Everything You Wanted To Know ( But were afraid to ask ) About A/R finance AR Finance
OVERVIEW – Information on the cost and mechanics of AR finance in Canada . Receivables financing factoring rates explained relative to cost, structure, ways to minimize cost and maximize working capital financing

AR Finance considerations often force the business owner or financial manager to consider the costs of Receivables Financing Factoring Rates as compared to traditional banking, or the worst alternative, no working capital financing at all. So, everything you wanted to know, but perhaps were afraid to ask? Let’s dig in.

So ‘ what the dickens ‘ is Receivable financing all about for a starter and why do top experts tell us that it’s one of the fastest growing parts of the cash flow financing industry. (We’re the first to love a great expression, and not everyone knows that it was Shakespeare that coined such terms as ‘ WHAT THE DICKENS, DEAD AS A DOORNAIL, in such plays as Merry Wives of Windsor and Henry V1 respectively)

A/R finance, simply speaking, is simply a method in which Canadian business owners and financial managers, predominately in the SME commercial finance needs sector can translate receivables into cash flow. The other alternative is of course the traditional bank line of credit which many firms, depending on their stage and financial status, cannot access.

We meet many clients, by the way, that actually can access bank financing, but just not enough! More often that not that’s because of hyper growth which almost always wrestle with. (It throws ratios out of whack).

AR financing is a subset of asset based lending in Canada. It can be combined with a full working capital non bank revolving facility, or it can be used as a ‘ stand alone ‘ method of financing your firm. As an example service companies such as personnel agencies or software technology companies often carry no inventory, and their entire cash flow model revolves around financing customer accounts.

So what about those receivables financing factoring rates in Canada? The bottom line is that they vary, and can be anywhere from 1.25% per month all to facilities that cost 3 times as much. In all cases they are higher than bank financing, but they deliver on all the cash flow and working capital you need for your business.

While some may consider this method of cash flow financing expensive the alternative is limited or no financing which can be hazardous to (business) health. When you are unable to finance daily operations or to meet any of your term debt obligations unlocking receivables via AR Finance is a true life saver for thousands of businesses in Canada.

Remember also that you are in effect ‘ trading off’ the cost of financing receivables and those receivables financing factoring rates versus your ability to grow your business and generate profits and solid return on investment. Remember also that you could well be eligible to consider 7 Park Avenue Financial = CANADIAN CONFIDENTIAL RECEIVABLE FINANCING Expertise allowing your company to bill and collect its own receivables, no notice required to your clients, which is often the case with old school factoring.

So if you choose not to be ‘ the bank’ for your customers seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success
who can assist you with your AR finance needs. It’s your probable solution to everything you wanted to know but were afraid ….!

Author: Stan Prokop – founder of 7 Park Avenue Financial

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies, specializing in working capital, cash flow, and asset based financing. In business 10 years – has completed in excess of $90 Million of financing for Canadian corporations. Core competencies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details:

CONTACT:

Greg LaBella
7 Park Avenue Financial
Off.   905 829 2653

Cell   905 302 4171
greg@7parkavenuefinancial.com

 

7 Park Avenue Financial
Canadian Business Financing