OVERVIEW – Information on asset based lender solutions in Canada. Receivables financing is a cornerstone of asset finance for cash flow and working capital needs in Canadian business finance
Receivables financing in Canada is in somewhat the crown jewel of the asset based lender. We’re taking you to the center of non bank A/R financing. Let’s dig gin.
Asset based lenders are almost always ‘ business to business ‘ type lenders for working capital and cash flow financing needs for almost every size of business – from startups to sizeable corporations. The financing that these firms provide allows your company to consider almost all options – that includes:
Growing your business
Expanding into new products/services and geographies
Engineering a turnaround
Companies that typically manage their A/R well are also more inclined to take advantages of supplier pricing/discounts and are viewed more positively by trade creditors. A solid receivable financing solution will allow your company to do that.
Why do thousands of businesses seek and utilized the services of an asset based lender that specializes in A/R solutions. One of the most common reasons is their company’s inability to access traditional bank financing. Owners are typically reluctant or unable to access additional equity financing that might be used to bolster cash flow.
One key aspect of a non bank A/R financing solutions is the fact that a full facility will also include combining inventory and fixed assets into that same credit line!
These solutions typically do not compete with banks as they are taking on more and different assets in an entirely different manner when it comes to margin calculations and borrowing limits. The asset based lender typically advances 90% of A/R as well as higher margins on both inventory and equipment which become part of that new borrowing facility.
Non bank lenders also have the reputation of being timelier on approval. It is critical to note that in almost all cases the typical asset based borrower has a goal to migrate back to traditional banking.
While bank credit lines typically tend to have fixed credit lines and yearly renewals the true beauty of receivables finance from asset based lenders is the flexibility to grow the facility almost instantly as sales and working capital assets grow. Simply speaking these facilities fund growth!
What do asset based lenders look at when it comes to approving and setting up such facilities. Key issues include:
Cash flows within the business
The ability of the company to report on financial performance – i.e. monthly financial and aged schedules of A/R and a/p
Government sources deductions being paid (Note – in numerous cases asset based lenders will construct financing to handle and payout CRA arrears)
Profitability (or the road to profitability)
Asset lenders put appropriate controls in place to make sure credit facilities are properly controlled.
Bottom line, its official – Asset Based Lending is a hit with companies of all size and financial position in Canada. Seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can help you put working capital/cash flow solutions in place that match your firms borrowing needs.
Stan Prokop – founder of 7 Park Avenue Financial –
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. Info & Contact Details :
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Office = 905 829 2653
‘ 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.
7 Park Avenue Financial
Canadian Business Financing