YOUR COMPANY IS LOOKING FOR CASH FLOW FINANCING!
SMALL BUSINESS SHORT TERM WORKING CAPITAL SOLUTIONS
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 banking cash flow alternatives might not be considered ' exciting by some - to others though they are critical. We're the first to admit financing your company might not have the excitement John Hetherington had on Jan 15th, 1797 (He invented the top hat, wore it on the street - women fainted, dogs yelped, he was charged with ‘breaching the peace').
CASH FLOW IS ( ALWAYS) KING
Nevertheless, if you buy into 'cash flow' being king in business it’s prudent to discuss some business banking alternatives around the ' business bank ' challenge.At 7 Park Avenue Financial we see business owners exploring everything from venture capital to a business credit card to finance their firms! Business credit solutions such as commercial non-bank financing and alternative lines of credit via asset-based lending facilities just might be your solution. Let's dig in.
IMPORTANCE OF ACCOUNTS RECEIVABLE MANAGEMENT / FINANCING
Accounts receivable is a key component of any business that sells on credit. When a true bank business line of credit is not achievable for a business (there are MANY reasons!) A/R finance, a subset of asset-based lending, is a solid alternative. The simple way to explain it is getting an immediate advance on your sales and paying a 'commission' for that financing benefit.
THE COST OF COMMERCIAL A/R FINANCING
On a $10,000.00 invoice as an example, a business owner/manager could expect to pay $ 200.00 payment terms to your client are 30 days and they are met.
FINANCING THE BALANCE SHEET
Canadian banks view your A/R as an ongoing asset on the balance sheet. Based on your end of previous month A/R you typically can create an ongoing borrowing facility of 75% of the value of your (less than 90 days old) receivables.
HOW DOES A/R FINANCE ( aka ' FACTORING') WORK?
A/R Financing on the other hand typically advances 90% of your receivables, and advances are made the same day you generate sales invoices. While the bank collateralizes itself by holding on to an ongoing ' GENERAL SECURITY AGREEMENT ' on your business the paperwork structuring A/R finance (also called 'factoring' and 'invoice discounting') reflects you selling on an ongoing basis your receivables and paying the aforementioned 'commission' we have mentioned.
FACTORING IS OFTEN MISUNDERSTOOD
So where do things go wrong when clients wade into non-bank A/R financing without experience or assistance? It's when they don’t understand both the components of the transaction, as well as the daily routine involved.
THE COMPONENTS OF AN A/R FINANCE EXAMPLE
Those components? They include understanding how much is advanced, how that 10% reserve works (you received immediate cash for 90% of A/R- The balance is called a ' reserve) and the financing fee or 'commission' we've referenced. Financing fees are often confused with interest rates, which they are not. The benefits of this method of Canadian business financing resolves the need for more long term permanent capital.
CONCLUSION
Small business owners should seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your cash flow finance choices that make the most sense for your firm. Financing receivables is an alternative to a small business loan that will often bring debt to the balance sheet.
The key benefits to small businesses of this business banking cash flow alternative are constant access to unlimited cash based on your sales, no debt on the balance sheet, and the ability to significantly reduce financing costs by generating more sales at more profits and utilizing cash to take vendor discounts and achieve better vendor pricing utilizing new-found cash flow.
P.S. Don't forget to explore CONFIDENTIAL RECEIVABLE FINANCING which allows you to bill and collect all your A/R in your own firm's name- no third party involved. Business funding via alternative financing should be explored by every small business that can't access traditional bank financing for their business needs.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
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