YOUR COMPANY IS LOOKING FOR BUSINESS CASH FLOW SOLUTIONS!
YOUR RECEIVABLES FINANCE SOLUTION JUST ARRIVED
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
Oakville, Ontario
L6J 7J8
AR Financing provides businesses with immediate access to working capital by leveraging outstanding invoices.
Struggling with cash flow? Discover how AR Financing can provide the quick liquidity your business needs!
7 Park Avenue Financial originates business financing solutions for Canadian Businesses – We offer A/R FINANCING solutions that solve the issue of cash flow and working capital – Save time and focus on profits and business opportunities
7 Park Avenue Financial: “Canadian Business Financing with the intelligent use of experience”
AR Financing - Canada
Receivable Financing Services are among the most popular working capital and cash flow alternatives today for Canadian businesses.
Receivables company solutions are a solid alternative to the Canadian chartered bank offering - the ‘business line of credit. ‘ Let’s dig in.
WHY A/R FINANCING IS ESSENTIAL FOR BUSINESS GROWTH
Accounts receivable financing is a financing solution that allows businesses to leverage their outstanding invoices to access immediate cash flow. A/R Finance is a game-changer for companies struggling with cash flow issues, allowing them to fund day-to-day business needs and allowing the company to take advantage of growth opportunities.
Talk to 7 Park Avenue Financial about why this method of business financing can help your business.
HOW ACCOUNTS RECEIVABLE FINANCING WORKS
Once approved for account receivable funding, unpaid invoices can be submitted immediately for funding advances. The provider may finance up to 90% of the invoice's face value and hold the remaining as a holdback until the client pays. When a customer has paid, the provider will refund the balance to your business minus factoring costs.
DOES ACCESS TO BANK FINANCING PROVIDE YOU WITH THE FUNDING YOU NEED TO RUN AND GROW YOUR BUSINESS
It’s not hard to see why business owners/financial managers are mesmerized by the lure of bank facilities - they are low-cost and have some solid flexibility.
The problem? Getting approved! Essentially, it’s all about the credit standards our banks set. An accounts receivable loan can be a viable alternative to traditional bank financing, providing cash in advance based on outstanding invoices and offering financial flexibility.
THE DIFFERENCE BETWEEN AR FINANCING AND AR FACTORING
Sometimes, people mistake account receivability finance with account remittance factoring or invoice remittance factoring receivables.
These two seem identical, but they have separate financial arrangements. It varies from invoice to invoice if you are using a different invoice.
Account receivable factoring involves a factoring service that pays a percentage of invoices in full before collecting payments from the customer. With AR financing, your account remains a part of AR's portfolio, but you can use these assets as collateral to acquire an unsecured loan.
ACCOUNT RECEIVABLE FINANCING FILLS THE CASH FLOW GAP
A receivables company finance solution might be the ‘ buried treasure ‘ owners/managers seek.
These commercial firms fill the ‘ need gap, ‘albeit at a higher cost. Accounts receivable financing companies provide these services and can be a valuable business resource. It should be no secret that the vital collateral is simply the company's business assets, specifically A/R.
Receivable Finance, aka ‘ factor financing ‘ - it’s not ‘ equity ‘ or ‘debt’ financing; it’s simply monetizing your sales for the business lifeblood - cash flow.
HOW CAN YOUR COMPANY OFFSET INVOICE FACTORING COSTS?
Financing costs for accounts receivables financing vary widely and are typically in the 1.25 - 2% per month on outstanding invoices that you choose to finance off your balance sheet.
These costs are outlined in the accounts receivable financing agreement between the business and the financing company. You have just changed your company’s balance sheet into a cash flow machine.
These costs, though, can genuinely be significantly offset in several ways -
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Your business can negotiate better pricing on products and services because of newfound cash availability from the factoring company
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The business can now afford to take valuable supplier discounts for prompt payment, which themselves are often 2%!
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Less sophisticated owners do not always consider the actual cost to ‘ carry a/r.’
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Larger commercial or govt contracts can be taken on with the knowledge sales can be financed, thereby generating additional profit for your business - receivable financing accounting is easy to implement
In our experience meeting and talking to clients, the actual ‘needs’ of the business become blurred, as the business owner/manager often co-mingles other needs such as equipment, property, and inventory.
The best way to view A/R solutions is as a combination of short-term operating needs and a solution for early receivables payment.
ADVANTAGES OF ACCOUNTS RECEIVABLE FINANCING
A commercial financing company invoice factoring facility has some distinct advantages. One of them is borrowing power, as typical advances are 90% of outstanding A/R, significantly better than the bank's 75% ratio.
Accounts receivable financing provides immediate cash flow and operational flexibility by allowing businesses to submit invoices for funding and receive a percentage of the invoice's face value.
The best use of a facility is to have an ongoing facility based on the ebb and flow of sales and A/R collections.
Other solutions might be worth investigating. One is Revenue-based finance, which allocates a portion of all sales as the borrowing base.
In the smaller end of the market, i.e., small businesses and retailers/restaurants, ‘ Merchant Advance ‘ solutions are popular. They monetize future sales today and act as lines of credit in a way—some business owners refer to them as receivables loans.
Top experts will tell you that the best use of non-bank commercial financing is for business growth—in most cases, it is the ‘ bridge ‘ back to traditional financing, and common timeframes for utilizing this type of service are a year or two.
OUR RECOMMENDED BEST RECEIVABLE FINANCING COMPANIES / FACTORING SOLUTION
One of the best A/R factoring solutions is ‘CONFIDENTIAL RECEIVABLE FINANCE, ‘which allows you to bill and collect your own invoices without notifying others—least of all your competitors.
Additionally, receivable loans are another option for businesses looking to improve cash flow.
KEY TAKEAWAYS
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Invoice Financing: Businesses sell unpaid invoices to a lender at a discount to get immediate cash.
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Receivables Factoring: A financing method where a business sells its accounts receivable to a third party at a discount to obtain cash.
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Cash Flow Management: Utilizing AR Financing to maintain a steady cash flow, ensuring operational expenses and growth opportunities are met.
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Working Capital Loans: Short-term loans aimed at financing the day-to-day operations of a business.
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Invoice Discounting: A financial product where businesses use their invoices as collateral to receive a loan from a lender.
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AR Financing Payment Process: In AR Financing, the business retains ownership of the invoices and is responsible for collecting payment when the customer pays their invoice.
CONCLUSION
If you believe account receivable factoring companies are the solution, then financing accounts receivables is your cash flow solution.
It allows companies to fund day-to-day operations and is easily accessible.
If you want to explore a Receivables company's potential cash flow power, call 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can assist you with your working capital needs.
Financing accounts receivable can help businesses fund day-to-day operations and improve cash flow by borrowing against outstanding invoices or selling them to a third party at a discount.
FAQ
How does AR Financing work?
AR Financing allows businesses to use their outstanding invoices as collateral to secure immediate funds, improving cash flow and operational efficiency.
How does accounts receivable financing work?
Accounts receivable financing allows a company to use its unpaid invoices as collateral for a type of loan. The lender advances a percentage of the invoice value, and fees, percentage calculations, and annual percentage rates (APRs) are involved in the process.
What are the benefits of AR Financing?
The main benefits include quick access to cash, improved cash flow, no need for additional collateral, and the ability to effectively handle operational expenses and growth initiatives.
Who can benefit from AR Financing?
Any business with outstanding invoices and needing immediate working capital can benefit, especially those experiencing cash flow challenges.
How is AR Financing different from a traditional loan?
Unlike traditional loans, AR Financing doesn’t require long approval processes or additional collateral. It’s based on the value of your outstanding invoices.
What are the costs associated with AR Financing?
Costs can vary but typically include a fee for the financing service, which is a percentage of the invoice value. It’s important to compare providers for the best rates.
What is invoice factoring?
Invoice factoring involves selling your accounts receivable to a third party at a discount to get immediate cash.
How can small businesses improve cash flow?
Small businesses can improve cash flow through AR Financing, better inventory management, and negotiating favourable payment terms with suppliers.
What is the difference between AR Financing and factoring?
AR Financing involves using invoices as collateral for a loan, while factoring consists in selling the invoices outright to a third party.
How does invoice discounting work?
Invoice discounting allows businesses to use their invoices as collateral to receive a loan from a lender, maintaining control over their sales ledger.
What are working capital loans?
Working capital loans are short-term loans designed to cover the day-to-day operational expenses of a business, ensuring smooth operations and growth.
