YOUR COMPANY IS LOOKING FOR THE RIGHT ACCOUNTS RECEIVABLE FINANCE SOLUTION!
LET ACCOUNTS RECEIVABLE FACTORING DELIVER CASH FLOW
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
Recent studies in the United States, ( and we believe the Canadian business landscape is very similar ) suggest that one of the most viable ways for businesses to grow and continue growing in the current economic and somewhat difficult credit environment is to consider a factoring working capital facility for their business. This type of financing facility is also known as accounts receivable financing or ' factoring facilities '.
WHAT IS A FACTORING FACILITY
Factoring goes by many terminologies including invoice discounting, invoice factoring, debtor finance, etc - It is the purchase, by an accounts receivable factoring company, for a 'factoring fee' ( not an interest rate ) of your accounts receivable in whole or in part. Businesses can receive cash from a finance company as they generate invoices and sales. Companies can choose from recourse or non recourse factoring, depending on how they want to assume normal bad debt risk. This financing is a potential solution to a line of credit and is a solid way to finance a balance sheet . Factoring is a subset of ' asset based lending '. Using a third party such as 7 Park Avenue FInancial to fund receivables allows companies to improve their cash position.
CAN YOUR COMPANY ACCESS ALL THE BANK FINANCING YOU NEED?
If your company is doing reasonably well, and the general economic and business and credit environment are quite positive naturally more traditional financing is considered – as a Canadian business owner you know the drill - prepare an executive summary or business plan ( 7 Park Avenue Financial prepares business plans that meet and exceed lender requirements ), produce several years of financial statements, and meet with your Canadian chartered bank to discuss receivable or term financing. The reality of today’s economic environment is that many businesses aren’t in a position to pursue this traditional financing and therefore must consider what the alternatives are.
THE KEY BENEFIT OF A/R FINANCING? CASH!
One of the appeals of factoring/accounts receivable financing is that your business is generating positive cash flow right out of the gate.
One of the other main benefits of such a facility is that business owners and financial managers can focus on running their business, and not spending all their time on cash flow problems and working capital challenges. We would point out that the time saved on collections of course refers to the factor that the finance or factor firm is the one collecting your accounts receivable. Many business owners do not like this direct contact with the customer, and that is one of the reasons that the Canadian business environment has, relatively speaking, been ‘ slow ‘ to catch on to factoring.
THE HISTORY OF FACTORING
This necessitates a brief discussion around the concept of notification and how factoring has traditionally been done in the U.S. and elsewhere in the world. Factoring started hundreds, some say thousands of years ago in Europe and Asia. Traditionally it involved the total ‘sale ‘of your receivables, your firm got the cash but you didn’t own or collect the receivable at that point. In recent years, due to the creativity of the North American financing markets, there are numerous other product offerings related to factoring, one of which is ‘ non – notification ‘.
WHAT IS THE BEST FACTORING SOLUTION?
At 7 Park Avenue Financial we believe non-notification factoring is the absolute best solution for Canadian business owners who are considering alternative financing. Under non-notification type facilities, you bill and collect your own receivables, while at the same time receiving cash for them as soon as you generate your invoices. This provides a double whammy, so to speak!
1. You bill and collect your own receivables and get cash ASAP
2. You maintain the relationship with your customer, which is key to most Canadian business owners
At 7 Park Avenue Financial we feel that the aforementioned financing, which we call CONFIDENTIAL RECEIVABLE FINANCING is the best form of a/r funding for a business. It's a factoring company solution that works .. finally!
BENEFITS OF CONFIDENTIAL A/R FINANCING
As we have noted in the past factoring is more expensive than traditional financing, but that premium that is paid , called the ' factoring discount ' provides your company with literally all the cash you need to grow your business. Savvy Canadian business owners are able to use that cash to improve supplier relationships, take prompt payment discounts, and purchase more inventories for sale to their customers. In certain cases, all, yes we repeat, All.. yes, all ! of the costs of a factoring finance facility can be offset by good gross margins and strong operating efficiencies.
CONCLUSION
Is it any wonder why receivable factoring, accounts receivables financing and non-traditional working capital facilities are becoming more popular in Canada? We don’t think so! Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your cash flow needs.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
7 Park Avenue Financial/Copyright/2021/Rights Reserved
