Your Business Financing Isn’t Broken .. So It Must Be Working.. Right? Asset Based Lending 101


OVERVIEW – Information on asset based lenders in Canada . Alternative business finance just might be the way to get your company financed properly

Asset based lenders play an increasing role in the business owners/financial mgrs search for alternate business finance needs that solve their challenges around growth and operations. Let’s dig in.

One fundamental challenge of understanding the ‘ABL’ (asset based lending) offering is… you guessed it… understanding what it is! As in numerous industries different terms mean different things to different folks. In the context of what we’re talking about it’s the offering by commercial finance companies of loans and credit lines based on the core collateral of your company. Typically that’s receivables, inventory, and fixed assets. It’s as simple as that.

Because a real asset based loan or credit line is based on borrowing against specific assets the real benefit of ABL emerges very quickly – more cash and significantly more flexibility as compared to Canadian chartered bank offerings. We can’t say it any more simply – it’s all about the asset!

Different forms of asset finance are available for the stage your company is in, up to and including distress in many cases certain industries demand more financing needs, and your company may be in a transition stage from typical scenarios of start up, high growth, mature, distress, etc. Because it’s all about the assets and the true value (not book value!) ABL works.

Most common forms of ‘ABL ‘? They include

Non bank asset based lines of credit (they combine receivables/inventory and fixed assets into one revolving credit line)

Sale Leasebacks

Tax Credit Financing

Inventory Finance

A/R finance

SR&ED Tax Credit Financing

Equipment Finance

What then are some key benefits that would make the business owner consider an alternative business finance solution. They include:

1. Any form of debt or alternative finance is cheaper than giving up equity ownership

2. Business owners/mgrs still have all the flexibility of running their own company without the fear of falling offside on ratios and covenants typically associated with senior debt financing

3. The competitive nature of the asset finance industry allows owners/mgrs to gravitate to a firm who best meets their needs

4. True asset based credit lines grow along with the business

One of the most interesting aspects of the offerings of asset based lenders is the fact that these offerings appeal to firms of any credit quality. Even well managed growing and profitable businesses have the constant pressure of working within current credit facilities to run and grow their business.

Equally, companies that have much more unpredictable financial progress (variable profits and losses, cash flow bulge needs, too much term debt, etc) are more often than not the perfect match for the asset based lender offering.

If your business financing is ‘ broken ‘, and you want to fix it 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 you alternative business finance needs.

Stan Prokop
– Founder : 7 Park Avenue Financial

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years – has 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 re: Canadian business financing & contact details :


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

Office = 905 829 2653

‘ Canadian Business Financing with the intelligent use of experience ‘

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.