YOUR COMPANY IS LOOKING FOR A RECEIVABLE FINANCE SOLUTION!
RECEIVABLES FINANCING FOR LINES OF CREDIT ALTERNATIVES
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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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Struggling to secure traditional business financing? Unlock the potential of your outstanding invoices with Receivables Finance today!
7 Park Avenue Financial originates business financing solutions for Canadian Businesses – We offer RECEIVABLES FINANCE solutions that solve the issue of cash flow and working capital – Save time and focus on profits and business opportunities
RECEIVABLES FINANCING CANADA
Receivables funding in Canada, thankfully, comes with choices. Is a receivable credit solution your firm's ' golden chance ' at working capital success? It just might be, and here's why. Let's dig in.
Receivables Finance emerges as a vital tool for companies seeking to optimize their cash flow and unlock capital tied up in outstanding invoices. By leveraging the value of their accounts receivable, businesses can access immediate liquidity, fuel growth initiatives, and navigate cash flow challenges with confidence. As traditional lending criteria tighten and businesses face increasing pressure to maintain liquidity, Receivables Finance offers a strategic avenue for sustaining operations, driving expansion, and seizing growth opportunities.
CHOICES IN FINANCING YOUR RECEIVABLES
It is a good thing that the business owner has choices in accounts receivable financing. One of those reasons is that bank financing, for some, or all of the cash flow financing you need simply might be unattainable by Canadian chartered bank standards.
RECEIVABLE FINANCE IS A PART OF ASSET-BASED LENDING SOLUTIONS
So enter receivables finance. It comes in various ' sizes' and 'flavours’. It can be a stand-alone solution, or in some cases, it can be a subset of an asset-based line of credit, that type of facility monetizes both receivables and inventory and equipment into one revolving line of credit.
AT 7 PARK AVENUE FINANCIAL WE RECOMMEND CONFIDENTIAL RECEIVABLE FINANCE
And, throwing more choice into the mix, the Canadian business owner and financial manager has the choice of utilizing ' traditional ‘A/R factoring, or it can opt for our preferred and recommended solution: CONFIDENTIAL RECEIVABLE FINANCING.
The key difference in understanding non-bank receivable financing simply boils down to two things:
UNDERSTANDING PRICING
UNDERSTANDING HOW IT WORKS
BENEFIT OF A/R FINANCE
While it only makes sense that an alternative non-bank solution will be more costly thousands of firms gravitate to this method of business financing simply because it gives them all the cash flow and working capital they need based on their sales level - with virtually no upper limit to financing available.
TRADITIONAL FACTORING companies
If you opt for traditional financing, most typically called ' FACTORING' you're involved in a tri-part deal between yourself, your lender, and your client. Your client pays the lender, the one key advantage to your firm is that you receive the cash, at your option, the day you make an invoice for the sale. That's cash flow power. The cost of that transaction, typically 200$ on a $10,000.00 invoice ( assuming 30-day terms/payment) can often be very justified when you consider your newfound ability to buy inventory, reduce payables, take discounts with your suppliers, or negotiate better pricing.
2 KEY POINTS IN NON-BANK A/R FUNDING
Two other key factors come into play when considering non-bank receivables funding. First of all, you aren't taking on debt; the accounting treatment of A/R financing is simply not ' borrowing' when recorded by your accountants. And finally, you can of course bring in new equity into your firm, or consider a working capital term loan - but those two solutions simply dilute ownership and bring debt to the balance sheet.
The Confidential A/R financing we mentioned simply allows you to receive all the benefits we mentioned from a factoring company but it’s no longer a ' 3 way ' - because you bill and collect your receivable with no notice to any client or vendor.
KEY TAKEAWAYS
Invoice Factoring: This involves selling outstanding invoices to a third party at a discount in exchange for immediate cash flow.
Accounts Receivable: These are the amounts owed to a company by its customers for goods or services delivered.
Credit Risk Assessment: Evaluating the creditworthiness of clients to minimize the risk of non-payment.
Cash Flow Optimization: Strategies for managing cash flow effectively to ensure smooth operations and growth.
Funding Solutions: Various methods and instruments are available for businesses to access capital using their accounts receivable as collateral.
CONCLUSION
Is a receivable credit solution in the works for your firm when you're considering financing accounts receivable?
It just might be the ' golden chance ' for cash flow peace of mind.
Call 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can guide you through the myriad of lingo and options in receivables finance solutions and the right types of receivables finance for this very popular method of financing growth.
FAQ
What is Receivables Finance?
Receivables Finance involves using outstanding invoices as collateral to access immediate funding, helping businesses maintain cash flow.
How does Receivables Finance differ from traditional loans?
Unlike traditional loans, Receivables Finance provides funding based on the value of outstanding invoices, offering more flexible and accessible financing solutions via a financing agreement to fund a/r. The receivables finance process allows a company to achieve the same goals as a bank a/r credit facility. Credit insurance can also be available.
Can Receivables Finance help businesses with cash flow challenges?
Yes, Accounts Receivables Finance provides a way for businesses to convert unpaid invoices on the company's balance sheet into immediate cash, helping to improve liquidity and navigate cash flow fluctuations.
What are the benefits of Receivables Finance for businesses?
Receivables Finance offers advantages such as improved cash flow, faster access to capital, and the ability to fuel growth without taking on additional debt in areas such as supply chain finance - Funding a company's accounts receivable provides positive cash immediately as soon as sales are generated and invoiced
How does credit risk assessment play a role in Receivables Finance?
Credit risk assessment in receivables factoring is crucial in Receivables Finance to evaluate the creditworthiness of clients and minimize the risk of non-payment.
What are the typical costs associated with Receivables Finance and Invoice financing?
The costs of Receivables Finance invoice discounting can vary depending on factors such as the volume of invoices, the creditworthiness of clients, and the chosen financing provider.
Is Receivables Finance suitable for startups or small businesses?
Receivables Finance can be beneficial for startups and small businesses looking to improve cash flow and access capital without traditional loan requirements.
Are there any industries that commonly utilize Receivables Finance?
Industries such as manufacturing, wholesale, distribution, and business services often leverage Receivables Finance to manage cash flow and support growth initiatives.
