YOUR COMPANY IS LOOKING FOR A SOLID
RECEIVABLE FINANCE SOLUTION!
ACCOUNTS RECEIVABLE FINANCING WORKS!
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Financing & Cash flow are the biggest issues facing business today.
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
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EMAIL - sprokop@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8
Working capital accounts receivable factoring is a powerful financial strategy that converts outstanding invoices into instant cash flow for your business.
Struggling with cash flow? Turn your invoices into cash today!
7 Park Avenue Financial originates business financing solutions for Canadian Businesses – We offer WORKING CAPITAL FINANCING AND FACTORING solutions that solve the issue of cash flow and working capital – Save time and focus on profits and business opportunities
Canadian Business Financing with the intelligent use of experience
THE BEST WORKING CAPITAL FINANCING OPTION?
Receivable financing in Canada has made some exciting gains in recent times. First, there is nothing like winning a 'popularity contest,' and thousands of firms have continued to embrace this method of financing cash flow.
Even better than that, some interesting 'changes' to how this finance from a factoring company works have appealed even more to the Canadian business owner/financial manager. Let's dig in.
Boost Your Business Growth: The Power of Receivable Factoring
Unlock the hidden potential of your business’s cash flow with working capital accounts receivable factoring.
This innovative financing solution, offered by an accounts receivable factoring company, transforms your unpaid invoices into immediate cash, providing the liquidity you need to maintain smooth operations and seize growth opportunities.
WHO USES A FACTORING COMPANY?
Canada's SME (small to medium enterprise) sector can be forgiven for feeling underserved when accessing capital that other larger and public companies find easier to achieve.
So a subset of asset-based lending, ‘factoring services‘ have stepped in nicely when they find themselves less ‘ creditworthy’ and unable to access all of the working capital they need.
Business owners can leverage factoring services to manage cash flow and outstanding invoices, ensuring they have the necessary funds to keep their operations running smoothly.
WHAT IS THE BEST TYPE OF FACTORING SOLUTION?
If we step back a bit, it’s not hard to discover why accounts receivable financing services are so appealing: they allow users to quickly access working capital.
Utilizing this method of financing, including our favourite and recommended “CONFIDENTIAL RECEIVABLE FINANCING,” your company can finance all North American accounts receivable.(International accounts often require some form of credit insurance), depending on the type of financing you need and the risk of bad debt. EDC insurance can also be accessed.
HERE IS WHAT'S WRONG WITH TRADITIONAL ' OLD SCHOOL' FACTORING FINANCING
While the traditional form of this financing can be termed somewhat ‘invasive’ as the collection department of your firm is taken over by the finance firm, it still works for thousands of firms who wish to access capital and aren’t concerned about notifying clients about how they finance their business.
Compared to the challenges of qualifying for traditional bank loans, which often require good creditworthiness, collateral, and a lengthy approval process, factoring provides a more accessible alternative for many businesses.
WHAT IS THE APPEAL OF CONFIDENTIAL A/R FINANCE FOR CASH FLOW?
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 your own invoices.
HOW DOES ACCOUNTS RECEIVABLE FACTORING WORK?
So, how does this method of financing cash flow work? It's pretty basic stuff. Standard finance documents you would sign with any funding are put in place at the outset of the arrangement with factoring companies.
It's all about financing your balance sheet and cash flowing those outstanding invoices.
All sales you generate can be financed the same day that invoices are generated. 90% account margining is typically available, which beats the 75% our Canadian chartered banks offer. Your clients are unaware of your financing mechanism.
You're running a ' business as usual ' company, with one exception: you have all the cash flow and financing you need based on your sales growth via financing accounts receivable. It's the alternative to bank financing for short-term day-to-day funding, a business credit line facility; it is not a term business loan that brings debt to the balance sheet.
Businesses can choose between non-recourse invoice factoring or regular recourse funding, where you still keep your bad debt risk.
The factoring fee is not an interest rate, which is an often confusing part of a/r financing when we talk to new clients here at 7 Park Avenue Financial.
KEY TAKEAWAYS
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Cash Flow Improvement: Factoring improves cash flow by providing immediate funds from unpaid invoices, ensuring continuous business operations.
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Eligibility Criteria: Understanding the basic requirements for factoring, such as creditworthiness of your customers and invoice validity, is essential.
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Factoring Process: The process involves selling your receivables to a factoring company, which then advances a percentage of the invoice value.
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Cost Structure: Familiarize yourself with the fees and rates associated with factoring, including discount rates and service fees.
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Risk Management: Recognize the potential risks, such as the impact on customer relationships and the importance of choosing a reputable factoring company.
CONCLUSION - RECEIVABLES FACTORING
Looking for the best accounts receivable factoring for your small business? If your firm has good financial records and a track record of growth and future growth potential, seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with the best factoring services for business owners in Canada.
FAQ
What is working capital accounts receivable factoring?
Working capital accounts receivable factoring involves selling your unpaid invoices to a factoring company in exchange for immediate cash, improving cash flow.
How does accounts receivable factoring benefit my business?
Factoring companies provide instant liquidity, allowing you to cover expenses, invest in growth, and manage financial obligations without waiting for invoice payments.
Who is eligible for accounts receivable factoring?
Eligibility for invoice financing typically depends on the creditworthiness of your customers and the validity of your invoices. Most businesses with reliable customers can qualify.
What costs are associated with factoring accounts receivable?
Factoring costs include discount rates and service fees, which vary based on the factoring company and the agreement terms.
How do I choose the right factoring company?
Selecting a factoring company involves evaluating their reputation, fee structure, contract terms, and customer service to ensure they meet your business needs.
How is accounts receivable factoring different from a traditional loan?
Factoring provides immediate funds from unpaid invoices, whereas traditional loans involve borrowing money that must be repaid with interest over time.
What industries benefit most from accounts receivable factoring?
Industries with long payment cycles, such as manufacturing, transportation, and staffing, benefit significantly from improved cash flow through factoring.
What are the risks of accounts receivable factoring?
Risks include potential impacts on customer relationships and the factoring company's financial stability. Due diligence is crucial.
Can factoring affect my business’s credit score?
Factoring typically does not affect your business’s credit score since it is not a loan but a sale of receivables.
What should I consider when evaluating the cost of factoring?
Consider the discount rate, additional service fees, and any hidden costs that might affect the overall factoring expense.
How does the factoring process work from start to finish?
The process involves submitting invoices to a factoring company, receiving an advance, collecting payment from the factoring company, and receiving the remaining balance minus fees.
What are the advantages of choosing accounts receivable factoring over other financing options?
Factoring offers quick access to cash, no debt accumulation, and flexible funding based on your invoice volume, making it a versatile financing solution.
