Factoring Financing For Working Capital Needs Factoring Finance In Canada - A Lot Easier To Understand Than Bitcoin!

Tweet

YOUR COMPANY IS LOOKING FOR FINANCING VIA  WORKING CAPITAL  FACTORING!

YOUR GUIDE TO CAPITAL  AS A WORKING CAPITAL SOLUTION IN CANADA

You've arrived at the right address! Welcome to 7 Park Avenue Financial 

        Financing & Cash flow are the biggest issues facing businesses today

                              ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?

CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs

EMAIL - sprokop@7parkavenuefinancial.com

 

THE BENEFITS OF FACTORING FOR IMPROVING WORKING CAPITAL

 

Factoring for working capital needs in Canada is quickly becoming a recognized and traditional strategy for cash flow financing. We say traditional because for many years factoring via Canadian factoring companies in Canada was viewed as a non-traditional and alternative financing strategy.

 

 

 

A bank is a place where they lend you an umbrella in fair weather and ask for it back when it starts to rain." - Robert Frost 

 

Poet Robert Frost probably wasn't talking about factoring accounts receivables to obtain cash, but he highlights the risk around being too heavily reliant on traditional financing options such as bank credit!

 

INTRODUCTION - ACCOUNTS RECEIVABLE  FACTORING AS A FINANCING SOLUTION IN CANADA

 

Small businesses in Canada constantly struggle with cash flow management issues - that challenge of covering operating expenses, the purchasing of materials, and asses for the business is a challenge - Factoring services helps those cash flow issues business experiences, allowing the company to finance accounts receivable at a slight discount to third party business factors.

 

 

The simple explanation around this financing tool is that it allows Canadian firms to access financing and cash flow immediately to smooth out the ups and downs of any company's business cycle.

 

WHAT DOES A FACTORING COMPANY FINANCE

 

Firms in Canada utilize the strategy for short term working capital needs. Invoice factoring is not a term loan. Most business owners don’t realize that factoring as a financing strategy brings no debt on the balance sheet. We could comfortably argue that your balance sheet looks better when using this financing tool. It, in effect, allows you to satisfy short terms needs for payroll, purchase of inventory, etc.

 

WHAT IS THE IMPORTANCE OF FACTORING IN WORKING CAPITAL MANAGEMENT?

 

Factoring is a valuable tool to manage working capital in your business because businesses can instantly convert sales, i.e. accounts receivable, into cash.  By financing ( selling ) invoices to the factoring company, the enterprise receives immediate same-day cash to fund day-to-day business needs around suppliers and current liabilities on the balance sheet - The bottom line?  Cash flow is improved, and the business can operate more efficiently and effectively.

 

By reducing the need for traditional financing via term loans or lines of credit, the company can maintain liquidity at times when conventional channels for funding are limited for a business - A factoring company focuses on the creditworthiness/credit quality of your accounts receivable base versus the financial health of your business - Many companies cannot access some of all of the traditional bank financing they need to run and grow a business which is why accounts receivable financing is a valuable solution.

 

Using traditional factoring solutions, businesses also can transfer both credits and collect risk to the factoring company if they so choose - At 7 Park Avenue Financial, our focus is often on recommending a Confidential Receivable Financing factoring agreement, allowing a business to bill and collect its customer payments while reaping the immediate benefit of factoring -  CASH FLOW!

Most factoring solutions will also allow the business owner and financial manager to finance the receivables invoices they choose to finance, so this finance solution is the ultimate in short-term cash flow gap solutions. Any business requiring ongoing cash flow needs to operate successfully and manage asset turnover, and credit risk should consider receivable financing as a Canadian Business Financing solution.

 

 

BENEFITS OF FACTORING -  IMPROVED CASH FLOW / QUICK ACCESS TO FUNDS / IMPROVED RISK MANAGEMENT AND ASSET TURNOVER  

 

A factor financing strategy has significant benefits if utilized properly (more about that later). Some of these benefits include:

 

• The ability to purchase more inventory on a short-term basis at preferred pricing and quantities

 

• Access a working capital credit facility that many times are significantly higher than what your firm could achieve with bank financing.

 

• Increase sales with the right customers by offering better payment terms than your competitors (cash flow is king for your customers also!)

 

• Take advantage of payment discounts offered by suppliers – many firms offer discounts such as 2% ten days – by taking advantage of these discounts, you can remove a huge portion of your factor financing discounts

 

EVALUATING FACTORING AS A WORKING CAPITAL SOLUTIONS

 

We can’t overemphasize the need to ensure you understand the Canadian factoring market. It differs significantly from the U.S., and some enhancements to a factor financing strategy can supercharge your cash flow. For instance, by combining an A/R facility and an inventory financing scenario, you can often at least double all your firm's previous liquidity. That’s a powerful cash flow statement.

 

Also, for firms that are factoring now, we are quite convinced, after talking to clients, that they either don’t understand factoring pricing or in some cases have been misled about what they are really paying for this type of financing. Even improving your factor facility by ½ % can drive profits straight to the bottom line.  Clients are encouraged to seek a trusted, credible, and experienced advisor such as the team at 7 Park Avenue Financial  in this area , who can help them achieve the right factoring facility for their firm.

 

We also encourage clients to seek out factor facilities that don’t lock you into long term contracts, as our experience indicates your firm might be a candidate for other forms of financing at some point down the road.

 

WHEN SHOULD A  COMPANY  CONSIDER FACTORING?

 

 

5 REASONS TO CONSIDER FACTORING FINANCE 

 

1. The ability to cash flow slow-paying customers will allow a business to fund daily operations and invest in growth

 

 2. Companies with a limited credit history or who do not have the financial strength to access financing via traditional financial institutions such as banks can access business funding for ongoing capital needs

 

3. Businesses that have cyclicality or seasonality to some aspects of their business can benefit from  overcoming cash flow fluctuations that help smooth out the cash flow cycle of a business

 

4. Growth opportunities such as expansion into new markets or international markets can be funded by sales financing and receivable factoring

 

5. Service-oriented businesses  that do not have assets or collateral required by banks can still access working capital

 

 

We spoke previously of properly utilizing a factoring financing strategy. By that, we mean that you should ensure you understand what you are paying, as some firms have methods of presenting factoring in a method to confuse the customer about overall ‘all in' cost.  Things to look for are clear per diem pricing – you want to ensure you only pay for what you use in your facility. Open contracts make more sense for your firm; why would you let a finance firm lock you into a contract? Other things to look for are the advance rates on your transaction.

 

Most business owners understand the basic mechanics of factoring – they are of course:

 

• Your firm ships or delivers your goods and services
• You invoice and receive same-day cash for your invoices – usually in the range of 80-90%
• Your customer pays the invoice and at that time you receive the original amount that was held back, minus the factoring discount fee

 

U.S. Based firms that offer factoring in Canada are heavily involved in the entire process that we just walked through. They often insist on verifying your invoices, talking to your customer about payment, etc. Our recommended solution to eliminate this intrusiveness is a factoring or working capital facility that allows you to bill and collect your own receivables.

 

 

KEY TAKEAWAY - WORKING CAPITAL FACTORING 

 

Factoring improves cash flow by providing immediate cash for  outstanding invoices generated by business-to-business sales

 

Cash flow access is immediate - often the same day or the next day at the latest

 

Obstacles to traditional financing are eliminated as  receivable finance is a viable alternative to traditional bank loans that have significant requirements around  personal guarantees,  collateral,  and the  bank requirement for strong financial statements.

 

Companies can better manage  credit risk by utilizing non-recourse financing solutions, credit insurance,  or  utilizing the collection expertise of business factoring companies

 

Factor financing is often tailored to a business or industry's particular needs around the cash flow gaps in the business.

 

Any business selling on trade finance/credit terms to business customers domestically or internationally can access factor financing working capital solutions.

 

Increased buying power - cash flow from receivable financing can be used to maximize inventory purchases.

 

Factoring will often be an intermediate solution for a company to improve the business credit history and make the journey back to traditional financial solutions.

 

  

CONCLUSION  

 

Factoring for working capital is a proven strategy. The challenge becomes being an educated business owner. Find out what benefits apply to your firm when utilizing this type of financing, and investigate the best facility for overall ease of doing business and pricing. That’s cash flow 101! For working capital factoring.

Call 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor to discuss your business financing needs.

 

  

FAQ: FREQUENTLY ASKED QUESTIONS / PEOPLE ALSO ASK / MORE INFORMATION  

 

What is factoring, and how does it work as a working capital solution?

Factoring is a business financial transaction in the area of asset based lending which allows a business to finance its sales by selling unpaid invoices to a third-party commercial factoring company at a discount to obtain immediate cash instead of waiting for payment from the client. This form of financing allows a business to finance daily operations and cover business needs around current liabilities and short-term obligations.

 

  

How can factoring benefit businesses in terms of working capital?  

 

Factoring benefits businesses by providing access to cash needed to cover the investment a business makes in working capital accounts such as accounts receivables and inventory - Cash flow is improved when the company cannot access traditional financial options from banks for short-term working capital loans or business credit lines to fund business operations. Companies cash choose between non recourse invoice or traditional recourse factoring based on credit and collection policy and bad debt experience.

 

 What potential drawbacks or risks are associated with factoring as a working capital solution? 

 

Factoring financing is more costly than bank financing based on the factoring fee that the invoice factoring company charges. Firms using traditional notification factoring have a potential loss of control in the collection process, and customer relationships can become a concern.  Not all businesses are suitable for factoring.

 

 What types of businesses can benefit from factoring as a working capital solution? 

 

Any business that sells on trade credit in any industry has the potential to benefit from factoring. Longer payment terms can be offered to clients that can be financed via a factoring solution.

 

 

  

How can businesses determine if factoring is the right working capital solution?  

 

Businesses should consider factoring receivables for working capital by assessing factors determining their working capital needs with a business advisor to determine if they can benefit from factoring as a working capital solution for immediate cash flow as a line of credit alternative.

Click here for the business finance track record of 7 Park Avenue Financial

How Asset-Based Lending Cash Flow Asset Finance Solutions Can Help Your Business

Tweet

YOUR COMPANY IS LOOKING FOR CANADIAN ASSET FINANCE ASSET-BASED LENDING CASH FLOW  FINANCING! 

UNLOCK THE POWER OF YOUR BUSINESS ASSETS - LET ASSET BASED LENDING HELP YOUR CASH FLOW NEEDS

You've arrived at the right address! Welcome to 7 Park Avenue Financial 

        Financing & Cash flow are the biggest issues facing businesses today

                              ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?

CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs

EMAIL - sprokop@7parkavenuefinancial.com

 

  

ASSET-BASED LENDING - YOUR ALTERNATIVE FINANCING SOLUTION!  

 

Asset based lending in Canada often brings a straightforward question from our clients - namely: Can you explain asset finance cash flow solutions to us?

Businesses all over Canada in every industry keep hearing about nontraditional lending solutions for their businesses - in many cases, their competitors are already taking advantage of them. They want to know more... so... let's dig in.

 

WHAT IS ASSET BASED LENDING?

 

In today's challenging business environment, it's all about access to business loans and cash flow for a company's ability to thrive .. and survive!  Asset-based lending is  secured lending finance, allowing a business to use its sales and business assets such as :

 

Accounts receivable

Inventories

Fixed assets/property plant and equipment /rolling stock

Commercial real estate owned by the business

 

These assets become collateral and a  ' borrowing base ' for a loan or line of credit availability. That allows the company to maintain the liquidity needed to fund day-to-day operations and cover short-term expenses. Businesses utilize asset-based lending as an alternative to traditional bank financing. Asset-based lenders are experienced in valuing business assets on the balance sheet and use that expertise to provide the maximum amount of funding as a line of credit or business term loan solution.

 

 

WHAT IS THE DIFFERENCE BETWEEN ASSET BASED LENDING VS. TRADITIONAL BANK  LENDING? 

 

The key differences between asset-based loan solutions and unsecured loan / cash flow based loans and lending by banks revolves around the focus of each type of lending - For asset-backed loans, it is all about assets - for banks, it is all about cash flow. Banks view cash flow performance as the key to repayment - Asset-based lenders view business assets as sources of repayment.

For any business, it's all about the ability to borrow capital, and companies have different options and choices.
 

 

IMPROVING CASH FLOW AND WORKING CAPITAL

 

So is business financing via asset finance a difficult concept to understand?  Hardly.  Asset-based financing, often called 'ABL' by those in the industry, is simply the method of obtaining the maximum working capital you need from your assets, which include typically receivables, inventory, and in many cases some equipment and/or real estate. That's as simple as it gets.

 

So how can monetizing your assets be your business's ultimate working capital tool?

 

Although it's been in existence for many years, in the past asset finance or asset based lending (we also call it a 'working capital facility') is coming into vogue.

 

It doesn't take rocket science to understand then, given traditional financing almost totally collapsed in the 2008-2009 global meltdown, that companies began searching for options and alternatives to their business financing needs. In our post-pandemic/covid interest rate and business lending challenged market, access to business capital is as crucial as ever.

 

Lenders like asset based financing simply because they are using their expertise and knowledge in your assets to help you cash flow your business.

 

USES OF  ASSET BACKED FINANCING

 

Although many companies turn to asset based lending when they can’t access traditional bank financing the reality is that this type of financing has some unique characteristics that allow you to utilize the financing for other reasons - Those include:

 

Major expansions

 

Buying another business

 

Bridge financing your business while you undergo restructuring or turnaround.

 

In many cases, it's 'buffer' financing, allowing you to return to more traditional 'bank type' financing.

 

 HOW DOES ASSET BASED LENDING " ABL ' WORK?  IMPROVE CASH FLOW WITH ASSET BASED FINANCE

 

As we stated, it's very simple for us to explain to clients what an ABL facility is, it's a bit more complicated to get them to understand how it works. The best way to explain it though is to simplify it all and say that you should consider asset finance via a working capital facility as simply a 'revolving line of credit around all your business assets'. Can that be any simpler to understand?  We don't think so.

 

  

CRITERIA FOR EVALUATING YOUR BUSINESS CREDIT NEEDS  

 

Typically the process is as follows - After the traditional 'application' process, there is an agreed-upon value put on all your business assets - as we said, 99% of the time the assets under this financing include receivables, inventory, equipment, and in some cases real estate.  The most common assets though are receivables and inventory.

 

Your firm provides regular monthly, and in some cases weekly updates on the values of these assets, and you in turn use your regular bank account to draw down on funds, as you need them, to run your business. Similar to a bank revolving line of credit facility your asset-based financing facility fluctuates every day as a dollar of capital flows through your business - you purchase  product, you generate a receivable, you collect your receivable, and of course, the process repeats itself.

 

  

ASSET BASED CREDIT LINES GROW AUTOMATICALLY - AS YOUR BUSINESS GROWS!  

 

If there is one simple advantage of asset-based lending it's that the financing grows as you grow sales and assets! You can truly say you have access to unlimited funding, albeit often at a higher cost.

 

Other forms of asset based lending such as SR&ED Tax Credit Financing, Leasing, factoring receivables, and PO Finance, are being routinely used by many of your competitors. Why not your firm?

 

Asset Finance strategies help you do that. 50% of Canadian businesses report that the inability of their sales growth to generate funds hinders their progress. Top experts such as Canada's BDC cite growing a business as the most common goal of the vast majority of firms.

 

  

KEY TAKEAWAYS - ALTERNATIVE ABL FINANCING  

 

Asset-based loans are a method of secured financing via business assets on the balance sheet - allowing a company  to access business capital

A Cash flow loan relies on a company's ability to generate cash flow as repayment

Cash flow loans are suitable for businesses that are not asset-intensive such as service-based companies that rely on higher profit margins

Asset-based loans are best suited to businesses that are more capital intensive and who have balance sheet assets -

 

  
CONCLUSION - UNLOCKING THE POWER OF BUSINESS ASSETS FOR CASH FLOW 

 

Asset-based lending will allow your company to borrow for lines of credit or short-term bridge loans based on balance sheet asset values. The traditional focus on cash flow is secondary, as the asset-based business lender funds are based on inventory, a/r, and fixed asset values. Even real estate owned by the business can be bundled into the facility or used as collateral for a separate bridge loan solution - Asset based lenders offer higher borrowing margins against the face value of business assets - As an example, 90% of receivables can be financed.  Receivables finance/factoring is a stand-alone business financing solution within the asset-based lending business model.

 

Call 7 Park Avenue Financial, a trusted, credible business financing advisor in this area to ensure you understand the options and of course, the benefits of this unique and creative method of business financing.

 

FAQ- FREQUENTLY ASKED QUESTIONS PEOPLE ALSO ASK MORE INFORMATION

 

What is asset-based lending, and how does it differ from other forms of financing?

Asset-based lending is a form of secured business lending that allows a business to use key business assets such as receivables, inventory, and equipment as collateral for a line of credit o term loan. This method of financing physical assets via specialized asset-based lenders is the primary difference and determining factor versus bank financing cash flow lending techniques, which focus on various measures of business score around financial history, cash flow generation,  outside collateral, and loan covenants tied to an unsecured credit facility.  The majority of companies using asset-back financing are not able to receive some or all of the financing they required from traditional financial institutions such as banks.

Asset based loans typically are shorter in duration and are often seen as a bridge back to traditional financing.

 

What are the benefits of using asset-based lending for cash flow management?

Asset-based lending solutions can provide a company with a business revolving line of credit or short-term bridge loan based solely on the value of business assets - that allows a company to cover day-to-day operating expenses and maintain liquidity based solely on sales revenues and business assets.  Companies with good balance sheet assets but who might have lower profit margins and cash flow generation abilities are excellent candidates for asset-based lending solutions.

 

What types of companies are most likely to benefit from asset-based lending?

Companies that are asset rich and who have growing sales and accounts receivable and inventory are strong candidates for asset finance loans and lines of credit - Many services-based companies, including technology companies, are well suited to this method of financing. Companies that have seasonality or cyclicality in their business model and who have good balance sheet assets as collateral are candidates for ' ABL' financing as a working capital or bridge loan solution. While banks focus on key business ratios such as the debt-to-equity ratio asset backed lenders are ' covenant light ' and do not insist on loan covenants that banks might require. Some banks are in fact asset based lending banks but these are smaller divisions within the bank.

 

How do lenders evaluate a company's creditworthiness when offering asset-based lending?

Asset-based lenders evaluate overall creditworthiness with a focus on valuing company's assets as well as other general risk assessment techniques. In some cases,  asset appraisals of certain  key assets may be required for firms with asset rich businesses.

 

 

 

What are some potential drawbacks of using asset-based lending for cash flow management? 

 

One drawback of asset-based financing as a cash flow management technique is the fact that credit facilities are limited to the value of company collateral assets and the sales growth of the business. Interest rates and financing costs tend to be higher than traditional bank financing, and borrowers should understand that the collateral for pledged asset-backed facilities is subject to default/repossession when they borrow money under asset backed finance.

 

 type of financing isn't necessarily better than the other. One is better suited for larger companies that can post collateral or operate with very tight margins. The other may be better suited for companies that don't have assets (i.e. many service companies) but are confident in future cash flow

 

 What is cash flow lending? 

Cash flow-based lending solutions are an alternative to secured financing and asset-based loan solutions - Cash flow lending focuses on cash generation and significant cash flow potential and profits for loan or line of credit repayment. Traditional bank loans backed by a company's cash flow do normally not require collateral securitization and the loan approval and underwriting process is generally more time-consuming and detailed as the focus is on issues such as how the company will perform in any economic cycle when it comes to cash flows. Companies with profits, cash flow and good margins can benefit from lower rates in unsecured business cash flow based financing.

 

 

 

 

 

Click here for the business finance track record of 7 Park Avenue Financial

Maximizing Working Capital with Receivables Finance / How To improve Cash Flow With Financial Factoring

 

Tweet

YOUR COMPANY IS LOOKING FOR  RECEIVABLE FINANCING!

ACCOUNTS RECEIVABLE FINANCING SOLUTIONS IN CANADA VIA COMMERCIAL FINANCE COMPANIES

You've arrived at the right address! Welcome to 7 Park Avenue Financial

Financing & Cash flow are the biggest issues facing businesses today.

ARE YOU UNAWARE OR   DISSATISFIED WITH YOUR CURRENT  BUSINESS  FINANCING OPTIONS?

CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs

EMAIL - sprokop@7parkavenuefinancial.com

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

The Benefits of Financial Factoring for Small Businesses: Managing Cash Flow and  Risk 

 

 

Receivables finance in Canada is a solid fix when companies are on the brink of a collapse of cash flow. But do business owners / financial managers really understand the ' math ‘around ‘ financial factoring ‘? Let's dig in.

 

Receivable financing, aka ' financial factoring,'  is a valuable source of cash flow for businesses looking to maximize working capital. By selling, or assigning receivables to a specialized finance company ( factoring firms ) businesses obtain immediate cash for sales made to clients . Businesses with slow-paying clients or who grant extended terms to certain clients can reduce the strain of negative cash flow.

 

 

WHAT IS ACCOUNTS RECEIVABLE FACTORING? 

 

Accounts receivable (A/R) factoring is sometimes called invoice discounting - This business financing solution is a form of short-term financing that does not bring debt to the balance sheet. Business borrowers use a commercial accounts receivable factoring company as an alternative to traditional bank financing to fund unpaid invoices. 

 

This method of cash flowing a balance sheet asset ( receivables ) is a business funding solution for companies to sell to clients on trade finance terms, extending typical terms in the 30-60 day range to customers. 

 

A business's receivables often represent the largest and most liquid current asset on the balance sheet. Companies looking to accelerate cash flow utilize this method of financing working capital which allows them to enter into a factoring agreement that in effect, sells the receivable to the business lender/financing company at a discount.

 

The benefit? No more waiting for client payments and generating immediate cash flow for products and services sold to customers; some forms of A/R finance allow a company to transfer credit and collection risk to the factoring company.

 

 

"The lack of money is the root of all evil." - Mark Twain

 

At  7 Park Avenue Financial, we think Mr. Twain had it right - that's why the key to understanding this option's benefits in Canadian business finance is ensuring you know how the math works in accounts receivable factoring.

 

Simple perhaps? But it is often significantly misunderstood regarding short-term financing for any invoice amount. Simultaneously, this type of financing may be viewed as a business loan, but that is incorrect - its cash flowing your assets, specifically a/r, allowing companies to fund day-to-day operations for their business needs.

 

 

WHAT ARE THE BENEFITS OF RECEIVABLE FINANCING? 

 

There are numerous benefits to receivable finance:

 

Cash flow immediately improves as a company receives immediate cash, at their option, for some or all outstanding invoices financing - this allows for better cash flow management and allows a company to meet short-term obligations around accounts payable and other short-term cash needs-  Better cash flow management and credit risk management are keys to understanding the benefit of proper a/r finance and better financial forecasting and planning for growth.

 

Certain forms of  a/r financing, such as traditional non-notification finance, allow a business to transfer credit and collection risk to the factoring lender - This is known as non-recourse financing - this eliminates bad debt risk and overall bad debt management - International trade financing and supply chain financing can be achieved via structured factoring solutions.

 

A/R financing is  the monetizing of a business asset - as such, no debt comes on the balance sheet and improves overall bad debt and liquidity ratios around DSO and inventory management.

 

Factoring companies and asset-based lenders fund receivables daily, so businesses receive cash the same day they generate an invoice to clients - this quick turnaround is a key benefit of receivable finance

 

The majority of receivable finance facilities are specifically tailored to the business needs of the company - Businesses have the option to fund some or all of their sales, and the company can choose the amount f financing as it is needed - Facilities are increased automatically as sales revenues grow - so not pre-defined credit limit will limit sales and cash flow growth.

 

Small business owners will be pleased to know they receive the cash the same day for financing under a factoring solution. Owners will be pleased to know that you can eliminate the notification by a third party by considering the Confidential Receivable Financing solution.

 

HOW DOES ACCOUNTS RECEIVABLE FACTORING WORK?

 

When businesses don't qualify for some... or all of the financing they need (especially when growing), financial factoring becomes an excellent capital source for cash flow.  Typical advances are in the 80-90% range based on receivables under 90 days old. (Accounts receivable greater than 90 days old infers potential collectibility) 

 

The balance of the receivable, i.e. the additional 10-20%, is a temporary holdback released as soon as your client pays into a bank lockbox set up in the factoring agreement.

 

Business owners and financial managers finance receivables at a discount to the face value of the invoice - The cash amount they receive on the invoice is known as the advance rate - The typical advance rate is usually a 90% rate, and the company receives the final 10% when the end user customer pays the invoice, less the financing cost, which is expressed as a fee, not an interest rate

 

This process is similar to a bank financing receivable pledge, where banks take an assignment of the receivable and a security interest against the company and use a loan to a value of only 70% as a borrowing base the customer can draw down on. That is the main difference between a factoring company and traditional commercial lenders like banks.

 

So far, so good.  Here's where a common-sense understanding of arithmetic comes in. Let's assume your company has a gross margin in the 40% range, not uncommon, depending upon your industry.

 

 

RECEIVABLES FINANCE EXAMPLE BENEFIT

 

 

Using a $ 10,000.00 invoice as an example, your gross margin of $4000.00 can be put to work the same day you issue that invoice, for the simple fact that a Receivable Finance solution provides you same-day cash ( if you choose ) for sales revenue generated by your firm. 

 

The benefit? Your newfound ability to generate even more sales and profits by putting that cash to work in a same-day timeframe.

 

ACCOUNTS RECEIVABLE FINANCIAL FACTORING ANALYSIS EXAMPLE

 

Many businesses fail to recognize or calculate   ( there's that understanding the math again ) the cost of carrying receivables and being unable to take ' QUICK PAY ' supplier discounts that vendors offer.  While the cost of accounts receivable financing is typically a .75- 1.25 % fee to the factoring company, that amount alone can often be recovered by taking vendor discounts!

 

For customers with access to ' all ' the bank credit they need, that might seem like not a big deal, but for firms that are forced to self-fund and manage cash flow almost hourly, that becomes a huge consideration.

 

Canadian businesses can choose between non-recourse accounts receivables factoring, and recourse factoring based on their desire to hold their regular credit risk and bad debt risk or transfer it to a third party.

 

The main ' misunderstanding ' around the cost of financial factoring of receivables is that bank rates need to be viewed as an annual borrowing cost. At the same time, accounts receivable financing is a fee, not directly comparable.

 

  

WHAT IS THE BEST ACCOUNTS RECEIVABLE FINANCE SOLUTION?  

 

Traditional Canadian factoring solutions come from U.S. and British firms that have successfully marketed the same offering for hundreds of years.  We encourage clients to consider ' Confidential Receivables Finance ‘solutions that mirror a bank facility's day-to-day operations - most notably, your ability to bill and collect your own accounts without notice to clients, suppliers, etc.

 

 KEY TAKEAWAYS - MAXIMIZING WORKING CAPITAL AND CASH FLOW WITH RECEIVABLE FINANCING FINANCIAL FACTORING

 

Accounts receivable factoring solutions are a source of financing for any business selling on trade finance credit terms.

 

Companies sell or assign receivables in exchange for immediate cash as sales and invoices are generated for customers.

 

A/R non-bank finance solutions and the factoring fee are more expensive than traditional bank lines of credit, but funding advance rates are higher, and there is unlimited capital available as the business grows

 

 

"Never spend your money before you have it." - Thomas Jefferson

 

 

CONCLUSION - FACTORING AND ACCOUNTS RECEIVABLE FUNDING SOLUTIONS VIA FACTORING COMPANIES

 

Financing accounts receivable and invoice factoring is a key aspect of any business looking to improve its working capital.

If you feel you might be missing the right considerations in accounts receivable finance in Canada or want to rescue your cash flow ' from the brink. '

 

Call   7 Park Avenue Financial, a trusted, credible, experienced Canadian business financing advisor who can assist you with your receivables and small business financing needs - helping you achieve balance sheet financing and working capital success for your business needs. Letting Canadian businesses benefit from this asset-based funding now utilized by thousands of firms.

 

    

FAQ: FREQUENTLY ASKED QUESTIONS / PEOPLE ALSO ASK/ MORE INFORMATION

 

  

What is receivables finance, and how does it work?  

Receivable finance is also known as financial factoring. It is a form of business financing for a firm to sell accounts receivables to third-party financial firms known as factor companies. Invoices are sold at a discount for immediate cash. When clients pay the invoice, the factoring company keeps a fee for financing the transaction. Both banks and factoring firms will focus on any large concentration risk in the accounts receivable portfolio and the eligibility criteria associated with either bank or factor financing.

 

  

How can receivables finance help me manage my business's cash flow and credit risk?  

Receivables finance helps companies manage credit risk and cash flow by allowing the business to receive immediate cash for sales made to clients. In traditional notification factoring solutions, the factoring company assumes collection risk and under non-recourse facilities, a business can eliminate bad debt risk.

 

 What are the different types of receivables finance, and how do I choose the right one for my business? 

The different types of receivable financing include non-recourse factoring, recourse factoring,  and invoice discounting. The business borrower must assess payment terms and advance rates, how they wish to manage or absorb credit risk and other factors such as factoring fees/financing costs when choosing a receivable finance provider for a cash flow financing solution.

 

Recourse factoring solutions specify that credit risk remains with the borrower, while non-recourse financing has the factoring company assuming bad debt, collection risk, and default.

 

Traditional factoring solutions are notification-based and require invoice verification by the factoring company - The customers of the business are notified of the transaction, and payments are made directly to the factoring company. In non-notification, a/r finance, also known as confidential receivable financing, clients of the company are not aware of the financing transaction

 

Some businesses choose ' spot factoring ', aka selective receivables financing,  which allows a single ' one of ' transaction to be financed based on new invoices selected to be funded by the company.

 

What factors should I consider when selecting a receivables finance provider?

When a business selects a receivable financing provider, key factors to consider include expertise and reputation, the factoring advance rate/holdback reserve, and financing cost related to factoring fees. The lender's due diligence process around the company's business model should also be considered as well as how the factoring company takes responsibility for day to day collections.

 

  

What common challenges are associated with receivables finance, and how can I overcome them?

 

  

Common challenges associated with receivable financing solutions include how customer disputes on invoices are settled and how payment delays will be addressed with the end user customer. The ability of a firm to focus on clear payment terms with clients and an overall sound credit and collection policy will reduce risks associated with receivable finance.

Companies should also be aware of concentration risk, as some factoring companies prefer a more extensive base of business clients versus one or two substantial clients. Concentration risk can also be limited with third-party credit insurance, which can be purchased separately or in conjunction with the factoring company.

 

 

Is factoring receivables financing?

 

Yes, factoring is a form of receivables financing and cash flow management - in a factoring solution, a company enters into a factoring agreement to fund outstanding invoices. Specialized finance firms, known as ' factors, ' purchase invoices generated by the company for immediate cash. Factors collect the receiveable and charge a fee for the services. Factoring services are one of the largest types of alternative financing and is an alternative to traditional bank loans and bank lines of credit. The factoring financing companies take responsibility for collections under invoice financing when a business chooses selling unpaid invoices.

 

 

What is factoring versus receivables finance? 

 

Accounts receivable factoring solutions and operation lines of credit are both a financial transaction and a form of receivable financing. Business owners can fund working capital via  a/r factoring or a traditional line of credit.

Issues to consider in the choice of  A/R financing include the interest rate associated with the credit facility, Operating lines of credit are less costly. Bank credit lines have the lowest cost of working capital financing based on current bank prime rates, Factoring solutions are more costly but are also more accessible with factoring rates in the range of 8% per annum to 1.15% per month for the majority of facilities.

Banks margin accounts receivable at a lower rate and determines the margining of facilities based on annual reviews and credit limits. A/R factoring solutions do not necessarily have any limits and can provide unlimited financing for company sales growth.

 

Bank lines of credit have borrowing margins in the 70-75% range, while factoring firms offer a more generous 90% advance rate, inferring higher borrowing power for cash flow needs - Many businesses choose to factor due to the higher borrowing margins and loan to value calculation associated with factoring, as well as the fact that the factoring company pays the business the same day invoices are submitted for funding.

 

Bank borrowing will typically focus on the general working capital management needs of the business and banks place certain restrictions on the use of funds s well as requiring potential additional collateral and personal guarantees of business owners. Factoring companies do not specify any restrictions on how the business utilizes cash. In some cases businesses experiencing some form of financial trouble will access factoring in lieu of attempting to access bank funding solutions.

  

 

What are the methods of valuing accounts receivable?  

 

A company can choose two different methods to address bad debt risk accounting and payment risk - either the direct write-off method of an invoice value on the outstanding receivables,  when a company deems a receivable uncollectable or utilizing a general allowance for bad debts recorded on the balance sheet based on perceived bad debt risk and experience via credit risk management.

 

Click here for the business finance track record of 7 Park Avenue Financial

Creative Inventory Financing Solutions for Startups and Growing Businesses

Tweet

YOUR COMPANY IS LOOKING FOR INVENTORY FINANCING!

FINANCING INVENTORY FOR SHORT TERM FINANCE NEEDS

You've arrived at the right address! Welcome to 7 Park Avenue Financial

Financing & Cash flow are the  biggest issues facing businesses today

ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT  BUSINESS FINANCING OPTIONS?

CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs

EMAIL - sprokop@7parkavenuefinancial.com

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

 

WORKING CAPITAL OPTIMIZATION FOR INVENTORY FINANCING SOLUTIONS

 

Inventory financing in Canada.  What are the methods that Canadian business uses to ensure that working capital investment is maximized? How does inventory financing work?

 

The good news is that there are several inventory financing solutions for businesses in Canada - It is a valuable type of financing that allows a company to fund inventory and stock - Solutions such as supplier trade credit / vendor financing, purchase order financing, inventory loans and inventory finance solutions within asset-based lending ABL lines of credit are all available to the Canadian borrower and can help fund business expenses.

 

Each of these financing solutions is unique and has different benefits and potential drawbacks, so it's important to understand financing options that best match the needs of your business.  Let's dig in!

 

 

"Financing is not a one-size-fits-all proposition." - Barbara Corcoran

 

 

WHAT IS INVENTORY FINANCING 

 

Inventory financing is a type of short-term business financing that allows a business to either purchase inventory or use inventories as collateral for financing the business - That ability to leverage inventory helps in overall cash management when used in an efficient manner.

 

For a business selling products ( as opposed to service-based companies ), it is critical to maintain an appropriate inventory level without negatively impacting the company's cash position. That allows a business not to have to liquidate inventory or pledge other assets as collateral.  The ability to avoid more expensive forms of business financing eliminates the worries around the company's cash flows. Many firms are seasonal businesses in cyclical industries, requiring specialized financing solutions.

 

In many cases inventory financing from alternative lenders is easier to obtain than traditional bank financing. Many banks are hesitant to lend on inventory to the SME commercial finance segment of the industry. Those small businesses and medium-sized firms often require business capital the most but find it hard to access.

 

Many business lenders have particular inventory funding expertise not available in the SME banking segment in Canada.

 

The ability to access financing for inventories will also allow firms to benefit from bulk purchases from key vendors, and that strategy is also often accompanied by volume discounts - ie better pricing / more profit margin!

 

The worldwide pandemic reinforced the importance of inventory and supply chain management - talk about an example of market conditions demand fluctuating and focus on supply chain disruptions. 

 

Effective inventory financing and asset management of this critical current asset will always lead to better profitability and the ability to achieve long-term business growth.

 

When business owners/financial managers are challenged on how to finance inventories, it's important to focus on two areas - we'll call them ' tips' and ' traps'!

 

 

TRADITIONAL FINANCING TENDS TO AVOID FINANCING INVENTORY FOR A VARIETY OF REASONS

 

 

Financing inventory typically revolves around retail or commercial concerns and may involve a line of credit combination. Smaller retail businesses have a huge challenge as banks and other commercial lenders are reluctant to lend against inventory based on business credit score history or financial health. In many cases, they will demand the personal or business assets of the business owners as collateral. Compounding the problem is the fact they view that type of business as an ' all-cash ' business - so why would it need small business financing?

 

 

INVENTORY FINANCING LOANS

 

Typically when inventory is financed by a bank or commercial concern via business loans, it's important to realize that it's always financed at cost.  Another good thing to know is that in certain types of financing actual physical counts, inspections, or appraisals will be required by your inventory financing lenders - again, typically a bank or non-bank commercial lender.  That won't always be required, but it’s an absolute must on occasion. The lender needs to determine the ' margin formula ' they will lend against on an ongoing basis.

 

WHAT IS THE FORMULA FOR INVENTORY FINANCING?

 

While there is no specific formula around how different traditional and alternative business lenders address inventory financings, several key factors determine the amount of borrowing a company can achieve in pledging existing inventory or purchasing inventory. 

 

At the top of the list is the actual value of the inventory of a business as that value becomes the key component in margining for an inventory term loan or part of a business line of credit. Factors assessed here are the potential resale value and the initial cost.

 

Business owners and financial managers should understand that inventory financing is about asset turnover. ie the inventory turnover ratio. This is a critical measurement in lender financing consideration - how quickly a business can turn inventories into accounts receivable and then cash!

 

The collateral required around an inventory loan as a stand-alone loan or part of a line of credit is the inventory itself - so the value and quality and marketability of the inventory are key.

 

Businesses should be prepared to present proper financial statements and properly aged listings of inventories and accounts receivable - allowing the bank or commercial finance firm to best assess financial health and repayment.

 

WHAT ARE THE TYPES OF INVENTORY A BUSINESS COULD USE AS COLLATERAL

 

The types of inventory reviewed by the inventory financing lender, in the majority of businesses, can be broken down into 3 categories

 

Raw Materials

Work In Progress

Finished Goods

 

Finished goods are the most liquid of these 3 categories and will always command the higher borrowing power unless the product is highly specialized/unique.

 

However, in many cases, raw materials can command significant borrowing power based on potential resale value.

 

Each of these 3 different inventory segments will usually have a specific loan to value attached to it - That is simply the amount the business lender will lend against that portion of the inventory - As an example, if a lender assigns a 50% loan to value on raw materials can borrow 50k on 100k of raw material inventory.

 

Understanding the different types of inventory on the balance sheet allows a business to secure better financing to support ongoing operations and business needs/business growth.

 

KEY TAKEAWAYS INVENTORY FINANCING  - THE MARGIN FORMULA IN INVENTORY FINANCE

 

Margin formulas vary significantly based on several key factors. They include an analysis of which one of the three stages your inventory is in (raw materials, work in process, and finished goods).  Businesses that are able to demonstrate they have perpetual inventory systems in place stand a  much better chance of ' borrowing power ' when it comes to financing inventories as part of their overall ' current assets.

 

Your overall gross profit also plays a key point in financing. Ultimately important is the lender's/bank's opinion on how marketable your goods are under a worst-case ' forced sale ' scenario.

 

  

THE GOVERNMENT SMALL BUSINESS LOAN PROGRAM DOES NOT FUND INVENTORY AND RECEIVABLES   

 

Many business owners consider the Canadian Small Business Loan Program to finance their business. They wrongly assume that the program covers some sort of working capital, cash and inventory components. That is not the case! In that program, only 3 classes of assets can be financed - equipment, leaseholds, and real estate. The program is a term loan versus a revolving credit facility typically required to finance inventories.

 

UPDATE! In 2022 the Government of Canada updated the SBL loan program to now include working capital financing and business credit lines that would allow inventory financing components and receivable financing as part of the program. The financing of inventory for startups is very challenging, and the federal loan guarantee program can help!

 

CREDIT FACILITIES THAT COMBINE INVENTORIES AND ACCOUNTS RECEIVABLE

 

How does the business owner use inventory financing to maximize sales and profits? Is there a winning way we constantly recommend and implement for clients looking for inventory finance? The answer is that most successful financing in this area is in the context of a combined credit facility that also financed receivables. Two sources of financing exist here - The Canadian Chartered bank and, in some cases even better: Non-bank asset-based lines of credit. 

 

  

 NON-BANK ASSET-BASED LENDERS ARE GREAT AT FINANCING INVENTORY   

 

While the bank or commercial non-bank lender places a higher emphasis on receivables due to their more immediate liquidity, they also fully realize those sales are generated from inventory turnover.  While banks differ in Canada on inventory margins, it is non-unusual in ' ABL ' (asset-based credit revolving line solutions) to achieve anywhere from 30 - 75% borrowing power. Your  Inventory management system and asset turnover are the keys to asset-based loans of this type. Having a good management system in place is key, such as FIFO / LIFO-based programs

 

Oh, we almost forgot. Why can't used submarines be financed? We would say that they can't be readily liquidated, and valuation is extremely hard to determine. Although we suppose the financing company lender could utilize a ' FLOATING DEBENTURE '!

 

CONCLUSION - THE IMPORTANCE OF INVENTORY FINANCE SOLUTIONS

 

Managing inventory is a key part of business asset management - the inability to properly finance inventory can lead to lower working capital availability and prohibit proper purchasing of inventory needs.

 

Solutions available to  businesses looking for inventory financing include

 

Supplier financing

P O Financing

Inventory Term Loans

Asset-based loans/lines of credit

 

Effective financial and inventory management will enhance cash flow and provide a key solution to the business financing challenge.

 

 

"The biggest challenge in business is not the competition but making sure you have enough capital to execute on your vision." - Jason Calacanis

 

If you want to beat the challenge of inventory finance in Canada, call 7 Park Avenue Financial,  a trusted, credible and experienced Canadian business financing advisor with a track record, allowing you to achieve the business loan funding you require. Whether it's an unsecured loan or asset based financing solution, talk to the experts about an inventory line facility or short term loan solution.

 

 FAQ: FREQUENTLY ASKED QUESTIONS / PEOPLE ALSO ASK  /MORE INFORMATION 

 

What are the advantages of inventory financing?

 

 

There are numerous advantages and benefits to inventory financing facilities via an inventory financing loan  - key benefits around inventory finance companies who offer different types of inventory financing include the ability to improve the overall cash flow position of the company. Companies with positive cash flows and better asset turnover can improve buying power and access better pricing from key suppliers and vendors who sometimes offer bulk discounts for larger purchase orders that accompany prompt payment.

 

Fast turnover in inventory helps accelerate sales revenues which can generate additional profits.

Proper use of inventory financing can fund all types of inventory, including raw materials,  inventory as work in progress, and finished goods.

When inventory financing is combined with other credit facilities, such as asset-based credit lines, a business can achieve lower costs of financing regarding interest rate, etc.

Business lenders view asset turnover as a key part of overall working capital management, enhancing the company's ability to access other forms of credit.

 

 

Click here for the business finance track record of 7 Park Avenue Financial

Alternative Sources Of Financing In Canada For Business Loan Solutions! What Scares You About Alternative Financing?

Tweet

 

YOUR COMPANY IS LOOKING FOR  BUSINESS FINANCE SOLUTIONS!

How Alternative Financing is Taking Over in Canada

You've arrived at the right address! Welcome to 7 Park Avenue Financial

Financing & Cash flow are the  biggest issues facing businesses today

ARE YOU UNAWARE OR   DISSATISFIED WITH YOUR CURRENT  BUSINESS  FINANCING OPTIONS?

CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your 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

 

 

The Rise of Alternative Financing: A Game-Changer for Canadian Business 

 

Alternative financing sources in Canada sometimes conjure images of the unknown to Canadian business owners/financial managers. Is there anything to be afraid of when considering this method of business loan finance? Hardly. Let's dig in.

 

At 7 Park Avenue Financial, we have long maintained the financial industry landscape in Canada for the business borrower has changed drastically compared to traditional bank loans for example. Current trends in alternative lending provide numerous solutions and financing options for your business. Naturally, any form of business financing has advantages and potential disadvantages when it comes to how much funding is needed.

 

  

 Redefining Business  Capital: The Power of Access To  Alternative Financing  

 

The ongoing struggle for businesses in small and mid-market sizes to secure financing for their firms leaves many more options to explore these days. It's the rise of alternate forms of funding as benchmarked to traditional Canadian chartered bank financing.

 

One kind of hybrid example is always worth exploring in small business loans  - it’s alternative finance offered by the banks. We're referring to the Government guaranteed business loan program for financial assistance, which provides term loans to borrowers who can help startups or established businesses otherwise cannot access a small business loan based on traditional bank criteria.

 

SBL loans are worth examining, but entrepreneurs with poor credit histories will not be approved. Funding startups and franchise financing are two popular uses of the program.

 

The borrower should be prepared to present a proper business plan for the loan application process.

 

  

  

  

Alternative Sources of Business  Finance in Canada: Exploring Innovative  Business Loan  & Funding Options  

 

  

  

Alternative lenders for small businesses and medium-sized firms are essentially commercial finance firms that are not funded like our banks, i.e. deposits. Therefore, they are ' unregulated' and operate under their own risk and lending models around alternative funding options versus traditional loans. More often than not, these firms specialize in offering to finance certain types of loans or working capital solutions.

 

  

 

  

Revolutionizing Finance in Canada:  Alternative Funding Solutions

    

 

Here is a list of various forms of alternate finance:

 

A/R Receivable Financing / Invoice financing for unpaid invoices

 

Inventory Finance

 

SR&ED Tax Credit Financing

 

Working Capital Loans

 

Equipment financing - Sale-leaseback

 

Non-bank Asset-based business lines of credit

 

Sales/Royalty financing

 

Merchant Cash Advances / short-term working capital loans

 

Purchase Order Financing

 

Business credit cards

 

 

The above solutions offer tremendous flexibility for the business owner in how funding can be derived. Naturally, that flexibility will almost always come with higher finance costs. Because lending standards are less restrictive than the banks, your firm can access the finance it needs.

 

The best way to look at these financing forms is to consider that they are heavily ' asset ' based and much lighter on things such as covenants and other restrictions. Traditional lending has almost always focused on pure cash flow generation.

 

  

SPECIAL LOANS / RESTRUCTURING / TURNAROUND 

 

For firms financing with traditional banks who find themselves in some form of distress or business turnaround challenge, the alternative finance vehicle is an excellent way to refinance your business when a workout with the bank in ' special loans '  cannot be established.

 

One key factor in assessing when you’re e considering business loan finance of an alternate nature is to ensure you understand any reporting requirements.  Essentially that reporting becomes the ' communication vehicle ' between yourself and the lender. In many cases, that reporting can also work positively to help identify additional or other types of financing you might need. Being 'self-aware ‘in your financial condition is essential, and a disciplined reporting system helps that cause.

 

  

CONCLUSION - BEYOND BANKS - BEST  ALTERNATIVE FINANCING SOURCES IN CANADA 

 

 

Ensure you are 'self-aware' of your business's overall financial health. If you're looking to explore alternative financing sources.

 

Call 7 Park Avenue Financial, a trusted, credible, experienced Canadian business financing advisor who can help eliminate the curiosity gap in choices.

 

  

FAQ: FREQUENTLY ASKED QUESTIONS PEOPLE ALSO ASK MORE INFORMATION  

 

WHAT ARE ALTERNATIVE METHODS OF FINANCING IN BUSINESS

An Alternative financing method includes non-traditional borrowing from non-bank commercial financing companies and asset-based lenders. Typically, alternative finance solutions provide greater access to business credit because eligibility criteria are less restrictive than traditional financial institutions such as banks. Alternative financing tends to be less stringent without many financial covenants imposed by business lenders such as banks.  Some businesses pursue equity financing for raising money via equity crowdfunding, friends and family, angel investors or venture capital solutions, and their own money in a venture. Alternative financing solutions are approved in a relatively short period when compared to more traditional lending institutions.

WHAT ALTERNATIVES ARE THERE INSTEAD OF BANK FINANCING

Alternatives to bank financing for businesses looking for equity financing include crowdfunding, angel investors, venture capitalists, and private equity sources. Some business owners pursue government grants as well as peer-to-peer lending. For debt financing and cash flow/working capital solutions for small business owners, financing is available via asset-based lenders,  invoice factoring companies,  and solutions around purchase order financing,  merchant cash advance, tax credit financing, and lease finance and sale-leasebacks as potential alternative financing options.
 

WHAT ARE NON-CONVENTIONAL SOURCES OF FINANCE

 

Non-conventional sources / alternative funding sources are business borrowing solutions from non-bank financial institutions such as commercial financing companies and asset-based lenders who lend money to businesses. They offer financial solutions similar to a traditional bank loan and numerous other types of financing, although in many cases, interest rates will be higher.

 

Click here for the business finance track record of 7 Park Avenue Financial