OVERVIEW – Information on asset based lines of credit . This alternative finance solution allows companies to achieve maximum liquidity when chartered bank lines are not available to the Canadian business owner/financial mgr
Asset based lines of credit are an alternative to Canadian chartered bank financing in Canada. It is certainly well documented that Canadian business, small, medium, and even large has experienced general credit tightening by our chartered banks here in Canada. Business owners and financial managers are forced to consider alternative financing solutions which are certainly not numerous in natures here in Canada. Let’s dig in.
So what in fact would happen if you had access to all the business credit you need to support sales growth .
Asset based lines of credit are absolutely one solution to the financing you might be searching for. Surprisingly many of our clients have not even heard of this type of financing, much less understand it.
Many customers are actually forced to consider an asset based lending solution because of the concern of owners, lenders, and suppliers that their business does not have the ability to finance the firm properly. When suppliers and other lenders act aggressively on the belief that your firm can’t meet its obligations problems ensue!
One key point we continually make with clients, and we would recommend this to everyone is that you should be aware of your financing alternative before you are forced to be aware of them. Simply speaking, it behooves you to learn about asset based lines of credit. Although the ‘ABL ‘ ( short form ) financing facility has been around for years some people still associate it with distressed lending – it is not just that . It also is not borrowing or taking on additional debt, which is certainly a relief to owners.
So what is it then? It is just the financing of all your current (and sometimes fixed) assets as total collateral for borrowing. In fairness most of that financing is done on receivables and inventory
Because you are in effect borrowing more than you ever could have in a traditional financing arrangement there is some additional reporting requirements when you borrow under an asset based line of credit. But frankly when we talk to customers they indicate this additional reporting often helps them to understand their business better.
It is interesting to note that many firms utilize this type of financing for a long period, and view it as an excellent source of financing, while some business owners and financial mangers view it as a bridge to solve temporary working capital and financial statement challenges. Generally firms considering asset based lines of credit can’t meet some of the ratios required for traditional banking and debt service, yet at the same time they have new contracts, need new assets, or more headcount , etc – with asset based financing being a solid solution to provide this additional capital .
In summary, asset based lines of credit are a business financing option. They are utilized in Canada by hundreds, even thousands of medium sized and larger firms. They are a form of non traditional lending that in reality is become mainstream. Asset based lines of credit provide the maximum working capital against your operating assets such as receivables, inventory and equipment…
Speak to a business financing advisor who has credibility, experience in this aspect of Canadian business financing. You can then determine that if it’s the right solution for your Canadian business.
7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Direct Line = 905 302 4171
Office = 905 829 2653
Email = firstname.lastname@example.org
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 100 Million $ of financing for Canadian corporations .
‘ 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