YOUR COMPANY IS LOOKING FOR BUSINESS FINANCE!
ASSET BASED LENDING AND ASSET BASED FINANCING SOLUTIONS IN CANADA
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
Unlock your business's hidden potential with ABL Credit Lines - Where your assets become your advantage.
7 Park Avenue Financial originates business financing solutions for Canadian Businesses – We offer ABL Line Of Credit solutions and working capital solutions – Save time and focus on profits and business opportunities
7 Park Avenue Financial: “Canadian Business Financing with the intelligent use of experience”
ASSET BASED LINE OF CREDIT
An ' ABL ' asset-based credit facility often fully satisfies business credit line needs.
They are 'non-traditional' only because the sole ' traditional ' solutions are Canadian chartered bank facilities. Yet they deliver on everything you need and, more often than not... more. Let's dig in.
WHY CONSIDER AN ASSET-BASED CREDIT LINE?
When Canadian business owners and financial managers consider revolving credit facilities, they rarely think ' outside the box. '
Hence, they are quite surprised to find out from us that all business assets can be combined into one total borrowing facility based on day-to-day business needs, seasonality, ' bulges ' in sales growth and cash flow requirements.
Hence the name ' Asset-Based Line of Credit. '
TWO KEY ISSUES IN ABL CREDIT FACILITIES
The two issues that immediately need to be considered when focusing on a business credit requirement are ' facility size ' and cost. We can clarify and explain the cost issue very quickly — ABL costs more 99% of the time, but the benefit is unlimited access to credit needs based on your sales.
It's common knowledge that business borrowing costs today at the bank level are the lowest in recent history.
But ' cost' should never be the only factor when it comes to business borrowing, so when ABL offers all the capital you need to run /grow your company, we suggest you listen.
Oh, and by the way, have we forgotten to mention that thousands of companies cannot qualify for any or all of the financing they need at certain critical times? That alone is a good reason to consider Asset-based lending facilities.
WHO USES ABL?
We are not presenting the ABL solution as the 'be all and end all ' method to finance your credit line needs, but it is a logical alternative to traditional borrowing.
The spectrum of ' ABL ' users is vast, from start-ups to the largest corporations in the world.
Naturally, those larger corporations represent the small percentage of applicants that can actually achieve bank or better pricing.
HOW TO QUALIFY FOR AN ASSET BASED LOAN / LINE OF CREDIT
To qualify for ABL, your firm must be able to produce regular financials and report on the current assets in your business regularly - typically monthly, on occasion, even weekly.
That typically is not as bad as you think - it’s just about providing regular reports on aged payables, receivables, and inventory lists.
We suggest to clients that if you can’t provide those reports, you're in bigger trouble than you think... if not today... tomorrow.
HOW DOES THE ABL FACILITY WORK?
ABL business credit lines provide 90% financing on accounts receivable, 30-70% financing of inventories, and even combine the value of your unencumbered equipment.
Company-owned real estate can also be part of the credit line! That means 50-100% more borrowing power on an ongoing basis.
Remember also that this facility, unlike the typical bank line, grows as your sales grow, and is not fixed, typically associated with a bank credit line.
Asset-based lenders establish a borrowing base certificate for how much funding you can draw down based on sales and assets and their due diligence on your financial reporting.
It's not always about interest rates when financing the balance sheet, but ABL facilities have become very competitive based on the size of transactions and overall credit quality.
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Talent retention strategy: Consistent cash flow from ABL Credit Lines enables competitive compensation packages, attracting and retaining top talent.
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Market expansion catalyst: ABL Credit Lines can fuel rapid inventory scaling, allowing businesses to swiftly capitalize on new market opportunities based on a company's cash flow from the facility
KEY TAKEAWAYS
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Borrowing base: Understand how lenders calculate your available credit based on eligible assets, including physical assets and even real estate if company owned
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Collateral valuation: Learn the methods asset based lenders use to assess the value of your inventory and receivables and determine final loan to value ratio for the facility
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Advance rates: Grasp the percentage of asset value typically offered as credit for different asset types.
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Reporting requirements: Familiarize yourself with the ongoing financial documentation needed to maintain the facility.
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Covenant compliance: Recognize key financial ratios and performance metrics you must maintain versus covenants and ratios demanded by banks on unsecured loans
CONCLUSION - ASSET-BASED LENDING WORKS!
ABL Lines of Credit revolutionizes business financing by transforming idle assets into powerful working capital engines.
ABL Credit Lines has emerged as a powerful tool, offering flexibility and accessibility that traditional financing options often lack.
This revolving credit facility, secured by a company's assets, provides a lifeline for businesses looking to optimize their working capital and seize opportunities.
By leveraging the value of inventory, accounts receivable, and other assets, ABL Credit Lines empowers Canadian business owners to unlock the potential within their own operations.
Asset-based loans are a solid solution for your lines of credit needs.
Are you looking to feel ' in charge ' of your working capital and cash flow needs and want to explore the real benefits of ABL asset-based credit lines?
Call 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can assist you with your reinvention of credit solutions.
FAQ
How does ABL Credit Lines differ from traditional business loans?
ABL Credit Lines offers more flexibility by basing credit limits on your asset values, allowing for potentially higher borrowing capacity and adapting to your business's growth.
Can ABL Credit Lines help my business manage seasonal fluctuations?
Yes, ABL Credit Lines provides the flexibility to increase borrowing during peak seasons and reduce it during slower periods, aligning with your cash flow needs.
What types of assets can be used as collateral for ABL Credit Lines?
Typical assets include accounts receivable, inventory, and equipment. Some lenders may also consider real estate or intellectual property.
How quickly can I access funds through ABL Credit Lines?
Once established, ABL Credit Lines typically allows for rapid access to funds, often within 24-48 hours of submitting a borrowing request.
Is ABL Credit Lines suitable for businesses with less-than-perfect credit?
Unlike a personal loan, ABL Credit Lines can be an excellent option for companies with challenged credit, as lenders focus more on the quality and value of your assets rather than credit history.
What is the typical term length for ABL Credit Lines?
ABL Credit Lines facilities are usually revolving lines of credit with terms ranging from one to three years, often with options for renewal.
Are there industry-specific ABL Credit Lines solutions?
Many lenders offer tailored ABL Credit Lines programs for specific industries such as manufacturing, wholesale, and distribution.
How does ABL Credit Lines impact my business's balance sheet?
ABL Credit Lines is typically structured as a current liability, which can improve your company's debt-to-equity ratio compared to long-term loans.
What happens if the value of my collateral decreases?
If the value of your collateral decreases, your available credit limit may be reduced. Regular asset valuations are conducted to adjust the borrowing base accordingly.
Can startups qualify for ABL Credit Lines?
While more challenging, some lenders offer ABL Credit Lines to startups with strong assets and a clear business plan, though terms may be more conservative.
How do lenders determine the advance rate for different asset types?
They assess factors like asset quality, liquidity, and historical performance. Typically, accounts receivable may have higher advance rates (70-85%) than inventory (50-70%).
What role do financial covenants play in ABL Credit Lines agreements?
Financial covenants, such as maintaining a minimum fixed charge coverage ratio, ensure the borrower's financial health. They act as early warning signs for lenders and can trigger adjustments to credit terms.
How does ABL Credit Lines support business growth compared to equity financing?
ABL Credit Lines allows businesses to leverage existing assets for growth without diluting ownership. It provides flexibility to scale operations while maintaining control, unlike equity financing, which involves giving up shares. Small firms can use accounts receivable financing - a subset of asset-based lending.
