Confidential Receivable Financing : The Re- Invention Of Invoice Factoring Services

The Experts Guide To The Best A/R Financing

OVERVIEW – Information on receivable financing in Canada. One of the best factoring services is Confidential receivables finance – here’s why




Receivable financing in Canada has made some interesting gains in recent times. First of all there is nothing like winning a 'popularity contest ' and thousands of firms have continued to embrace this method of financing cash flow. And even better than that some interesting ' changes' to how this finance works has offered even more appeal to the Canadian business owner/ financial manager. Let's dig in.

The SME (small to medium enterprise) sector in Canada can be forgiven for feeling under served when it comes to accessing capital that other larger and public companies find easier to achieve. So a sub set of asset based lending, ' factoring services' have stepped in nicely when they find themselves less ' credit worthy' and unable to access all of the working capital they need.

If we step back a bit it's not hard to discover why receivable financing services have such appeal. Utilizing this method of financing, including our favourite and recommended " CONFIDENTIAL RECEIVABLE FINANCING ' your company can finance all North American A/R , ( international accounts often require some form of credit insurance ) , and depending on the type of financing you need risk of bad debt can even be transferred to your financing partner.

While the traditional form of this financing can be termed somewhat ' invasive ' as the collection dept of your firm is taken over by the finance firm it still works for thousands of firms who simply wish to access capital , and aren't really concerned about notifying clients about how they finance their business .

Enter Confidential A/R finance. The appeal here is significant. While the main benefit continues to be the fact that you have daily access ( if you need it ) to working capital this type of ' confidential ' credit line facility allows you to bill, and collect, all your receivables without any intervention whatsoever with a third party . In our own experience with clients that seems to be the desired route business owners/ financial managers wish to take, perhaps it’s our inherent Canadian conservatism!

So how does this method of financing cash flow work? It's pretty basic stuff. Standard finance documents that you would sign with any type of financing are put in place at the outset of the arrangement.

All sales you generate can be financed the same day that invoices are generated. 90% margining of accounts is typically available, which by the way even beats the 75% offered by our Canadian chartered banks. Your clients are totally unaware of your financing mechanism, and you're running a ' business as usual ' company, with one exception; you have all the cash flow and financing you needed based on your sales growth!

If your firm has good financial records and a track record of growth, as well as future growth potential seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with the best factoring services.





Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :


7 Park Avenue Financial = Canadian Receivable Financing expertise!







Stan Prokop









Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:

7 Park Avenue Financial

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


Direct Line = 416 319 5769

Office = 905 829 2653


Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '

Stan Prokop

A Sale Leaseback Is A Solid Way Accessing Bridging Finance Needs : The Asset Bridge Loan Made Easy

A Different Way Of Looking At Short Term Loans Via Bridge Finance



OVERVIEW – Information on the bridge loan concept in Canada . Sale leaseback transactions can help the balance sheet and cash flow via a unique way of looking at bridging finance need




Bridging finance , in some manner, is often sought by Canadian business owners and financial managers. The sale leaseback, via a traditional lease, or a ' bridge loan' (there’s a difference) is one way to achieve that financing need. Let's dig in.

Your company has the ability to make maximum use of your firms owned assets in a manner you may not have considered. It's the 'sale lease back’, and by selling back the asset, or assets to a third party you can address several key challenges you might be facing on the balance sheet, not the lease of which is cash flow.

So how is this type of transaction completed... successfully ? Several factors come into play. When you have assets such as equipment, technology, and even real estate that are used in your core business, are still needed, and are owned outright a significant opportunity exists to ' cash flow' the asset/assets.

Naturally the need for capital can be satisfied in a number of ways, but most owners are reluctant to address the issue of new equity investment - it dilutes ownership and sometimes simply isn’t possible.

Let's recap some of those key benefits of a bridge loan/ leaseback on owned assets. They inlcude:

The ability to free up equity that’s held on your balance sheet - this could actually be distributed to the owners or used as a working capital component to continue growth of the company

If your business is doing well and simply hampered by growth capital the ability of your company to earn higher profits that offset the costs of the bridging finance is a desirable route

In many cases it allows the company to re do their balance sheet in some manner, i.e. pay down other more expensive debt, eliminate some debt altogether, etc

Using company owned real estate as an example you can ensure your company is using capital to operate and grow the business, as your charter is clearly no real estate ownership. Note: Many large corporations, even our chartered banks included have sold their real estate holdings and leased them back - even the big guys recognize they are running a business, not investing in real estate. Apologies of course to those ' PRIDE OF OWNERSHIP' folks!

In certain cases the interest rate environment alone might be a major consideration. The current low rate environment might make sense to acquire capital at 4% and reduce debt acquired at 9% as an example.

Finally, in some cases your advisors such as accountants and the tax folks might be able to point out some solid advantages to a sale leaseback.

If you’re looking for a different way to raise capital/cash the sale leaseback is a great way to address bridge finance needs. That might be either a traditional lease or a short term bridge loan. Seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can turn those needs into ' easy'.



Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com
Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :

7 Park Avenue Financial = Canadian Sale LeaseBack expertise!







Stan Prokop









Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:

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

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '

Stan Prokop

Franchise Loan Search : How Not To Ruin Franchising Opportunities In Canada

Franchise Financing : If Opportunity Knocks Are You Ready? Here’s Your Backstage Pass

OVERVIEW – Information on financing franchise opportunities in Canada . Getting a Franchise Loan Approved Is About The Right Info With The Right assistance




A franchise loan search in Canada, when it comes to exploiting franchising opportunities that appeal the entrepreneur can be a daunting search. In fact top experts tell us that the industry as a whole recognizes the fact that access to the right amount of loans and financing is ' top of mind' for new and existing franchisees. Let's provide a bit of a ' backstage pass ‘into critical aspects of this challenge. Let's dig in.

Franchisees in Canada have access to numerous services provided by their franchisor and other members of their ' team'. However actual loan financing tends not to be one of them.

Almost all franchisors provide a portfolio of ser vices around location, training, business development and other aspects of franchise survival. Is anything missing in all that assistance - Most often it’s financing!

It comes down to some pretty simple basics - knowing who finances franchises, understanding how they are financed, and knowing if you qualify for the capital you need to both acquire, operate , and grow the business.

Think of it as basically matching your profile to the right amount of capital - simple as that.

So what are those key basics that the franchisee, he or she, must have under their belt? They include:

Understanding term debt and operating capital needs for both acquisition and ongoing operations

Knowing the amount of capital that you need to invest as an equity investment that satisfies the franchisor, your lender, and the capital structure and ongoing needs of the business (Too many franchisees we work with underestimate long term needs for credit facilities and asset replenishment)

If you are approved for a franchise loan is there a clear understanding as to how the loan will be repaid out of cash flow and profits (The cash flow in your business plan must be realistic and allow for contingencies)

The ability to assess how much personal collateral/guarantees are required

In Canada franchise loans are made by a small handful of specialty lenders as well as the often used Govt Small Business Loan ( SBL) which has evolved into being perfectly suited for the acquisition of a franchise . Interest rates by specialty lenders as well the SBL loan are very reasonable , in our opinion and misc. set up fees or processing fees are ultra reasonable in the scheme of things.

The forms of finance you undertake come under 3 categories:

Assets
Leaseholds
Operating Capital

You need the right mix of financing to successfully attain all three. Numerous external financiers such as equipment lessors and working capital lenders (term and operating) round out the financing of franchise opportunities.

The most clarity to your financing needs will come out of your business plan, which will include info on yourself, aka the ' franchisee', as well as the industry, the business model, and solid financial projections that provide a road map to the right financing.

To ensure you're ready for a franchise loan when opportunity knocks in this industry seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your loan needs.





Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :

7 Park Avenue Financial = Canadian Franchise Financing Expertise





Stan Prokop







Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:

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

Direct Line = 416 319 5769

Office = 905 829 2653




Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '

Stan Prokop

Financing Film Tax Credits And The SR ED R And D Tax Credit : Think You’re Winning ?

The ‘ Second Coming ‘ Of SR&ED And Film Tax Credits Is : Financing !

OVERVIEW – Information on financing the SR ED ( SR&ED) R & D tax credit in Canada . Finance Research and Film tax credits accelerate cash flow and working capital for two great Canadian government programs



Financing the SR&ED R&D Tax Credit, or Media and Film Tax Credits is, in our opinion, equivalent to the ' second coming '. A bit of a play on words, but signifies the added benefit that a tax credit loan brings to the already good news inherent in a tax credit claim in these two solid Canadian programs. Let's dig in.


SR&ED

While there's been a few times over the last years when everyone, ourselves included, tried to figure out where SR ED was going it turns out that a lot of those changes simply solidified the program. While it's unclear whether the Billions of $ that the government provides via refundable tax credits will see a reduction in usage it’s absolutely clear on the other hand that the program is still in full force.

Yes, when it comes to R&D credit calcs some of the rates have dropped, and capital assets are no longer eligible - but truth be told the majority of claims have never really included the capital asset spend . Simply speaking the Scientific Research Experimental Development Program is still the largest program out there to allow Canadian business owners and financial mangers the ability to recoup their R&D spend.

Business owners can accelerate, or initiate that ' second coming ' by financing their SRED claim. While there seems little doubt that the government is committed to speeding up claim approvals ( they have level of service standards around claim receipt acknowledgement /processing and reviews ) this whole process in many cases can takes months and up to a year for the owner/manager to await the cheque for their claim.

Financing the claim simply accelerates the whole process - and super accelerations kicks in if you choose to finance next years claim - now! That's done by accrual financing, allowing you to start cash flowing next years spend!

FILM /ANIMATION/TELEVISION/MEDIA

The other industry that also generates Billions of dollars in refundable (and financeable!) claims is the entertainment industry in Canada. Although we say ' Canada’, approved joint ventures/co-ventures can also utilized tax credit programs and of course financing.

The tax credits that come with film/TV/ animation are a key part of any total financing package in the industry. They in many cases form the largest part of the total finance package. Ontario, BC and Quebec based productions garner the majority of the action, but almost all provinces participate. Using Ontario as example owners/producers can opt for any of the three major programs in place, OPSTC/OFTTC and OCASE.

FINANCING SR&ED and MEDIA TAX CREDITS

We comfortably can talk about bridge loan financing for both of these two programs because of key similarities. Those include:

1. Claims are either prepared by a specialty accountant or consultant in each area (SRED consultant / Film Tax Credit Accountant

2. Both Financings require a simple application with appropriate back up including a copy of the claim, any previous claim experience etc

3.Claims are typically financed at the 70% range of the total value of the combined Federal and Prov. claim

4. Financings are structured as Bridge loan with no payment being made during the duration of the loan

The main security in the financing is the claim itself

If you want to accelerate that ' Second Coming ' of a tax credit, i.e. the cash! seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with your finance needs in this unique area of Canadian business finance.




Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :

7 Park Avenue Financial = Canadian SR&ED & Film Tax Credit Financing Expertise




Stan Prokop









Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:

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

Direct Line = 416 319 5769

Office = 905 829 2653


Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '

Stan Prokop

Financing To Buy A Business : Sources Of Finance Aren’t Hard To Find .. If

Why Time Travel Would Really Help When You Buy A Business


OVERVIEW – Information on achieving successful financing to buy a business in Canada . Sources of finance are abundant if you know how, how and where.







Financing to buy a business , we maintain, would be a lot easier with some help from the concept of time travel. Probably not going to happen, but the idea of being able to ' move between different points in time using a time machine of sorts' sure would help pinpoint a lot of issues that come out during the owners/ financial managers search for the right sources of finance . Let's dig in.

Goes without saying also that your ability to asses financing a business acquisition is greatly enhanced when you've got some business and experience in that industry. That isn’t always the case though and there are some great tools to alleviate that problem.

When it comes to financing a business either a bank or commercial lenders may in fact have an extreme positive (or negative) bias on that industry. For example currently ' franchising’ is fairly hot, and seemingly gains momentum every day. A few years ago for example automotive sector transactions were very much out of favor.

Key considerations in purchasing an existing company include positive outlook on the industry, your ability to generate real profits from the business, and most importantly (we’re biased here!) the ability to ensure you understand the financial pitfalls and issues around the acquisition. In some cases your ability just to manage the business better turns your transaction into a winning deal

How you pay for a company is integral in overall success. While making all cash offer may be appealing it to has the ability to backfire in some ways at certain points down the road. So balancing the right amount of debt and equity is a strong focus. In certain cases your lender - i.e. a bank or commercial finance firm will want to see a minimum amount of ' new equity' in the deal. Taking on debt to raise equity should be avoided if possible.

Remember also that sellers will focus on ' share sales' of a business, which are difficult to finance because of the liquidity issues inherent in a private company in the SME Commercial sector. So an asset based sale is much easier to validate, buy and finance.

Valuation plays a key role in buying a business. The ability to access, (and understand! ) past and current income statements, balance sheets, and cash flow statements will allow your to get a strong handle on the acquisition value . We have always recommended to our clients that they access several months of the sellers bank statements to allow for the understanding of cash inflow / outflow.

Sources of finance in Canada, when looking for financing to buy a business include:

Canadian chartered banks
Commercial finance companies
Asset based lenders
Government Crown Corp banking debt
The BIL program (Govt guaranteed loan)
Equipment lenders
Private equity firms (these pertain only to larger transactions)

Using simple common sense investigate issues such as the ability to source a vendor take back on your deal, as well as spending a lot of time on client receivables ( quality and quantity)

Yes, that ' time machine' would be great - but utilizing our tips we've provided will get you many of the insights you need to acquire and grow a company in Canada. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with the financing you need.



Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :


7 Park Avenue Financial = Canadian Business Acquisition Financing Expertise







Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:

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


Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '
































Stan Prokop

A Cash Flow Rescue Plan : Some Higher Education In Business Working Capital Solutions

Getting Comfortable With Cash Flow And Working Capital Solutions

Information on improving cash flow for Canadian business owners and financial managers. Business working capital solutions and management are at the heart of business success




Improving cash flow and accessing business working capital solutions is pretty well always a situation of the business owner /financial manager getting comfortable with the right information and solution. There's nothing like a bit of ' higher education’...

so let's dig in.










The reality of the situation is that it’s a combination of managing your balance sheet assets, granting credit to clients in the right manner, and accessing cash flow solutions that match your first overall credit quality. In many cases we see in talking to clients they are often focused more on sales generation (which is important) but at the expense of working capital management.

But are these types of financial solutions difficult to obtain. Truth be told they are if your firm doesnt satisfy what we call traditional criteria by Canadian chartered banks and other ' mainstream' lenders. But if you're in a bit of a credit crunch and don't satisfy the criteria of solid balance sheets, profits, and satisfactory operating ratios it's an upward struggle.

If your firm doesn’t have ' bank support ' it’s a case of exploring alternative solutions that are in fact numerous. They include:

Receivable Financing
Inventory Finance
Supply Chain/PO financing
Tax Credit Monetization
Business lines of credit that are non bank in nature
Govt SBL busines loans

In our clients minds, unfortunately, it's almost always only about ' the rate ' when it comes to accessing alternate solutions. While ultimately you have to be able to support any form of external financing we maintain that the way you manage external financing, as well as how you use it is in fact a 'fresh way' to look at things .

Take A/R financing for instance. Our own preferred and recommended solution is Confidential Receivable Financing. While coming at a higher cost than bank lines it provides unlimited access to working capital, as well the ability to minimize costs by prudent day to day management of your accounts. Don't forget also that no debt is added to the balance sheet, and new found cash flow can help you sustain better supplier relationships and maximizing better pricing on goods and services you order.

As we have said it’s important to take a ' holistic ' approach cash flow management. That includes:

Monitoring customer credit granting
Accelerating cash inflow via better collections
Taking supplier discounts whenever you can
Ensuring you have a good handle on future cash flow needs

Remember also that while any non traditional financing will always cost more it replaces the need to consider outside equity which is much more expensive.

Your ability to know how much cash you need in the future will always be a key factor in business success. Seek out and speak to a
trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with your financing needs.





Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :


7 Park Avenue Financial = Canadian Cash Flow Solution Expertise







Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:

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

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '

Stan Prokop

Government Loans In Canada : A Fool Proof Formula For The SBL Small Business Loan ?

How Long To Get A Govt Business Loan? Not As Long As You Think


OVERVIEW – Information on government loans in Canada. What Does It Take To Get Approved For A ‘ SBL ‘ Small Business Loan . Tips for Success





Government loans in Canada , specifically the ' SBL Small business Loan ' program often seems ' unattainable' to clients we meet who don't understand the program. So if there is a key, or in our words, a ' fool proof ' formula for success in financing here its understanding eligibility. Let's dig in.

We feel that because the program is so straight forward the only reason you can not be successful with such financing is simply because you didn’t know if you or your firm/project qualified. So let's review some of those key qualifiers.

The true benefit of the program is of course the ' government guarantee ' that the Canadian government loans come with. So your ability to put forth a solid proposal hinges on ensuring that guarantee is available.

That goes for every use of the program, which predominantly finances assets and leaseholds, and in some cases actual real estate. Franchisees contemplating entry into the Canadian franchise financing industry also make maximum use of the program.

It's also critical to understand ' sizing' of the program. This loan program maxes out at $ 350,000.00, and finances 90% of all items up to and including this cap. That means two things of course:

Any financing you require over 350k must be met or arranged by the owner/owners

You will need a minimum personal equity investment, aka the ' down payment' of a minimum of 10%. You should ensure that you should be able to meet two other key criteria of the program - a debt to equity ratio that is reasonable, and a positive ' current ratio ‘. That item simply signifies your need to show that a combination of cash, inventory and prepaids is able to meet 1st year debt repayments.

A great way to look at your potential success in Small business loan financing is simply to walk a mile in your banker/lenders shoes. That's because unlike your suppliers that supply you with goods and services your financing sources is lending with the sole expectation of loan repayment, with interest income as their only profit.

Here's where a solid business plan and cash flow kick in, as your ability to demonstrate realistic cash flow repayment becomes a key critical element in the SBL loan formula approval. That repayment is going to come from sales revenue and profits, receivables collections, sale of assets, etc.

Businesses that aren't cash flow based should also be able to, within a reasonable amount of time, utilize business credit lines that help offset revenue bulges versus cash collections.

While many clients we talk to at first believe an SBL loan process takes weeks or months, the reality is that a properly prepared proposal should only take a matter of days for adjudication. The key? A properly prepared package that consists on owner information, business plan, cash flow, and financing requirements for assets and leaseholds to be financed.

The bottom line - the winning formula in government SBL loans really revolves around understanding eligibility and providing a tight package of the basic requirements which certainly are NOT onerous. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can fast track your SBL small business loan with maximum chances of success and minimum expectation in timing!



Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :


7 Park Avenue Financial = ‘ SBL ‘ Govt Business Loan Expertise








Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:

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

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '

Stan Prokop