YOUR COMPANY IS LOOKING FOR CASH FLOW FINANCE
SOLUTIONS!
INVOICE FACTORING VIA ACCOUNTS RECEIVABLE FINANCING
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
AR finance solutions in Canada go under various ' pseudonyms ' - they include ‘factoring’, ' invoice discounting’ etc. Not only can the names be confusing sometimes (there are some subtle differences in each type); actual arithmetic around this type of financing is clearly not understood by clients we meet and talk to about factoring companies. Let's dig in.
Therefore if there's a theme or message it’s both the ' COST' and the ' STYLE ' of this growing method of financing your business.
LOOKING FOR THE BEST FACTORING COMPANY SOLUTION? HERE IS THE 7 PARK AVENUE FINANCIAL RECOMMENDATION
When it comes to recommending what type of receivable financing solution you look into we're clearly recommending ' CONFIDENTIAL RECEIVABLE FINANCING '. It, like traditional factoring, invoice discounting, etc is a subset of what we can broadly term ' asset finance ‘. The key benefit of this method of business financing is clear - monetizing your sales as soon as they become accounts receivable!
TRADITIONAL RECOURSE FINANCING
Unlike traditional forms of A/R finance, your company is responsible for all billing and collections, and the better you manage your accounts the more cash flow and less financing costs will become very apparent. In essence, you are achieving a business line of credit via factoring services.
THE ABILITY TO KEEP YOUR FINANCING PRIVATE
Why does the business owner want the ability to manage their own business and keep their financing private? The more obvious reasons are pretty simple - Canadian business owners and managers feel that their suppliers, competitors, and other parties don't necessarily need to know how their business is financed. Most business people would agree that the posture of Canadian business is more conservative than that in the U.S., which is probably why Confidential A/R finance lends itself very well to the Canadian market.
KEY BENEFITS OF COMMERCIAL RECEIVABLE FINANCE
Another key benefit of financing receivables in this manner is the ability to get 90% margining of your accounts. This differs from the traditional 75% allowed by Canadian banks. Funds received from financing in this matter allow your firm to:
Reduce payable levels
Take supplier discounts - enhance vendor relations with key suppliers
Negotiate better pricing based on new found cash ability
EXAMPLE OF THE COST OF FACTORING
As we said the key to understanding factor companies and why this method of financing might work for your firm is often in the math. Financing is based on a 30 day collection period and costs increase on a ' per diem' basis for your clients that pay later than 30 days. Beware of any facility that doesn't quote you a per diem rate.
Using a $1000.00 invoice as an example it will cost you about 15$ to finance that invoice if your terms of payment are 30 days
THE INVALID COMPARISON OF BANK FINANCING AND INVOICE FACTORING COMPANIES
The danger of understanding A/R finance pricing comes when business owners and managers compare it to bank financing or working capital term loans. A better way to look at it is to consider it in the same manner as if you were offering a discount to your accounts for prompt payment.
CONCLUSION
The reality of financing receivables is that a lot of working capital and cost is tied up in your investment in accounts receivable. Confidential A/R financing allows you to operate your company, grow your company, and not take on excessive debt or search for new equity.
The ability to get paid on your accounts receivables is key to business success - Also, strong asset turnover and new found cash flow allow you to stimulate more sales and generate more profits. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your business funding receivables factoring cash flow needs.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
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