Feel Like You’re Flying Blind On Business Credit Lines And Alternatives?Business Credit

OVERVIEW – Information on business credit line funding in Canada. Revolving facilities such as asset based lending and traditional bank credit round out the solution you’re looking for . Which works for your business?

Business revolving credit line funding

has many Canadian business owners and financial managers feeling like they are ‘ flying blind ‘. At the heart of the matter are really only two basic funding decisions – A Canadian chartered bank credit line or an alternative Asset Based facility offered by a non bank commercial lender. Which one works, or won’t work for your business? Let’s dig in.

The actual financial strength of your company will often drive the decision for which type of business credit lines make sense for your firm. In certain case a bank or an asset based lender will have certain industry expertise that will be invaluable to your firm.

Businesses that are currently financially challenged in some manner or in some sort of temporary downturn will almost always be unable to attain ‘ conventional bank financing ‘. That then gravitates your business to an asset based lender.

One area that comes under some interesting discussion around bank vs. asset credit lines is the reporting requirements. Typically bank credit lines require monthly and annual reporting at a minimum – Asset based lenders certainly mirror this policy but reporting requirements actually might be on a weekly basis. Typically asset classes that are financed under revolving credit lines are:




The proper way to look at this as maintained by most experts is that banks lending on business credit lines are ‘ cash flow ‘ focused – the downside here is that numerous covenants are put in place by the bank and must be maintained at all times . If they are not companies are put in SPECIAL LOAN portfolios and find themselves at significant risk. The other side of the coin is that asset lenders focus on assets only, not covenants or cash flow per se

Many firms we meet qualify for some bank financing – but not all the capital they need to run/grow business. As a result they have a low cost of borrowing but are constantly constrained by lack of liquidity. In many cases asset based credit lines can immediately double your borrowing power.

Double your borrowing power? Yes, simply because receivables are typically financed at 90% (versus bank 75%), inventories are margined to actual collateral value, and, unlike bank lines, equipment/fixed assets can be a part of any asset based credit line.

We always like to point out to clients that the most efficient turnovers you can attain in receivables and inventory turns will eliminate that much more the need to borrow. Its internal financing 101.

If you’re looking to simplify your business credit needs , understand alternatives, and wish to avoid that uneasy feeling in business of flying blind 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 your borrowing needs.

Author Stan Prokop
7 Park Avenue Financial :
http://www.7parkavenuefinancial.comBusiness 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 90 Million $ of financing for Canadian corporations . Info /Contact :


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‘ Canadian Business Financing With The Intelligent Use Of Experience ‘

Stan Prokop

7 Park Avenue Financial
Canadian Business Financing