Business Line Of Credit Strategy Required? Check Out Asset Based Lending

The Dirty Little Secret Your Banker Won’t Tell You About Asset Based Lending As A Business Line Of Credit Alternative

OVERVIEW – Information on a business line of credit facility known as ' asset based lending ' - Check out this Canadian business financing solution for you cash flow and sales growth needs

A business line of credit alternative comes with a dirty little secret. That secret? Canadian banks aren't the only ones to offer full blow credit lines that allow you to margin receivables, inventory, equipment, and even purchase orders! That solution by the way is called ' asset based lending'.

Can you blame someone for not telling you about a good thing? No surprise then that asset based lending is the dirty little secret in asset finance that that bankers in Canada don't necessarily want to let you know about.

So we're sharing that secret with you and touch on why it's such a powerful non bank financing strategy. Let's dig in.


Understanding why asset based financing is so different requires the need to understand what we are comparing it against. The comparison is of course an operating line of credit with a Canadian chartered bank. They are great, low cost, and run smoothly on a daily basis. If... and we repeat if... you can get one and get it increased as you need it.

Your ability to access a business line of credit with the bank focuses in on everything you probably feel isn't necessary. You have assets; you have growth, so what’s the problem. The chartered banks, in their wisdom allocate these lines of credit based on yes... the assets... but as importantly ratios, covenants, personal guarantees and outside collateral.

Nobody does a better job and at the lowest cost than our Canadian banks. They do that because they are lending you my money which is on deposit at their bank. So all power to safe lending practices, and that's why Canadian banks are some of the strongest in the world.

That brings us back to: asset based lending in Canada and why this type of asset finance is a powerful working strategy. And could it be simpler. Not really. It focuses on the two things you have always had... assets and growth potential for sales and profits.

Asset based lending is the ability of your firm to borrow, daily, as you need it , against receivables, inventory, as well as equipment and real estate if they factor into the picture . It supports your business credit needs, and does not, we repeat, does not overly focus on the bank requirements we mentioned.

Dirty little secret # 2 - Some of the Canadian banks actually have small boutique divisions of asset based lending! In our experience these divisions don't communicate properly with regular commercial bank divisions around what their offering is- that’s just our opinion.

So who actually offers this type of asset based lending. In Canada it's a relatively small handful of firms, some of which are U.S. based, and who have a tremendous expertise on the things you already have, inventory, receivables, and purchase orders and contracts.

Asset finance can cost the same as the chartered bank offering, in ,many cases it costs a bit or a lot more, depending on the size of your transaction .A business line of credit via an asset based line of credit generally starts at 250k and goes up to anywhere up to 50 Million or more!.

Accessing and navigating the maze of this boutique financing is difficult for the Canadian business owner and financial manager. The solution? Speak to a trusted, credible and experienced Canadian business financing advisor on why asset based lending is the secret you want to know more about.

7 Park Avenue Financial :
http://www.7parkavenuefinancial.com
Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations


7 Park Avenue Financial

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

Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

' Canadian Business Financing With The Intelligent Use Of Experience '



Stan Prokop

Top 4 Most Overlooked Benefits of Leasing of Equipment As a Business Finance Strategy

Information on four key benefits with respect to leasing of equipment as part of your overall business finance strategy in Canada. How lease financing benefits can help you reduce and overcome capital acquisition risk and challenges. Make lease financing work for your firm!

Most Canadian owners and business managers wouldn't think of always paying cash for equipment and other capital acquisition needs. They also can't imagine, in the current economic climate, paying cash for everything. Whether you are in an industry that is highly capital intensive, or if you simply on occasion need to upgrade or purchase new equipment the leasing of equipment should be considered as an effective overall financing strategy for your company

Naturally no form of business financing in Canada could be considered perfect and met absolutely every one of your needs, but let's examine what are considered to be normally the top four benefits of equipment leasing. Naturally you want to ensure you are dealing with the right type of lease firm and you have also carefully examined your rights and obligations under the business lease.

Anyway, benefit #1- Flexibility. The reality is that working with the right lease partner firm should provide you with the flexibility you want in your transaction. Flexibility is of course a broad term, but we are basically referring to the type of lease that works best - for your firm! Not everyone else's. That flexibility comes in the form of low or no down payment, monthly payment structuring options ( here are possibilities abound!), balance sheet optics around the amount of debt you can carry without getting your bank offside. Flexibility also comes in the form of the ability to return the equipment or extend the lease for a pre agreed period of time.

Benefit # 2 might well be called Cost efficient. The last thing you want to be doing is getting your firm locked into a long term lease on a depreciating asset - and the reason you lease financed the equipment in the first place is that you as a Canadian business owner and financial manager recognize that the equipment ultimately will probably have no value after its economic life is completed.

If the business world was slow moving and predicable you would never have to worry about competition, changing technology, etc- however things don't work that way and as your needs change over time you can using equipment financing as the tool to address those needs.

Benefit 3- Tax benefits! We hate getting into long accounting and financial statement dissertations when we are lease financing info with clients, but the reality is that leasing of equipment as a business finance strategy has accounting and tax benefits re write off strategies around your payments.

Our final focused major benefit is simply Cash flow

conservation. It's tough enough in today's business environment to achieve positive working capital and cash flow for daily and long term needs. Utilizing lease financing as a tool to minimize cash outlay and reduced down payment requirements makes total sense. Choosing an off balance sheet operating lease strategy will also ensure your ratios and debt covenants stay intact.

In summary, as we stated, no overall business financing strategy works perfectly for all companies in all industries. But leasing of equipment has significant benefits that clearly outweigh other options such as purchasing for cash, entering into long term loans, etc.

Speak to a trusted, credible and experienced lease financing advisor to ensure you can take advantages of the 4 key benefits we outlined.

Stan Prokop is founder of 7 Park Avenue Financial -

7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations





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

Article Source: http://EzineArticles.com/5189939

Working Capital Financing In Canada - Yes You Can When It Comes To Successfully Accessing Business Lending Solutions

Working Capital and Business Lending in Canada Without the Voodoo!

OVERVIEW – Information on alternatives to working capital financing needs in Canada. Accessing the right business lending improves your firms success in growing sales and profits

Business lending in Canada . Is it all just voodoo? We don't think so, and there are solutions you can investigate to achieve maximum working capital & cash flow financing. It's time to get your business on track - so let's dig in.

There seems to a lot of ' optimism ' in small and medium sized businesses - we hear and read about that every day. But it's tough to sift through all the smoke and mirrors, dare we call it voodoo? and get a sense of where working capital and business lending is at here in Canada.

Optimistic? Most business owners & financial mgrs these days are in fact bullish about their businesses. In some cases though external industry and competitive and economic issues have some folks hanging on for life!

If you are forecasting and planning your cash flow needs, say on a 12 month basis your biggest challenge is often how you do get that liquidity squeezed out of receivables, inventory, and purchase orders and contracts. That has been and still is the real challenge - it's all about that cash flow is king guy!

When looking at your cash flow and financing needs you need to focus in on several key issues and determine how they fit together - typically those issues your ability to collect your receivables and how you are financing them, what your sale growth is going to be, and what type of longer term capital do you need for things like equipment, real estate, etc. Naturally all that has to be benchmarked against how you are currently financing your company.

Looking at new equipment while at the same time conserving working capital? In certain cases you might have to spend a considerable amt. on new assets to keep up with the competition. That's where equipment/lease financing is key to minimizing cash outlay while keeping your asset needs up to speed. Typically new assets help grow sales and profits.

There are great solutions for working capital via creative business lending in Canada. When we meet with clients they typically are looking for one solution, the ' holy grail' so to speak. In reality we show them that a number of solutions, possibly combined, can get you where you want to be in Canadian business financing.

Those solutions include receivable financing. Heard about factoring but not sure you like how it works... then consider confidential invoice financing... allowing you to bill and collect your own receivables.
Don't also forget to investigate two sources of govt financing - One is the Canada Small Business Guaranteed Loan program, which finances a combo of equipment or leasehold needs. Those companies investing in R&D should take advantage of SR&ED financing. That allows you to monetize your SR ED claim, without waiting for the federal and provincial governments to cut your cheque.

Have contracts upcoming, worried about financing them. Investigate purchase order and inventory financing... despite the myth it really is available!

Finally, as an alternative to traditional bank financing consider an asset based lending facility... it combines the power of receivables, inventory and equipment... with your firm borrowing against those assets on a daily basis as you need the working capital . It grows automatically as you grow sales.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your cash and loan needs.


7 Park Avenue Financial :


http://www.7parkavenuefinancial.com


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations

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

Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

' Canadian Business Financing With The Intelligent Use Of Experience '



Stan Prokop

Business Lease Finance Options In Canada : Know Your Asset Needs & Understand Leasing Equipment Finance Strategies

What Mom Never Told You About The ‘ Credit Box ‘ & Acquiring The Business Assets You Need

OVERVIEW – Information on leasing equipment in Canada. Knowing your business lease finance options allows you to acquire the assets you need to run, and yes grow your business

Business lease finance options aren't necessarily always a straightforward process when it comes to acquiring assets. Equipment leasing might also find your company ' outside the credit box ' - in otherwards potentially not qualifying for the asset financing you require.

The real world reality? Your lease options and who you deal with in this area can make or break good or bad financing decisions. Mom never told us that one! Let's dig in.

We're arming you with some lease basics, and we'll let you in on some inside secrets to the trade. We have often told our clients we're not impressed by the ways in which some industry participants create a smoke and mirrors scenario around some of your most important lease financing acquisitions.

You're wrong if you think that it's all about interest rates also. Unfortunately most of the time new clients we meet are only focused on rate. In reality pure math analysis will more often than not show that leasing is a bit more expensive option. The actual reasons you chose to lease probably should be more focused around the two types of leases available, and which one is right for your firm. And as mentioned, leasing strategies properly structured will also put you inside that ' credit box ' - in other wards: You're approved!

Alternate decisions to lease are driven by, guess what...? Credit approval (leasing approval is easier to obtain) and the managing of your payments in a predictable fashion related to your cash flow. An if you are in a technology business you're most concerned with the fact that you have 3 or 5 years to go on payments and your asset is depreciating, or become obsolete a lot faster.

Don't forget also that many small, what we can call ' service features ' come with the lease facility. They include the ability to include taxes on your payments, bundle in warranty and maintenance, etc. Not everyone knows also that used equipment can be lease financed - provided the asset is purchased from a legitimate vendor either here in Canada or in the U.S.

Is it possible to figure out the exact rate you are being charged in a lease? As we said, it shouldn't always be about rate, but the answer is ' yes'... you can figure out what the interest rate is.

How do we do that then? Relatively simple, if you have the tool. The parts of any lease calculation are term of lease, amount financed, the final obligation or future value, the interest rate, and the payment. If you know any four of those you can use a financial calculator to calculate the 'real' rate the lessor is using.

Example: Your business is leasing 50,000$ of assets/ asset for 3 years and you own the equipment at month 36 you are told, and the monthly payment is 1600.00$. By entering those 4 into a financial calculator (a real financial calculator) you can see that the rate is 10%.

Let's stay with our client's fixation on rate. Is that 10% high, low, acceptable, competitive? More often than not it's a competitive number because the entire industry has to stay competitive to be in business.

A better question you never asked is what rate your lease company borrows at in order to allow leasing equipment for business such as yours. If they can borrow at 5% they are making 5% on you... if their cost to borrow is higher... and in most cases it's higher than you think, they are making less.

Let's share another of those secret strategies not commonly known. Your firm has a lease... it's for 50,000, for three years, and the monthly payment is 1600.00 and you. Your competitor has the same lease, but that monthly payment is 1480$. How could that be, ask clients?

The answer is that one lease is probably an operating lease, structured as a rental, and the lower payment simply means the lessor is going to get the equipment back at the end of the lease - sell it, and recover the shortfall (hopefully) on the lower payment you have been making.

So... is it all smoke and mirrors when it comes to lease finance options? It doesn't have to be.80% of Canadian business use various lease strategies to acquire assets. Shouldn't your firm be considering that?

Do your homework, compare apples to apples, and speak to a trusted, credible and experienced Canadian business financing advisor in the lease financing area.



7 Park Avenue Financial :

http://www.7parkavenuefinancial.com


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations . Info /Contact :


7 Park Avenue Financial

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

Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

' Canadian Business Financing With The Intelligent Use Of Experience '




Stan Prokop

Business Finance Needs : Check Out Asset Financing Credit Facilities

We’re Predicting Love At First Sight For This Canadian Business Financing Solution

Information on ' ABL ' asset financing credit facilities in Canada. It's time business owners & mgr's who can't access traditional bank credit lines check out this Canadian business finance  financing solution

Business finance solutions are never 100% perfect all the time, and of course making a prediction is a sometimes risky scenario, potentially damaging to your credibility, but we're quite confident in saying that Canadian business owners will recognize non bank asset financing as credit facilities for business finance loans to be the best thing they ever heard of when it comes to financing their business. In fact, we're predicting a potential ' love at first sight ‘! Let's dig in.

Frankly we're probably not exactly going out and making a stretch comment because, hundreds if not thousands of Canadian firms are investigating and utilizing this type of financing. You just may not have heard of it yet.
As the Canadian business economy turns itself around going most of our clients are finally focused on growth again .But how is that growth to be financed , since lending standards and criteria at institutions such as the banks don’t appear to have been liberalized at the same pace that your company hopes to grow !

That’s where our trend prediction comes in. Asset based lending focuses on your assets and growth opportunities - it doesn’t focus on ratios, tangible equity in your company, covenants, cash flow coverage, etc, etc, etc! Are we forgetting the dreaded ' personal guarantee’?

So you are picking up on the opportunity, let’s see how things work. Asset based lenders keep it simple, they lend a very high value against your ongoing assets. What are the typical assets lent against - you can almost guess what they are. They are receivables, inventory, unencumbered equipment and real estate if in fact there's a real estate equation in your company's assets.

The big mystery around asset based lending in Canada, based on conversations with our clients, is that business owners don’t really know or understand who these firms are. So we'll tell you.

They are specialized firms, both Canadian and U.S. based, that focus solely on providing credit facilities and business finance loans with your assets as security. They take the same security as a Canadian chartered bank would, and you manage your facility on a day to day basis, drawing down cash as you need it. Funds are wired into your account as you need them, based on... guess what ... assets! That really is the one key difference that our clients pick up on, that the total focus of this type of assets financing is the collateral itself.

We already know your next question... because we've heard it a hundred times before. Its' how much can we get ‘... followed by 'what does it cost’?

Speaking in general terms your receivables are financed at 90% of their value, and because of the nature and marketability of different types of inventory this type of collateral is margined anywhere from 25-75% . Even work in process can be financed for those firms that have progress billings. Recall we had noted that unencumbered equipment can be drawn against also. Typically an appraised current market or liquidation value is agreed upon with you and the asset financing provider. That saves the sale leaseback approach, which by the way is also a separate viable option.

Costs vary around this type of financing. On occasion it is competitive with bank financing - and giving you twice the liquidity - but more often than not it’s more expensive. You offset those costs by greater access to credit facilities that will grow your business and profits.

Speak to a trusted, credible and experienced Canadian business financing advisor who can walk you through the Canadian landscape of business finance loans in the asset based lending area. You'll quickly find, we think, that our prediction is becoming more true every day, asset based financing is hot! And here to stay.


7 Park Avenue Financial :

http://www.7parkavenuefinancial.com


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations . Info /Contact :



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

Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.









Stan Prokop

SBL Loans! Is The Canadian Government Business Loan Help From Where You Least Expect It? Gov Programs For Business Finance

Government Assistance In Financing ? Yes!

Information on the Canada government business loan . SBL loans are the leading example of gov programs that work for Canadian business financing

Help from where we least expect it. We can't speak for you but we've always appreciated assistance in business, especially when it comes from sources you least expect. We're talking about the Canadian government business loan, in our opinion it’s the best or 2nd best of gov programs that work.


We've always loved the line ' Hi, we're from the government and we're here to help ‘... which is why SBL Loans in our opinion are the real world example of a phrase that is often associated with negavity. ‘Government ' ... ‘Banking’ ... many small and medium sized business owners cringe when they contemplate those words. Not today, though.


The government business loan in Canada is a primary offering via INDUSTRY CANADA in Ottawa. It offers SBL loans up to $ 500,000.00 for the purpose of financing equipment assets, leaseholds, real estate, software, etc. In actuality the 500k limit is specifically related to real estate, while other asset categories are capped at $ 350,000.00.


The program provides a long term fixed or variable rate financing to businesses looking to start, expand, and grow!


Misinformation abounds around the program; we're always surprised at the amount or lack of solid understanding and facts around gov programs such as this.


One of those main misconceptions revolves around who the lender is. We can at least forgive our clients who misunderstand the fact that while this is a government sponsored and guaranteed loan, in actuality the actual day to day dealings are in the private sector.


One of the greatest benefits of the program is something we have alluded to already, its that SBL loans fit perfectly for a number of company categories, including start ups, growing firms, and also franchises which make up a huge portion of the borrowing segment of this program.


As we have hinted, the program is run at the local level, local meaning wherever your firm is, because the program is underwritten and funded by your local Canadian chartered bank. By the way, one of the challenges of the program, as ironic as it may seem, is to find a banker that understands and supports the program in a positive manner. That means of course facilitating your application and recommending you for approval!


A common complaint we hear from clients on anything to do with ' gov programs' or banks in general is that ' forms and documents' are a challenge. Let's be realistic. All business financing requires a forms and app's, and we don’t necessarily subscribe to the fact that SBL loans are any different.


Some key basic requirements are a reasonable personal credit history for the busines owner/owners, a business plan and cash flow, and some historical financial statements if you're already in business. Very basic things such as your articles of incorporation are also required. Oh, and by the way, we strongly encourage clients to pay their taxes as you can expect to get a government loan when you owe them for back personal taxes already, right?!


The Canadian government business loan funds billions of dollars of small business loans in Canada. It's a working example of Gov. Programs that work. Speak to a trusted, credible and experienced Canadian business financing advisor today on achieving solid finance rates and terms you otherwise could not achieve. Bottom line? Get with the program!

Stan Prokop - founder of 7 Park Avenue Financial –
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 13 years - Completed in excess of 100 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing. Info & Contact Details :

http://www.7parkavenuefinancial.com


7 Park Avenue Financial

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

Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

' Canadian Business Financing with the intelligent use of experience '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.


Stan Prokop

Factoring Financing In Canada - Your Viable Cash Flow Solution

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Cracking The Code In A/R Cash Flow Financing

Information on factoring financing in Canada . Here's how this real world business finance solutions works and why it just might make sense for your company

Factoring - Financing in Canada has a limited number of options, and factoring is certainly become one of them. When we meet with Canadian business owners and financial managers to discuss their working capital and cash flow problems customers are either self financing or requiring cash flow assistance, or their current financing needs to not provide them with the working capital and cash flow they require.

Canadian banks are among the strongest and most successful in the world - part of that reason is their somewhat conservative stance to Canadian business financing .- That conservative stances serves shareholders very well, but certainly doesn’t help small and medium sized business owners achieve their financing needs .


So where does your business get the cash flow it needs. Long term borrowing, i.e. what the finance people call ' term debt ' is not really the solution for day to day operating and working capital needs. Companies generate cash from the ' current assets ' portion of their balance sheet. That involves the following asset categories -

Cash
Inventory
Receivables

Factoring focuses on turning receivables into immediate cash. Yes there is a cost and a process but those costs and that way of doing business can be properly justified with the help of a trusted and credible advisor in this area of Canadian working capital finance.

When we meet with business owners to discuss their working capital needs it is essential they understand their working capital situation and requirements. Customer doesn’t need to be full fledged chartered accountants to measure their working capital situation and needs.

By taking a very few numbers for their financial statement customers can monitor the level of working capital to fund the business, and make payments on any debt the company has - i.e. loans, leases, etc .

Those calculations are very simply but not always properly understood or monitored by our customers. For example, determine your current working capital by taking your current assets and subtracting current liabilities - it’s as simple as that. Then monitor this number against the following items:

Sales
Total assets
Total liabilities

By at least on a monthly basis analyzing these very basic numbers will show your trends in your working capital needs and any deterioration that might be setting in.

Well, to this point we have discussed the problem - Is factoring the solution? It can be.

Factoring works as follows if you have properly structured a facility for your own particular business model and way of doing business. You simply sell, or ‘factor’ invoices as you generate them. You receive 80-90% of the money immediately, the balance on payment from your customer. There is of course no ' free lunch' in Canada so a financing fee, or ' discount fee ' is deducted from the funds due you. In Canada this can be in the range of 1 - 2 1/2% on average. Your ability to negotiate the best fee and the type of facility that suits your daily paperwork is probably going to come from working with a trusted and credible advisor in this area of Canadian Finance.

Higher turnover of receivables, I.E. via factoring, is a great indicator of a successful company. Your company is in a better position to invest funds, pay creditors in a timely fashion, and grow and profit your business.

If your firm could sell more because it had the working capital to finance receivables and inventory and purchase more goods you are turning over assets constantly and generating more profit .Therefore the 1-2% cost of the factoring is hardly what the Canadian business owner should focus on. You can also extend credit terms to major customers or new potential customers, which becomes a major competitive advantage - like your firm your customer also views ' cash as king' and will probably reward you with new business. Offering larger amounts of credit to good customers, with great payment terms is a great way to increase your competitive presence.

Factoring might no be the solution for every firm in Canada, most certainly it is not - 'BUT ' - if you cant get the financing you need its a solid working capital Canadian alternative . Work with a trusted advisor to get the facility that suits your business and needs.



Stan Prokop - founder of 7 Park Avenue Financial –
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 13 years - Completed in excess of 100 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing. Info & Contact Details :

http://www.7parkavenuefinancial.com

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

Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

' Canadian Business Financing with the intelligent use of experience '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.


Stan Prokop