What Is ' Factoring Accounts Receivable ' ?

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Why Factoring Accounts Receivable Works

Is Factoring Receivables A Good Idea ?

Our goal is to explain the art and science of business to business factoring so that Canadian business owners can understand the benefits and costs of commercial accounts receivable financing. ' Commercial ' receivables of course refer to any non consumer-related a/r.


Companies that consider the financing of A/R are in different phases of their life cycle. In some cases they are growing to quickly or have unique customer situations, thereby eliminating the chance of accessing traditional bank financing solutions - aka the ' business line of credit '. Factoring is a form of a line of credit , but has some major technical differences as to how it it utilized on a daily basis. One of a number of possible answers to overcome cash flow obstacles is the financing of your a/r. There are of course other solutions - working capital loans, both short term and long term in nature, P O Financing, sale-leasebacks, etc, etc. We're focused on factoring today .

It is important to know that financing your AR can come in the form of a one time scenario, a periodic solution, ( when you need it ), or, most commonly, on an ongoing basis. The bottom line is that your firm has the option to choose.

WHY IS FACTORING ACCOUNTS RECEIVABLE USED ?

It might seem a little to obvious, but the financing of your accounts if generally for the day to day running of your business, retiring obligations with suppliers, employees, lease and loan repayments, etc.

In well run companies working capital needs should generally fluctuate - otherwise your firm might feel sometimes that it is in constant crisis mode. Clients of 7 Park Avenue Financial are often the first to admit the reason they are seeking the advice of a business advisor is that when cash flow is constantly tightening they look for new innovative solutions in Canadian business financing.



Simply speaking business to business factoring is the sale of your receivables for cash. It sounds so simple, that’s why we are hoping to convey the ' stripped down' explanation of this type of financing, while at the same time warning clients where some of the complexity and risk lies if you don't have proper business finance advice.

Receivables , normally , have to be paid in 30 days - however most owners know that 60 and 90 days are common occurrences. Your ability to smooth out the cash flow ultimately will reflect in your overall business financing success.


Let's focus in on our core asset, your A/R. Go to any balance sheet and receivables will make up a very large portion of your ' most near liquid ' asset. Your ability to monetize that asset on an ongoing basis creates working capital.


Business owners need to consider that their ability to monetize cash through receivables factoring in essence can become a competitive tool, allowing you to penetrate markets, and generate more sales and profits at the expense of your competitors.


Business to business factoring has been around for 100 years . Why is it more popular today? The simple ' stripped down ‘reason it is easier to obtain than bank credit, and can often be fully functional in your company within a couple weeks.

Why Factoring Accounts Receivable Is Utilized By Canadian Business

Why do business owners like and utilize A/R financing? - simply because it has limited focus on personal covenants of the owners, other asset collateral is not required, and under the right circumstances your customers and suppliers aren’t even aware of how your firm has suddenly become flush with cash .

How Much Does Accounts Receivable Financing Cost ?

So that’s all the upside, is there any downside? Only if you don't know what you are doing !You need to focus on what types of business to business factoring is out there, what are the costs ( they vary from 1-2%/month) and if your receivables partner has the flexibility and straight forward processes to accommodate your day to day activity .

What Is The Best Type Of Factoring

At 7 Park Avenue Financial we recommend Confidential Receivable Financing via factoring receivable companies . It allows the business owner/financial mgr to bill and collect their own a/r with no interference by 3rd parties. For more info on Confidential A/R Finance
CLICK HERE FOR MORE INFO ON CONFIDENTIAL RECEIVABLE FINANCING

Speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business financing success to ensure our ' stripped down ‘version of business factoring meets your business and cash flow goals.







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

What Is A Business Turnaround Plan For Cash Flow

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What Does A Business Turnaround Specialist Do?

What is a business turnaround plan when it comes to financing ? It's all about a strategy and that covers a lot of issues, but our main focus today is ' cash flow '

All business owners and their financial mgrs. recognize the importance of cash flow and working capital at critical times in their business. For most companies that cash is generated from accounts receivable and inventory sales that come from sales revenues . Of course the ultimate failure for lack of cash flow is business failure.

So understanding what the turnaround requirement is when it comes to funding your business often simply comes down to the solutions that are available to put in ' the fix '.

It's not always ' intuitive ' to realize cash flow deficiencies , especially when sales revenues are growing ; fast growing sales can mask a lot of financial problems ! The good news is that there are some basic technical fundamentals to help you assess the problem . Think of that type of analysis as being a business cash flow doctor.


When looking for outside help in someone that understands your financials and business look for someone that has a solid track record and experience, and can facilitate cash flow turnarounds by offering up solid and sometimes creative working capital solutions.


One way of taking a look at the seriousness of your cash flow challenge is a technique known as 'DOOMSDAY RATIO '. So What is that ratio and what is its significance? It's simply a ratio ( we at 7 Park Avenue Financial have always called it a 'relationship ') of your cash on hand divided by current liabilities.


The final result is really one of the most powerful and effective solvency ratios ( or relationships ) that a business owner can utilize. Business people might be aware of two other similar ratios, the current ratio and the quick ratio. The current ratio included the firm's current assets, including accounts receivable and inventory.



The Quick ratio did the same but excluded inventory. While not all 'non-financial' folks might not like taking this detailed a look at their financial statements this hard look at your numbers will often reveal key insights into business financing turnaround needs.

The business owner can quickly see that the doomsday ratio focuses solely on Cash! We can call it a very 'demanding' ratio because it focuses solely on the liquid gold within the company, cash!

Although your firms accounts receivable and inventories are somewhat close to being cash, and no matter how well they are managed those two current assets aren't cash yet, and everyone knows the day to day business challenges of converting receivables and goods into a final cash customer payment.

Really the best way to look at the Doomsday ratio is to view it as an ongoing measure of the firm’s cash 'buffer'. The bottom line is that it will show the business owner what 'cushion' of cash the firm has. Business owners could even choose to monitor the ratio daily, as it could very well warn against impending shortages of working capital.

Many business owners know that it is also not productive to carry cash on hand, particularly in today's low interest rate environment. So it makes common sense that the doomsday ratio may in fact be less than the number '1' , but at least we have a number that, on an ongoing basis, we can monitor.

Each business over time has a philosophy and business practice around how much cash is kept on hand. Naturally it's also obvious, and important to know that if you reduce your operating line of credit with you cash you still have the full liquidity of your operating line, but you aren't paying any interest to borrow. That's a good strategy also.

How Can Your Business Accelerate Cash Flow

One method is to consider a receivable financing strategy - one that factors or sells your accounts receivable as your firm sells it's product and services. Our recommended solutions for clients of 7 Park Avenue Financial is a ' CONFIDENTIAL RECEIVABLE FINANCING ' solution, allowing you to bill and collect your own receivables while generating cash as you sell ! That strategy allows you to generate cash , and maintain that positive ' DOOMSDAY RATIO'!

In summary , take a look at any relevant financial analysis technique to monitor cash flow/working capital for your business.

What Is Your Business Turnaround Financing Plan ?

And don't forget to see that CASH FLOW doctor who can implement solutions such as:

A/R Financing

Working Capital Loans

Bridge Loans

Sale leasebacks

Non bank asset based revolving credit facilities

Tax credit monetization

Purchase Order Financing / Supply Chain Financing

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who has a track record of business finance success and turnaround expertise for refinancing your company properly.






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

How Can Cash Flow Problems Be Solved ?

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Fixing The Cash Flow Problem

How To Correct Cash Flow Problems - Here at 7 Park Avenue Financial we aren't so sure there's a case for the regular blues, but if the challenges that come with working capital deficiencies and cash flow are ' top of mind' with your business it might be refreshing to know we have some solid solutions , tips and techniques to solve those key issues . We suppose you can call them a ' cure for the cash flow blues '.


When a company can properly address the issue of working capital, cash management and ensure accounts receivable and inventories are being managed properly that helps ensure daily and long term survival, while at the same time improving owners overall return on investment, aka ' R O I '. Proper management of the current assets on your balance sheet, relative to your sales growth simply brings a double whammy of benefits to your business.

So what about those ' current asset ' accounts on the company balance sheet that we have been talking about . Having a poor handle on receivables and inventory can severely impact your overall company performance. We're speaking of two things, how you manage those assets, and how to finance working capital. It's a dynamic situation, because those two asset categories - a/r and inventory literally change every hour - sales get generated, invoices are issues, receivables get paid and inventory gets shipped as more goods are purchased. Talk about ' dynamic '.


Canadian business owners and financial managers often have a poor handle on their current asset accounts - primarily of course receivables and inventory. We can forgive them for that, because those balances changes pretty well every couple hours. Talk about a moving target! .... Invoices get issues, receivables get paid, inventory gets shipped... and more goods are purchased.

How Do Cash Flow Problems Occur?

Simply speaking it revolves around the fact that if you are mismanaging these accounts, or not financing them properly you lose the ability to deploy funds more productively - i.e. growing your business. That’s when the total ' mix ' of your assets becomes important.


Clients of 7 Park Avenue Financial might sometimes tire of our focusing on the importance of isolating which type of financing is going to fix the company working capital problem. Solutions vary and they include:

Short Term Working Capital Loans

Long Term Loans

More Owner Equity

Asset Monetization ( We confess that's our favourite )


There is a very simple way of matching the financing you need to your assets. The solution - use financing of similar maturity to your assets. A quick example ?

Utilize leasing /equipment financing for long term more permanent assets. Another example? Utilize a receivable financing program for your Accounts Receivable

Why Do Cash Flow Problems Occur ?

Another solid rule of thumb is to always not forget that the longer it takes for a dollar to flow through your firm (your cash conversion cycle) the more working capital financing you will need). That is critical to identifying the long term solution for your business, which often is industry specific as industries vary as as to being asset intensive, service oriented, etc.


Business owners and their financial mgrs should focus on proper management and financing your accounts receivable in a manner suited to your business.

Here's a shocker - there’s a cost to carrying receivables and inventory . Receivable financing, aka ' factoring ' is a solid tool when you can get a good handle on net savings using this type of short term financing . Never forget (everyone else seems to!) that stronger sales, asset turnover, and more profits can easily justify the use of a receivable finance facility.

There needs to be a solid balance to the overall problem your firm might be facing. The ' text book answer ' is that if your are able to manage your working capital accounts properly you can better assess any financing risk and cost for the overall cure to cash flow shortages. That perfect balance is what your firm should constantly try for .


As we noted cash flow accounts change daily and require a lot of vigilance. Solutions to your business financing needs include:

A/R Financing

Inventory Finance

Purchase Order / Supply Chain Finance

Asset Based Non Bank Credit Lines

Unsecured Short Term Working Capital Loans

Tax Credit Financing

Sale Leasebacks


Seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success who can assist you with your business finance needs.


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

Small Business Financial Advisor - Canada

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What Does A Commercial Loan Brokerage Do?

Here's What You Need To Know

A business financing advisor in Canada may well never be needed by your company, but that is provided that you and your team know everything about business financing in Canada, have credible funding sources, as well as having all the time in the world to explore traditional and alternative business finance solutions to run and grow your company !

Most business owners and their financial mgrs would agree there is significant value in not wasting internal resources and people time when you are looking for business financing when you lack all the experienced need to close on business finance needs.


Over time, and trust us we don’t know why, we have come to dislike the word ' loan broker ' , ' business loan broker ' etc . In reality we confess at the same time that we see everyone uses a mortgage, insurance or other type of broker to get a qualified, credible ' best deal '. So the middleman approach clearly has value to the consumer. Does it have value to a business? We think so, and at 7 Park Avenue Financial we've proven to hundreds of clients that we have a track record of business finance success.

Businesses require financing needs are in various stages of their life history; they might be in ' hyper growth ' mode , or at the unfortunate opposite end of the spectrum ' financial distress '. In some cases firms might be looking to complete business acquisition financing , or to augment their working capital and cash flow facilities . Revolving business lines of credit are often needed in order to finance the build up of accounts receivable and inventories as your sales grow.

All of the above types of business finance need the right data, help and expertise to identify the solutions best fitted to your firms needs. We always point out to clients that there is no ' one size fits all ' and in fact many industries require specific types of financing .

You could make a case that a good business finance loan advisor is in fact a ' business doctor ' of sorts , recommending and executing on the right ' cure ' for your business finance needs.

The right business loan advisor firm will allow you to get the answers you need on business finance solutions that fit , and , even more importantly pinpointing finance alternatives that your firm may not be aware of , or had not considered.

Naturally there are some that might tell you they can assist in those business finance solutions but in fact might not know of what they speak ! Therefore the right choice of Canadian business financing advisor can make or break your success in Canadian business financing for new or refinancing capital.

Qualifications for a Business Loan Advisor :

What they should your firm be looking for in the search for the right funding advisor ? We're pretty sure it’s intuitive, but we speak to so many clients who feel either burned or let down by past experience. So focus on some key areas such as the advisor number of years in practicing what they do. Do they have solid credible contacts? At 7 Park Avenue Financial all Canadian banks and even government finance institutions refer clients to us.

References are of course critical , and with the internet you can Google anyone in business with a reputation and determine a lot about the quality and reputation and credibility of that firm or person. Remember, you're entrusting them with your financing in a very confidential way, and that's important.

Don't settle for generalists also, focus in on someone who can deliver on the specific financing you need.

Key Areas Of Business Financing :

Business Acquisition Loans

Working Capital and Cash Flow

Asset Based Lending

Franchise Loans

SR&ED Tax Credit Financing

A/R Financing / Confidential Receivable Finance


You ultimately want to feel comfortable on sharing information with this person or firm, reviewing pitfalls, and most importantly, ensuring your firm is represented professionally and credibly with respect to it's business capital needs.


So, call them anything, but call them. A Canadian business financing advisor, a loan broker or intermediary, a capital broker, loan broker etc.

Focus on trust, credibility and experience !




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

Small Business Financing In Canada

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Working Capital and Financing Options

Small business financing in Canada ' should ' mean that your company has access to all the working capital you need to both run, and grow, your business .

At 7 Park Avenue Financial we believe that is not impossible, but the business owner and his or her financial manager must have a solid understanding of the options and your company's ability to qualify for and execute on the option or options that make the both sense . Note that in some cases it might make sense to cobble together more than one option to achieve that ' cash flow nirvana' you are looking for .

The business reality is that cash flow doesn't discriminate - both companies in looking for SME COMMERCIAL FINANCE solutions, all the way up to the largest corporations need access to cash flow options. The challenge for smaller firms is that business finance loans are often more limited to the smaller company. So it's therefore important to know what those options are!


Accessing the cash flow challenge might be easier than you think . More often than not smaller firms though have the challenge of locating the expertise and resources they need to evaluate the business finance conundrum.


Two key elements of your first step to what we call 'working capital assessment 'are your gross margins and your turnover. That’s the big problem we have with text book / academic solutions to working capital - they point you to the text book calculation - give you a formula which essentially has you subtracting current liabilities form current assets, and voila ! the inference is you have working capital . However, our clients have never paid a supplier or completed a company payroll with a ratio!

Many firms have an ' inventory component ' to their business - These companies are typically non service type firms , which often are less capital intensive.

To properly assess your working capital needs focus on understanding your turnover - how much inventory do you carry, what are the days outstanding in inventory, and as importantly, or more importantly, are your receivables turning over .

Business experts tell us that for many firms 80% or so of the total of all the business assets you have are tied up in A/R, inventory, and, on the other size of the balance sheet let’s not forget accounts payable .

It is possible to have financial business financing success based on your new found knowledge and analysis of your cash flow and asset turnover.


Canadian business financing solutions to small business finance loans really revolve around a couple viable solutions. Typically, in our experience Canadian chartered banks cant satisfy your business working capital needs - if only for the reason that they rarely finance inventory and require significant merit in your overall financials, profitability, external collateral, personal credit worthiness, etc .

Solutions To Business Finance In Canada

 

There are very viable options that have the potential for a 100% turn around in cash flow :

A total working capital solution can be achieved by a they working capital finance solutions such as a non bank asset based line of credit. This solutions monetizes your accounts receivable and inventory into one borrowing facility .

This is commonly called an asset based line of credit that provides high leverage margining on all you business assets.


Other solutions, still as viable , yet somewhat misunderstood are securitization, and purchase order financing of new contracts and orders. (Your suppliers are paid directly for the orders you have in hand - what could be better than that?)

One of the most active types of ' instant small business financing ' Finally, coming up the road at lightening speed is factoring and invoice discounting. We mention them lastly but they are probably the most popular method, gaining traction everyday. Our favorite is confidential invoice financing, allowing you to control your financing .

Recommended A/R Small Business Financing : 

 Confidential Receivable financing, allowing your company to bill and collect your invoices in a normal fashion , turning current and future sales into instant cash flow.

We have identified several ways to determine the need for proper business financing ; we have outlined a number of solutions that will take the guess work out of working capital.

These loan and financing options are available with a bit of research and/or help from a trusted , credible and experienced Canadian business financing advisor who can provide you with timely and valuable assistance in your cash flow needs .




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

How Does Non Bank Receivable Financing Work ?

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Confidential A/R Finance Is The Best Kept Secret In Business Credit Finance

Accounts Receivable financing isn't always in the headlines - we're the first to admit that . But it should surprise business owners and their financial managers that thousands of Canadian firms are moving toward a working capital financing facility known as receivable factoring.

There are numerous reasons why businesses choose, or must choose to finance their sales outside traditional bank norms . One reason might be they aren't able to access all the business credit they need ; in other instances they might not qualify for any traditional bank credit solution while at the same time their business is growing !

Confidential Invoice Financing

Here is a question . What if you could get invoice finance that would allow you to bill and collect your own receivables under this facility? Possible? Absolutely.

Canadian business financing solutions such as Confidential A/R Finance provide your business with unlimited cash flow, and, unlike your competitors, you , not a third party, are in control of your facility.

HOW RECEIVABLE FINANCING WORKS

Most Canadian business owners and financial managers know a bit about how factoring, aka receivable financing works.

The Confidential AR Financing Difference :

Factoring , we call it ' old school ' factoring, is a process whereby you sell your receivables and receive immediate, same day cash for those invoices. 99.9% of all the financing done in Canada under this business model has the third party lender firm collecting your invoices and notifying the customer. They also follow up for collection and interact with your customer, because, as we said, you have sold them your receivable, or receivables in whole.

Why Trade Receivable Financing :

Clients of 7 Park Avenue Financial like the end result:

Instant Cash Flow

Constant Working Capital replenishing

What they don't necessarily like is the 3rd party firm taking over the client relationship as it relates to accounts receivable.

Enter Confidential Receivable Financing - Under this scenario your receivables are billed and collected by your firm , and there is no third party interference with the relationship you have with clients when it comes to billing and collecting.

Business owners like this latter model - The bottom line is that your financing relationship is not disclosed to your customers, and that’s a good thing. Your firm achieves all of the benefits of accounts receivable financing, but under the confidential invoice finance model your receivable factoring is in your control.

Under traditional U.S. And U.K. type receivable factoring your customers receives a letter from either yourself or the factor firm, notifying your clients about the issue of your firm having sold its receivables. If you don’t care about that, no problem...! But if you do care about what the perception of that letter might be then you should consider confidential invoice finance.

Using a solid non bank a/r finance model gives you a competitive advantage - It differs from bank financing, and is the alternative to the traditional factoring of invoices that we have talked about here. The bottom line is there is a world of difference in the facilities offered.

Cost Of Factoring / Confidential A/R Finance

The cost of confidential invoice discounting is the same as traditional factor financing - so that’s a good thing! This method of financing is costlier than bank interest rates, but does not require the significant emphasis that banks place on personal guarantees, outside collateral, ratios, covenants, credit limits , etc. In fact business owners may be surprised to know that credit limits are virtually unlimited if you business has the sales levels to justify increases in the facility, and that the facility is operating properly .

Speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success , one who will assist you in closing this valuable type of working capital financing solution.







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

Equipment Leasing Companies In Canada

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Equipment Financing Rates & Strategies

Excellent equipment leasing options and solid asset finance solutions do exist in Canada , and suffice to say that equipment finance continues to be a popular and success method of acquiring both new and used assets for your business . Yes Virginia , used assets can be financed also. Financing assets is a proven formula to run and grow your business while at the same time conserving cash and not having to disturb existing credit lines.

Why Is Equipment Lease Finance So Popular with Canadian Business?

There are several key factors that drive the reality success of equipment financing in Canada :

Tax and Accounting Benefits

Conservation of capital and cash flow

An alternative to owning assets that depreciate in value and require replacement

Leasing assets is the ownership alternative - your firm reaps all the benefits of using the asset but is not obligated to the significant capital outlay for those assets. An old adage in the equipment asset finance industry is that businesses benefit through the use of assets , not the ownership . While there is nothing wrong in that other saying - ' pride of ownership ' the reality is that to stay competitive in current times business owners and their financial mgrs must always consider optimal use of capital.

Naturally the additional cash flow saved from lease finance strategies allows your company to invest in other resources and assets to make your business more profitable and competitive.

One of the major concerns for any business, particularly those that are in industries that are deemed ' asset intensive ' is the issue of obsolescence.

Assets that run your business include those shop floor assets as well as the computers and software that drive your business forward. Also some assets have limited long term use - a good example might be the constant upgrades needed for computers and software. ( Yes , application software can be leased !)The constant upgrading of technology needs can be a major cash drain on your business if this component of your business is not addressed properly from a cash flow perspective.

Purchasing assets that have limited long term use is not a solid working capital strategy for any business- your accountant can confirm that one ! Not too many business folks can imagine using todays computers for 3 to 5 years out - doubtful to say the least.

Equipment finance provides your business with ' buying power ' ; that is to say that you can buy more and better assets if your have a lease finance strategy in place.

Example Of Effective Leasing :


Lets say you need a new computer system for 250,000$ and the reality is that an alternate vendor has a better solution for 350,000$. If you were purchasing you have to wrestle down two key issues, laying out 250k , or alternatively coming up with an additional 100k of real cash to complete the second alternative purchase .

The monthly lease payment on a 250k 3 year lease would be approx 7700 dollars, and on a 350k deal it would be approx 10 600 dollars .

So as a business owner which solution do you want to wrestle with - paying either 250k or 350k out of working capital, or working an additional 3k into your operating budget?

Certain assets can also be financed under an operating lease strategy - that's a more technical aspect of equipment finance for another day but one that bears checking into .

The Leasing Bottom Line :

Business owners and financial mgrs must take advantage of some great rates, terms, and structures via one of the most comprehensive and flexible asset finance strategies available to business.

Seek out and speak to a trusted, credible and experienced equipment leasing advisor with a track record of business finance success, You will get the help you need maximize the benefits of this Canadian business financing proven strategy.



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