Time To Shift Gears In Your Search For A Business Credit Line ? Business Credit Line Alternatives : Engineering The Right Revolving Credit Facilityhttp://www.7parkavenuefinancial.com/business-credit-line.html

OVERVIEW – Information on the business credit line solution for Canadian business . What type of revolving credit facility works for your firm . Here’s an overview.

Business credit line alternatives basically boil down to two choices. These two fundamental solutions around a revolving credit facility ‘revolve ‘ around participation with a Canadian chartered bank, or alternatively a non bank facility. While non bank facilities have more flexibility and liquidity for your business they come at a higher cost. How can the business owner/financial manager both recognize, and ‘ engineer’ the right solution for their business? Let’s dig n.

Asset based lending
has become the ‘ new ‘ alternative to bank credit lines? We highlight the word ‘ new’ only because this solution is not new; it was either misunderstood in the past, or generally simply not known to owners/financial managers. Circumstances such as the world wide 2008-2009 global recession put a lot more emphasis on alternative lending practices such as ‘ASSET BASED FINANCE ‘…. aka ‘ ABL ‘.

ABL is all about 2 things, collateral and constant monitoring by the lender. That monitoring typically revolves around reporting weekly or monthly on key assets of your business – i.e. aged receivables, payables, inventory lists, and fixed asset summaries. These assets (excluding payables!) are rolled up into one borrowing facility that gives you maximum borrowing power.

Because your sales are constantly changing (i.e. going up, but not always) your liquid current assets such as A/R and inventory make up the bulk of your borrowing power. Simply speaking, the more sales, the more access to borrowing power. That’s contrasted with bank solutions which typically are fixed credit limits with annual renewals, not always recognizing that your business grows or has bulges in borrowing needs. On occasion banks might require a periodic third party audit, but this typically pertains to larger facilities in the millions.

It’s therefore easy to understand the main difference in bank credit lines- as we have pointed out that the reporting and admin controls that ABL lenders place on your business is simply much less rigorous in a banking environment. Let’s also not forget that the flexibility around bank credit comes with the lowest borrowing costs.

Although we have referenced two types of main credit line solutions there are subsets of asset based lending. These include simple A/R financing, as well as inventory loans/finance. Inventory loans tend to be suited to retailers who have no commercial receivables. As far as the best way to finance your A/R outside the bank we recommend CONFIDENTIAL RECEIVABLE FINANCING which allows you to bill and collect your own receivables with no notification to others.

It’s important to recognize that credit lines are simply the monetization of your existing assets; this is not permanent debt, although in some cases both in bank and ABL financing a working capital term loan might make sense, but that’s a rarity.

If you’re focused on re-engineering your business credit line borrowing 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 make sense for your firm’s credit profile and size.

7 Park Avenue Financial :

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 FinancialSouth 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 start ups 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