Solving Business Cash Flow Problems with Asset-Backed Business Loans | 7 Park Avenue Financial

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Unlocking Business Growth: The Power of Asset-Backed Loans

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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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Asset-backed business loans are a solid solution for companies seeking to navigate the challenges of modern-day financing.

Unlock your company's potential with the key you already hold: your assets.

7 Park Avenue Financial originates business financing solutions for Canadian Businesses – We offer ASSET BACKED BUSINESS LOAN solutions that solve the issue of cash flow and working capital needs – Save time and focus on profits and business opportunities

Asset-Backed Business Loans: The Ultimate Solution for Canadian Firms

Introduction to Asset-Backed Financing

When did you last find business loan solutions that made sense for your firm?

We think you'll say, 'Right about now!' after you hear what we’ll tell you about asset lending and asset-backed lines of credit in Canada.

Asset-backed business loans via non-bank asset based lenders emerge as a beacon of hope for firms grappling with cash flow challenges. These solutions promise to transform your company's liquidity and offer a pathway to sustainable growth by leveraging what you already possess: your assets. Let the 7 Park Avenue Financial team show you how this innovative financing solution can answer your business's funding needs for operations and growth.

The Reality of Business Financing Today

Are you looking for understatements? We always are. Here's one: ‘Business financing has never been more difficult to achieve than in the last couple of years!' Now, that’s an understatement. It seems to be all about problems and never about solutions.

ABL: A Revolutionary Business Financing Model in Canada

What if there was a type of business financing in Canada that made all firms eligible yet gave you access to an unlimited amount of credit and only had one requirement? Too good to be true? Not necessarily. And what is that requirement our clients always ask? The answer is 'assets‘.

Canadian asset lending via a non-bank asset-backed line of credit makes business loans more sensible today than ever.

Understanding the basics of Asset-Backed Financing

Let’s get to the solution's core, and then you'll see how that solution can fix your current financing challenges. This type of business operating loan is a revolving line of credit secured by inventory, accounts receivable, and other balance sheet asset accounts as applicable. (Typically, those might be equipment and real estate.)

Who Benefits Most from Asset-Backed Financing?

Is there a size that makes the most sense when contemplating such financing? We have found through experience that clients requiring at least $250k/month in operating working capital are the best candidates for this type of financing. There is virtually no upper limit on asset-based lines of credit financing in Canada!

The Daily Benefits of Asset Management

We always come back to the word 'assets' when discussing the availability of this type of financing. Daily, you monitor your receivables, inventory, etc. and draw down against them. As you can see, the facility fluctuates every day simply because each day, your firm bills new customers, collects receivables from past sales, purchases inventory, and converts that product into a sale, resulting in a receivable. That whole process is known as your operating cycle.

The Competitive Edge of Asset-Backed Lending

Asset-backed lending in Canada is a secured form that grows as you grow. That’s the main difference from a chartered bank line of credit, which typically has fixed limits and imposes all sorts of other conditions, including covenants, collateral, and personal guarantees on the business owners and managers. That’s now what asset lending via bank line of credit is about in Canada.

Qualification and Approval for Asset-Backed Loans

The key qualification difference here is that a large part of the approval process for this type of facility revolves around verifying your assets, such as the quality of your receivables and inventory turns, and your ability to 'scorecard' your business via proper financial reporting every month around receivables and inventory.

Is Asset-Backed Financing Right for Your Business?

Does our solution make sense? We think it does if you fall into one of several categories, including not being able to access bank credit or not being able to access enough bank credit, and if your firm is in a growth mode and has assets that can be financed for working capital needs.

Key Takeaways

1. Asset Collateralization: This is the crux where your business's assets (inventory, accounts receivables, etc.) serve as collateral for the loan. In some cases intellectual property can be included as well as the balance sheet assets.
2. Loan Accessibility: Asset-backed loans are more accessible to businesses that might not qualify for traditional loans due to stricter lending criteria in traditional cash flow financing. Inventory financing is a key aspect of asset backed credit lines.
3. Flexibility and Scalability: Asset based finance loans offer flexibility in borrowing amounts directly related to the value of the assets pledged to generate more of the company's cash flow.
4. Cost Efficiency: They might generally offer lower interest rates than unsecured loans due to the lower risk for lenders.
5. Risk Management: Understanding how default risk is managed, including the potential for asset seizure, is crucial.

Conclusion

Call 7 Park Avenue Financial, a trusted, credible, experienced Canadian business financing advisor who can guide you through the asset-backed line of credit strategy for your firm's survival, growth, and profit.

FAQ: FREQUENTLY ASKED QUESTIONS  / PEOPLE ALSO ASK  / MORE INFORMATION

How do asset based lending loans work?

Asset-backed loans provide financing based on the value of your assets, such as inventory or receivables, which serve as collateral.

What types of assets can be used as collateral?

Asset-based financing can include a wide range of assets, from inventory and accounts receivable to equipment and real estate.

Who benefits most from asset-backed financing?

Businesses needing to improve liquidity or expand operations but lack access to traditional loans benefit significantly from asset-backed financing.

How do asset-backed loans compare to traditional bank loans?

Asset-backed loans often offer more flexibility and accessibility since they are secured by your assets, unlike traditional bank loans that might require a strong credit history.

Can small businesses apply for asset-backed loans?

Yes, small businesses can apply for asset-backed loans, making them a valuable tool for managing cash flow and supporting growth.

What is the interest rate for asset-backed loans?

Interest rates for asset-backed loans vary based on the lender, your creditworthiness, and the value of the collateral.

How quickly can I get an asset-backed loan?

The timeline can vary, but because tangible assets back the loan, the process may be quicker than unsecured loan approvals.

Are there any industries that particularly benefit from asset-backed loans?

Industries with significant physical assets, such as manufacturing, retail, and wholesale, often find asset-backed loans especially beneficial through the asset based lender solution.

What makes asset-backed loans a reliable option for businesses?

The reliability of asset-based financing comes from using tangible assets as collateral, providing lenders with security and borrowers with potentially more favourable terms than cash flow lending solutions from banks around key areas such as covenants, personal guarantees, etc - The ABL higher loan to value ratio calculations deliver more financing potential.

How can asset-backed loans impact a company's growth strategy?

Asset based loans provide essential capital for expansion or operational needs without diluting equity, allowing companies to pursue growth strategies effectively.

What's the significance of asset valuation in securing an asset-backed loan?

Accurate asset valuation in an asset based loan is crucial in the loan to value ratio calculations as it directly influences a business's ability to secure loans, affecting its ability to fund operations or growth initiatives.