YOUR COMPANY IS LOOKING FOR BUSINESS CREDIT FACILITIES!
Asset Based Lending - Here's How The Asset Based Loan Works!
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
Business Credit Lines Via the ABL Commercial Lender. It's our feeling that this business financing solution via a commercial lender is the newest trendsetter in commercial finance in Canada. We've checked with legal and we're most comfortable in saying that. Why? Let's dig in.
ABL IS THE NEW TRENDSETTER IN CANADIAN BUSINESS FINANCING
We're told that a ' trendsetter ' is simply a person or thing that establishes a new trend. And that new trend, as far as we are concerned is the ' ABL Facility ' (Asset based credit line for business)
Thousands of businesses in North America, Canada included by the way! , are utilizing this unique revolving line of credit business financing service to grow their company. ABL most people agree that originated in the United States and has gradually over the years moved to Canada and other European countries.
WHAT IS ABL ?
And what is ABL? It's simply speaking a method of borrowing against all your business assets under one operating line of credit formula. Those assets are receivables, inventory, equipment and real estate if that latter is applicable. It's all about financing the balance sheet.
ASSET BASED LENDING WORKS IN ALL THESE 4 SCENARIOS!
The true beauty asset-based business credit lines is that they work in a large variety of circumstances. Those include:
- Fast growth scenarios
- Management buyouts
- Acquisitions
- Turnaround refinancing
THEL ABL COMMERCIAL LENDE SERVES PUBLIC AND PRIVATE COMPANIES IN EVERY INDUSTRY
Unlike some methods of financing, it’s also perfectly suited to both public and private companies - SME, Middle Market, and Larger corporations.
It also works well in both good and bad times - good time’s typically meaning fast growth situations where maximum borrowing power is needed, and those not so good times when business credit is hard to achieve and credit approval is challenging.
WHY ARE ASSET BASED LOANS GROWING IN CANADA?
Why is this new form of business credit lines gaining more traction every day? Top experts in the field say that it’s because of the flexibility that’s available to business owners and their financial managers. More and more companies are using it, so it’s all about market acceptance we suppose. While Canadian chartered banks provide tremendous amounts of liquidity to Canadian business it definitely can’t provide it all, primarily due to lending restrictions.
HOW DOES THE ASSET BASED CREDIT LINE WORK?
How much new working capital/cash flow can be obtained from a commercial ABL lender? We can comfortably say that it often is anywhere from 30-100%, as we have seen those examples all the time. Take the simple fact that ABL typically offers 90% accounts receivable margining secured via accounts receivable versus the banks 75%. Also, inventory and equipment are then bundled into the equation; create a new surge in your borrowing power. It’s simply a case of quickly reaching your maximum borrowing power.
COMPANIES OF ALL CREDIT QUALITIES CAN ACCESS ABL FINANCE
It also works well in both good and bad times - good times typically meaning fast growth situations where maximum borrowing power is needed, and those not so good times when business credit is hard to achieve.
THE DIFFERENCE IN APPROVAL VIA BANK CREDIT LINES VERSUS ABL FACILITIES
One key point that we make to clients is that the actual approval criteria when you compare bank credit lines with ABL are significantly different. While the chartered banks, by virtue of their mandate rely heavily on the quality of your profits, strong balance sheets and ratios and covenants that define those the ABL lender focuses on one thing - ASSETS!
Business owners and their finance managers that plan for the future pay close attention to their future borrowing power around access to lines of credit .When that ability to borrow what they need to survive and grow is restricted... well you can take it from there!
We point out to clients that there are some unique ' subsets' of ABL business credit lines. They might just be for account receivable , or just inventory (in the case of a retailer), or combinations of those that might include equipment, tax credits, etc. That same day / all-day access to credit capacity is what differentiates ABL as the new ' trendsetter' in business finance.
CONCLUSION
Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with the needs you require from a commercial lender.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
7 Park Avenue Financial/Copyright/2020/Rights Reserved
