YOUR COMPANY IS LOOKING FOR A/R FINANCE HELP!
Improve Cash Flow Today with Receivables Financing
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
Financing of receivables is an essential strategy for converting outstanding invoices into immediate cash flow, providing businesses with crucial liquidity.
Unlock instant cash from your invoices and keep your business thriving!
7 Park Avenue Financial originates business financing solutions for Canadian Businesses – We offer Financing of Receivables & solutions that solve the issue of cash flow and working capital – Save time and focus on profits and business opportunities
Canadian Business Financing with the intelligent use of experience
Canadian Financing of Receivables
Accounts receivable funding, appropriately implemented, is a great way to put your cash flow financing needs on ' autopilot.' Would AR factoring work for your firm, and more importantly, how, in fact, does it work? Let's dig in.
DISCOVER THE POWER OF FINANCING RECEIVABLES
Securing your business's financial health often hinges on having access to quick and reliable funding options.
Receivables financing, a strategic approach where businesses leverage their outstanding invoices to secure immediate cash, offers a vital solution for maintaining cash flow and fueling growth.
This method allows businesses to convert sales on credit into instant working capital, ensuring operational stability and expansion opportunities without incurring additional debt.
SALES DO NOT EQUAL CASH!
In business, it’s a lot about sales revenues and cash flow drivers (there are a couple hundred other issues, but let’s focus on these!).
Accounts receivable financing works by advancing a portion of your outstanding invoices, providing immediate cash flow to your business.
The core of our issue is that your sales rarely equal the amount of cash your company has in the bank. A factoring program allows companies to monetize their 2nd most liquid current asset - receivables!
IS YOUR BUSINESS CAPITAL INTENSIVE?
Those two issues are often key predictors of your current and future business health.’
Another hard reality is that all businesses, small or large, are not created equal - as such, some need a lot more cash on hand than others. Accounts receivable financing companies are crucial in providing capital to businesses requiring heavy fixed asset investment.
A strong example is a capital-intensive industry requiring heavy fixed asset investment versus a service business that might carry no inventory and only requires receivable finance to support growth.
GROWING SALES REQUIRES A HIGHER INVESTMENT IN ACCOUNTS RECEIVABLE
Unless you’re a retailer selling on cash, your only cash inflows are the A/R collections in your firm. An accounts receivable financing agreement can be structured as an asset sale or a loan, allowing businesses to access immediate capital based on their outstanding invoices.
(The only other way to get cash is to get outside equity or to sell assets) One of the great ironies of business is that you can grow and become profitable on paper and go broke on a cash flow basis. Ouch!
WHAT IS OPERATING CASH FLOW?
We’re focusing on operating cash in our discussion—we’re not talking about the ‘investing’ or ‘financing’ portion of the three-part cash flow statement. Focusing on operating cash will always keep your business running normally.
Accounts receivable is recorded as an asset on the company's balance sheet, and financing these receivables can significantly improve cash flows.
WHY CONSIDER A/R FINANCING
Consider accounts receivable factoring as a solution to avoid small or large cash flow crunches. The ' unlocking ' of those receivables and converting them into cash will put your company into cash flow problem immunity.
While most businesses sell on 30-day terms, most clients these days, small or large (the large clients are the worst?!), tend to pay you in 60-90 days. Slow-paying customers are almost the norm these days!
WHAT IS THE BEST FACTORING COMPANY SOLUTION?
AR Factoring, including our recommended version - CONFIDENTIAL RECEIVABLE FINANCING) allows you to generate cash as you generate sales. Using a 30-day collection period will cost you approximately 150-200$ on a $ 10,000.00 invoice—the key benefit - is no A/R and cash in the bank.
While those financing costs are higher than a Canadian chartered bank facility, they provide you with all the cash flow and working capital, you need to run your business, meet your obligations, etc.
While the only reason your firm would consider ACCOUNTS RECEIVABLE FUNDING is its inability to get proper bank financing, we point out to clients that many of the largest corporations in the world utilize this same method of financing -
They call it something fancier, such as ' securitization' etc.. In many cases for larger firms, the costs are equal to or less than a Canadian chartered bank facility.
WHAT FACTORS AFFECT ACCOUNTS RECEIVABLE FINANCING COST
Factors affecting your pricing and approval include your business's size, the quality and size of your A/R base, etc.
Factoring fees are expressed as a ' fee' as opposed to an interest rate, and this type of financing is the perfect third-party funding solution for the cash you need today to run your business on a daily basis. The invoice amount has a factoring fee deducted, which is typically in the 1-2% range.
KEY TAKEAWAYS
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Invoice Factoring - Convert invoices into cash by selling them to a third party.
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Accounts Receivable Financing - Use receivables as collateral to secure a loan.
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Cash Flow Management - Ensure a steady inflow and outflow of cash to maintain business operations.
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Credit Risk Assessment - Evaluate the creditworthiness of customers to minimize risks.
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Working Capital Solutions - Implement strategies to maintain daily business operations efficiently.
CONCLUSION
If you're considering a receivable financing solution and wish to consider the ' autopilot' features of AR factoring in Canada, to get started on your short-term balance sheet financing solution.
If you need immediate cash today, call 7 Park Avenue Financial, a trusted, credible, and experienced Canadian business financing advisor who can assist you with your Canadian business financing needs.
FAQ
How does accounts receivable financing work?
Financing of receivables involves selling your outstanding invoices to a third party or using them as collateral for a loan, providing immediate cash flow for your business.
What are the benefits of financing receivables?
The benefits include:
Immediate cash flow,
Reduced credit risk
Improved business liquidity
No additional debt on the balance sheet
Who can benefit from receivables financing?
Small to medium-sized businesses, especially those with extended payment terms or experiencing cash flow gaps, can greatly benefit from this financing method.
What is the difference between invoice factoring and accounts receivable financing?
Invoice factoring involves selling your invoices to a third party at a discount, while accounts receivable financing uses the invoices as collateral for a loan.
How can receivables financing improve cash flow?
Receivables financing provides immediate cash based on your outstanding invoices, allowing you to manage expenses, invest in growth, and maintain operational stability.
What is invoice discounting?
Invoice discounting is a process where businesses sell their invoices at a discount to receive early payment, improving cash flow without waiting for customer payments.
How does credit risk assessment impact receivables financing?
Credit risk assessment evaluates customers' creditworthiness, which helps determine the likelihood of payment and the terms of financing.
What are working capital solutions?
Working capital solutions are financial strategies designed to ensure a business can cover its short-term liabilities and operational needs.
How does cash flow management benefit a business?
Effective cash flow management of accounts receivables ensures that a business has enough cash to meet its obligations, invest in opportunities, and avoid financial distress.
What are the options for small business financing?
Small business financing options include bank loans, lines of credit, invoice financing, and alternative lending solutions. Business owners should understand accounts receivable financing vs factoring of unpaid invoices before they can collect payment before the customer pays.
What types of businesses use receivables financing?
Accounts receivable financing advantages accrue to Businesses with significant outstanding invoices or those experiencing cash flow gaps often using receivables financing from a financing company to maintain liquidity.
How does receivables financing impact credit management?
It can improve credit management by providing immediate funds and reducing the need to chase late payments, thereby focusing on core business activities.
What are the risks involved in receivables financing?
Risks include potential costs and fees, the impact on customer relationships, and the possibility of not receiving full invoice value. Understanding these risks can help mitigate them effectively.
