Is Your Business Credit Line Search Like An Internet 404 Error Page?asset based loans

OVERVIEW – Information on the asset based business credit line facility in Canada. Financing assets such as a/r, inventory and equipment under one borrowing facility.

The ABL business credit line facility is a relatively new solution that many business owners / financial mgr’s are still relatively unaware of. In the case of this it’s all about financing assets your company already has. When it comes to operating credit lines many business people today feel that their search for this type of financing feels somewhat like the internet error 404 page… i.e. : ‘ NOT FOUND’. Let’s dig in.

There are not a lot of ‘ standby’ solutions when it comes to business operating lines of credit. Frankly you’ve got two choices – a Canadian chartered bank facility or a non bank commercial asset based credit line. The later, often called ‘ ABL ‘ is growing more popular every day. In some cases banks will recommend to existing clients that they are more suited for asset based lending solutions.

Also, unknown to many, for larger transactions in the 5-10M range and up, banks offer these facilities- although it’s somewhat up for debate among industry professionals as to whether there is a huge difference in approval criteria.

The true beauty… perhaps better called ‘ flexibility ‘ of the ABL facility is that it appeals to every type of business – start up, high growth, financially distressed, public and private organizations, and large mature organization that are for all intents and purposes doing very well. Companies who are seeking informal or legal re-organization often view asset based lending as the immediate solution to the long journey back to financial health.

Asset based credit lines almost always command higher borrowing rates, but the trade off of course is that your borrowing power and approval chances are extremely high in almost every case where your balance sheet has receivables, inventory and fixed assets. It’s these three categories that combine in whole or part to give you your new revolving credit line.

It’s interesting (at least to us) to see how both banks and competing commercial credit line offerings view the qualifications for financing assets. From the banks perspective it’s all about ‘ cash flow ‘ – your ability to positively turn over assets combined with profits and depreciation calculations. The ABL lender simply goes to the balance sheet and values your assets – and by the way almost 99% of the time in a more generous manner than Canadian chartered banks.

What are some of the specific reasons that companies gravitate towards
the ‘ financing assets’ approach of ABL? They include fluctuating sales, the ability to reorganize and pay down some or all of term debt on the balance sheet, and the strong alternative to the inability to access new equity capital – either public or private. By the way, an often used strategy in the ABL business credit line facility environment is the use of the borrowing to acquire a competitor or strategic partner. One expert calls this the alternative to the ‘ blank from the bank’!

The real formula for ABL asset financing is simpler than you might think: 90% financing of receivables, inventory finance at real market values, and equipment financing within the credit line at appraised values.

If you haven’t figured it out by now asset lenders spend a lot more time keeping tabs on your firm – by simply requested more ongoing detailed reporting and asset schedules on receivables, inventory, etc. If you have trouble providing that basic info we’re suggesting you have other problems. You lower your borrowing costs by actively managing those asset categories, drawing down on your facility only as you need it.

There are some attractive and workable ‘ subsets’ to the ABL business credit line facility. They include Inventory finance, Confidential receivable financing lines, and PO financing. Whatever your need in financing assets or achieving the right ‘ type’ of revolving credit 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 with solutions that will make that ‘ glaring difference ‘ in financial success . Bottom line – no more ‘not found’ results similar to that 404 Error page!


7 Park Avenue Financial :

http://www.7parkavenuefinancial.com
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 . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS CREDIT LINE ALTERNATIVES AND EXPERTISE

 

7 Park Avenue FinancialSouth 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.