YOUR COMPANY IS LOOKING FOR RECEIVABLES FINANCING SOLUTIONS!
THE ASSET BASED WORKING CAPITAL SOLUTION
You've arrived at the right address! Welcome to 7 Park Avenue Financial
Financing & Cash flow are the biggest 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
Suite 301
Oakville, Ontario
L6J 7J8
Business funding in Canada. When it comes to financing receivables clients we talk to seem somewhat hesitant sometimes to be ready to grasp all the basic aspects of this method of financing cash flow needs. And that goes from CFOs of mid-market type firms all the way down to early-stage companies that are just starting to generate profits. Let's dig in.
TURNING SALES INTO CASH FLOW IMMEDIATELY
Why then is the business owner/financial manager reluctant to get out of the shallow side of the pool and step into the deep waters of factor funding receivable financing in Canada? At the end of the day is just one additional way to generate instant cash flow when your company is selling its products and services. It’s, quite simply a way to beat your clients at the waiting game when it comes to collecting your accounts.
THERE ARE 2 KINDS OF RECEIVABLE FINANCE IN CANADA - WHICH ONE WORKS FOR YOUR COMPANY
Did you know there are two basic kinds of receivable finance in Canada? One is what we can call ' traditional/old school ' whereby your A/R is co-managed by the finance partner. The other is a Confidential A/R financing solution that allows you to bill and collect your own accounts receivable, while all the while achieving all the benefits of this finance method - without any notification to a third party.
BUSINESS AS USUAL IS IMPORTANT!
While each has its own advantages and issues we certain prefer 7 Park Avenue Financial Confidential A/R financing because it's more business as usual. At the end of the day, each of the two methods are simply ways in which your finance partner assesses risk and manages their business.
UNDERSTANDING THE LINGO OF FACTORING FINANCE IS KEY
99% of the confusion (in our humble opinion) around business funding for A/R in Canada revolves around some of the semantics. Essentially we're talking about the difference between how a bank finances your A/R versus alternative A/R finance - aka ' factoring’. The bank simply creates a legal document around their ability to hold the collateral of your receivables as an ongoing borrowing. So from an accounting perspective, its business as usual since your AR stays on your balance sheet and you simply utilize a line of credit to borrow against 75% of your receivable base.
BANK FINANCING VERSUS FACTORING
75% is the standard borrowing base you get when financing your sales via a Canadian chartered bank facility. (By the way factor funding allows you to borrow against 90% of your a/r base, so you’ve got instant 15% additional borrowing power)!
On the other hand is the traditional or confidential method of financing the same asset. In this case the paperwork/legal docs of your finance partner show that you've in effect ' sold ' your A/R and are receiving immediate cash draw on that borrowing base.
We see little difference in the paperwork; however we see a lot of difference, as we have said in how the facility operates on a daily basis. That's where the confusion lies with clients. That's when, as Ricky Ricardo said, we’ve got a ' lot of 'splaining ' to do!!
CONCLUSION
If you're looking for the straight goods on business funding in Canada take some time to understand just a handful of basics. Business owners have the option of choosing a number of types of working capital business loans in Canada. Step out of the shallow side of the pool and wade in! Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your financing needs.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
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