Information on working capital financing in Canada. Factoring and other types of alternative business loans can provide valuable cash flow finance solutions for the funding challenges of Canadian businesses.
Working Capital Financing – Canada continues to be challenged by liquidity and financing for business. For Canadian business owners to be successful they need to have new financing alternatives today. I recently spoke to a business owner who was quite clear on his thoughts on the new financing alternative for business – factoring, also known as receivable discounting. Let’s examine his problems with this unique financing alternative and see how valid his points might be.
According to my customer – ‘Ten Reasons Not to Factor:’
and our answers to those issues! –>
COST – Many business owners perceive factoring to be very expensive – yes it is more expensive than traditional financing , but it provides you with all the liquidity you need when you cant get receivables financed or margined by a Canadian chartered bank – a proper effective analysis by an experienced business advisor can show you that you can recoup almost all of the costs of factoring in a number of ways – also, many business owners and financial managers don’t understand the true cost of carrying their receivables for 60-90 days and what the financial benefits are of turning receivables over quickly
DON’T UNDERSTAND THE MARKETPLACE-
There are many types of factoring – notification, non notification, recourse, non recourse, spot, etc – Yes , if you don’t understand the marketplace talk to a financing expert – he or she can explain what factoring solution works for your firm
TIME TO APPROVE THE FACILITY – In reality factoring and receivable facilities can be set up in days, not the weeks and months it might take to negotiate a significant bank line
HAVE FINANCING NOW – Factoring can be complimentary to your existing financing when all parties work together, which creates a win win environment
WEAK BALANCE SHEET– If you have a weak balance sheet that does absolutely not preclude you from a factoring or invoice discounting facility
LOSING MONEY – Factoring and receivable financing focuses on assets, not financial losses – Hopefully the financing facility will in fact put your firm back on the road to profits and working capital
I HATE NOTIFICATION – Our firm specializes in a unique form of non notification factoring financing – you bill and collect your own receivables – Check out CONFIDENTIAL RECEIVABLE FINANCING
I AM WORRIED ABOUT BAD DEBT – Depending on the factoring expert you are working with facilities can be structured to insure your receivables
OTHER FIRMS THINK I AM IN TROUBLE IF I FACTOR – that is an old way of thinking when factoring originated in Canada – the reality is that some of the largest and most successful corporations in Canada factor tens of millions of dollars of receivables
DON’T KNOW WHO TO TALK TO – Factoring is a newer form of alternative financing, talk to people you trust or engage the services of an experience factoring advisor who will take the time to explain your options and set up the facility
Hopefully my customer now understands that factoring as a working capital option is something that every business should consider as a financing alternative .
Stan Prokop – founder of 7 Park Avenue Financial –
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years – 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 & Contact Details :
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Office = 905 829 2653
‘ Canadian Business Financing with the intelligent use of experience ‘