Put An End To Business Funding Challenges - Why Accounts Receivable Financing Via A Confidential Invoice Finance Strategy Works

Don’t Let Your Business Experience Financing Downtime!


Information on accounts receivable financing in Canada . What is the best type of invoice finance strategy and how does this type of business financing work?




When Canadian business owners and financial mangers want to put an end to business financing challenges they are prepared to consider all alternatives. One of the most popular these days is accounts receivable financing via a confidential invoice finance facility. It only does one things for your company - it accelerates cash flow!

One of the other reasons that this type of financing gains in popularity every day is that allows you to increase your cash flow and working capital without having to consider additional equity arrangements into your company. Even more important is the fact that many business people miss the fact that an A/R finance strategy is not ' debt ' - you are simply monetizing your current assets, i.e. the accounts receivable, into immediate cash.

The concept is exceptionally simple, where it gets complicated we find is that clients don’t really understand some of the terminology, costs, and benefits of this type of financing. As we said, it couldn’t be simpler - you generate sales, and, via your receivables, sell those invoices, gaining immediate cash flow. Clients tell us it certainly is not unusual these days to have their A/R run anywhere from 30-90 days from a viewpoint of when they can expect payment from their customer.

So imagine how your firm would do if you have really unlimited capital based on the sales you generate. You're back to where you want to be, growing your company, not wondering how you will finance that growth!

Some of the day to day nuances of factoring need to be clarified to Canadian businesses who are considering invoice finance for the first time. One is the holdback. When you finance one or a number of invoices (and by the way, it’s your choice) you receive typically 80-90% of the invoice value the same day. The remaining balance is held as a holdback or reserve and remitted to you when your client pays.

If one issue typically concerns the Canadian business borrower who is considering and accounts receivable financing strategy it’s the cost of the financing. In Canada that cost, on an average, is typically in the 2% range. We hasten to add that sometimes it’s less, and sometimes it’s more. Factors that decide your final pricing are the general health of your business, the size of your monthly A/R, and the overall quality of the customer base.

Firms considering invoice finance are typically those that are growing too quickly and are unable to achieve traditional bank financing. Alternatively they may be working their way through some business challenges, such as an off year for financial results, etc,

One reason this method of business financing is growing so quickly in Canada is the fact that facilities can be set up very quickly, with less focus than the bank on issues such as rations, shareholder equity, personal guarantees, etc.

Is any one facility of this type better than the other? We sure think so, that’s why we constantly are recommending a confidential accounts receivable financing strategy.

This allows you to bill and collect your own receivables, finance which ones you want when you want, and has no involvement or notification to your clients. Unfortunately the majority of facilities offered in Canada don’t offer this type of financing
So consider speaking to a trusted, credible and experienced Canadian business financing advisor who can work with you to get you the optimal facility that works for you from a viewpoint of benefits and day to day ease of management.



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 . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing .Info re: Canadian business financing & contact details :


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

Are You Eligible For The Canadian Government Small Business Loan?

Use Government SBL Loans For Asset Financing Needs


Information on the ‘SBL ‘ - commonly know as the government small business loan . This program offers some of the best rates, terms and structures for small business financing needs in Canada .



Many business owners in Canada in the SME sector aren’t fully aware that they are already qualified to take advantage of the SBL loan program in Canada. The Government Small Business Loan is an initiative of the federal government in Canada that helps thousands ( in fact over 7000+ in 2010 ) of Canadian businesses to securing business financing on terms that rival those of the big boys when it comes to attractive rates, and structures .

There are many misconceptions about the program and that is why we feel quite sure that you may already qualify and probably just didn’t know it! Let’s examine some of these very basic and reasonable qualifications of the program, and let’s help you maximize the benefits already utilized by thousands of firms just like yours.

'Government ' isn’t necessarily the most popular word at any time when it comes to your day to day business. However, that’s misconception number 1, simply that this loan program is in fact operated in the private sector, by Canadian banks, not the government directly. So where does the government come in then? , ask clients. Simply that they are in fact guaranteeing the majority of the loan. Actual funding is done through your bank.

The challenge we work through with on a daily basis is that not all banks or bank employees rather are always familiar with the details of the program. So many clients who are keenly interested in availing themselves of this financing in fact get mixed signals on how the program operates, its benefits, and mostly importantly, how to start the process and get approved quickly!

Let's cover off some of the basic facts. To be eligible for the program your Canadian business, either incorporated or a proprietorship, must have revenues not exceeding 5 Million dollars. Start ups are eligible for the program also.

Most Canadian business owners who start from scratch are keenly aware of the financial challenges that are faced when financing a start up, or a franchise. That’s really the spirit of the Canadian government small business loan program... it’s providing financing to businesses and business owners who otherwise might not be able to acquire the financing they need.

Owners of the business must have reasonable good credit... in terms of the credit bureau beacon score that all Canadians possess that score should be in the 650+ range. Contrary to the belief of some this is not financing for people with poor credit.

What does the SBL government small business loan finance? That’s another area of what seems constant confusion when we talk to clients. In fact the program only finances equipment and leaseholds. Software by the way is included in the equipment category. We meet many clients that are under a major misconception on SBL’s - namely that the financing is cash and working capital. It absolutely is not!

How can any business owner in Canada not want to take advantage of financing that can help build and grow their business? Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in being successful and unlocking the benefits of the government small business loan program. That’s SBL for short!








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 . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing .Info re: Canadian business financing & contact details :

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

What You Need To Know About Equipment Lease Rates and Interest Finance Charges In Canadian Lease Finance

Are You Getting The Best Lease Finance Rates ?


Information on equipment lease rates and finance interest charges in Canadian leasing and financing . Factors and issues to consider for a transaction that makes sense for your business .



Although the Canadian equipment finance industry is very competitive many Canadian business owners and financial mangers don’t fully understand how equipment lease rates and interest finance charges are calculated... how they can be managed, and what issues affect your ultimate monthly pricing. Let's examine some ' need to know ‘points that will allow you to fully maximize the benefits of lease financing assets in Canada.

We don't blame clients for always wanting ' the best deal ‘... the ' lowest rate '... the ' smallest monthly payment ‘. Some of the variables that go into those issues are controlled by the lessor; some can easily be managed by you.

Asset quality is often a factor in Canadian lease finance. The ability of either yourself of the lessor to understand the ongoing value and the final residual value of the asset you are financing plays a key role in equipment finance pricing in the Canadian marketplace. A win win situation exists of course when both you and the lessor have a transaction that meets both of your needs.

Lessors refer to their profit on a transaction as their ' yield '. Many lease finance firms strive to earn a certain constant yield on their lease transaction they finance for Canadian business. It’s simply their ultimate profit for putting funds out on your transaction.

Canadian business mangers choose from only two basic lease types when acquiring and asset via a lease finance strategy. Its as simple as that, you are either selecting a capital lease, which is a ' lease to own ' strategy, or alternatively you are choosing and operating lease .The operating lease is a transaction wherein you have a stated intention to return or upgrade the asset during or at the end of the lease term . The true beauty of the operating lease is that it also gives you still the right to purchase the asset, even though that might not have been your original intention.

Put yourself in the eyes of the lease company, and let’s use a simple example of a 1000.00 transaction. If the final residua value of the asset at the end of the term of the operating lease is 100.00 and the lease firm estimated this as , lets say 50.00 then they have just realized a further 50.00 profit on the asset .

So who is the best to understand the actual true value of the lease at the end of the term? Quite frankly, sometimes its you, who understand your business only too well. Alternatively many lease equipment finance firms have significant expertise also. It depends,

The type of lease company you choose to work with also has a significant effect on your interest finance charges. Bottom line, your lease firms borrow funds also. In Canada that’s typically done through insurance companies and banks. So a general rule of thumb is that if your lease finance firm is larger, well funded, and well managed... the bottom line is that your chances of more aggressive lease rates increases.


We hate calling them ' games ' but the industry uses many nuances in pricing and structure and terms that significantly affect your overall finance charges . What are some of these?

A good example is advance payments you are asked to make, or security deposits. If you are asked me make a significant security deposit ensure interest accrues to your security deposit, at a rate commensurate with the size of the deposit.

Many assets are acquired on an interim rent basis... that has the lessor outlaying cash before you actually sign off on the final acceptance of the asset. It could be a complicated computer project that is being funded, or perhaps a production asset that is being assembled by your vendor in stages.

We've highlighted just a few of the basic issues that should come into consideration by your firm when you are concerned about getting those ' best ' equpment lease rates' in the Canadian marketplace . There are others.

If there is a bottom line here it simply that it’s worth it to take some time and understand how some up front knowledge and consideration at the start of your lease finance process can positively impact interest finance charges in your favor as the lessee. Speak to a trusted, credible and experienced Canadian business financing advisor who can guide you to the appropriate lease finance pricing for your ongoing equipment needs.


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 . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing .Info re: Canadian business financing & contact details :


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

Not Your Imagination ! It’s Possible To Finance A Franchise In Canada – A Franchising Loan ‘ How To’ !

Canadian franchise Financing Decisions You Need To Make


Information on how a franchising loan works in Canada. What are Options for business entrepreneurs who wish to purchase and finance a franchise?





One of the main reasons clients tell us that they wish to purchase a franchise is their belief that this type of business opportunity in essence gives them a head start in owning and successfully running a business... and we couldn’t agree more. But that life decision, and a big one at that, comes with the challenge of how to pay for, or finance a franchise. A franchising loan properly structured can make or break your business opportunity.

There really are 4 key categories or areas that you should focus on in both selecting and financing your franchise. They are the actual type of business you wish to be associated with... ie big, small, service based, asset based, hospitality based, etc. After that comes the all important analysis part of your decision. what we could call ' running the numbers.

Those numbers must then be translated into an effective financing plan to finance a franchise. i.e. getting a franchising loan that makes sense from a viewpoint of debt load, your own equity, and the right rates, term and structure that make business and financial sense, without putting you at risk.

Finally the 4th major consideration topic is simply ensuring you have weighed the pros and cons of owning an independent business under the franchise mode. The reality is though that you are in good company, as thousands have gone before you successfully, and a huge part of the Canadian economy (you’d be surprised how much) relies on the franchising industry for its products and services. And God knows the economy needs all the help it can get these days.

We tell clients that when they look to purchase a franchise they need to do a total... lets call it ' sanity check' on the numbers. Key questions need to be answered, including whether the investment will provide you with the proper return on your own investment. That’s an important concept when you think of it, and easily overlooked by franchisees that don’t have a strong financial background.

In essence you are simply asking yourself if the amount of money that you have to put into the business personally is going to be rewarded over time with a return. That makes total sense, don’t you think? In today’s Canadian franchising environment business owners can be expected to put anywhere from 10- 50% into their business. That amount varies with the size and type of franchise that you purchase.

In assessing your financial needs you need to take into account funds you need to open and purchase the business, as well as what type of working capital you need to maintain and grow the business - quite frankly that’s the same challenge that any business purchaser faces, whether or not its a franchise .

That ' pros and cons' analysis we spoke of is also critical at this point in your decision - you need to evaluate the cost of buying and financing a franchise against using that capital or debt to start a business . However, the concept of proven business models and branding is key, so that makes the assistance you get when you want to finance a franchise easier.

In Canada franchises are financed via one or two specialty finance firms, which tend to focus on the major players and names in the industry. Thousands of others are financed under the auspices of the government BIL /CSBF program. The attractiveness here relates to great terms, rates, structures, low personal guarantees, and flexible repayments.

Want help on making one of the most important financial decisions in your business life? Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in making the right decision and facilitating a franchising loan that works... for you !


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 . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing .Info re: Canadian business financing & contact details :


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

If Things Are So Bad Why Is a Canadian ABL Facility Business Line Of Credit So Good ? How Asset based Lenders Work

The Worse Your Financing Challenges The More An Asset Based Line Of Credit Should Appeal To Your Company

Information on why and ABL facility from Canadian asset based lenders and why this type of business line of credit is extraordinary in terms of delivering more financing to Canadian business .



Does it every get easy? It's probably just us but doesn’t it seem like there’s never a time when there isn’t some major economic turmoil these days that simply add to the constant challenge of being able to be successful in business financing for your firm.

That’s why an ABL facility... a business line of credit from asset based lenders is very much a total breath of fresh air. With the Canadian economy see sawing back and forth between good news and bad news the likelihood of your company getting the business credit it needs is never 100%.So is there a way to improve those odds? We think there is, and it’s an asset based line of credit, the technical term being ABL.

It is somewhat ironic that the asset based lender actually tends to do better in more difficult times - that’s easy to understand because the unique facility it offers has a much higher chance of approval for firms such as yours. And, as always, it’s about the assets, not the ratios. Coupled with the fact that the industry in Canada, relatively speaking is still quite new and somewhat fragmented , well , bottom line, its just seems to get more traction everyday.

Stats in other countries , and we think they are reflective of Canada also , show that 80-90 % of the firms that utilize asset based lending for their business line of credit are in fact small to medium sized corporations . It is sometimes overlooked that some of the biggest corporations in Canada also use this type of financing, abandoning the traditional Canadian chartered bank line of credit.


When we meet with clients to discuss their needs for an ABL facility it's often necessary to spend a bit of time explaining some of the mis information that exists with this type of facility. That is partly because this type of lending has some subsets, they include receivable financing, and in some cases purchase order financing.

The key benefit of an ABL business line of credit always comes back to one word - ' margining '. Typically this type of revolving facility margins 90% of receivables and anywhere from 30-75% of inventory, depending on the type of inventory your firm carries/requires.

Additionally, the key difference in the facility is the fact that your business access to working capital and cash flow grows with your needs, pretty well automatically! Now that’s the type of borrowing facility that every business owner dreams about!

So, when the bank is not the solution, (those hoops keep getting more difficult to jump all the time!) and your company is either reluctant or unable to raise additional equity speak to a trusted, credible and experienced Canadian business financing advisor on the benefits and requirements for an ABL business line of credit.






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 . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing .Info re: Canadian business financing & contact details :


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

Starved For Cash ? Dying For Business Loan Debt Financing Or Working Capital Solutions ?

Is Your Business Growing – Need Funding ? What’s The Best Solution


Information on working capital and debt financing for Canadian business owners . What type of business loan or asset monetization makes sense for your firm, and why.





At one point or another all business owners and financials managers find they have to focus on either working capital or debt financing business loan type solutions for the growth or perhaps even the survival of their firm.

The ' go to ' solution seems intuitively always to consider additional debt for the company - part of the reason is that the leverage that business loans via debt provide and pay off in higher returns on equity . Larger firms consider this as a potential means to obtain a higher valuation.

But is debt always the way to go ... not necessarily as there can be some troubling side effects for the starving patient! Working capital and debt financing are of course, when considered as a whole, the alternative to raising additional equity, bringing in a partner, having to consider the sale of your firm, etc.

So is there ways to consider ' sensible' business financing that actually make sense to the business owner of financial managers of a firm? We think there are.

Certainly there is nothing wrong with debt per se... It’s just that we hope in business that its ' good debt '. Business people recognize that as debt grows on your balance sheet (and assuming you can make the payments) your return on equity increases considerably. That’s a good thing! Higher sales will increase profits under that strategy. But again, at the end of the day it’s all about not pushing your firm to the brink with that increased debt.

The challenge also is that when firms use debt in an aggressive fashion they often have challenges in raising funding quickly, at rates that make sense and they are deserving of. At the extreme end of the curve debt will of course force a company to miss out on lost opportunities, competitors also seem to have a keen knack of sensing your weaknesses!... and in general day to day operating is often affected by the focus on debt repayments .

So are there some key management points and techniques to asses whether you should be taking on more debt. Here are some issues to consider.

Look at your financing needs from a longer term perspective; that’s often difficult to do and disregarded by many. Look at it from the viewpoint of can you defer financing additional debt without missing out on opportunities for growth.

At the same time, are you aware of the types of debt financing that might work for your firm. In Canada that consists of term loans, asset financing, cash flow loans, and other subordinated debt scenarios. Ensure you are comfortable with the rates and structures of each type of financing - more importantly from a time wasting point of view ensure you are aware of the requirements that each type of lender has for all those different debt scenarios.

This is of course the time to do some keen financial planning around your ability to meet any debt payments - and it’s a good time to consider worst case scenarios of not being able to make payments.

When debt financing isn’t the answer a working capital solution often can work. That could involve monetization of current assets via an asset based line of credit, receivable financing, securitization, or financing of tax credits or an asset sale leaseback for working capital purposes.

The best time to address finance needs is often when things are going well for your firm; consider speaking to a trusted credible and experienced Canadian business financing advisor who can assist you in business loan or working capital 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 . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing .Info re: Canadian business financing & contact details :


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

How to Successfully Avoid 6 Risks in Business Equipment Leasing in Canada – Make Lease Financing Work!

Managing Risk in Equipment Financing For Canadian Business Owners and Managers


Information on how to successfully work through and manage 6 potentially overlooked risks in business equipment leasing and lease financing in Canada .




It's not always just about the benefits of adopting a business strategy such as business equipment leasing and lease financing... sometimes it is about ensuring no undue risks are also taken.

So let’s examine 6 risks that Canadian business owners and financial managers can manage if properly understood at the outset of any lease transaction.

First of all it’s always great to understand that leasing equpment is all about two things, your rights and your obligations. Your ability to assess those at the start of your transaction is critical.

Our first risk management issue is the concept of addressing the end value of your asset at the end of the term. While most business equipment leasing in Canada is done on 3 -5 years terms shorter terms are possible (generally 2 years is the shortest) and assets that have long economic lives are often lease for in excess of the 5 year norm. If you are entering into an operating lease you must clearly understand that you have the obligation to return, buy, or re - lease the asset at the end of term.

That’s when knowing the potential value of the asset is important. If in fact you feel it has value why pass that value on to your finance partner without some sort of participation or negotiated benefit to your firm. In fact many leasing companies make a tremendous amount of profit by placing bets on the value to you, of the asset, at the end of the lease term. So make sure it’s an equal fight, so to speak. Discuss things such as early buyout or fixing a price at the end of the lease term that is mutually acceptable to both parties.

Our second issue on risk avoidance is the concept of maintaining your asset. While some assets, perhaps such as computers for example require little maintenance many other assets (think plant machinery or rolling stock) require some level of care. Lessors recognize this and often, if not always, write this into the lease. So understand your maintenance obligations.

It’s a ' taxing ' matter. Taxes! That’s our third risk element. Ensure that you and your management or financial team understands all the correct depreciation and tax issues surrounding your lease transaction. This is clearly a time, especially on larger transactions to invest a bit of time in speaking to your accountant or tax expert .The many benefits of equipment financing can sometimes be swept away by your inability to properly address tax, deprecation, how you account for the lease, etc.

Our fourth issue is the concept of upgrading during or at the end of term. Understand here that lessors are incented to keep leasing you assets in Canadian lease financing. Understand your upgrade options at the start of your transaction, and ensure they are properly document in your lease, whether it’s a capital or an operating lease transaction.

Our 5th risk avoidance tip is to properly reflect on indemnification. If any sort of indemnification is required in your lease ensure it is within reasonable risk and control. Issues such as title, transfer, operation of the asset should all be properly documented to your satisfaction

Our final item is in fact the insurance issues revolving around your lease. Ensure you insure am I guessing what we are trying to say, allowing for your insurance firm to cover the risk of any loss, damage or theft to your assets. In fact most lessors, who are in effect purchasing the asset for you and ‘renting’ it back to you, actually require you to provide a certificate of insurance on your transaction.

So, is there a bottom line? As always there is in business, and in this case it’s simply to view each business equipment leasing and lease financing transaction you undertake not only from a benefits point of view but from a risk avoidance perspective. Speak to a trusted, credible and experienced Canadian business financing advisor for additional assistance.



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 . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing .Info re: Canadian business financing & contact details :

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