AR Financing Account Receivable Factoring | 7 Park Avenue Financial

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AR Financing Just Got Seriously Better: Account Receivable Factoring Definition Redefined
Your Company Signed Up For A/R Financing & Didn’t Get What You Thought?



 

YOUR COMPANY IS LOOKING FOR  A/R FINANCE  !

FACTORING ACCOUNTS RECEIVABLE 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

accounts receivable factoring

AR (account receivable) financing is a critical aspect of any, large or small, commercial business that sells on credit.   That time gap from when you are finally able to issue an invoice, to when you get paid is one of the most critical time periods in any business. More often than not that time gap needs to be financed - in the right manner.  Accounts receivable factoring company solutions just might be the solution you are looking for! Let's dig in.

 

ARE YOU USING THE BEST TYPE OF FACTORING FOR YOUR CASH FLOW NEEDS?

 

Many clients we speak to have in fact already ' signed up' for some form of receivables factoring finance - in certain cases, they are ' factoring' their A/R. The challenge then? It's just a case of what they got isn’t necessarily what they signed up for. And a small handful of key tips can help you avoid any mistakes in this area .

 

WHY DO FIRMS FINANCE A/R? IS FACTORING RECEIVABLES A GOOD IDEA?

 

Why do firms finance A/R? As we have hinted it’s simply that in corporate finance the ' working capital cycle' needs to be addressed. And typically the way to ' shorten ' than waiting to get paid scenario is addressing the financing of your firm’s receivables. A/R Financing allows companies to increase their cash balances and offset working capital shortages.

 

BANK  ACCOUNTS RECEIVABLE FINANCING VERSUS FACTORING SERVICES

 

When firms use a third-party finance company, as opposed to traditional bank financing, to finance working capital it's really the type of facility and terms that ' make or break' a good deal in this area. It is probably apparent to all, but we will say it never the less, that Canadian chartered bank financing is simply not available to all commercial borrowers in Canada. And sometimes, even when it is, it's not enough when you are pledging accounts receivable / assigning a/r to the bank. A short term bank loan might be the solution, but most clients are looking for a longer-term view of the proper day to day funding for growth in their company.

 

One of the true ironies of Canadian business financing is that our banks, in general, are not generally in favour of meteoric sales growth - the type that requires huge bulges in financing needs.  As someone once put it, the challenge is to keep your company both ' going' and ' growing'!

 

factoring of accounts receivable

 

WHY DO COMPANIES FACTOR THEIR ACCOUNTS RECEIVABLES

 

So why do small businesses turn to a commercial finance company for factoring of their receivables as it sells its accounts?  It's really the reasons, and how the financing addresses those reasons properly that’s at the crux of our discussion today.

 

And those reasons? They more often than not are as follows:

 

 

5 REASONS TO FACTOR YOUR ACCOUNTS RECEIVABLES VIA FACTORING COMPANIES

 

1. Inability to secure bank financing (company too new or no established track record - factoring financings the balance sheet!

 

2. A/R Exposure to government receivables or out of country sales

 

 

3. Financing required is often greater than available through a bank even if the company were approved by its bank

 

4. Fast timing is required to address large orders/contracts

 

5. The need to address a slow down in payments from key clients

 

 

WHAT IS THE BEST TYPE OF FACTORING AND RECEIVABLE FINANCE

SOLUTION? 

 

So is there a ' perfect’ factoring facility that addresses and cures all of the above issues? One that we here at 7 Park Avenue Financial feel does that is Confidential A/R Financing. It allows you to bill and collect your own receivables, is competitive in price, requires no notices to your clients, and allows you to margin up to 90% of your AR on an ongoing basis as your firm ' goes; and ' grows'! Your company can also choose between recourse factoring and non recourse factoring, depending on the amount of risk you want to absorb in your a/r portfolio and average invoice amount,etc

 

receivables factoring

CONCLUSION

 

Where do things go wrong then in small business invoice factoring? It's simply when the business owner or financial manager doesn't understand the paperwork, factoring discount fee pricing, and ongoing management of this type of facility. One way to correct that? Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in your account receivable factoring needs.

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7 Park Avenue Financial/Copyright/2021/Rights Reserved

' Canadian Business Financing With The Intelligent Use Of Experience '

 STAN PROKOP
7 Park Avenue Financial/Copyright/2022

 

 

 

 

 

Stan Prokop is the founder of 7 Park Avenue Financial and a recognized expert on Canadian Business Financing. Since 2004 Stan has helped hundreds of small, medium and large organizations achieve the financing they need to survive and grow. He has decades of credit and lending experience working for firms such as Hewlett Packard / Cable & Wireless / Ashland Oil