Feeling A Tad ‘ Underbanked’ These Days ? Here’s A Call To Action
abl lenders

 

OVERVIEW – Information on how Canadian business can access the business credit line . These facilities are offered by bank and commercial ABL lenders and provide a constant cash flow source for the business

The business credit line requirement often has owners/ financial mgrs feeling somewhat ‘ underbanked’. This type of facility is only offered by either a bank or ABL lenders. (Asset Based Lending). Take us up on our ‘ call to action ‘
abl lendersand let’s end that hunt for that constant cash flow dilemma that you face. Let’s dig in.

Let’s cover off some basics. These types of facilities allow you daily access to capital as you need it. It’s a ‘ pay as you go’ type of borrowing that only charges interest as you access the credit – with the ability to pay it down all the time, typically daily as you collect receivables, etc.

Typical uses of the credit lines include payrolls, marketing, inventory purchases, and most importantly – filling the time gap between sales and collections!

Two key offerings are available in Canada – Banks and Non bank lenders. Banks offer secured and ‘ unsecured’ revolving facilities – typically non bank lenders are fully secured by security agreements covering collateral assets such as A/R, inventory, and often equipment, and of course owner guarantees. The best use of the credit line is when your company pays down and fluctuates the facility regularly.

Typically bank lines are not available to newer or start up businesses, and they are not a source of covering your financial losses/business errors.

While the ‘ unsecured’ credit line is highly appealing you need to understand that your overall business record and financials must be very strong and at a certain point based on dollar requirements typically security is requested. You must demonstrate profits, good financials, and a command of your business. (Financial statements tell almost all about whether you’re ‘ in command ‘)

Key point: Term loans are fixed in nature and usually are for specific assets. They are NOT credit lines per se, the latter having more flexibility. Note however that credit lines almost always have a limit!

To access the right amount of revolving credit facility you should be able to produce on an ongoing basis proper schedules of A/R, inventory, and other obligations your business has committed to. A cash flow forecast is ALWAYS helpful. You want to be able to demonstrate how and why the credit lines will assist you in running and growing your business.

While bank facilities are ‘ lowest cost ‘ they are more challenging to secure. Asset based lenders offer more credit but come at a much higher cost -although those costs have come down substantially in the last few years due to the highly competitive nature of the business.

If you’re feeling ‘ underbanked’ these days and want to access more, or better suited credit facilities seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can help you achieve the flexibility and ‘ gap covering’ that your business requires.


Stan Prokop
– founder of 7 Park Avenue Financial

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years – Completed in excess of 100 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.


7 Park Avenue Financial

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Office = 905 829 2653

greg@7parkavenuefinancial.com

‘ Canadian Business Financing with the intelligent use of experience ‘


ABOUT THE AUTHOR

Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.


Stan Prokop

7 Park Avenue Financial
Canadian Business Financing