YOUR COMPANY IS LOOKING FOR THE RIGHT
ACCOUNTS RECEIVABLE FINANCING SOLUTION!
ACCOUNTS RECEIVABLE FINANCING SOLUTIONS 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
Factoring receivables in Canada is a method in which your sales are turned into automatic cash. The good news is that no magician is required. And one or two little-known tricks of the trade will allow you to maximize the benefits of accounts receivable factoring. Let's dig in.
MANAGING YOUR ACCOUNT RECEIVABLE INVESTMENT VERSUS FINANCING YOUR A/R
By the way, we're the first to admit and educate clients on the fact there is no replacement for ongoing proper management and due diligence on the receivables you generate from sales. We're never more amazed when even clients with great customers of high-quality neglect the ongoing importance of turning that AR investment into cash for operations and growth as you grow revenues in your goods or services.
TALK TO THE TEAM AT 7 PARK AVENUE FINANCIAL ABOUT OTHER WAYS TO FINANCE YOUR CASH FLOW NEEDS
And yes, there are other additional ways to generate cash - i.e. working capital term loans, refinancing of assets, bridge loans, monetizing any SR&ED tax credits etc.; but on an ongoing basis, your investment in A/R is the next closest asset to cash on the balance sheet - enough said.
WHY IS FACTORING / FINANCING ACCOUNTS RECEIVABLE THE MOST POPULAR PART OF THE ASSET BASED LENDING INDUSTRY
Why then is factoring receivables via a trusted third party so popular? Receiving immediate cash fo for the invoice amount is one great reason! Part of the lure of this method of Canadian business financing lies in the fact that it's a simple process. Once your initial agreement is in place (with the ‘right’ commercial lender), you have the ability to raise capital in any amount commensurate with your sales growth. At the right cost and using what we feel is the best way to utilize factoring (we’re talking about CONFIDENTIAL ACCOUNT RECEIVABLE FINANCE), you have just turned your company into a cash flow machine.
WHAT IS THE BEST TYPE OF A/R FINANCING
What then are the advantages of Confidential AR Financing from factoring companies? The largest benefit should be self-explanatory - it's in the ' MIND YOUR OWN BUSINESS ' category, allowing you to finance your cash flow needs without your suppliers, clients etc., knowing your financial strategy. 99% of receivable factoring in Canada requires that your clients be notified in this whole process. That is not the optimal strategy sought by the Canadian business owner and financial manager.
USE YOUR INVOICE FACTORING FACILITY LIKE A LINE OF CREDIT
Utilizing Confidential Receivable financing via your trusted factoring company is your method of a sales line of credit really; comparable to a bank facility but at a high cost. The trade-off is that you have all the capital you need when you can't access it through traditional sources.
EXAMPLE OF ACCOUNTS RECEIVABLES FACTORING
Unlike a bank loan, factoring paperwork spells out that your firm sells its accounts versus the bank where you have to assign your A/R.
Here's a good example of how the cost of this method of business financing works. Let's use a $ 10,000 invoice as an example. When you are in a position to invoice your customer for services rendered or product delivered, you will pay approx 200.00$ for a 30-day' loan ' on that balance. If your customer pays in 60 days (unfortunately, many do!), the finance charge becomes $400.00.
Remember, though, that cash in your bank is now used to generate more sales, grow profits, and you can even reduce your financing costs by using part or all of those funds to take discounts with your own suppliers - who now suspect you're ' cash-rich! The finance charges represent factoring fees and are not an interest rate, a point often misunderstood when it comes to the factoring fee.
When your invoice is paid, the process continues to repeat itself as your business sells products and services and generates sales. It's a short term process that addresses all your day-to-day cash needs. Small businesses can achieve their business needs from the factoring program while growing their business. It's a process that allows companies to achieve cash flow success based on their investments in current assets such as a/r.
You also have the option to choose non recourse factoring, allowing you to transfer all credit risk and bad debt risk to the factoring company, as opposed to the standard recourse factoring of receivables.
CONCLUSION
If you’re looking to maximize the benefits of the ‘ right ‘ receivables factoring solution and want to achieve the benefits of factoring, 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. If you're a small business or medium-sized business in Canada and want to get started immediately on the factor receivables process, call us!
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Stan Prokop
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