OVERVIEW – Information on AR cash flow solutions in Canada . Receivable Loans ( it’s not a loan per se!) via Confidential A/R Financing just might be the solution to beat your working capital finance challenges
AR cash flow can be achieved in a number of manners. Receivable loans (they are not actually loans by the way!) for many business owners and financial managers immediately conjures up bank financing. But, that’s not always the case as we’ll see. And, you just might find the ‘design genius ‘ of some of these offerings quite interesting, and more importantly… achievable. Let’s dig in.
The concept of financing A/R revolves around the need for short term day to day operations. That challenge is accentuated when it comes to ‘ growing ‘ your revenues and profits. Businesses requiring SME COMMERCIAL FINANCE needs should not feel alone in this area – some of the largest companies in Canada constantly have to address cash flow needs.
So what then is ‘ Confidential ‘ A/R based finance? At it’s simplest it’s securing financing via your client receivable base on a typically ongoing basis. When you’re dealing with a bank your accounts are ‘ pledged’, but a commercial finance firm utilizes paperwork to reflect an ongoing ‘sale ‘ of your accounts as they turnover. That’s the essential difference.
It’s no secret that bank rates for any business financing is typically the lowest cost of borrowing. While Confidential ‘non notification’ loans are more expensive, their benefits mirror a traditional bank facility. This is achieved via your ability to bill and collect your own invoices, while still reaping the cash flow benefits of same day financing for all your sales.
Many firms that utilize commercial A/R cash flow loans are in a transitory phase. They are either leaving the bank (having been asked to!) or seeking commercial financing for their sales as they repair any financial issues in their business allowing them to migrate back to… you guessed it… the bank!
There is no business that does not have the ability to finance their accounts receivable. The only requirement – Sales and commercial A/R.
While we have painted a picture of many businesses having no access to bank funding there are numerous firms who have access to some bank credit, but not all that meets their needs.
From an approval perspective Confidential A/R funding takes a holistic look at your whole business – that encompasses your current financial position, its challenges, your industry, as well as your overall client portfolio. Issues that can slow down, but not hinder your AR financing might be CRA issues or having some clients or a client represent a large part of your whole business – i.e. the concept of ‘ concentration’.
What then are some key ‘ drivers’ that you would consider in receivable loans? They include:
Positive : the ability to achieve continual financing day to day, facilities revolve, growth becomes virtually unlimited, greater flexibility in negotiating terms with key / new /large clients
Less than Positive – higher cost, occasional higher reporting needs.
If you’re interested in the ‘design genius ‘ of AR cash flow financing that mirrors a bank solution seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you in your finance needs.
Stan Prokop – 7 Park Avenue Financial :
Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 – Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :
7 PARK AVENUE FINANCIAL = CANADIAN A/R FINANCING EXPERTISE
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