YOUR COMPANY IS LOOKING FOR BUSINESS LINE OF CREDIT SOLUTIONS!
ASSET-BASED LENDING WORKS! INSIDE ASSET BASED LOANS IN CANADA
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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?
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EMAIL - sprokop@7parkavenuefinancial.com
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Oakville, Ontario
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Business finance in Canada often requires asset-based financing in the form of a credit line. One alternative to the traditional Canadian chartered bank solution is the ABL credit facility. Let's dig in.
LOOKING FOR SPECIALIZED HELP IN BUSINESS FINANCE
The other day one of Canada major business newspapers had an interesting article around the need to treat certain aspects of business needs as a ' SPECIAL OPS' assignment - focusing on issues such as understanding the mission, the value of success, the training and info needed, so things don't go wrong ... Is it just us, but that's a solid analogy to addressing the need for business credit lines and revolving lines of credit via an asset-based loan.
ASSET BASED LENDING HAS CHANGED THE COMMERCIAL BORROWING LANDSCAPE IN CANADA
The ' ABL ‘(asset-based lending) solution is a fundamental game-changer in Canadian business financing. Although it originated in the united states and is even more utilized than traditional banking in the U.S., in Canada, it has become specialized lending 101, allowing any business with two key assets (Sales and business assets) to monetize that into a revolving line of credit. A company's assets on the balance sheet dictate the amount of business credit you can access!
FINANCING BUSINESS ASSETS
The even better news is that depending on your circumstances, other asset categories such as equipment and your business commercial real estate ( if the latter is applicable ) can be easily combined to give you tremendous borrowing power relative to your sales' ongoing value business assets. It's one time when ' growth is good, ‘giving you the ability to remove the concern around running out of ongoing cash flow needs.
ABL FINANCING IS SHORT TERM MAXIMUM BORROWING POWER
It's important to review ABL financing in the context of short-term borrowing power and not the dreaded ' debt ' word. Yes, its true cash flow could be alleviated in some form by a working capital term loan or mezzanine/cash flow financing - yet these solutions involved fixed payments, longer amortizations, etc. In the case of a bank credit line, or our situation, ' ABL, 'you will be repaying the facility constantly as your sales and accounts receivable come to maturity. Naturally, that is all part of what the finance folks call your operating cycle - the travel of a dollar through your business from materials purchase to inventory to receivable to... finally... CASH.
SALES AND ASSETS ARE THE ONLY COLLATERAL IN ABL FUNDING
Firms of all risk profiles are eligible for ABL asset-based finance solutions. Those solutions can be uniquely just inventory, or A/R, or a combo of both. If you have the collateral, ABL has the solution. Experienced business owners know that bank financing in the form of credit facilities requires a holy grail of profits, cash flow, and balance sheets/income statements that satisfy bank ratios. Great for some, but not accessible for all.
Typically, a line of credit is more cost-effective than term loans in some ways because you are only paying for the financing you are using.
ASSET BASED LENDING IS A SOLID BUSINESS ACQUISITION TOOL
In many cases, this type of Canadian business financing allows you to acquire a competitor through the use of asset finance and is also used by many firms as an interim ' restructuring' strategy.
CONCLUSION - LET 7 PARK AVENUE FINANCIAL BE YOUR SPECIALS OP'S TEAM IN BUSINESS FINANCING
If you're looking for some SPECIAL OPS assistance in the form of availability in a business credit line via ABL, seek out and speak to 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can ensure you aren't missing out on one of the most available solutions that you might not have known even existed in financing and business development.
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Stan Prokop
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