YOUR COMPANY IS LOOKING FOR A/R FINANCE SOLUTIONS!
ACCOUNTS RECEIVABLE FINANCING WITHOUT FACTORING COMPANY INTRUSION? A PERFECT LINE IF CREDIT
You've arrived at the right address! Welcome to 7 Park Avenue Financial
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 - sprokop@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8
AR Finance in Canada. The devil is in the details they say is a popular saying, and that’s the case with an account receivable funding loan for business financing success. Access to lines of credit and ongoing borrowing facilities is key to the long-term success of your business.
ACCOUNTS RECEIVABLE FINANCING IS THE MOST POPULAR ALTERNATIVE CASH FLOW TOOL IN CANADIAN BUSINESS FINANCING
Fundamentally it's an easy story to explain to our clients. Receivable financing is simply a cash flow tool that allows you to fund your sales as you make them - generating instant cash flow on your invoice amount as you sell your products or services. As you provide those goods and services you typically are advanced 90% of the invoice value, that remainder being temporarily held back and refunded to you ( less finance costs ) as soon as your client remits.
KEY BENEFITS OF A/R ACCOUNTS RECEIVABLE FINANCING
The benefits also could not be more clear. Its access to short term day to day working capital when you need it, you have maximum flexibility around borrowing only when you need it (and of course only paying for what you use). Alternative financing may come at a higher cost, but business owners and financial managers must ask the question - what is more critical at this time- access to capital or cost of capital?
EVERY TYPE OF BUSINESS IN ALL STAGES OF GROWTH ( STARTUP TO MAJOR CORPORATION' UTILIZE COMERCIAL A/R FINANCE
Where things get a little ' muddy ' shall we say is in the type of AR Finance that you choose. Ultimately that depends on the overall size of your business ( all business sizes qualify - some of the largest corporations in Canada use the service - all the way down to start-ups) and the industry and cash cycle your business finds itself in.
WHAT IS THE 'CHOC - IFIED "SOLUTION ?!
We're often asked if we have a ' recommended' strategy or solution around this method of financing a business. We do, and we are recommending that you get ' CHOC IFIED '. What's that? Well, C H O C simply stands for ' CLIENT HANDLES OWN CREDIT ' - so our preferred method of invoice finance is in fact confidential receivable financing. You maintain total control over your credit function, continuing to handle, as you did before, all your own invoicing and collection in the middle of that whole ' client relationship ' thing!
WHY DOES 7 PARK AVENUE FINANCIAL RECOMMEND CONFIDENTIAL INVOICE FINANCING?
At 7 Park Avenue Financial confidential a/r financing is our most recommended method of cash flow financing for our clients, Why? Simply because your customer is not aware of how you are financing your firm, and most Canadian business owners and financial managers like it that way. Payment is sent to your firm, and you bill and collect your own invoices. To qualify for this method of funding receivables you must have, generally speaking, good quality of a/r base. Normally you are still responsible for collections of course, as well as credit risk related to any bad debt. Good collection policies and decent asset turnover in your receivable base is the key.
HOW OLD SCHOOL FACTORING WORKS?
More traditional methods of account receivable financing work - they are just simply somewhat, shall we say 'intrusive' when it comes to your preference to running your own business - and who wouldn't want to do that if you in fact had a choice. The ability to finance your business and maintain customer control is key in confidential invoice finance.
We forgive all new clients who tell us they are somewhat confused by some of the terms in factoring finance - terms such as non-recourse factoring/factoring with recourse, etc can be a bit confusing to first-time explorers of this financing strategy that finances hundreds of thousands of businesses in the world, and their hundreds of millions of clients.
So back to those details. Many clients we talk to have been confused around the terms of invoicing finance, the way that costs are explained (or not explained). The main thing to always remember is that this method of finance provides you with the significant advantage of having cash flow available right away as you generate sale revenues and carry outstanding invoices. But unlike handing all your invoicing and collection to a traditional ' old line ‘ financing accounts receivable firm remember that you have the option of control over your financial operations if you choose to get ' CHOC IFIED'.
REQUIREMENTS FOR THE 'CHOCIFIED' SOLUTION OF AR FINANCE
Is the confidential finance solution available to everyone? It is if, and it’s important if, your firm can demonstrate it has proper financial statements, accounting controls, etc. Simply speaking, you have to have your business act together when exploring solutions tied to accounts receivables on your companys balance sheet.
CONCLUSION
AR Financing is simply a method by which your business can access cash flow related to your sales and outstanding receivables. We have shown that this financing arrangement can be done in several ways either through bank borrowing or asset-based lending arrangements.
AR financing solutions don't have to be as complicated as some (you know who you are!) make them out to be. For small businesses, it's flexible, ties cash flow directly to your sales, and is an alternative option to firms who can't or don’t want to seek Canadian chartered bank financing. Seek out and speak to a trusted, credible and experienced expert Canadian business financing advisor on solving your cash flow needs.
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Stan Prokop
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