You Are Looking for Canadian ABL Services and Financing!
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Financing & Cash flow are the biggest issues facing businesses today
Unaware / Dissatisfied with your financing options?
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Email - sprokop@7parkavenuefinancial.com
ASSET BASED LENDING IN CANADA / GROWTH FINANCING FUNDING!
It's always about the bank. Well... Not always...
It seems that Canadian business financing continues to evolve and Canadian ABL services via asset-based financing credit facilities are slowly getting to the top of the popularity pile versus bank credit and term loans.
WHY IS ASSET-BASED FINANCING THE NEW ALTERNATIVE IN BUSINESS CREDIT
Why this type of financing work well and why does is it becoming the accepted alternative to traditional Canadian chartered bank financing? Asset based lending banks also exist in Canada and provide abl solutions , as an alternative to bank cash flow lending and bank unsecured loans.
Although it might seem that the Canadian business and economic environment changes quickly these days we maintain that for the last two or 3 years the one thing that hasn’t changed is the ability for Canadian business owners and financial managers to get 'traditional' financing from those great folks at the bank.
Skepticism and bank regulations in Canada seem to eliminate more and more qualified business borrowers every day. So it’s a struggle and if you are a small or medium-sized firm in Canada the ability to grow or change your business is difficult.
ASSET BASED REVOLVING LINES
Enter ABL lending in the Canadian marketplace. This type (we call it non-bank) of revolving credit facility is the new ' band-aid ' for almost any size business, filling the void between traditional financing via asset secured loans.
So why an asset is based lending facility able to work for your firm when a bank facility might not even is attainable? We guess it’s about risk and reward, in that for the same or higher cost almost any decent-sized business has the ability to qualify for ABL services and financing. Asset lending values will always have more borrowing margin power for your business via fix asset facility limits based on the current value of the assets.
The other side of the coin is also that the whole approval process is often quicker, in that there is only one key agenda item to review - your assets. Typically these assets are receivables; inventory and physical assets such as equipment, with real estate a borrowing possibility also, included right in your asset-based lending facility.
Asset based lending for real estate is usually structured as term loan advances based on a loan-to-value formula.
ABL ADVANTAGES - HOW ASSET BASED LENDING WORKS
We speak of the 'power' of ABL. The true power lies simply in the fact that the assets we mentioned that are used as collateral are margined significantly higher than in the manner that a bank would margin those same assets. So it isn’t the strength of your financial statement that has the power - it’s those 'assets' within the financials!
Asset based lending rates are usually higher but not always, and the interest rate on ABL loans has never been more competitive. Many businesses refinance existing debt via tailor-made ABL lending solutions.
The broad appeal of asset based lending ABL also lies in the fact that it’s flexible, the other side of our ABL power equation. Your firm doesn’t necessarily have to be profitable (it helps... but is not required) and even if you face current financial challenges and setbacks, you are still eligible. Even demand loan clients that have had their loan called can use ABL to escape from the restrictive claws of a special loans environment.
Asset financing is known as having a covenant light structure, allowing firms to be less captive to bank ratios and other restrictions imposed by banks via conventional lending criteria.
ASSET BASED LENDING CANADA
So what's our bottom line - it is simply that if the Canadian banking environment continues to be unable to serve the demands of fast-growing or challenged businesses... well... ABL financing services will step in and nicely fill that gap.
CONCLUSION - ASSET BASED FINANCING - COLLATERAL LOANS ON BUSINESS ASSETS
Ultimately it still might be your business goal to obtain a ' traditional ' facility. That’s ok of course. In the meantime though consider the true power of asset based lines of credit as a funding option that will meet all your financing needs... Today! Why choose asset based lending ? Speak to 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor to eliminate that uphill financing battle you've been facing on your growth opportunities via the funding of your company's assets and sales via ABL solutions.!
FAQ FREQUENTLY ASKED QUESTIONS PEOPLE ALSO ASK MORE INFORMATION
What is asset-based lending?
Asset based lending provides line of credit or term loan structures secured by the collateral of the business. The traditional operating facility advances in abl origination involves financing specific assets via an operating line that provides more financing than an existing operating line with a bank.
Abl transactions are focus on assets of the business, not the emphasis place on cash flows by traditional lenders. ABL financing has a broad appeal to highly leveraged companies by providing an ongoing borrowing base that allows for ongoind servicing of working capital needs, via committed revolving lines and bridge loan strutures.
Many businesses that a in a cyclical or seasonal industry can draw down on advances at interest rates that might be higher but provide business capital . Midsized and large companies as well as smaller businesses in the SME landscape can utilize this method of financing.
What are the types of asset-based loan?
Different types of asset based loans provide for the financing multiple forms of a broad range of business assets such as accounts receivable, inventories and equipment assets of a business. Loan advances are usually based on current appraisal value of fixed assets facility limits which provide more access to business capital.
Real estate financing is also available , typically on a short term basis . Assets are pledged to ABL lenders as collateral for loans and credit facilities.
Click here for the business finance track record of 7 Park Avenue Financial
