult as You Think

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a track record of success.  We knew you wouldn't settle for second best !







7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com


Click Here For 7 PARK AVENUE FINANCIAL website !

A Quick Guide To The Government Business Loan In Canada

Tweet






Government Business Loans Solve Business Credit Challenges

How do government business loans work ? If we only had the proverbial nickel every time a 7 Park Avenue Financial client asked us that questions. You guessed it.. we'd be rich!

Due to the fact that both the government and the banks are involved in the government business loan process business owners and entrepreneurs can be forgiven for not understanding how this business financing scheme ( hint - it's not a ' scheme; !) works.

Sometimes the frustration with timing and the mechanics of the loan relate simply to the fact that business folks don't understand how the program works - and it's not complicated.

So let's be clear - the Canadian government small business loan ( some folks call it the ' SBL ' ) is a program that has been in existence for many years and is administered by Industry Canada. It's a great way to acquire long term and often start up capital for a business .

The three categories of assets you can finance are:

• Equipment

• Leaseholds

• Real Estate

In some cases the loan cap is one million dollars, we typically see our clients borrowing in the 200-350k range. So that's not necessarily small.

Key Point - many franchises are financed under the program! Govt loans can be used to buy a business - franchise or otherwise.

The program requires a minimum 10 per cent owner investment into the loan amount. The government guarantees the rest to the bank,

WHAT DO YOU NEED TO GET A GOVERNMENT LOAN APPROVED ?

• A business plan/cash flow

• An equipment list

• Good personal credit of the applicant - typically a 650 credit bureau score

Looking for a way to ' fast track' your loan?  Seek out and speak to a

trusted, credible and experienced Canadian business financing advisor with a track record of success.





7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com




Click Here For 7 PARK AVENUE FINANCIAL website!



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 .

' 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.

How to Explain Receivables Financing Vs Factoring to Your Boss

Tweet

How to Determine Best Receivable Finance Solution

As a financial manager can you answer the following question - Explain receivable financing vs factoring ?

Thousands of firms in Canada are currently using the factor finance solution. Many consider this form of financing, but often they are also not really sure as to the rate they are paying and how that rate is calculated . Hint - it's not an interest rate !

Unlike bank a/r financing, which is typically part of your bank business line of credit the factoring solution is in effect the sale of your receivables as a part of the financing.

Companies use this form of business finance when they can not obtain traditional financing . They are growing and need the valuable cash flow that comes from a factor facility.

What then are the factors that determine a/r pricing when it's non bank in nature? First of all note carefully that the cost of factoring is really a discount on your receivable sale to the commercial finance firm funding your facility. So it's not a loan per se, nor is it a credit line in the true sense of the word.

Factors that will determine your ' buy rate ' are the size of the facility, the volume of invoices you have, and the general credit quality of your clients. Also, there are a number of commercial lenders and its important to work with the right firm - Some are local, some are small, some are very large, and some are non Canadian but do business in Canada.

Another key factor in factor receivables finance is your advance rate , Typically you get immediately 90% of your invoice, the balance is held back until your client pays . Larger facilities in Canada tend to be very competitively priced and solid facilities can be arrange in the 1 to 1.5% discount rate.

Commercial factoring companies also might have some misc fees associated with your facility, as do the banks themselves.

How to Determine Best Receivable Finance Solution

So the best advice on accounts receivable financing ? Simply that whether its a bank facility of a alternative solution seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a track record
.


7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

Click Here For 7 PARK AVENUE FINANCIAL website !


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 .

' 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

Asset Based Lending Companies : What You Need To Know

Tweet

HOW DOES ASSET BASED LENDING WORK ? LIKE THIS !

Operating lines of credit , as in ' access to ' have been a challenge for many Canadian business owners and financial managers. So is there an alternative to consider ? The answer is a resounding ' yes ' , and its called the asset based loan/line of credit. We can prove it because it's working for thousands of firms in Canada.

It is somewhat ironic that many business folks have not even heard of this type of facility , i.e. what it is, and more importantly, how it works.

There is some confusion sometimes around the fact that there are a couple different versions of asset based credit lines, also known as ' ABL 's '. Even some of the name changes on this facility are confusing, such as :

Working capital facility

ABL revolver

Asset Based Lending

Etc?

In pure terms this type of credit line is simply an operating line based on underlying collateral. The most common assets for this ' collateral' are accounts receivable and inventory. But also included can be equipment and real estate. Your ability to margin all these assets turns into true liquidity - bottom line more cash flow!

Chartered banks also offer lines of credit - no secret there . The difference is that asset based lenders use higher margins on your assets and credit requirements are much less restrictive . Most commercial asset based lenders have a lot of expertise in different industries . At the same time they really want to understand your business and require a consistent level of reporting.

The reporting we refer to above is pretty standard stuff, ie receivable and payables lists, sales forecasts, etc . ABL lenders are very much less focused on those ' ratios' that our friends in banking obsess about!

Don't think of asset based credit as ' term loans' or debt . You are simply cash flowing your assets that you already have , in a bigger way!

Bottom line? Check out non bank business credit lines if you have working capital needs that traditional lenders can't satisfy. Seek out and speak to a
trusted, credible and experienced Canadian business financing advisor .






7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

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 .

' 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.

Short Term Working Capital Loans Help Overcome Cash Flow Challenges In Business

The Best Business Working Capital Loan to More Cash Flow

Tweet

A SME working capital loan ( SME = small to medium enterprise ) can easily help overcome the cash flow challenges your business faces . It is really an extension of the merchant cash advance concept that originated with the financing of retail type businesses.

Let's take a look at the cost and type of financing we're talking about . Your firm's ability to maintain the proper level of cash is no doubt a continual challenge . We read everyday in the business news about the reality of an upcoming recession .. or not ... but to our clients it always comes back to running and growing their business.

So how does the short term working capital loan in fact address your finance needs? It's an alternative form of financing that focuses on your sales and the funds that travel through your bank account on an ongoing basis. Rates are higher than bank financing, typically in the 1-1.5% per month range but the bottom line is that your loan is paid from ongoing sales. This is not long term loan financing!

So is this financing in fact ' expensive '. We'll let you decide because the new found cash can be used to generate more sales, negotiate better with suppliers via effective purchasing, as well as maintaining positive relationships with suppliers and employees. They both like to be paid!

Our clients typically use these funds to grow their sales, reduce payables, etc. It's important not to confuse the benefits of short term working capital loans with other forms of cash flow financing - these include a/r financing, inventory finance, tax credit financing, etc . And let's not forget about term loans of a longer nature.

Interested? Hopefully not confused!! Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist your with your business finance needs.




Click Here For Business Financing

Working Capital Financing Approaches ! Make Them Work For You

Tweet

 

The 7 Park Avenue Financial  Way  To Solve Cash Flow Problems

Working capital finance , properly structured, can provide the boost your business needs to both grow and operate. Businesses take on the lack of cash flow challenge for a variety of reasons :

New Market Opportunities
Special projects

Etc !

The bottom line is that properly structured business financing allows owners and financial managers to monetize the assets in the business on a short or long term basis. An example of a long term scenario would be a sale leaseback ; short term example might be the cash flowing of your accounts receivable.

It is important to know that certain types of business finance solutions are more applicable than others depending on the special needs of your business. The classic example of a cash flow challenge is when you are growing, profitable, but have a gap between cash on hand in your business and short term obligations.

Examples of working capital finance ? They include:

 Working capital term loans - Recent trends have demonstrated the important of both short and medium term cash flow loans. The overall credit quality of your business and the amount you require will drive a final solution. Loans can be secured against certain assets, or unsecured. Unsecured cash flow loans are currently very popular and have grown out of the popularity of merchant cash advances.

Business lines of credit, essentially an ' overdraft ' are often the most common sources of working capital cash flow . When these are not available from traditional bank sources other commercial asset based lenders step in to take up the slack.

A well structured business credit line is in fact a safety net for your overall cash flow needs.

Other forms of working capital financing ? They include :

1. Invoice finance - aka ' Factoring '
2. Purchase Order Finance
3. Tax Credit Financing
4. Sale Leasebacks

Bottom line ? There are numerous sources of working capital financing . Choose the right one for your firm with the assistance of a trusted, credible and experienced Canadian business financing advisor . Then get ready to grow your business!


7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

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 .

' 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