YOUR COMPANY IS LOOKING FOR BUSINESS FINANCE!
YOUR ACCOUNTS RECEIVABLES FINANCING / BUSINESS FACTORING
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 - INFO@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Receivable finance in Canada is a function of managing the investment your company has in A/R. The cash flow needs that arise are directly related to your policy of granting commercial credit to your clients - and the severity of that need is commensurate with the level of slowness your clients take in paying you.
HOW CAN BUSINESSES MANAGE THE CHALLENGE OF FINANCING SALES
Factoring receivables via good receivable financing solutions is one way to manage that challenge and done properly; it's ' full speed ahead with a business financing solution that makes sense. Let's dig in.
IS CONFIDENTIAL RECEIVABLE FINANCE THE BEST A/R FACTORING SOLUTION?
‘Quick ' is the word we hear most often when it comes to invoice financing. The real challenge, though, is the owner/ financial manager's ability to ensure he or she has the right facility in terms of size, rate, and ability to live with how this method of credit facility is handled. Our most common and recommended solution is CONFIDENTIAL RECEIVABLE FINANCE, allowing the owner/manager to mirror the same type of borrowing that could be achieved through a bank scenario.
IS BANK FINANCING THE SOLUTION?
That begs, of course, the question of why the owner wouldn’t utilize Canadian chartered banks as a solution to the cash flow/working capital challenge. For further clarity in that manner, it’s also important to understand that factoring receivables is not a ' loan, ‘and it certainly does not add any debt to the balance sheet.
WHAT ARE BANK CREDIT REQUIREMENTS FOR A CREDIT LINE
Firms that choose to go the bank route for a revolving credit facility must be able to demonstrate consistent profitability, in addition to a balance sheet that reflects required ratios around debt to equity. Any imbalance in your ' current ratio ' of liquid assets to payable and other debt you have also can bring a screeching stop to bank approval. Many firms actually do qualify for bank financing, but not enough to meet their needs. A typical example is when large orders or contracts need to be filled promptly.
3 KEY BENEFITS OF FINANCING VIA FACTORING COMPANIES
The common advantages of factoring receivables are:
Fast approval
Unlimited credit relative to the amount of sales and accounts receivable you are achieving
Unrestricted use of funds for general commercial purposes
EXAMPLE OF FACTORING
It is a common misconception that you have to finance all your a/r all the time - that is certainly NOT the case, and prudent owners/managers will draw down what they need, paying only for what they are using in the facility at any given time. That alleviates many of the facility's costs, which typically in Canada, using $ 10,000.00 as an example, costs 200$ for a 30 day period. Naturally, the benefits of receiving those funds immediately, no later than within 24 hours, including being able to satisfy all your operating obligations, as well as being able to better manage price and discounts with key suppliers.
SOME HISTORY AND BACKGROUND ON FACTORING
As we consistently meet Canadian business owners who are not even familiar with this method of financing its quite a consolation to them to know that factoring has been around a few hundred years - with even major FINANCIAL POST top 500 firms utilizing this or similar ( securitization) methods of cash flow financing. In effect, your factoring facility is a type of line of credit providing immediate cash.
CONCLUSION - IS FACTORING FINANCE RIGHT FOR YOUR BUSINESS
Certain industries such as transportation, staffing are perfect candidates for factoring, but the reality is that any business with commercial receivables qualifies.
Business owners should also note that you have a choice between recourse factoring and non recourse factoring depending on the amount of risk they wish to carry or transfer to a third party. The non-recourse solution allows you to remove bad debt risk from your business model.
The type of invoice factoring facility you set up (traditional vs. non-notification), the cost, who you are dealing with and the actual agreement is what makes or breaks success in non-bank account receivables financing. Seek out and speak to 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can assist you with your working capital needs.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
7 Park Avenue Financial/Copyright/2021/Rights Reserved
