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Financing & Cash flow are the biggest issues facing business today
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs
EMAIL - INFO@7parkavenuefinancial.com
See below or Call for info on :
Leases and Term Loans & Sale leaseback Financing
Working Capital Loans
Asset Based Lines of Credit
Bank credit lines
Receivables Financing / Factoring
Franchise finance capabilities
SR ED tax credit financing /SR& ED Loans
Inventory Lines of Credit
Purchase Order Financial
Commerical mortgages
We service all of Canada , but here is some information on our service areas locally -
Business Financing:
Toronto
Mississauga
London
Windsor
Brampton
Scarborough
Computer Leasing / Financing: By Stan Prokop - 7 Park Avenue Financial
Many companies are not aware of the significant benefits related to acquisition financing in computers and technology segments . The proper term for this type of financing is ' Technology lifecycle management '. Most business owners simply consider the following question : ' Should I buy or lease my firms new computers and software and related products and services ? '
Two old adages related to leasing still ring true when it comes to the technological aspect . That is that one should finance something and depreciates, and one should buy something that appreciates in value . Most business owners, and consumers as well know very well that computers depreciate in value . Systems we paid thousands of dollars for years ago are now hundreds of dollars . Walk into any ' big box ' retailer and see the dramatic moves in technology .
Business owners who finance technology demonstrate a higher level of cost effectiveness . The company wants to reap the benefits of the technology over the useful life of the asset , and , importantly, more evenly match the cash outflows with the benefits . Leasing and financing your technology allows you to stay ahead of the technology curve ; that is to say you are always using the latest technology as it relates to your firms needs .
Businesses that lease and finance their technology needs are often working better within their capital budgets . Simply speaking they can buy more and buy smarter .
Many companies that are larger in size have balance sheet issues and ROA ( ' return on assets ' ) issues that are compelling . They must stay within bank credit covenants and are measure often on their ability to generate income on the total level of assets being deployed in the company . Lease financing allows those firms to address both of those issues . Companies can choose to employ an ' operating lease ' structure for their technology financing . This is more prevalent in larger firms, but works almost equally as well in small organizations . Operating leases are ' off balance sheet ' . The firm adopts the stance of using technology, not owning technology . The lessor/lender owns the equipment, and has a stake in the residual value of the technology . The main benefit for the company is that the debt associated with the technology acquisition is not directly held on the balance sheet . This optimizes debt levels and profitability ratios .
At the end of those operating leases, which are usually 36 months long, the customer has the option of:
1. Returning the equipment
2. Buying the equipment ( not likely though )
3. Negotiating an extension of the financing for continued use of the computers, technology, etc .
Companies that have recently acquired computers and technology can in fact negotiate a' sale leaseback ' on those same assets. This financing strategy brings cash back into the company , as the firm has employed a leasing and financing strategy building on our above noted them - using technology, not owning technology .
In summary , the key benefits of computer and technology lease financing are :
* The company can stay ahead of the technology curve
* Computer leasing and financing has significant balance sheet and income statement benefits
* The firm has flexibility with respect to buying new product, returning existing technology, and generating cash flow for purchases already made
Many of the benefits we have discussed relate to leasing in general . However, technology and lease financing are very perfectly suited to the business financing strategy of leasing
Working capital saved on computer leasing and equipment leasing in general allows a company to use that capital to grow revenues . Depending on which types of leases are utilized there are also tax benfits associated to leasing .
With the current focus on the environment customers can work with their vendor to return unused equipment at the end of the lease for proper ' green' disposition.
- Stan Prokop
HOW TO GET YOUR EQUIPMENT AND BUSINESS LEASE APPROVED -
.' What is my rate? ' is a question I am often asked by customers when they work with us with respect to equipment and lease financing . They are surprised when I tell them that they get to pick their own rate ! ( All customers want the lowest rate !)
I am not trying to be facetious when we make that statement . What we are saying is that the over all credit quality of a customer, as perceived by the lender ( that's important !) is in fact set by the customer, thereby driving a final approval on rate , term and structure of the proposed financing request .
The role of the customer , or their trusted advisor is to understand the basic credit information requirements and how the overall risk to the customer and their industry will be perceived by the lender. The irony of a lot of business leasing is that the industry for the most part used historical analysis to project future ability to pay . That is a difficult concept for the customer to handle more often than not - as an example the customer may have lost some money last year, driving a negative cash flow figure . Prospects have improved, new orders are coming in, and yet the business has a problem in getting new financing.
The customer needs to ensure that the information and ' story ' make the transaction become more ' approvable'.
Critical categories in the information submission by the company are as follows :
Length of time in business
Personal credit history of the owners
Relationships with other financial institutions
Quality of the financials ( Some customers submit balance sheets that dont balance !)
Additional collateral available if necessary
Summary of key financial info such as depreciation, cash flows
Positive focus on management and its background and experience
If the customer is qualified to make such a submission a solid package as per our list noted above should lend itself towards an approval at current market rates and structures . If the customer feels they are not properly qualified to make such a submission they are strongly encouraged to used a qualified intermediary who knows the industry and, more importantly , knows the specific weighting given by a lender to the above noted submission requirements .
The amount of information required around each component is more often than not determine by the size of the transaction or the lenders total exposure to that customer . In many cases small ticket transactions ( those under $ 25,000.00 ) are adjudicated via a credit application and public reporting sources such as Equifax or Dun and Bradstreet . Typically 60-70% of all small ticket transactions are approved.
In summary, customers who want to get a prompt and of course positive lease approval should focus on providing a clean package of required information that will ensure a prompt approval based on specific industry requirements around the transaction size and asset type.
Knowing that the lender will focus on future potential of the firm, the management experience, and the collateral asset are valuable data points for any business seeking a business equipment - financing lease . Stan Prokop
Toronto
Mississauga
London
Windsor
Kitchener
Business Loans:
Toronto
Brampton
Mississauga
London
Windsor
Kitchener
Asset Based Lending:
Asset based lending is the business of providing loans on the basis of assets given by the borrower as collateral security. Assets used may be either fixed for permanent assets such as land, building, equipment, etc. or current assets such as stock, accounts receivable etc. Asset based lending is also known as secured lending. Asset based lending is the most common form of lending on the market.
Asset based loans are provided for periods ranging from 6 months to 3 years or more. Asset based lending is suitable to meet the cash flow requirements of companies. These loans are used by the companies for various purposes such as working capital, debt refinancing, mergers and purchase of assets etc.
Rates of interest on asset based lending are lower than those of unsecured loans. This is because, the lender has the power to take over the assets of the borrower if the borrower defaults the loan payment. However, the borrowers are more prone to lose their valuable assets in the eventuality of non payment.
Asset based lending has many benefits over traditional methods of financing. The borrowers get more liquidity and fewer financial covenants. Asset based loans are generally provided by lenders on the basis of some conditions to be followed by the borrowers.
Consumers of asset based loans include retailers, wholesalers, producers, distributors, public companies, private firms etc. The following are benefited by asset based lending - companies having past losses, companies having negative cash flow, companies having less operating period, fast growing companies.
Lending provides detailed information on Lending, Equity Lending, Commercial Mortgage Lending, Mortgage Lending Companies and more. Lending is affiliated with Mortgage Amortization Schedule [http://www.e-AmortizationSchedule.com].Article Source: http://EzineArticles.com/?expert=Steve_Valentino
http://EzineArticles.com/?Asset-Based-Lending&id=408595
Toronto
Mississauga
Brampton
London
Kitchener
Windsor
Factoring & Working Capital Financing: What is the Best Type of Factoring and Receivable Financing Facility For Canadian Firms? - By Stan Prokop - 7 Park Avenue Financial
Enabling cash flow is the kind of objective desirable for every business that experiences a time of difficulty. Even if asset based loans and factoring are generally preferable for short-term securing of cash flow, they can form a model of the manner in which the borrower would function in long-term loan circumstances. New businesses and even businesses that go through a time interval of fast growth often find it necessary to hold more capital flowing in order to secure their profitable development. In the case where they are successful in handling such short-term means of business financing, they are more likely to obtain long-term loans since lending institutions will already have a proof of their reliability.
Let us look at asset based loans and factoring as two instruments of chance on the business market. When business occasions emerge within certain markets, experienced businesspersons know that they may disappear too fast before they are able to raise the capital necessary to grasp such opportunities. Most frequently, securing long-term financial loan will require a waiting period that may be too long and such opportunities do not wait. This is where factoring and asset based loans bring their advantages. The primary advantage, particularly with start-up businesses or small businesses, is that they can obtain, through asset based lending, more cash, faster than with the regular loans obtain from the typical lending institutions, i.e. banks.
Moreover, and this goes true for factoring as well, asset-based lenders and factors will take care of a number of services, such as invoicing or approaching the handling of accounts receivables. In addition, if in the past borrowers had to confront rather high interest rates and other similar charges for the asset based loans they received now the situation has changed, since such rates are experiencing a fall. The decrease in the rates and additional charges has taken place because of the increase in terms of market competitiveness.
Of course, the amount of the rate remains negotiable, which is a supplementary advantage for the borrower. Make sure you provide a reliable basis for the lender to agree to provide you with asset-based financing. This means that you should allow the lending institution to check the liquidity of the assets you are tapping in order to obtain the loan. In addition, you do have to bring evidence of a dependable credit record and of the manner in which you have conducted your company for as long as you have been active in your field.
In other words, reliability is the keyword. On the other hand, with factoring, they will look at the credit history of your customers. The regular sequence for securing cash flow through this method includes several stages. First, it is necessary to produce an invoice for the services or products distributed. Then you need a copy of the invoice and advance it by e-mail or fax. Next, it is the factor’s turn. The factor needs to estimate the credit reliability of your customer and his or her readiness to recoup the invoice when the time comes. After completing the estimation, the factor wires a quoted percentage of cash advance. Then the factor does the work associated with the collecting of the payment and, at the pre-established moment, he or she must receive payment. Finally, you will receive the balance, minus the discount charge.
Therefore, if you want to invest profitably in assets that are highly likely to generate income, if you want to avoid any limitation coming from suppliers, and if you want to enhance the marketing of your products or services, you need an improvement of your cash flow. If you cannot afford to wait for the regular loan procedures to complete (it may take at least a month for such a process to reach its actual financing stage), then asset-based financing and factoring are what you need.
Resource box: You need cash flow in order to conduct a profitable business. We are here to make it possible for you to secure what your business needs to survive, by means of advantageous asset based loans and factoring.
Article Source: http://EzineArticles.com/?expert=Claude_Cote
http://EzineArticles.com/?Do-You-Really-Need-A-Factoring-Expert-To-Help-Your-Business?&id=716701
Toronto
Mississauga
Brampton
Scarborough
London
Windsor
SR ED/SRED Tax Credit Financing:
Toronto
Take Advantage Of SRED Program During Tough Economic Times
The Canadian business environment is becoming increasing competitive. With talk of recession looming in the horizon, it's time to look at another 'R' word that can help you to recession-proof your company. And that 'R' word is RESEARCH. Why should you conduct even think about research during a recession, you might ask? Sales are down, and companies are downsizing. Cash is scarce. Well, believe it or not, there is a way to obtain free cash flow from your previous years' expenses. This method involves taking advantage of tax subsidies through the Canadian government's SRED(Scientific Research and Experimental Development) program. The federal government's sred program is one of the most generous r&d tax incentive programs in the world. Filing for a sred claim can generate tax rebates from 20% to 41.5% of r&d expenses from the two previous fiscal years. This rebate can be either awarded in cash, or in tax credits, or a combination of the two, depending on your current taxable situation. Keep in mind that the sred program allows you to recapture funds that you had previously invested in qualified r&d activities. Therefore, if you haven't taken advantage of the sred program already, you had better act quickly so as not to lose an entire year of eligibility!
Expenses that qualify for the sred program include:
- Salary that is attributed towards sred-eligible activities
- Business overhead expenses (estimated at 65% of the salaried labour costs).
- Contractor expenses that can be directly-attributable towards sred-eligible activities
- Materials that were consumed during the sred experimentation process
For example, let's assume that you are in a net-loss situation for the current fiscal year. Let's also assume that in the previous two years, you had spent the following on sred-eligible activities (each year): $200,000 in salary costs, $50,000 in contractor costs, and $50,000 in material costs that can be directly-attributed to sred-eligible projects.
How much cash flow could you generate by filing for a sred tax claim?
Total sred costs = {salary labour costs } + {business overhead costs} + {contractor labour} + {material costs}
= 2 x [ $200,000 + ($200,000 * 0.65) + $50,000 + $50,000 ] = $860,000
Since you are in a net-loss situation, you are entitled to a 41.5% cash rebate.
Free cash generated by sred claim = $860,000 * 0.415 = $356,900
By filing for the SR&ED claim, you could generate $356,900 in EXCESS CASH FLOW!
Now, wouldn't a cheque for $356,900 from the federal government help your bottom line?
The sred program is a little-known secret that offers you a huge competitive edge over your competition. Take advantage of the sred program, and not only will you survive the recession, but you will thrive afterwards.
Article Source: http://EzineArticles.com/?expert=Gerry_Funk
http://EzineArticles.com/?Take-Advantage-Of-SRED-Program-During-Tough-Economic-Times&id=1082206
Toronto
Everyone is talking about 'factoring' these days, even the people who don't really understand it! While one could maintain that factoring has been around for a number of years in Canada it is absolutely getting more prominence.
We feel that it is getting that prominence for potentially all the wrong reasons, namely that in the current Canadian economic and banking reality financial, cash flow and working capital facilities from traditional institutions such as the banks have been significantly curtailed.
So lets do a basic primer on factoring, and then discuss how it's similarities and differences from what is offered in other parts of the world, and why it works and when it is problematic. We also have a solution for some of the business owner challenges associated with factoring and receivable financing.
Factoring has been around for hundreds of years (if not longer!). What's the basic premise? It's simple. You sell one, (or a number) of your receivables, and you immediately get cash. In our article we will continually try and point out some of the nuances of factoring that get Canadian firms into trouble - here is the first one - when you sell your receivable make sure you understand whether its recourse or non recourse. By that we mean that on a recourse deal if your customer never pays, goes bankrupt, etc you are responsible for paying back the finance firm. If you arrange what is known as 'non-recourse' financing the finance firm is responsible for the loss, not you. As you can imagine non recourse factoring is a bit more expensive, as you are eliminating all collection risk.
Let's touch on another relatively unknown point in factoring, and that is that it is a key component of a potential asset based lending strategy. Asset based lines of credit are available to Canadian firms - these facilities are generally not with our Canadian chartered banks and are offered by very specialized firms. Not only can the business owner get financing for its receivables, but inventory and equipment and real estate can be included also. As the business owner knows, inventory and equipment are crucial parts of working capital, inventory more so.
When businesses factor their receivables in Canada, they, for the most part, are no longer involved in the collection function of those receivables. Two very important points come into play here -
- You have just eliminated cost, personnel, and time involved in collections - ( that's a good thing
- You have just handed over part of the key customer relationship to a third party with whom your customer has no previous knowledge, dealings - (That we feel, is a bad thing!)
In summary, we have touched on a few key basics revolving around factoring and receivable financing in Canada - i.e. the history of factoring and why its growing more popular; and, in addition we have focused on some ' nuts and bolts ' of a factor / receivable financing offering with respect to some positive and negative aspects of such an alternative financing facility. In future articles we will discuss additional pros and cons of this relatively new type of financing in the Canadian landscape.
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