YOUR COMPANY IS LOOKING FOR A RECEIVABLE FINANCE SOLUTION!
RECEIVABLES FINANCING FOR LINES OF CREDIT ALTERNATIVES
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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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EMAIL - sprokop@7parkavenuefinancial.com
Receivables funding in Canada, thankfully, comes with choices. Is a receivable credit solution your firm's ' golden chance ' at working capital success? It just might be, and here's why. Let's dig in.
CHOICES IN FINANCING YOUR RECEIVABLES
It clearly is a good thing that the business owner has choices in accounts receivable financing. One of those reasons is that bank financing, for some, or all of the cash flow financing you need simply might be unattainable by Canadian chartered bank standards.
RECEIVABLE FINANCE IS A PART OF ASSET BASED LENDING SOLUTIONS
So enter receivables finance. It comes in various ' sizes' and 'flavours’. It can be a stand-alone solution, or in some cases, it can be a subset of an asset-based line of credit, that type of facility monetizes both receivables and inventory and equipment into one revolving line of credit.
AT 7 PARK AVENUE FINANCIAL WE RECOMMEND CONFIDENTIAL RECEIVABLE FINANCE
And, throwing more choice into the mix, the Canadian business owner and financial manager has the choice of utilizing ' traditional ‘A/R factoring, or it can opt for our preferred and recommended solution: CONFIDENTIAL RECEIVABLE FINANCING.
The key difference in understanding non-bank receivable financing simply boils down to two things:
UNDERSTANDING PRICING
UNDERSTANDING HOW IT WORKS
BENEFIT OF A/R FINANCE
While it only makes sense that an alternative non-bank solution will be more costly thousands of firms gravitate to this method of business financing simply because it gives them all the cash flow and working capital they need based on their sales level - with virtually no upper limit to financing available.
TRADITIONAL FACTORING
If you opt for traditional financing, most typically called ' FACTORING' you're involved in a tri-part deal between yourself, your lender, and your client. Your client pays the lender, the one key advantage to your firm is that you receive the cash, at your option, the day you make an invoice for the sale. That's clearly cash flow power. The cost of that transaction, typically 200$ on a $10,000.00 invoice ( assuming 30-day terms/payment) can often be very justified when you consider your new found ability to buy inventory, reduce payables, take discounts with your own suppliers, or negotiate better pricing.
2 KEY POINTS IN NON BANK A/R FUNDING
Two other key factors come into play when considering non-bank receivables funding. First of all, you aren't taking on debt; the accounting treatment of A/R financing is simply not ' borrowing' when recorded by your accountants. And finally, you can of course bring in new equity into your firm, or consider a working capital term loan - but those two solutions simply dilute ownership and bring debt to the balance sheet.
The Confidential A/R financing we mentioned simply allows you to receive all the benefits we mentioned from a factoring company but it’s no longer a ' 3 way ' - because you bill and collect your own receivable with no notice to any client or vendor.
CONCLUSION
Is a receivable credit solution in the works for your firm when you're considering financing accounts receivable. It just might be the ' golden chance ' for cash flow peace of mind. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can guide you through the myriad of lingo and options for this very popular method of financing growth.
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Stan Prokop
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