How Does Non Bank Receivable Financing Work?
Confidential A/R Finance Is The Best Kept Secret In Business Credit Finance
Information On Confidential Invoice Finance
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Accounts Receivable financing isn't always in the headlines - we're the first to admit that. But it should surprise business owners and their financial managers that thousands of Canadian firms are moving toward a working capital financing facility known as receivable factoring.
There are numerous reasons why businesses choose or must choose to finance their sales outside traditional bank norms. One reason might be they aren't able to access all the business credit they need; in other instances, they might not qualify for any traditional bank credit solution while at the same time their business is growing!
Confidential Invoice Financing
Here is a question. What if you could get invoice finance that would allow you to bill and collect your own receivables under this facility? Possible? Absolutely.
Canadian business financing solutions such as Confidential A/R Finance provide your business with unlimited cash flow, and, unlike your competitors, you, not a third party, are in control of your facility.
Most Canadian business owners and financial managers know a bit about how factoring, aka receivable financing works.
The Confidential AR Financing Difference:
Factoring, we call it 'old school factoring, is a process whereby you sell your receivables and receive immediate, same day cash for those invoices. 99.9% of all the financing done in Canada under this business model has the third party lender firm collecting your invoices and notifying the customer. They also follow up for collection and interact with your customer, because, as we said, you have sold them your receivable, or receivables in whole.
Clients of 7 Park Avenue Financial like the end result:
Instant Cash Flow
Constant Working Capital replenishing
What they don't necessarily like is the 3rd party firm taking over the client relationship as it relates to accounts receivable.
Enter Confidential Receivable Financing - Under this scenario, your receivables are billed and collected by your firm, and there is no third-party interference with the relationship you have with clients when it comes to billing and collecting.
Business owners like this latter model - The bottom line is that your financing relationship is not disclosed to your customers, and that’s a good thing. Your firm achieves all of the benefits of accounts receivable financing, but under the confidential invoice finance model your receivable factoring is in your control.
Under traditional U.S. and U.K. type receivable factoring, your customers receive a letter from either yourself or the factor firm, notifying your clients about the issue of your firm having sold its receivables. If you don’t care about that, no problem...! But if you do care about what the perception of that letter might be then you should consider confidential invoice finance.
Using a solid non-bank A/R finance model gives you a competitive advantage - It differs from bank financing and is the alternative to the traditional factoring of invoices that we have talked about here. The bottom line is there is a world of difference in the facilities offered.
Cost Of Factoring / Confidential A/R Finance
The cost of confidential invoice discounting is the same as traditional factor financing - so that’s a good thing! This method of financing is costlier than bank interest rates but does not require the significant emphasis that banks place on personal guarantees, outside collateral, ratios, covenants, credit limits, etc. In fact, business owners may be surprised to know that credit limits are virtually unlimited if your business has the sales levels to justify increases in the facility and that the facility is operating properly.
Speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success, one who will assist you in closing this valuable type of working capital financing solution.
' Canadian Business Financing With The Intelligent Use Of Experience '