YOUR COMPANY IS LOOKING FOR TRADE RECEIVABLE FINANCING!
ACCOUNTS RECEIVABLE FINANCING AT IT'S BEST
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?
CONTACT US - 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
Invoice Factoring Canada offers a crucial financial lifeline for businesses seeking immediate cash flow solutions from outstanding invoices.
Struggling with cash flow? Discover how Invoice Factoring Canada can turn your unpaid invoices into immediate cash!
7 Park Avenue Financial originates business financing solutions for Canadian Businesses – We offer INVOICE FACTORING & solutions that solve the issue of cash flow and working capital – Save time and focus on profits and business opportunities
RECEIVABLE FINANCING CANADA
Trade Receivables Financing is increasingly sought after as a method of cash-flowing accounts receivable in Canada. Is there a mathematical secret to understanding and getting... shall we say... below the surface of this method of business financing? Let's dig in.
Invoice Factoring Canada is a solid and popular solution to maintain cash flow and fund operational efficiency. By converting immediate sales to outstanding invoices, immediate cash provides a lifeline to a company experiencing liquidity challenges. By leveraging this method, Canadian enterprises can ensure steady growth and stability without worrying about client payment delays.
ACHIEVING BUSINESS CREDIT SUCCESS IN CANADA VIA FINANCING OF CURRENT ASSETS
Getting business credit in Canada (and being successful at it!) is the ongoing struggle of the business owner / financial manager, particularly in the SME sector. Term loans are not the answer. While there are good reasons to secure long-term working capital for your business, it’s a fundamental financial principle that your business's current assets should be financed through short-term financing.
BANK FINANCING VERSUS NON-BANK ALTERNATIVE FINANCING - WHAT IS TRADE RECEIVABLES FINANCE?
If that 'short-term financing' doesn't come from a bank, where does it come from then? The answer is commercial finance companies that focus on receivables finance. These firms put paperwork in place that allows you to finance (in fact, the proper term is 'sell') your A/R as you generate sales to fund your business. That whole process is known as factoring, where a company sells receivables instead of assigning them to a bank (pledge of accounts receivable ) under a traditional bank facility.
3 KEY ISSUES AFFECTING THE FUNDING ADVANCE IN A/R FINANCING
That's simple, right? In fact, the math is very simple if you understand how accounts receivable financing companies calculate and advance that financing on accounts receivables. Critical factors in the whole process include:
The overall ' risk profile ' of your client base
The ongoing amount of your Receivables on a typical monthly basis
The payment history of your clients
THE COST OF RECEIVABLE FACTORING VERSUS THE BENEFITS
Although receivable financing is more expensive than Canadian chartered bank credit, one specific advantage is that your ' advance rate' or ' margining' is generally in the 90% area. That means more liquidity. Note also that this is' same-day' financing—as you generate sales, those sales are immediately monetized into cash flow, with funds wired into your operating account the same day.
WHAT RECEIVABLES CAN BE FINANCED / WHAT IS PLEDGING ACCOUNTS RECEIVABLE
In general, you can finance any receivable that is less than 90 days old—in some cases, a special exception will be made on that timeframe—but most business owners/managers quickly realize that receivables become less collectible when they are older and negatively impact the company's balance sheet. When a company sells its accounts, it generates immediate funding.
QUICK AND EFFICIENT FUNDING
Businesses that can't obtain the full amount of financing they need gravitate to receivables financing from a factoring company for different reasons. One reason might be to leverage and monetize current assets such as A/R to free up working capital. Many clients tell us they prefer trade A/R financing through a non-bank entity simply because it’s a more efficient process for securing approval.
WHAT IS THE BEST TYPE OF A/R FACTORING FINANCING YOUR TRADE RECEIVABLES?
7 Park Avenue Financial's accounts receivable financing solution is CONFIDENTIAL RECEIVABLE FINANCING. We do meet some clients who prefer ' old school’ receivable finance, which has your finance firm inserting themselves into the collection process with your outstanding invoices. It's short-term funding that allows companies to fund sales growth and investment in A/R.
WHAT OTHER SOLUTIONS ARE AVAILABLE UNDER ASSET BASED LENDING
Are there times when trade receivables financing doesn't work? If your company is in a death revenue spiral, no amount of financing will often fix the problem. Growing revenues can hide a lot of problems! Also, there are other complementary solutions to financing current assets, including tax credit financing, PO/Contract financing, and full-scale non-bank asset-based lines of credit. Bottom line - explore your options!
KEY TAKEAWAYS
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Invoice Factoring Benefits: Focus on the immediate cash flow and reduction of bad debt.
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How Invoice Factoring Works: Highlight the process of selling invoices to a factoring company.
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Choosing an Invoice Factoring Company: Emphasize key factors such as reputation, fees, and services.
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Cost of Invoice Factoring: Clarify typical fees and how they are calculated.
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Eligibility for Invoice Factoring: Explain the basic requirements for businesses to qualify for factoring.
CONCLUSION
A/R financing is a multi-billion dollar business in Canada. Explore the options.
Call 7 Park Avenuel Financial to discuss your cash flow needs. We're a trusted, credible, and experienced Canadian business financing advisor who will help you understand this financial offering.
FAQ
How does invoice financing differ from traditional loans?
Invoice factoring provides immediate cash by selling invoices, whereas traditional loans require repayment with interest and are based on credit history.
What types of businesses benefit most from invoice factoring providers?
Businesses with long payment cycles and those experiencing rapid growth or seasonal fluctuations benefit greatly from invoice factoring.
Are there any risks associated with invoice factoring services?
Potential risks include fees that can add up and the possibility of damaging client relationships if the factoring company handles collections poorly.
What is Invoice Factoring Canada?
Invoice Factoring Canada involves selling unpaid invoices to a factoring company for immediate cash, allowing you to receive cash until the customer pays.
How does invoice factoring benefit my business?
It improves cash flow, reduces bad debt, and provides funds for operational expenses.
What are the costs associated with invoice factoring cost?
Costs typically include a factoring fee, a percentage of the invoice value, and possibly additional charges based on the agreement.
How do I choose the right invoice factoring company?
When choosing the right financing solutions for your firm consider the reputation of the invoice factoring companies you are considering, fees, terms, and the services they offer to ensure they meet your business needs.
Who is eligible for invoice factoring in Canada?
Eligibility usually requires that your business issue invoices to creditworthy clients with a minimum amount of receivables.
Can invoice factoring help with seasonal cash flow issues?
Yes, it can provide the necessary funds during peak seasons when cash flow is critical, as funds are deposited into your bank account as soon as you give invoices to the factoring company.
Is invoice financing suitable for small businesses?
It’s a popular choice for SMEs looking to manage cash flow efficiently.
What is the difference between recourse and non-recourse factoring?
There are different types of invoice factoring - Recourse factoring means the business remains liable if the invoice is not paid, while non-recourse factoring transfers this risk to the invoice financing company.
How quickly can I receive funds through invoice factoring?
Funds are typically available and transferred into your business bank account within 24 to 48 hours after verifying the invoice.
Can invoice factoring be used for international invoices?
Yes, many factoring companies offer services for international receivables.
