Asset Based Lending : We’re Hacking Into The Alternative Finance Solution For Cash Flow Without Debt !

Tweet

Asset Based Lending - Everything Your Wanted To Know But Were Afraid To Ask

OVERVIEW – Information on asset based lending in Canada. These cash flow and working capital finance facilities can help you fund operations and finance growth

Asset Based Lending - Canadian business owners and financial managers continue not to take advantage or investigate one of the most powerful business financing strategies available to Canadian firms today. Afraid to investigate? Let's dig in.

While asset based lending, or ABL lending as it is sometimes called, is a very common U.S. and European financing tool Canadian business has been slow to catch on and investigate this option.

ABL lending is coming into popularity on a slowly but increasing basis in Canada because it provides your firm with increased liquidity - i.e. more working capital and cash flow! Asset based lending is certainly not the only choice - your firm can be financed by a Canadian Chartered bank line of credit, a single factoring or invoice discounting facility, or possibly by some other mix financing strategies .

When we meet with business owners and talk about why asset based lending is coming into vogue it is our opinion that this is not a fad, but a financing solution and reality brought about by the 2008 and 2009 liquidity crisis in Canada which affected every aspect of Canadian business financing.

New, start up, and even established corporations found it more difficult to get business financing that suited their needs, so, necessity being the mother of invention, Canadian business owners looked to see what was working where! ABL, or asset based lending in Canada is a huge industry, with many market participants. The Canadian market place, similar to other aspects of Canadian and U.S. business comparison is smaller, more fragmented geographically, and a bit less robust.


We strong recommend that business owner's work with a trusted, experienced and credible advisor in this area to map out an asset based lending solution that works best for your firm, as each industry differs with respect to asset based and capital requirements.

We have all heard the term 'perception versus reality 'and asset based lending is a great example of that phrase. By that we mean that many perceptions exist about asset based lending that simply aren't true, or if they were perhaps true once they certainly are not now .

As an example your firm might not be willing to entertain asset based financing because 'ABL 'is simply unknown to many of your business peers. The reality is that many of the largest and most successful organization in Canada, some of them public entities utilize ABL solutions. You'd be surprised!

Asset based lending is clearly an 'alternative financing 'form for your business liquidity. Many customers view the word 'alternative 'as a negative statement, which might infer financial problems etc. ABL should simply not be viewed in such a negative way. If your Canadian firm had an asset based financing facility that gave you more working capital, greater cash flow turnover, less restrictive covenants, and competitive pricing would you view that as a negative? We clearly don't think so!


In summary, investigate asset based lending for your firm as an alternative long term source of working capital and cash flow. Work with a dependable and experienced advisor to structure a facility that meets your working capital needs.

You might quickly find that other firms in your industry and your competitors start to realize that your firm differentiates itself in a very positive manner based on your new financing facility - i.e. access to more working capital, better relations with suppliers, ability to finance more inventory and receivables and grow your business. ABL - investigate and inform yourself of the possibilities.


7 Park Avenue Financial :

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

http://www.7parkavenuefinancial.com



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







7 Park Avenue Financial


Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

' Canadian Business Financing With The Intelligent Use Of Experience '

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

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

Stan Prokop

Asset Based Lending : The Only Business Credit You Might Ever Need?

Tweet



Why an ABL Solution might be your Cash flow Saviour!

OVERVIEW – Information on asset based lending solutions. The challenge of proper business credit is many times solved by the ' ABL ' solutions available in alternative financing

Asset based lending. The only business credit tool your firm will ever need?

It's possible, and we've seen it work all the time. How could one type of business financing, i.e. asset based lending, be the only business credit tool our firm will ever need? Let's dig in.

Many of our clients want to discuss t non-bank alternatives to cash flow and working capital challenges. In most cases one type of Canadian business financing is not necessarily going to do the entire job you need - Except..! Except when it’s an Asset based lending solution for business credit.

'ABL' is sort of the new kid on the block - it’s vastly popular in the U.S. and rapidly taking off in Canada, some say in fits and starts, which is partially due to the entry and departure of various firms that dominate the market.

ABL, which is our acronym for the solution can be tailored very specifically to be the total one stop financing solution your firm needs. The two greatest dynamics of ABL is that it offers your business more credit availability (isn’t that what it’s all about) and at the same time can be customized to your industry and specifically, your company!

In its purest form is simply putting in a customize loan facility to allow you to draw daily against the value of your receivables, inventory, and in many cases fixed assets and real estate. It’s kind of the business version of a home equity line of credit we like to explain to clients!

But wait a minute, clients say, isn’t it exactly what a bank does. Well, yes, and absolutely no! Conceptually it is still the same, but the asset based lending business credit facility focuses solely on the assets, so you will rarely , if every hear terms such as rations, covenants, outside collateral, personal guarantees, etc in the context of an ABL solution .

So is it the right financing tool for your firm - we'll let you be the judge of that. But if your firm required a working capital and cash flow revolver in excess of 250k and you have some financial challenges you are immediately a candidate. Oh and by the way, you absolutely need to have receivables, inventory and fixed assets to get this type of facility, that’s really the main premise.

Typical candidates we work with all the time have margin pressures, they don’t have the business financing in place to support sales growth and new orders, , or they have some real business and balance sheet issues revolving around restructuring, turning around, coming off a bad year, receiving a mega contract, etc ..

If that sounds like you we can assure you that you're a candidate for asset based lending business credit.

The benefits? Greater cash flow, no covenants or ratio maintenance, and the ability to take advantage of opportunities otherwise not available.

So is it the be all and end all financing solution? Only you as a Canadian business owner and financial manager can decide - so speak to a trusted credible and experienced business financing advisor to see if this type of business credit is for your firm.



7 Park Avenue Financial :

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

http://www.7parkavenuefinancial.com


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







7 Park Avenue Financial



Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

' Canadian Business Financing With The Intelligent Use Of Experience '

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

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

Stan Prokop

The Truth About Business Factoring And The Real Factor Cost Of AR Finance In Canada

Tweet

Factoring Pitfalls and Solutions for Canadian Business

OVERVIEW – Information on the actual costs of business factoring in Canada and how ar finance factor cost should be assessed in terms of opportunity costs and financing charges

Business factoring in Canada. It's A/R Financing. You can't handle the truth!

Or can you?










We think you will be able to once we review the basics around business factoring in Canada, what is the true factor cost of AR finance (ar = accounts receivable). Let's dig in.

Your firms ability get financing around the most liquid and accessible business asset you have, your receivables, is what can make or break many small and medium sized businesses .

The big corporations seems to have this down quite well already , as they have large sophisticated infrastructures for credit and collections, as well as access to corporate borrowing and securitization facilities that smaller companies just don't have . By the way, we can make a strong case that the big guys use factoring, but they call it securitization!

So what's the true cost - (it's not what you think it is!) and, even as critical - picking your partner in this method of Canadian business financing.

Is your firm eligible for a business factor facility? If you can answer yes to one single question - ' Do you have accounts receivable?' then, you guessed it, you're eligible!

In many cases if you are working with the right firm you can blend in receivable and purchase order financing into the same facility - the names tend to change then, as we refer to that as asset based lines of credit and working capital facilities.

So, it's always about cost, right? We don't think so, but our client's sure do, so let's invest some time to discuss the real factor cost of ar financing in Canada. Part of the problem in addressing the cost issue is the perception by clients, totally understood of course, that factoring costs are viewed as interest rates by the borrowers.

That's not how the industry views it; they are buying something you are selling, at a discount. That discount rate is often (99% of the time!) interpreted as an annual interest rate. So while the factor firm buys your receivables at a rate of between 1-2% (on a monthly basis) our clients gasp and view that as 12 - 36% annual percentage rates.

So, how do you assess the factor cost then? Here are the elements you should consider in assessing business factoring in Canada. First of all, if you don't have some decent gross margins on your products or services then even bank financing or carrying your own receivables is expensive. So a solid gross margin is important.

To calculate your margins of course simply take your gross income and divide that number by your sales revenue and express it as a percentage. The number of course shows you how much you are making considering the costs you incur in actually producing that product. Naturally service companies have usually great margins, because there is no direct cost of sales.

Other issues to consider in understanding the true cost of factoring is how long it takes to collect your receivables, as well as the actual cost it is taking you to carry that investment . And don't forget the concept of lost opportunity - you can take you factoring cash and turn that into additional sales and profits, as opposed to waiting for a cheque to come in 60- 90 days later.

Our final point is that the cost of factoring can be significantly offset by your ability to take discounts and purchase in a smarter fashion, in quantity, etc.

In summary, the true factor cost of AR finance is probably not what you think it is. Thousands of firms that use and offer this service can't be wrong.

Speak to a trusted, credible and experienced Canadian business financing advisor for assistance in understand the real cost of business factoring in Canada. You might just be surprised, and find you can handle the truth!



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

http://www.7parkavenuefinancial.com


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







7 Park Avenue Financial

Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

' Canadian Business Financing With The Intelligent Use Of Experience '

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

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

Stan Prokop

Equipment Financing : Exclusive Strategies For Asset Financing

Tweet

Equipment Financing : Your Rock When It Comes To New Assets For Your Business

OVERVIEW – Information on equipment financing in Canada . The ability to benefit from using lease finance to acquire new ( and used ) assets to grow business is key to long term success

Equipment financing in Canada is both wanted... and needed. As the Canadian economy continues to improve your business has the need for new or replacement equipment.

How do you do that efficiently, economically, and cash flow smart? Finance those new assets! Let's dig in.


Pretty well every asset can be financed.

Computers ('Information technology" 'IT ‘)
Plant and production equipment
Software - (Yes, software!)
Rolling stock - i.e. trucks, trailers, etc
Specialized Equipment

Etc! Emphasis on Etc!

So what lease partner should you deal with?

Many of our customers focus on 'rate ', or in effect the price. It goes without saying that your firms want a competitive rate, and clients are surprised when we say they get to pick their own rate! What do we mean by that? We simply mean that your company's overall credit quality will always determine the rate and structure and term of the lease. However, in order to achieve that best rate or ' pricing ' you need to ensure your company is presented in the best light possible.

The right lease advisor/partner will allow you to reap some, or all of the following ten benefits:

Conserving cash

Cash flow predictability

Ability to use cash for more pressing current liabilities

An alternative to ' the bank'

Letting new assets improve your processes/production

Flexibility re adding on, upgrading, trading in

No equity give up

Allows your other borrowings to stay current

Reap the accounting benefits - i.e. depreciation, etc

Stay competitive with what your competitors are doing



How is lease approval decisions made? No one factor determines an equipment lease financing approval. It's quite frankly what our firm likes to call the 'weight of evidence '. That simply means that several key factors such as your financial statement health, the current state of your industry, the asset quality, and your ability to demonstrate re payment are the key factors in any lease financing approval.

But wait - there's more!

1.You don't have to be an established business - lease financing can be for a start up or emerging company also

2. Your equipment doesn't necessarily have to be new, it can be used if you can demonstrate its value and that it has been maintained and still has a useful economic life

3. You might already own an asset - let's say it is not financed, you can lease it back to the lease firm and generate cash flow and working capital from that transaction!

4. Banks in general in Canada do not provide lease financing - two of the Canadian banks have lease financing operations but credit quality must be quite good to achieve bank type lease financing

5 . Being declined does not necessarily mean that you can't get the equipment financing - we simply re structure the transaction to meet the approval criteria - that might mean a simple restructuring of the lease

Seek out and speak to an equipment finance expert!



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

http://www.7parkavenuefinancial.com


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







7 Park Avenue Financial

Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

' Canadian Business Financing With The Intelligent Use Of Experience '

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

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

Stan Prokop

SR&ED Tax Credit Financing : Trending Now! Here’s Why!

Tweet


Tired Of Waiting For Your SR&ED Cheque? Finance Your Refund & Access SR ED Bridge Loans

OVERVIEW – Information on sr&ed tax credit financing in Canada. The ability to finance some , or all of your sr ed refundable tax credit is key to cash flow success under the SRED program

SR&ED claim waiting isn't fun. Any firm that has an R&D capital investment wants to know their claim is approved and being processed by the federal and provincial government. But did you know that you refund can be financed... today? Let's dig in.

The process of financing your claim via a SR&ED bridge loan raises immediate capital, often much needed, for your company. Naturally proceeds of this ' bridge loan' can be used for any purposed, including of course more R&D investment - allowing your company to maintain its coveted competitive edge.

SR&ED funding is truly a ' business personalized solution' for your R&D cash flow needs. By choosing the right SR&ED consultant to prepare your claim and facilitate its filing is key to avoiding the financial repercussion that come from audits, requests for more info, etc. Don't underestimate the need for a solid preparation of your claim.

Most companies in fact have consultants prepare their claims on a contingency basis - meaning the risk of success is mostly transferred to the SRED preparer.

Each year there are some dramatic and less dramatic changes in Canada's SR&ED program. Companies that use the program are in pretty well every industry in Canada - that includes mfg, food, technology, life sciences... and on it goes.

Federal and Provincial govt seem focused on continually changing and modifying the program - focused on ensuring both the govt and your company get the right ' ROI ' from the program.

Yet through all those changes SR&ED Loan funding remains the same. In fact it's improved dramatically, allowing you to fund credits prior to filing, or setting up a SR ED credit line, etc. Funding can often happen within a couple weeks assuming full co operation and documentation around your application.

How much can you get? We're glad you asked - Typically sred loans are based on 70% of the total value of your claim.

So, tired of waiting for your SR ED refund? Finance it and use that cash flow to grow and replenish your business funding needs. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can effectively manage your SR ED loan process.






7 Park Avenue Financial

Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

' Canadian Business Financing With The Intelligent Use Of Experience '

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

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

Stan Prokop

Equipment Leasing In Canada : Now You're A Know It All!

The Doctor Is In : Expert Advice on Canadian Leasing

OVERVIEW – Information on equipment financing in Canada. The ability of business owners/financial mgrs to maximize leasing benefits conserves cash and provides financial flexibility for asset acquisition

Equipment financing basics allows the business owner/mgr significantly increase their chances of approval, and, equally as important, ensuring the Canadian lease financing they are looking for comes with rates, terms, and general structures that are commensurate with their overall credit quality and business financing needs . Let’s dig in.

A lease and equipment financing provider has some basic needs around your initial application for financing. Some of the key areas you should focus on are detailed below.

Leasing is available for firms with all durations of ‘time in business ‘. Although a start up firm can be financing via a lease financing solution your overall time in business can be a great factor to increase your chances of a proper approval. Equally important is the overall industry and business model you are in – as on occasion some industries are out of favor. In 2008-2009 the auto industry was clearly ‘out of favor ‘.

Lease financing is a segment of ‘asset based lending ‘- therefore the asset you are financing has a considerable role in determining your overall approval and pricing. Equipment that is financed generally tends to depreciate, so your lease firm will focus on the value of the equipment during the term of your lease. As an example a lessor could only reasonably expect to recover 5 or 10% of a computers value three years from now, simply because a computer and telecom equipment in general as asset classes depreciate quickly .

Equipment that is not purchase for bona fide vendors and manufacturers also on occasion can present financing challenges. Therefore if you have a choice work with repeatable dealers, wholesalers, manufacturers, etc.



Any lease firm will draw commercial credit reports on your firm and look for payment trends to suppliers – if personal guarantees are required on private small and medium sized firms quite often a net worth statement and credit bureau check will be asked form . Quite frankly these types of information and credit diligence are associated with any borrowing, whether that is a corporate credit card, a business loan application, etc. In reality lease firms in Canada probably provide the quickest overall approval times than any other type of business financing. Many lessors use automated credit scoring systems and smaller transactions fewer than 50k for example can actually be sometimes approved in a matter of minutes or hours.

Lease transactions in Canada can run into the many millions of dollars, lease financing is one of most vibrant financing initiatives in the country – so expect on larger deals that a higher level of due diligence will be performed on your firm for larger lease facilities .

Finally , leasing is all about ‘structure ‘ so you should feel free to be creative in your lease structure request in order to maximize the particular benefits of lease financing that you are trying to achieve – they might include lower rates re your credit quality, seasonal payments, flexible end to term options etc .

In summary, business owners should learn some key leasing basics around what is required to make a lease approval successful. Being armed in this manner will ensure a more prompt approval and the overall approval you are seeking re asset type, term of lease, and flexibility at end of term. That is sensible, proactive financing. Seek the advice of a trusted and credible lease financing advisor who can assist you with asset finance needs.




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

http://www.7parkavenuefinancial.com



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







7 Park Avenue Financial

Direct Line = 416 319 5769

Office = 905 829 2653

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