YOUR COMPANY IS LOOKING FOR ASSET FINANCING!
SMALL BUSINESS LOAN FINANCE IN CANADA
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
Asset finance. When it comes to Canadian business financing and business loans in Canada there some surprising simple, yet powerful, shall we call them ..' tricks' when the small business owner or financial manager needs to measure current and future financing needs. And those ' tricks ‘? They’re really just simple tools to measure ASSET TURNOVER. Let's dig in.
THE TIMING OF ASSET TURNOVER IS CRITICAL - FASTER IS BETTER
Speed counts in a lot of aspects of business - not all the time, but often. So the speed at which you turn assets into cash will often ultimately dictate the type of finance your firm needs to make it to the goal line.
THE INVENTORY FINANCING CHALLENGE
It's important though to look at the trends in those numbers over time, not just on any one day. Let's take inventory as an example. Yes of course you want to know how many times your inventory turns (Sales / Cost of Sales) - It's important, but won't on its own dictate the overall health of your company.
3 CRITICAL ASSET CATEGORIES IN YOUR BUSINESS
The GANG OF THREE, as we'll nickname them, dictates how you are using those assets. They are:
A/R
INVENTORY
FIXED ASSETS/EQUIPMENT
DSO IS AN IMPORTANT BUSINESS SUCCESS MEASUREMENT
Knowing your DSO, ' day’s sales outstanding “simply tells your company how long it takes to turn over your accounts receivable in the short term. Because you are selling on credit you need financing to support the sales growth in your A/R levels. Companies can address receivable financing via asset based financing in the following manner -
Factoring (Traditional)
Confidential Receivables Finance
Commercial bank lines from Canadian chartered banks/business credit union financing services
Non-bank asset-based lines of credit that are individual or combos of A/R and inventory margining
DOES YOUR FIRM HAVE PROGRESS PAYMENT CHALLENGES
When you do a good job of granting credit, and collecting A/R even more expensive alternative finance solutions such as factoring make strong sense to cover the loam amount they are looking for. Many clients we meet are in the business of PROGRESS PAYMENTS. Here's where things get a bit tricky, but they don't have to be. If you're able to get a down payment that helps - many firms do that. And, guess what? Progress payments can be financed if you've got the right financing partner.
We've touched on inventory finance already a bit, so let’s look at Asset turnover in general. You use your non-current assets to typically operate your company and generate revenues. This is particularly important if you are in a capital intensive business. We meet with many clients who are service-based and have little need for asset finance.
4 IMPORTANT BUSINESS FINANCE AND WORKING CAPITAL SOLUTIONS
At the other end of the spectrum are companies who need to utilize:
EQUIPMENT FINANCE - Managing asset acquisition via lower monthly payments
SALELEASEBACKS
BRIDGE LOANS
ASSET BASED LINES OF CREDIT THAT INCLUDE FIXED ASSETS
The GOVERNMENT OF CANADA SMALL BUSINESS LOAN PROGRAM
as methods of Canadian business financing. While the interest rate will always be higher in asset based financing solutions it becomes a question of access to capital versus cost of capital and higher interest rates than traditional bank loans and bank pricing on business credit solutions.
CONCLUSION
As we have said there are numerous ways to measure what type of business loan and how much financing small businesses need, and what type of financing works best for your particular situation. 7 Park Avenue financial Asset financing solutions often de-emphasize the need for a high credit score required in more traditional funding solutions. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your capital business needs.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
7 Park Avenue Financial/Copyright/2020/Rights Reserved
