YOU ARE LOOKING FOR CANADIAN ACCOUNTS RECEIVABLE FINANCING
YOU'RE AT THE RIGHT ADDRESS! WELCOME TO 7 PARK AVENUE FINANCIAL!
CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Direct Line = 416 319 5769
Email = sprokop@7parkavenuefinancial.com
Accounts receivable financing solutions often have Canadian business owners/financial mgrs not fully understanding the impact and benefits. Also known as ' factoring receivables,' one top expert probably describes it best - Expensive... and Valuable! Let's dig in.
Numerous sources of A/R financing are available to your company when you're looking to finance sales. Whether you like it or not, that is part of the confusion around the multitude of ' offerings' that come from asset-based lenders and commercial finance companies.
The best way to describe the fundamental receivables finance offering is to think of it as an alternative to a bank line of credit - although numerous key differences have to be fully understood to make the ' Valuable' part of our expensive/valuable equation work!
One positive aspect of factoring is that it provides a significant borrowing leverage - typical advances are in the 90% range. Most business owners are aware that banks only finance AR at 75% as a most common practice.
Proper financing will allow you to draw against the previous month's end A/R. With that information, the owner/mgr can then calculate ' borrowing power' for the month, allowing for proper cash flow planning.
When you are factoring receivables, who your client pays and how they pay is key to getting the best possible facility in place. In most cases, payments by your clients are made to a bank ' lockbox/post office box' controlled by the finance company. This works best... for the finance company. The optimal solution sought by most owners is, of course, to have their clients pay them. They want to maintain the client relationship and be perceived as in charge of their own business finances.
The solution to the client payment problem? We call it Confidential A/R / Invoice Financing .The process? Your client pays you!
Pricing on A/R financing in Canada varies, again emphasizing the need to ensure you are working with the right firm or advisor. While small facilities are in fact available and popular, the truth of the matter is that facilities typically are in the 250k range and up - with virtually no upper limit - including 'factoring' in your growth prospects.
In future updates, we'll discuss the mechanics and cost of factoring receivables and why the perfect solution to financing your sales might be around the corner. If you're looking to understand ' VALUABLE ' versus ' EXPENSIVE ' in non-bank sales finance solutions, speak to 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can assist you in your funding needs.
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