YOUR COMPANY IS LOOKING FOR A/R FACTOR FINANCING!
ACCOUNTS RECEIVABLE FINANCING FOR CASH FLOW NEEDS
You've arrived at the right address! Welcome to 7 Park Avenue Financial
Financing & Cash flow are the most significant issues facing business today.
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs
EMAIL - sprokop@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8
Business cash flow pretty well always comes with challenges. The A/R factor has emerged as a reliable solution that has stayed constant through turbulent and regular times. What then are the benefits of such solutions, which type is best, and how do things work? Let's dig in.
CASH FLOW CONTRIBUTES TO YOUR FINANCIAL AND BUSINESS PERFORMANCE
In business, it's all about performance, and the ability to generate cash flow and working capital from A/R financing can be a substantial contributor to that performance.
WHY CHOOSE AN A/R FACTOR?
Why does a business owner/manager choose an ' AR FACTOR’ more traditional Canadian chartered bank financing? The process seems simple enough once we explain it to clients - it’s your company's ability to generate immediate cash against your sales. At your choice, this can happen periodically, i.e. weekly, monthly, etc., or constantly... i.e. all the time!
BANK LENDING VERSUS A/R FACTORING - WHAT'S THE DIFFERENCE
It should be no secret that the primary ' collateral' of this method of Canadian business financing is your actual accounts receivable. In contrast, Bank lending relies on that same collateral but places a considerable emphasis on historical and present profits, clean balance sheets, and business and personal collateral. Suffice to say that that latter combination provides a strong safety net for our Canadian banks.
FACTORING ALLOWS YOUR COMPANY TO GROW
Utilizing an AR factor in Canada is almost always a short term or intermediate solution to a growing company, or one has faced and is fixing some challenges. Using Europe as an example, top experts tell us that anywhere from 15-30% of all businesses in the SME sector (small to medium enterprise) have used A/R financing solutions offered by commercial finance firms. Those same experts also draw an obvious conclusion that financing A/R outside of the bank plays a large role in economic development.
USING CASH FLOW FOR GROWTH AND DAY TO DAY FUNDING
Cash flow generated from an A/R factor solution from a factoring company is used for various reasons - it’s ' asset monetization' and is not term debt of any sort. For that reason, the business owner/manager has the flexibility to use funds for immediate needs primarily related to growth and operations. Think of it as a ' buffer ' to ongoing working capital requirements.
DIFFERENT TYPES OF FACTORING ARE AVAILABLE
Business owners can choose between non recourse factoring and recourse factoring, depending on what level of credit risk they wish to carry. Any account receivable can also be insured if desired.
WHAT ARE MISCONCEPTIONS AROUND A/R FINANCE
So why don't more businesses access business cash flow via A/R financing? Studies tell us that one primary reason is Canadian business doesn't know about this solution. They also tell us that there are key misconceptions around what type of company is using these methods. It might surprise many business owners/managers that the largest and most well-known corporations access this same financing vehicle... in certain cases, the Bay street gang gives it a fancier name - such as Securitization.
WHAT IS THE COSTS OF FACTORING
Cost also plays a factor in adopting the use of an AR Factor when considering factoring financing. It's critical to understand that this financing method works best in a standard or high growth environment. Companies that are in a downward sales spiral would not benefit from the solution. A factoring fee is charged in this method of financing, sometimes called ' discount factoring.' It is not an interest rate but a factoring discount of your receivable - that's the key difference and is often misunderstood and understanding that allows you to understand the real definition of factoring.
Still, others feel it's complex to administer daily. While that might be true, our recommended client solutions, CONFIDENTIAL RECEIVABLE FINANCING, allows for the business to bill, collect and cash flow their sales in a completely confidential manner. One factor that may surprise you around approval is the lesser focus on personal credit history and net worth of owners- which is a bank focus almost all the time!
CONCLUSION - FACTORING FINANCE
So bottom line, the AR factor solutions is NOT a loan, it’s not a bank overdraft facility, it’s simply a method to cash flow sales on an ongoing basis in an unlimited manner. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your A/R financing and growth needs. If you're looking for a factoring company for invoice factoring, call us at 7 Park Avenue Financial. Any small business can get started as soon as you wish.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
7 Park Avenue Financial/Copyright/2021/Rights Reserved
