OVERVIEW – Information on asset based finance solutions in Canada . Business owners & financial mgrs should focus on business credit alternatives and loans and cash flow monetization strategies that make sense for their company
Asset based finance solutions for your business are a solid ‘ self help ‘ strategy that delivers on loans & business credit alternatives made to run and grow your company . ‘Self help ‘ seems to be more popular than ever … so let’s dig in.
Companies face a lot of challenges these days, and financing is certainly one of them. Let’s not forget thought that those challenges might have a positive spin to them – sales growth opportunities, competitor acquisition, yet can also be daunting when it comes to threats against your very existence in today’s competitive environment.
How then can asset based finance aid your firm in allowing you to generate the working capital and cash flow you need to prosper and grow, let alone survive?
Asset based financed helps your firm in both good time and challenging times. It comes in a variety of forms – it is commonly in the industry itself referred to as ‘ ABL ‘ financing, and typically your firm would negotiate what is simply or commonly known as an asset based line of credit . The facility provides you with a revolving line of credit very similar to a chartered bank facility.
Non bank operating credit lines might also include a significant inventory financing component, and usually address what we could best call special needs or special situations re: turnarounds, growth, distress, etc.
The finance costs are higher, but asset finance solutions deliver! Pricing in Canada on asset based lines of credit is all over the map – We tell clients they can expect to pay anywhere near a point or two over prime up to an including 1.5-2% per month . What defines that huge difference in pricing? The answer is that that there are different what we will call ‘ tiers ‘ in ABL lending in Canada, and the overall size and deal quality of your firm will ultimately drive you to an asset based finance partner that more closely matches your needs and your overall ‘ risk profile ‘.
A perfect match? The best candidate for an asset based finance line of credit is a firm that is experiencing strong growth but can’t attract the traditional capital that is used to finance receivables, inventory, plant and equipment, and even in some cases real estate.
Creativity is the benchmark for asset based financing. Essentially your balance sheet can be financed ‘ to the max ‘based upon your different asset components. In some cases even intellectual property or patents might be included in the overall financing, although that clearly is not the norm.
The reality is that asset based finance has somewhat changed the overall face of business financing in Canada and more and more firms , both large and small are gravitating to this form of finance . Deal sizes in Canada vary greatly – we do not encourage clients who have an under 250k/mo need to explore asset based finance because at a certain point the reporting, costs, etc done make sense for neither your firm or the ABL lender .
Other general asset based financing solutions include:
SR&ED Tax Credit Loans
Sale leasebacks on owned equipment/real estate
Is there any downside in asset based lending and an ABL working capital facility ask our clients? With relative certainty we can say any downside is significantly offset by upside. The facility gives you almost unlimited working capital, and margins assets that might otherwise not be finance able. And don’t forget, this type of facility does not add debt to your balance sheet, you are simply monetizing your hard and in some cases soft assets.
Speak to a trusted, credible and experienced advisor in asset based lending.
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 13 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
Direct Line = 9053024171
Office = 905 829 2653
Email = email@example.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.
7 Park Avenue Financial
Canadian Business Financing