YOUR COMPANY IS LOOKING FOR BUSINESS CREDIT!
AN OPERATING LINE OF CREDIT ALTERNATIVE
ASSET BASED LENDING AND ASSET BASED LOANS 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
Business credit lines in Canada are often the ' secret sauce ' that helps propel a company to financial success. Whether it’s a non-bank commercial credit ' ABL ' line or a Canadian chartered bank line of credit, it's a fact that financing your working capital properly is often the differentiator in success or failure in commercial finance. It's one of the ' Secret Sauces ' in business success. Let's dig in.
LET ASSET BASED LENDING ADDRESS THE CASH FLOW GAP IN YOUR BUSINESS OPERATING CYCLE
As your business invests more funds in the products and services you deliver, the need for commercial credit financing of some type increases. The straightforward reason for that is that your customers don't pay you the same day you deliver products or services, and quite often, the gap in even getting to your invoice stage is significant.
BANK CREDIT LINES VERSUS ASSET BASED CREDIT FACILITIES
Revolving credit facilities in Canada can be broadly grouped into two areas: bank lines of credit and non-bank commercial asset-based lines of credit. (In truth, there are some subsets of Asset-based lines of credit - they might include accounts receivable finance only, inventory finance, leveraging equipment assets, or combinations thereof!)
EVERY INDUSTRY HAS DIFFERENT CASH FLOW AND WORKING CAPITAL NEEDS
Your ability to finance your current assets properly will deliver solid cash flow as your company grows. The gap between different industries is significant. We can only envy the internet retailer who gets paid before they even deliver the product! Conversely, a firm in another industry might take on a project that takes a month or two to deliver on, and another month or two, or more !.. to get paid. That’s the working capital challenge.
UNDERSTANDING THE WORKING CAPITAL CYCLE IN YOUR BUSINESS
Business owners know the value, and your assets' timing is key to financing business credit lines. Once the business owner/financial manager has a handle on a company's working capital cycle, the solution becomes a lot more achievable.
BUSINESS CREDIT LINES ALLOW YOUR COMPANY TO BE PROACTIVE IN GOING FORWARD AND GROWING
Having access to business credit for cash flow allows you to stay ahead constantly- it's better to be planning growth than reacting to cash flow shortages in your operations. Simple, fundamental trends can be determined by having regular monthly financials and charting your trends in A/R, inventory, sales, etc.
Term lenders that you might have in your business (term loans, equipment leases, etc.) want to rely on your cash flow from operations to retire your monthly obligations.
It should be pointed out also that if your business is ' capital intensive ‘for fixed assets, etc., you require more access to commercial credit business lines.
WHAT ASSETS CAN BE FINANCING IN AN ASSET BASED CREDIT LINE?
Bank or ABL lines will finance on an ongoing basis the value of your A/R and inventory. In the case of ABL, your fixed assets are also thrown into the mix, allowing you to borrow on a revolving basis against the value of those assets, together with inventory and receivables. Credit line increases are almost automatically possible as your assets and sales revenue grow! On occasion, real estate might be a part of your balance sheet structure, and equity in company-owned real estate can be a part of your revolving facility!
INTEREST RATES AND THE COST OF FINANCING
While bank pricing is lower and more flexible, companies that are growing quickly and can’t access ' traditional ' financing should consider Asset-based credit lines.
CONCLUSION
If you are looking for the ' secret sauce' deliverable in a business credit line, seek out and speak to a trusted, credible, and experienced Canadian business financing advisor who can help you achieve working capital and cash flow success.
Click here for the business finance track record of 7 Park Avenue Financial.
Stan Prokop
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