Understanding ABL Backed Loans & Asset Based Financing In Canada – Not What You Think!

Challenge yourself to invest some time in understanding asset based financing. Once you understand ' ABL ' loans we're quite confident you'll give them strong consideration for your Canadian business financing needs.

ABL (Asset backed lending) loans are asset based lines of credit that provide you with a business operating line of credit similar to a Canadian chartered bank facility. Big deal, we can hear you say, whats the big difference.

All we'll say for the present is ' lots ‘! and we'll leave it up for you to decide whats the best solution for your firm . We can categorically tell clients that we have seen numerous examples where firms who couldn’t access bank facilities for operating credit could now have all the operating funds they need for working capital and cash flow purposes.

Secondly, many firms see their credit facilities double if not more on occasion, once they understand and embrace asset based lines of credit .So I guess now it’s up to us prove it to you. so here we go !

You’ll find very quickly that the asset based financing places a huge emphasis on what we call your operating cycle - simply speaking your credit facility is structured to match your operating cycle. And what exactly is that cycle ?Its really just the tracking of how cash flow goes through your business, from the time you purchase inventory ( unless you're a service company of course ) to the time you generate sales and of course receivables .. and finally your collection of that a/r. Simple as that . That’s your operating cycle.

We agree with many clients that their business is unique, rarely does a Canadian business owner or financial manager feel they aren’t special! But the reality is that many industries have the same operating dynamics and cycles and challenges - and you will find asset based lenders tend to be a bit more experienced than our friends at Canadian chartered banks on industry issues .

It’s actually possible to calculate your operating cycle in days and compute some very accurate working capital and cash flow needs just out of 3 or 4 basic calculations.

So you can see where we are heading here, its just simply that understanding asset based financing is about ensuring you have enough cash flow and working capital to work through your own firms entire operating cycle . Naturally large more well heeled corporations can finance daily needs via their own profits and existing capital structure. They are usually more eligible for bank and traditional type borrowing.

But thousands of smaller and medium sized corporations, who are growing, have challenges, or who have really unique situations can't often access traditional bank financing.

That’s where ABL loans come into play - you simply have the ability to convert assets such as A/R, inventory and other fixed or hard assets into a business line of credit - outside of the chartered banks!

ABL lenders work extra hard to understand your business. Why? It's pretty simple. They have to! Simply because they place little or no emphasis on the borrowing criteria of banks, which typically include ratio maintenance, covenants, outside collateral, personal guarantees, well... ytou get the drill!

By spending a significant amount of time eon your business, industry, and operating cycle an
ABL lender can better put together a facility that works uniquely, for you. Bottom line, this is not cookie cutter financing.

Factors such as your management or ownership team, the quality of your assets, and their marketability quickly become job #1 for an ABL lender, but all of that translates into higher borrowing facilities for you - just what you needed and couldn’t get previously.

So, have we convinced you? At a minimum we hope understanding asset based financing has just become a bit easier. And hopefully we've shattered some of the mis information around why this type of facility differs from a bank offering.

More info. Questions? Costs of this type of financing? Seek a trusted, credible and experienced Canadian business financing advisor who can ensure this type of non bank operating business line of credit is for your firm.




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 80 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

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

Relieve The Challenge Of Canadian Business Cash Flow Loans & Financing – Working Capital Solutions

A call to battle! Overly dramatic? Maybe ... maybe not. But its a great definition of challenges , and very applicable to what Canadian business owners and financial managers face when confronting business cash flow loans financing, or just in general assessing working capital problems .

Success business owners are solution oriented. You have to be.

It seems like a common sense statement that you have to understand the problem before you can fix it. When it comes to cash flow a number of areas can be pinpointed as the problem, its quite rare that it’s just one single item.

Some of those other problems might be a slowdown, (or increase ... by the way!) of sales, external issues that you have no control over - in general market challenges.

Certain financing arrangements you might enter into could actually be dangerous for your firm. It might be as simple as having taken on too much debt , or having an operating facility or working capital arrangement that has too many restrictions on what you can borrow, and what you can borrow against .

Another common mistake we often see is that many credit facilities are set in stone, in effect they are ' capped' so even though you have growing sales, good receivable and inventory .. Well you know the story, you are unable to access a higher limit and tap into the working capital you need.

The optimal solution for any business is the ability of your firm to access higher operating lines when your business is growing or expanding.

A good way to understand this is to imagine that when sales are growing your current cash outflows or payments are being made on items and expenses that were incurred weeks or months previous. So you are in effect accessing business cash flow from your current larger asset based to reduce the obligations of your older debt.

We always spent time with clients ensuring they understand the differences of profitability and cash flow. We find it ironic that many times their success in being able to access business cash flow loans financing and working capital can end up being their downfall. How? It's simple. When business owners and managers are in a position to pay their bills all the time... they, guess what? assume profitability!.

But when things turn around and sales slow and inventories and A/R shrink then there is the danger of being trapped in a downward spiral.

So how can you watch out for some of these key factors ? When you think of it , they are really just basics - if your business cash flow is trending down and your sales are stable there is a problem . If you are in a cyclical business then understand then ensure you understand your cycles. Is it possible to grow to fast or over expand? It sure is. So yes, it’s great to grow, but at what cost.

In today’s environment that are both traditional and newer alternatives to working capital. Many of them don’t involve taking on extra debt. They includes asset based lines of credit, combo receivable and inventory facilities, tax credit financing, purchase order financing , confidential invoice discounting, etc .

Want some help in both recognizing potential problems, and more importantly seeking viable solutions? Seek and speak to a trusted, credible and experienced Canadian business financing advisor who can set you on the road to elimination those working capital and cash flow challenges.





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 80 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

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

Business Computer Laptop Leasing & PC Financing In Canada - Smart Tools & Smart Choices

Put yourself to the test, and ask yourself this simple question: Are you 100% comfortable with what you understand about business computer leasing and PC financing. From laptop to desktop to notebook to tablet, let's ensure you have some of the basics under your belt... so to speak!

When you are purchasing, and then financing technology assets such as those that we have described thee are certain economics that come into play. Financing those economics can be the make and break between a good decision and a bad decision... and trust us we're not talking about your choice of hardware or software manufacturer.


Let's explain. The reality is that there are some special decisions you need to make when financing a tech asset. Naturally you want to receive the benefits of the technology, keep your firm competitive, etc, but at the same time smart financing and acquisition strategies wouldn’t be bad either, right?

So let’s dig in. One major difference we can cover off quite quickly is simply that software, as well as hardware can be financed. We're talking about application software though, not development software, which is a different kettle of fish and a more complex discussion for a later date. A significant amount of Canadian businesses don’t seem to realize that software can be financed.

Traditionally software you finance along with business computer leasing is done on a 2-5 year term - we would never recommend a longer term for tech assets - quite frankly with changing technologies 2 years makes sense.

One great trick we have picked up over the years ( can we call it a trick ? !) is to structure a combination hardware and software business computer leasing and PC financing transaction on a 3 year operating lease, with the software being priced on a capital lease to own basis within that same transaction .

Whether you are financing a business computer laptop or a huge server farm you essentially have two choices of lease types in Canada - Capital and operating. Operating leases, you should know, play a huge part in the tech industry in Canada. If you have owned any computing in your home you quickly have probably become and expert in operating lease financing and didn’t know it.

How is that, ask our clients. Simply that you quickly realize technology changes, and anticipating that a laptop, PC, notebook, etc will last you a number of years is an incorrect assumption. It still might work; it’s just that it will be slower and not being able to handle new apps, programs, features, etc!

That’s why we tell clients they can adopt the same tech financing strategies as the largest corporations in Canada - utilizing operating leases. Why? Simply because an operating lease, which is a ' lease to use ' gives you triple flexibility during the usage of your product. Why triple? Simply because you can upgrade, return, or purchase the asset at any time during the term of the lease! That's true flexibility.

Smart choices can also be made around all the soft costs associated with a business computer laptop and pc financing strategy. Why? Simply because items such as delivery, installation, warranty, etc can be financed. Remember simply that your deal is with the hardware of software maker re terms of use, etc, - Your tech leasing partner simply facilitates that with some complimentary financing to lower your cash outflows.


So whats our bottom line, simply that tech financing is a little different, requires some specialized info on best structures and optimal advantages that accrue to you the user. Just the choice of lease type alone can save you thousands of dollars on any one transaction.

Want some extra help. Speak to a trusted, credible and experienced Canadian business financing advisor on business computer leasing - from laptop to PC. Make those smart choices in technology finance.




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 80 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

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

Imagine! Canadian Accounts Receivable Loans That Work – Financing Receivables The Right Way

Anyone who knows about the challenges of business financing in Canada knows that capital is harder to obtain these days, recession over notwithstanding! So when clients hear about accounts receivable loans and financing receivables strategies that seem to work for others, including their competitors, well... naturally they want to know more.

Let's share some basics around A/R loans (they are not really loans per se) and what the best method of financing receivables is in Canada.


Cash flow shortages. Sounds like a common challenge you face almost all the time these days. But when solutions to those shortages seem limited then a financing receivables strategy just might be your optimal solution.

In order to embrace a new finance strategy you have to know what it is, and what it costs, and even as important, how does it work. At its most simplest this type of business financing can best be explained as the selling of your A/R as you generate sales, getting cash in return. Naturally there has to be a focus on the quality of the receivable, and its age. (Generally receivables are sold when they are current).

Many clients always ask if they need to sell receivables as soon as they generate them, as in some cases they just might not need the cash flow and additional working capital at that moment. The answer is that you can sell your A/R anytime you want, typically as long as the receivable is less than 90 days. (If your A/R is older than 90 days there is somewhat of an assumption that it is uncollectible, unless you have given special terms to your clients.

So why do firms in Canada embrace this new form of financing more and more every day. Simply because it frees up the capital that you have tied up in inventory and A/R, your current assets. Financing receivables can be implemented more much quickly than any other type of loan or financing.

And, oh yes, getting back to that word ' loan ' - we mentioned that many clients refer to this strategy as ' accounts receivables loans '.

The last thing you want to do when you are short of working capital is to take on debt, so its very important to understand that this type of financing, also called ' invoice discounting ‘.. or ' factoring’ does not, we repeat ' does not ‘! bring any debt to your balance sheet. The world loan is a misnomer here, as all you are doing is monetizing or cash flowing your assets, making them immediately liquid.

Any Canadian business owner or financial manager would prefer to take on a new solution to their business in the right way. That means from a viewpoint of both cost and methodology.

Many clients view the cost of financing receivables as a setback. In Canada depending on the size of your A/R and some other factors the costs run between 1-3% per month. What business owners forget is that they can offset those costs in a number of different ways... they could increase their prices nominally, they can take discounts with their suppliers with their new found cash, and, if applicable, they can ' purchase ' smarter and harder. further reducing their cost of financing .

Our favorite and most recommended accounts receivable loans is a strategy called C I D. It stands for confidential invoice discounting, whereby you bill and collect your own receivables during the entire financing receivables process. Unlike your competitors, who are forced into rigorous notification of their financing with their clients or suppliers?

In summary, not all business financing strategies work for all firms. But firms of all size in Canada, even large corporations are looking at A/R strategies. Make sure you get a facility that works for your firm, both from a cost and daily procedural basis. When in doubt, or if you need more info, seek a trusted Canadian business financing advisor who can make sure the ' right way ' is your way!



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 80 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

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

The Real Truth On Canadian Film Tax Credit – Let Movie & Animation Financing Refund Loans Enhance Your Project

You already have the financing in place that it takes to make a winning film, animation, and TV project successful - you just might not know it.

We're talking about the Canadian film tax credit system, and why movie and animation refund financing of your tax credit can be the last piece of the puzzle in your Canadian production, or U.S./Canadian co -production.

The reality is, and of course we're sorry (kind of ...) that more and more U.S. regions are eliminating or downsizing the film and animation tax credits that can often make or break your projects final success. In fact, using Hollywood California as an example, as at June 2011 the state has in fact used up all their tax credits for the remainder of the year! No wonder why U.S. and of course Canadian producers and owners realize the Canadian system is still committed to job creation and support of the industry.

Ours has never been to debate the merits of the Canadian film tax credit (animation and TV included of course)... Ours has been to promote it and ensure our clients are using it. In Canada , aka Hollywood North the tax credits are viewed in all provinces as great economic and tourism development, and, as we said , we're not arguing!

In Canada the film, TV, movie and animation credits can generally get up to 40% of your project financed. That of course leaves the other 60% up to you, but what a great head start!

Although most producers and owners think of the Canadian film tax credit in terms of movies/ film etc. the Digital media area is probably growing the quickest. 6 of Canada's ten provinces already have a separate special digital media tax credit in place.

B.C. has a very strong and growing animation environment (could that be because of its proximity to California?!) and provides 17 1/2% credit to your total labour cost on any project.

While most U.S. and Canadian producers always tend to think in terms of Toronto, Montreal and Vancouver as major film and production and animation centres the reality is currently that the most lucrative digital tax credit is out of Nova Scotia. They have a very simple formula, 50% of expenditures that qualify under the legislation, or 25% of your total budget. Your tax credit accountant and Canadian business financing advisor can assist you in maximizing what works best for your project.

Quebec also increased and broadened its tax credits, with 25% of all expenditures qualifying for a Canadian film tax credit refund. When you compliment this with the federal Productions Services tax credit an additional 16% of financing becomes available.

Naturally there are all sorts of nuances in maximizing and qualifying for your tax credits. Producers should in general always set up a special purpose entity and typically should own the copyright or content.

Your tax credits in Canada can be financed, either through traditional sources, or independent firms specializing in this type of financing, also at the same time usually helping you maximize the credits. Financing is available on a ‘when completed ' basis, or, often more desirable, on an accrual basis as you start to spend on your project. Bottom line: Cash flow and working capital for your project.

So, as we said your challenge is equity, debt, gap pre -sales, etc. But let tax credits be the final component to your projects success.

If you choose you could creatively carve out the tax credit from your overall finance plan and enhance the equity position, of simply finance the credit refund on its own. Use your tax credit to either attract an investor, or as a stand alone component.

When you want the real truth and current dynamics of the Canadian film tax credit and refinancing strategies speak to a trusted, credible and experienced Canadian business financing advisor.

P.S. Mr. Demille - we're ready for our (tax credit) close up!





Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.comOriginating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

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

Unlimited Time Offer – The Canada Small Business Loan – Government SBL Loans For Financing Success

You're in for a pleasant surprise. Why? Because the information we're sharing should absolutely convince you that the ' SBL ‘, the Canada small business loan , aka ' the government loan' is by far the best amongst loans for small and medium sized businesses in Canada .

Let’s get that ' medium' size out of the way quickly before we begin. To qualify and receive the Canada SBL loan you must have actual or projected revenues less than 5 Million dollars per annum. That covers a lot of our clients, so it is easy to see why they are genuinely excited about this often misunderstood part of the Canadian business financing landscape.

Let's set some groundwork here. We're going to cover off whats important to you - so pardon us for paraphrasing typical questions we receive everyday on this program. What are those questions -? They are as follows: Why have we not heard about this program, who manages the program, how much can we get, and what do we need to do to qualify.

We think you'll agree that if we cover off all those bases you'll be well grounded in determining if the Canadian small business loan, aka the ' government SBL ' is right for you.

So, first question. Why haven’t you heard about the program? Quick answer - we're not sure, because 7441 of your peers and, worse yet, your competitors took advantage of the program in 2010. Oh and by the way, they got loans totaling $ 957,000,000.00. That’s an average of about 128k per loan, but most of the requests we see tend to be in the 200-300k range.

You also may not have heard about the program because of its unique structure. It's sponsored and mandated by the folks at INDUSTRY CANADA in Ottawa... but you don’t need to drive there to get the loan. The government has mandated Canadian banks to offer the loan under the terms and conditions of the program.

Which brings us to a side point which is that we're often asked why many small business and commercial bankers don't talk up or offer or recommend this great financing strategy for business loans. We suspect, and surely they can’t be proud of it, that many bankers either haven’t taken the time or have had the training to facilitate this loan properly... we suspect they would prefer to sell us a mutual fund or mortgage. Anyway, we'll weigh in on that one another day.

So, how much financing can you get under the program. The program actually goes to $ 500,000 but that is if it is a real estate type deal. Typically the program caps out at $ 350,000.00 for 99% of business owners.

Many clients are disheartened to hear the loan is not a ' cash loan ' or a revolving line of credit. It isn’t - it’s a term loan with very attractive rates, and can be used for equipment, leasehold improvements, software, etc.

If we had to identify two quick qualifiers for the Canada Small business loan it would be a reasonable credit history of the business owner, as well as a properly prepared package.

The 'package ' i.e. your proposal, has been the downfall of many clients we have spoken to who have ventured on their own to get the SBL loan approved. They simply aren’t prepared on some key basis, such as a executive summary, business plan, cash flow, etc. ( Banks for whatever reason love to see hwo they will get repaid!)

Well... there you have it. Want to fast track the best business financing in town? Speak to an expert, a trusted credible and experienced Canadian business financing advisor who will assist you in your approval and funding.

PS. Government loans don't even require a full personal guarantee, another great reason to consider the program.




Information by Stan Prokop - 7 Park Avenue Financial
http://www.7parkavenuefinancial.com/canada_small_business_loan_government_loans_sbl.html

We finance the little guy . P.S. We finance the big guys also!

Are You Interested In Achieving Best Leasing Rates & Financing With Canadian Lease Companies?

It may seem difficult for Canadian business owners and financial managers to think they can achieve the best leasing rates and business financing with lease companies in Canada.

It's not as hard as you think, and we're going to demonstrate to you some key methods to ensure you understand, and can achieve prompt credit approval and solid lease pricing.

And oh yes, some extra tips on ensuring some additional benefits not readily known to everyone would help also, and we’ll be sharing those also.

Most business owners know intuitively that they should be leasing - one simply reason is that millions of other firms are also .They simply are looking for a better or easier way to understand what makes a ' perfect ' lease financing transaction .

Ways in which you can determine what level of pricing and prompt credit approval you can achieve focus around some very basic issue - for example, do you want to own the asset, or use it. Just that decision alone will save you thousands of dollars and significantly impact working capital. Lets use a ' real world ' (that’s where we work every day) example.

Let’s say your company requires some significant plant equipment as an example. The cost is, say $300,000.00. You're not entirely sure you can afford the asset; you simply know you need it, and you are perfectly sure you can't afford to pay cash for it. Imagine what that would do to your bank line of credit or cash on hand!

Using our example the monthly payment on a 3 year lease would be 9338$ approximately. We estimated an interest rate of 8% on the transaction. Let's say you determine that you can afford $7000/ mo, but not $9338. Does leasing provide a solution? ... It sure does?

Ask you lessor to determine the term you need to change the lease to, allowing you to fit your payment. We've done the calc for you, and its 51 months. And, guess what, by committing to a longer term you can usually get a lower interest rate. Lessors like when they can guarantee their yield for a longer period. No surprise here, as that’s how they make money.

We don’t necessarily agree, but most clients we talk to are ' only ' focused on the lowest pricing or monthly payment in trying to achieve those best leasing rates. Lease financing companies consider a number of factors when offering you those rates.

So what are the key issues in lease pricing, and, more importantly, which of those can you as a Canadian business owner and lessee impact upon?

All assets can be financed, subject to credit worthiness. However, some assets depreciate slowly, some very quickly (think computers!), and some assets both hold their value, or even appreciate in price. Asset class plays a big factor in lease pricing, so be prepared to position and defend your asset quality.

Useful life of the asset is somewhat the same; don’t expect to get a 5 year lease at great rates on state of the art computers or telecom unless your firm has a stellar credit rating.

If your firm is entering into an operating lease it is highly recommended that you arm yourself with the best possible date on residual values of the asset at any future point in time. That will allow you to negotiate a higher residual, and achieve best leasing rates and financing.

We noted there are some aspects of leasing rates and pricing you simply won’t have an effect on. It should come as no surprise that leasing companies borrow money also. Their cost of funds and their required ' yields ' determine... your lease pricing. (As well as your credit quality of course)

So we can make a broad general statement that best leasing rates are achieved by dealing with larger more well capitalized lease companies in Canada.

In many case small admin and processing fees can add up and drive up your leasing rates. Negotiate hard and determine if these additional add on type charges are really necessary and if you can avoid them your pricing will improve.

Simple, perhaps not, but you can see that many factors determine lease pricing. Determine which ones make the most impact on your firm, and which factors you can influence. Speak to a trusted, credible and experienced Canadian business financing and leasing advisor for assistance in achieving best financing and lease pricing in Canada.


7 Park Avenue Financial - Financing for the little guy - P.S. We finance the big guys too!

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