YOUR COMPANY IS LOOKING FOR CASH – ACCOUNTS RECEIVABLE FINANCING IS A SOLID BUSINESS-TO-BUSINESS LENDING STRATEGY!
Transform Your Cash Management with Confidential Invoice Finance
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Financing & Cash flow are the biggest issues facing business today
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Confidential factoring streamlines business liquidity without exposing financial arrangements to the public eye.
Unlock cash flow without the wait — discover the hidden power of confidential factoring!
7 Park Avenue Financial originates business financing solutions for Canadian Businesses – We offer CONFIDENTIAL FACTORING solutions that solve the issue of cash flow and working capital – Save time and focus on profits and business opportunities
Confidential Invoice Factoring: The Lending Solution
Introduction - What is Confidential Factoring?
Confidential factoring is a cash flow solution invoice finance facility that doesn't compromise customer relationships or your competitive edge.
As an underutilized form of invoice financing, confidential a/r financing allows businesses to maintain their branding while a third party finances your accounts receivable. It's a guarantee for steady liquidity but also safeguards the company's public image and client confidentiality.
It's a simple fact - if your business is growing a business-to-business company such as yours needs a 'business to business' lending solution.
That’s even more of a pronounced need when your growth is outpacing your financial means. That's when Canadian business owners and financial managers look for an efficient, yet flexible means of financing their growth the solution of cash accounts receivable financing often comes up.
Why Choose Confidential Factoring?
Let's explore why this factoring arrangement might be the 'optimal' one when it comes to business finance.
Of course, it’s safe to say we can’t save the patient if we don’t know what the cure is. So let’s examine exactly what this solution does. In cash flow financing, aka 'factoring', aka 'receivables financing' it's all about generating working capital and cash flow. It’s on paper a very simple procedure... We don't make it complicated... Many do! You simply agree to sell your receivables, as you generate them for an immediate cash advance.
U.S. vs. Canadian Methods
If you utilize the U.S. method of this type of financing you also can remove all or at least a part of your bookkeeping, collection, and risk from your company’s daily procedures. While that is a good thing our recommended and favourite solution for this method of business financing is a confidential receivable finance facility that allows you to bill and collect your receivables without any notification to your suppliers, clients, etc. More about that later though!
Generating Cash Flow Through Sales
We also mentioned that this business-to-business lending solution allows you to sell, and generate cash flow for your sales as you make them. One technical point we should clarify is simply that it’s your choice, you certainly don’t have to finance all your A/R, and you can finance it 15 or 30 days from your billing if you choose if you need cash flow.
Details on Cash Receipts
So, cash flow. How much exactly do you receive when you sell an invoice or your ongoing A/R regularly?
We can typically say that in Canada you will receive 98 % of your receivables. That’s based on a 30-day term of sale. You receive approximately 90% when you make the sale, and the balance is paid to you when your client remits, less than a 1-2 % discount fee which effectively becomes the finance charge.
Why Use Confidential Factoring?
So, why in the heck would you do this? For the following reasons: Many firms simply don’t have the balance sheet or personal resources to finance growth. When you grow so do your inventory and receivables. They become an investment, and cash accounts receivable financing turns that investment into cash flow on your balance sheet.
Extending Trade Credit
Additionally, many firms in Canada use 'trade credit’ as offered to their customers to maintain strategic relationships, i.e., keep their clients. You are now in a position to offer, should you choose, extended terms to your client - because, as we said, you get paid as soon as you generate sales under our business-to-business lending solution.
Key Takeaways
Invoice Financing: Central to understanding confidential invoice discounting factoring, this is where a business sells its invoices to a factor at a discount for immediate cash.
Accounts Receivable Management: Efficient handling of invoices and receivables is crucial, as the factor takes over the collection responsibilities discreetly.
Business Liquidity: This financing option directly impacts liquidity by providing cash flow when needed most, which is essential for operational continuity.
Client Confidentiality: Preserving customer relationships through non-disclosure of financing arrangements is a core benefit of confidential factoring.
Credit Management: By using a factor, businesses can improve their credit management and scoring, as the factor often assumes the risk of bad debts.
Conclusion
In many cases, we talk to clients that have one of several large opportunities. It could be a large contract, a new major sale to a new client, etc. This factoring facility solution gets you to the goal line!
So, the bottom line? It's simply that a true business-to-business lending solution such as receivable finance gives you very predictable working capital - bottom line your company is now liquid, and that’s a good thing.
Call 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor as to how you can implement a confidential cash A/R financing solution that makes sense and works!
FAQ: FREQUENTLY ASKED QUESTIONS / PEOPLE ALSO ASK / MORE INFORMATION
How does confidential factoring work to improve cash flow without alerting my customers?
It provides immediate cash by purchasing your invoices at a discount while maintaining your customer interactions and keeping the financial arrangement private.
What makes confidential factoring different from traditional loans?
Unlike loans, invoice finance facilities do not create debt but advance money against your invoices, with the factor handling collections discreetly.
Can confidential factoring help my business if I have clients with long payment terms?
It turns outstanding invoices into immediate cash, ideal for managing long payment cycles effectively.
How does confidential factoring affect my business’s credit?
It can improve your credit standing as the risk of non-payment shifts to the factor, reducing your credit risk.
Is confidential factoring suitable for all types of businesses?
It is particularly beneficial for businesses that need to keep sales and financial dealings private while requiring steady cash flow. In traditional notification factoring the factoring company deals directly with the collection of the invoice.
What are the typical fees associated with confidential factoring?
Fees vary based on the volume of receivables and the creditworthiness of your clients, usually a percentage of the invoice amount that the factoring company advances based on the value of the invoice.
How quickly can I access funds through confidential factoring?
Funds from invoice factoring companies are typically available within 24 to 48 hours after the factor verifies the invoices and issues the cash advance invoice discounting
Does confidential factoring require collateral?
No, it uses your accounts receivable as the only collateral, making it accessible even without hard assets.
What happens if a client fails to pay an invoice under confidential factoring?
The factor assumes the risk of non-payment, often offering non-recourse invoice factoring to protect your business.
Are there industries that particularly benefit from confidential factoring?
Industries with high invoice volumes and long receivable periods, like manufacturing and wholesale, benefit most from an invoice finance arrangement.
How does confidential factoring stabilize business operations?
By ensuring predictable cash flow, it allows businesses to plan and execute operations without cash flow interruptions based on invoice value financing
What is the role of a factor in confidential factoring?
The factoring company manages credit control and collection processes discreetly, providing cash advances against your invoices.
How do I choose the right factor for confidential factoring?
Evaluate their expertise in your industry, their funding capabilities, and their ability to manage credit discreetly.
