How To Get The Best Factoring Financing From Your Receivable Investment And How Factoring Firms Differ in Canada

Clients who are in the process of investigating factoring financing want to know their receivable investment is being financed in the best manner possible. So... are factoring firms different - oh boy - you dont believe how different they are.

Let's examine some of the key issues around factoring and receivable financing in Canada - lets look at what the best type of facility is (in our opinion at least!), how the financing works, and most importantly, why you should consider using it.

Let's address the last issue first, namely why you should be using, or at least considering factoring financing. The reality is that your business is in one of several categories - they might be as follows: you are unable to unable to obtain traditional bank type financing; your business is growing at an exceptionally fast rate to support bank financing approval, your firm has financial challenges re operating losses and other issues.

So how do you choose among the many factoring firms out there in the Canadian environment? This is where it gets tricky, and you will save probably thousands of dollars when it comes to working with the factoring firms that make sense for your needs.

Here's the basic ' lay of the land' in a nutshell. Canada has hundreds, and we mean hundreds of factoring firms that come in all shapes and sizes, small local boutique operations, branches of U.S. and U.K. firms, and everything in between. We recommend a Canadian receivable financing firm that is local to understanding your needs, and one that offers confidential invoice factoring, which by far in our opinion, is the best type of A/R financing.

As most Canadian business owners and financial managers know invoice discounting, aka factoring is simply the sale of your receivables, on a one of, or entire basis, for immediate cash. Sounds simple and sounds great, right. It is, but the type of facility you choose and what you pay can make or break your decision to finance your A/R investment.

Costs of financing your A/R with factoring firms differ greatly - Generally you can be expected to pay between 1-3% per month based on a few key issues such as the size of your A/R investment, the industry you are in, and your receivable turnover, or DSO as its known in the business.

We strongly recommend clients search for a confidential invoice discounting facility - by far the best. Your firm retains all the advantages of factoring financing, but bills and collects your own receivables, receiving cash instantly as you invoice. This facility compares to the other 99.9% of the industry which uses a cumbersome system that involves notification to your customers around your financing arrangements.

There isn’t a day when we aren’t asked by clients about the cost of factoring, which is perceived as high by many clients. We can assure you that yes, it is higher than bank financing, but ask your bank if they will give you an unlimited line of credit based on your receivables . Keep us posted on that one, because we thing you know the answer already.

Also, if you used receivable factoring prudently you could actually in many cases achieve the same costs as you have in bank type lines of credit, but that’s a subject for another day.

Unsure of how factoring finance works - lets cover it off then! You invoice you client for work or services or product done/shipped, etc. You receive the same day, cash flow wired into your bank for that invoice or invoices. Typically 90% is advanced same day, the other 10% is a buffer , held back and remitted to you when your client pays, less the factoring costs themselves .

So whats our bottom line then - we think we can sum it up as follows. There are different types of factoring - we maintain confidential invoice factoring works best. Cost vary between firms and you should ensure you work with a trusted , credible and experienced Canadian business financing advisor to get the facility that makes most sense financially for your company .


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Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/factoring_financing_receivable_factoring_firms.html

Why You Should Use Canadian Film Tax Credits For Your Film Production Financing

Don’t consider using Canadian film tax credits for film production if your film production has all the financing you need and your current projects are totally financed and will achieve a solid return on investment for your project.

Unfortunately, we haven’t met one producer or project owner in film, television and animation that seems to have all the funding they need and in place! We've heard they exist, I guess we just haven’t met them.

The Canadian government, and more often than not Ontario, British Columbia and the Maritimes are totally focused on providing you with non repayable funding for your projects in the genres of film, TV and the growing genre of animated features. They are offering, so what aren’t you taking?!

We are pretty sure the Canadian film tax credits have the same goal as in other parts of the world, namely stimulation of investment and employment.

If your film production (we will use that term interchangeably with tv/animation) requires additional funding (which project doesn’t) the provincial film funds can provide you with anywhere from 30 - 45% of your entire budget. And by the way , that’s not a loan , that’s tax credits that are certified and come back to you as the project owner in the form of a cheque - In Hollywood terms the government wants to ' show you the money ' !

We are often asked why Canadian film tax credits vary when we meet with clients and discuss broad ranges of per cent age funding of your project. It all comes down to a few simple issues around which of the 6 available tax credits you use (we recommend you use the one that will give you the most funds by the way!) and where your project is originated re shooting, production, development, post development, etc .

We encourage clients to seek an advisor who is trusted, credible and experiences in Canadian film tax credits for film production. That allows you to maximize your funding, ensure you are eligible, and, as we have said, allow you to 'max out ', so to speak, on the credits that are applicable to your particular project.

What you need to do is ensure your project qualifies and that you are aware of application, filing and other regulations that come into play that allow you to receive funds.

And oh yes, by the way. You could wait 3, 6, or even 12 months for your funds, but we recommend all clients assess the financeability of your credits before you receive the cheque. Financing your Canadian film tax credits allows you to monetize that future credit into a bridge loan, collateralized by the credit, and provides you with cash flow and working capital for your current production.

Financing your film production via the monetization of your tax credits involves just a few basics - ensuring you have your other debt and equity in place, validating your credit and budgets as eligible, and ensuring your financial filings are up to date.

Speak to a trusted expert in Canadian film financing to achieve additional funding for your projects - maximize on that film tax credit, and consider borrowing against it for funding you need now. Fade to credits!

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Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/canadian_film_tax_credits_film_production.html

Effective Sred Tax Credit Financing – Using A SR ED Loan For The Right Reasons

Would your company like to make the most out of a good thing in business - Effective sred tax credit financing, we think you'll agree, does just that. Contemplating a sr Ed loan for the right reasons to us just makes solid business sense.

Lets cover off exactly what you need to know about maximizing your participation in whats known as the Canadian governments Scientific Research and Experimental Development offering - we in the layman’s world call it the SR ED , or SR&ED program . Leave it to the government to use that formal terminology!

Whether you have never heard of the program at all, or are a first time claimant for your share, or , if you are one of the lucky ones and have been filing for years for your share of the 3 Billion dollar pie you are clearly in line to hear some great news . What is that news? It's simply that for the right reasons your ability to cash flow, monetize, borrow against, factor, whatever you want to call it , your sred tax credit can be an effective way of increasing your working capital and cash flow .

Could it be any simpler? Your company is eligible for a refund on expenditures that have been verified under the program for R&D expenditures. Thousands, and we mean thousands of businesses, many of them your competitors, are receiving cheques from the government, that are non repayable for your investment in R&D processes, products and services.

If you are not missing out on filing your claims are you missing out on effective sred tax credit financing. You just might be. We strongly believe that utilizing a sr ed loan for the right reasons is a great way to stay one step ahead of the working capital game .

Let’s examine why effective sred tax credit financing via a sr Ed loan makes sense. Generally it only makes sense under one single condition - its that your firm needs cash flow and working capital for payables reduction, further investment, equipment, and general operating expenses .! We are quite sure you are already in that group!

Monetizing your sred tax credit is simply borrowing against a rebate that is coming to you from the federal and provincial government via your sred claim. Is there anyone in the room that disputes funds today are better than funds tomorrow? We don’t believe you will argue with us on that.

If you are part of the program, or considering the sr&Ed program from a participation point of view you should consider financing your claim after it’s completed. In actuality you can finance it immediately after it’s filed, or in many cases, as you are expending funds!

SR&ED financing is simply the monetizing of that account receivable (that’s really what your sred claim has now become) to use the cash for any worthwhile corporate purpose. A sr ed loan for the right reasons allows you to increase cash flow , and simply stay more competitive - which you probably already are given you are investing in r&d type work .

Effective sred tax credit financing works best when its done quickly and efficiently at competitive rates - no payments are made by your firm and the proceeds of your sr ed loan are netted against the final cheque your firm is due .

Want to wait 3, 6, or 12 months for your sr&Ed cheque. By all means do - but remember your competitor got their cheque today by effective use of a sr&Ed tax credit finance strategy. That’s something to think about.

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Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/sred_tax_credit_financing_sr_ed_loan.html

Financing a franchise business? What you need to know to obtain finance for a franchise

Can too much expert knowledge in financing a franchise business ever be a bad thing? We certainly don’t think so and we'll show you how to obtain finance for a franchise business that you have chosen to purchase.

When talking to clients about franchise finance in Canada we generally talk about the Boy Scout motto. You will recall that their motto is ' BE PREPARED ' and that’s the total strategy around financing a franchise successful that you must adopt.

Getting the money to purchase your franchise of often the biggest worry of new entrepreneurs such as yourself. People search out franchising opportunities because they are essentially looking for a combination of opportunity and wealth - there is usually only one major obstacle to that road to success, it’s the funding for the acquisition of the franchise business.

If we had to summarize in a very simple and basic what you need to be successful in franchise financing we would boil it down to a few key issues. Want to know what they are? From our perspective it all comes down to a reasonable history of business or management experience , a decent personal financial profile - more about that one later, and access to the ' inside secret ' of franchise financing in Canada, which, you may be surprise to know, is the government of Canada !

Let’s circle back on those points - and as always it comes down and back to our Boy Scout motto - be prepared. We can see our client’s eyes rolling back now when we tell them we need a crisp business plan . That’s a key requirement of your ability to obtain finance for a franchise, simply because it’s the ' proof’, if you will, of your ability to understand and run your business properly. In that document you have info about yourself, the business you are purchasing, the industry you are in, and the financial performance you expect to achieve in your new role as business owner and entrepreneur.

From a lenders perspective financing a franchise business is all about one thing - getting paid back for the loan. So the lender will look at how you have structured the financial portion of your business plan to reflect ability to repay your franchise loan, as well as how much cash flow and working capital is left to pay yourself a salary and run your new business. Could anything make more sense than a properly crafted and positioned business plan - we don’t think so.

Your money - you have it, you want to keep it - don’t we all. However, whether it’s a franchise business or any business for that matter OPM never works - OPM is ' other people’s money' and you can't rely on 100% of outside financing to obtain finance for a franchise in Canada. So be prepared to invest anywhere from 25-50% of the purchase price into your acquisition. Coupled with that and this is critical, you must be able to demonstrate that you have run your personal and business affairs respectably from a credit perspective. Obtaining a copy of your credit report, in advance, by you, is strongly recommended.

And, oh yes, what about that Government Issue we mentioned. That’s one of the great secrets and tips we promised to reveal. Did you know that probably 90% or more of financing a franchise business in Canada revolves around a special loan program called the CSBF/BIL loan? It’s a federal program, and administered by financial institutions. Whats so great about it - limited personal guarantees, great rates, terms and structures.

Speak to an expert in franchise financing when you are looking to obtain finance for a franchise - seek out someone who is trusted, credible and experienced. Be prepared, and get ready to be successful.

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Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/financing_franchise_business_finance_for_franchise.html

What’s the State Of Asset Finance Solutions in Canada and What Asset Based Lending Rates Make Sense For My Firm ?

There must be a reason why asset finance solutions are becoming one of the most popular solutions to business financing in Canada. Let’s look at asset based lending rates in Canada and the types of solutions that might be available for your firm.

Because of the broadly interpreted nature of the term asset finance solutions lets be really clear on what we are talking about here. Asset based lines of credit is really the essence of our topic and discussion. Simply speaking it’s the financing that your firm secures, on a revolving of operating basis, and it’s collateralized by receivables and inventory.

But wait, we should also add that in many cases your firm’s equipment and unencumbered fixed assets are also eligible for operating financing. Most business owners realize that Canadian chartered banks generally do not allow you to monetize or borrow daily against equipment and fixed assets such as real estate. Asset finance, i.e. our asset based line of credit does just that? That is one of the reasons why it is significantly different.

So we have made the statement that asset finance solutions are becoming more and more popular everyday - why is this so? Think alternative, think liquidity, think ' less rules '. That’s what an asst based line of credit is all about. We tell our clients we haven’t seen one case where a customer’s asset based line of credit didn’t improve significantly from a viewpoint of borrowing power, with fewer rules.

What are those ' rules' we are referring to? Let's put it this way, you couldn’t measure our respect for the Canadian banking system in Canada - it’s immense. But the reality is that typically small and medium sized businesses in Canada - ( lets define that as , say anything from between 1 -30 Million in revenue ) are challenged when in comes to operating lines of credit .

Asset finance solutions via an ABL facility (ABL = asset based line of credit) remove a huge part of that challenge. They monetize assets, allowing you to borrow against them on a daily basis. Very little if any emphasis is placed on balance sheet ratios, profitability (it helps and is nice to be profitable though!) personal guarantees, or outside collateral.

Are asset based lending rates different from bank credit facilities? In some cases they actually are the same of better from a viewpoint of a pure rate discussion, where they differ is that if you firms facility size is under the 3 Million dollar range from a viewpoint of A/R and inventory balances. At this point you can expect to pay a significant premium compared to a bank line of credit.

Is the ' premium’ on asset based lending rates worth it to your firm? It absolutely isn’t worth it, IF... and thats a big IF... you don’t place value on increased borrowing power, the ability to borrow against your assets as you grow, as well as the increased flexibility around the terms and conditions of you facility . That’s a big IF..! and we think clients get our point when we say that any premium you might pay is easily justified .

Asset based lending rates have some other considerations also, but frankly they don’t differ all that much from any business financing facility - so you might be expected, depending on who you are dealing with , to pay an origination fee, a termination fee, and standard legal expenses to set up an securitize the facility .

Are asset based lines of credit becoming more popular in Canada - absolutely! Will they cost you more - maybe and maybe not - depending on the overall size and quality of the facility you require. Are the advantages of increased liquidity important for you - that’s for you to decide! Speak to a trusted, credible and experienced Canadian business financing advisor to learn more about asset finance solutions in Canada.
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Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.parkavenuefinancial.com/asset_based_lending_rates_asset_finance_solutions.html

What will cash flow financing cost your firm and what working capital cash facilities make sense?

Cash flow financing is typically what makes or breaks your company as your firm grows or struggles to overcome temporary challenges. Working capital cash finance is a top priority for small and medium sized business in Canada.
We hate taking the easy way out for an answer to those concerns, so we'll attempt to provide some real world immediate solutions for that working capital challenge that is always top of mind.

We haven’t found anyone who does not disagree that working capital management tends to be the single most important measurement for your firm on a daily and ongoing basis - its always comes back to that ' cash flow is king' fellow!

If your liquidity is limited you need to recognize that. Your accountant, with all due respect will easily and quickly calculate your working capital and potentially advise you that you're in a great position. He or she does that by going to your balance sheet and subtracting current liabilities from current assets. Let’s say he or she came back and gave you the great news - that you have 4 dollars of current assets for every one dollar of payables. Sounds great so far, right?

Wrong, because you might find that your actual cash on hand is only .30 cents for every dollar of payables due, and all your money is tied up in - you guessed it, receivables and inventory that are slow paying and slow turning, respectively.
So the reality is you have great working capital only if you feel very comfortable that you can pay bills, loans, leases, employees, etc!! .. as they come due . We don’t meet a lot of business owners in the small and medium size business category that have that level of comfort.

So, why do you have a cash flow financing need, and what is the cost of a working capital cash facility that makes sense.
Sitting down with clients and talking about their cash flow needs often revolves around the same key issues they are going through : temporary financial losses, lack of long term financing ( i.e. buying or leasing non current assets without good long term debt solutions ) , and , you guessed it , your biggest problem - growth ! Dramatic increases in sales, as great as they sound, lead to cash flow financing needs.

An internal solution that will not cost you a lot and solve your working capital cash challenge is simply better turnover of receivables and inventory. That’s easy for us to say and difficult for you to achieve, right? So, how does Canadian business address that - it’s by monetizing receivables and inventory and in effect your future sales, via a cash flow financing facility.
If you firm is in a great industry, has clean balance sheets, and makes money your bank facility for a revolving line of credit will typically be in the 5-10% per annum range for cost of financing.

If your firm doesn’t qualify for bank financing should you abandon ship? Definitely not. Working capital financing via receivables financing and asset based lending can solve all your problems and in effect turn your firm into a cash flow machine.

That new found cash flow comes at a price, as rates can be in the 1% or 2% per month range, but you are actually paying that now by carrying A/R and inventory and losing out on the opportunity cost of turning capital into new sales and profits.
Speak to a trusted, credible and experience Canadian business financing advisor for your cash flow financing solution that makes optimal sense for your company.

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Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/cash_flow_financing_working_capital_cash.html

The Advantage of Lease Financing When You Have the Right Equipment financing Company As A Partner

In your lease financing needs wouldn’t you like to have what they call the ' home team' advantage? Advantages in business are great, especially when your competitor is on the other side of that advantage! That's why we feel the right equpment financing company in effect becomes your home team advantage, as it becomes a partner and solution provider for your lease financing needs.

You probably have already decided why you are going to lease, rather than buy and purchase outright. We start telling clients about things like the tax advantages of equipment financing in Canada, depreciation strategies that follow tax benefits, their ability to manage obsolescence, adding in install and warranty and maintenance into the lease , etc,etc,etc ..... but do you know what ? All those benefits are great, but firms such as yours more often than not are mostly concerned about cash flow and the concern of drawing down on bank credit lines, etc for equipment that ultimately depreciates or has to be replaced.

So yes, you do need to know all those advantages, and focus on the ones that make the most sense for your company, so you can maximize them - but the bottom line is that lease financing is mostly regarded as a cash flow tool. The textbooks call it the most efficient use of your resources when you have limited capital - we simply call it a great way to conserve cash flow.

One of the advantages of lease financing is simply clearly that it covers you from low tech to hi tech. What do we mean by that, simply that all assets can be properly financed if you partner with the right equipment financing company. That goes from computers and technology that seems to depreciate one second after you purchase it, to your shop floor and office equpment that might give you useful economic benefits for years.

And hey, what about that other advantage - leasing to own, or leasing to use? Many clients aren’t aware they can structure whats known as an operating lease whereby they use the asset, minimize their cash flow outflows, and have maximum flexibility at the end of the lease financing transaction. What is that flexibility? They can utilize one of three options at the end of the term - they can buy the unit, return it, or upgrade/extend the transaction. Tell us that’s not flexibility?!

So we've laid out all those great advantages, but it is easy to find the right lease financing company. Clients are surprised to hear that there are hundreds of lease finance firms in Canada - some are huge, some are small, some are geographic, some don’t want your type of business, some are dying to find you and get your business and provide you with great rates, terms, and structures.

If you don’t have the time to approach a few hundred firms, meet them discuss your needs, and give them your financial statements is there a solution. There is. Speak to a Canadian business financing advisor who is trusted, credible and experienced in lease financing. Flexible Terms, documents and credit approval come quickly when you have the right equipment finance company as a partner.

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Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/equipment_financing_company_lease_financing.html