YOUR COMPANY IS LOOKING FOR CASH FLOW FINANCING VIA
THE A/R FINANCE SOLUTION!
INVOICE FACTORING AND CONFIDENTIAL INVOICE DISCOUNTING IN CANADA
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Financing & Cash flow are the biggest issues facing business today.
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AR Financing in Canada allows business owners and financial managers to remove some of the ' panic ' that sets in when a cash flow crisis seems to be threatening and just around the corner. Numerous solutions exist for fixing a working capital shortage - one of them, confidential invoice finance, seems tailor-made for... the fix on those outstanding invoices in your sales ledger. Let's dig in.
A/R FINANCING, AKA FACTORING, IS THE MOST POPULAR TYPE OF WORKING CAPITAL FINANCING IN CANADA
A/R Finance is really a subset of the broad business solution called 'asset-based lending. Many people refer to it simply as ' factoring ' - although that is a generic term covering numerous receivable finance types. They include ' invoice discounting, ‘'notification factoring,' ' forfaiting, '' spot factoring, 'non-recourse factoring,' etc. .. Etc..! Large well-known corporations, some of the largest in the world in fact call it ' Securitization' - they move receivables off the balance sheet constantly in bulk by selling them.
7 PARK AVENUE FINANCIAL RECOMMENDS CONFIDENTIAL RECEIVABLES FINANCING AS THE BEST SOLUTION TO CASH FLOW NEEDS
It goes without saying that some of that terminology can be a bit confusing in this third-party factoring and invoice discounting, so we'll be zeroing in on just the key basics, including our recommended solution for this method of Canadian business financing, Confidential A/R Finance.
HISTORY AND BACKGROUND ON FACTORING
It's interesting to note also that for those clients we talk to that have never even heard of the term, in fact, it's been around and in practice since pre-Roman Empire times. And the word ' factor ' comes from Latin, meaning ' he who does things. ' That ' doing things ' revolves around monetizing the sale via the monetization of accounts receivable between a ' sellers ‘... that's you, and your customer.
3 TYPES OF 7 PARK AVENUE FINANCIAL CLIENTS USE A/R FINANCING
The majority of clients who use A/R finance solutions are in a couple of basic categories - they can't get all the financing they need from a bank ( or can't qualify for any finance) or are in special situations turnaround, growth, etc. In most cases, solutions such as Confidential Invoice Financing is an interim solution, possibly for a year or two, allowing customers to migrate back to more traditional financing facilities?
TRADITIONAL ' OLD SCHOOL' FACTORING
In traditional ' factoring ' solutions, the concept of ‘notification’ is key. Here the lender, usually a commercial finance firm, requires that your clients be notified about the process of financing your AR. That's because the paperwork surrounding this type of facility is unlike the bank. Banks' collateralize' your receivables; commercial factor firms have paperwork that specifies that sales invoices you finance are in fact ' sold ' to them.
IT'S ALL ABOUT CONFIDENTIALITY
The way to beat any notification, i.e. being ' Confidential ' about this whole process, is to enter into an invoice financing facility that allows you to bill and collect your own invoices without anyone knowing how you are financing your business. Rates and paperwork are essentially the same.
In some cases, factoring accounts receivable can be part of an asset-based lending facility, allowing you to also finance inventory and equipment as a part of your non-bank business line of credit.
Accounts receivable financing solves the unpaid invoices problem - So, consider letting ' he who does things ' work for your firm's cash flow needs. Seek out and speak to 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can assist you with AR financing that works best and removes the ' panic ' around cash flow needs.
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