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ACCOUNTS RECEIVABLE FINANCING IN CANADA
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Financing & Cash flow are the biggest issues facing business today.
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
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EMAIL - sprokop@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8
AR factoring companies provide a vital cash flow solution for businesses by converting outstanding invoices into immediate funds.
Struggling with cash flow? Discover how AR factoring companies can help you get paid faster and keep your business thriving.
7 Park Avenue Financial originates business financing solutions for Canadian Businesses – We offer AR Factoring & 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
A/R FINANCING -CANADA
Factoring financing companies in Canada can help cure the ' inequality ' that Canadian business owners and financial managers face when arranging working capital and cash flow financing, specifically A/R Receivables finance. Let's dig in.
Is it possible that even Will Shakespeare weighed in our subject of accounts receivable factoring and factoring companies?!
We went back and found some famous sayings he made, and it clearly seems to us that some of his most famous lines potentially referred to Canadian business financing and cash flow finance.
MAXIMIZE WORKING CAPITAL WITH A/R FINANCING
Unlock your business’s cash flow with A/R factoring solutions. Converting outstanding invoices into immediate working capital ensures your operations run smoothly and efficiently. By leveraging your sales and accounts receivable, your company can overcome cash flow challenges, take on new projects, and grow without waiting for customer payments.
Confidentiality in AR Factoring Companies Business Financing
‘MUM’S THE WORD ‘ (From Henry V1) = The reality is that thousands of business owners and financial managers don’t know enough about alternative financing solutions such as accounts receivable factoring and receivable finance.
The truth? Simply put, it is a solid alternative to traditional bank financing when your business can’t access or enough of it. A considerable part of the Canadian business sector now considers this cash flow financing via a factoring company method a quick and accessible popular choice.
THE CHALLENGE OF SMALL BUSINESSES TO ACHIEVE BANK FINANCING AND IMPROVE CASH FLOW
‘RANT’ - (From Hamlet) It’s easy for many business people to ‘rant’ against the banks. Why is that when our banks have one of the strongest reputations in the world?
This is because many businesses lack the track record and financial strength mandated by banks when borrowing for business credit.
Banks in Canada are mandated by government and shareholder requirements to maintain a conservative lending policy. Accounts receivable financing can help small businesses manage cash flow and grow their operations by allowing them to sell their invoices for immediate cash.
WHAT ARE BANK QUALIFICATIONS FOR BUSINESS CREDIT AND LINE OF CREDIT
While rapid growth from the entrepreneur is desired, even dreamed about, banks typically prefer slow and steady, keeping those ratios and covenants intact.
Growth drives the need for continual working capital and cash flow as receivables constantly increase, along with inventories.
And if your firm doesn’t have a pristine balance sheet, or has an operating loss, or perhaps the owners have some personal financial issues… well, the bottom line is that those become new issues to struggle with when attempting bank financing.
Originating in the United States, factoring is currently the most popular subset and solution in the asset-based lending /alternative finance landscape. For businesses with less established credit, factoring can be more accessible than a line of credit, which often requires a good credit score and a low debt-to-income ratio.
For small businesses in Canada, it can be a long time before clients pay the invoice for your products and services - these days, 90 days is not unusual in specific industries!
WHO ARE THE ACCOUNTS RECEIVABLE FACTORING FUNDERS IN CANADA - 7 PARK AVENUE FINANCIAL KEEPS IT ' CONFIDENTIAL'!
“KNOCK KNOCK - WHO’S THERE’ (From Macbeth) - The who’s there refers to your choices when seeking a financing partner for A/R RECEIVABLES finance.
That includes regional firms, small boutique financiers specializing in specific business segments and industries, Canadian and U.S.-owned firms of all sizes, and invoice factoring companies.
Our specific recommendation is that businesses learn about and access CONFIDENTIAL RECEIVABLE FINANCING, which allows them to bill and collect their own receivables without intrusion.
Pricing from invoice factoring services depends on several issues, including invoice amount, the overall credit quality of your customer base, and the size of your facility.
The advance rate on your receivables tends to be in the 90% range, which is a higher level of funding than traditional bank facilities—i.e., more borrowing power!
Receivable factoring offers benefits such as immediate funding and transparency in fees. The industry prices are based on a factoring fee rather than an interest rate.
At 7 Park Avenue Financial, we spend much time explaining that to new clients. Businesses can choose between non-recourse factoring and traditional recourse factoring. If the owner chooses, accounts receivables can also be insured against credit risk.
KEY TAKEAWAYS
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Invoice Financing: Understand how factoring companies convert outstanding invoices into immediate cash to enhance cash flow.
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Cash Flow Management: Learn the importance of maintaining steady cash flow and how factoring can support this.
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Working Capital: Recognize how factoring increases available funds for daily operations.
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Factoring Agreement: Familiarize yourself with the contract terms and conditions between businesses and factoring companies.
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Factoring Fees: Be aware of the costs associated with factoring services and how they impact overall financing.
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Invoice Payments: Efficient management and monitoring of invoice payments through online portals are crucial. Factoring companies often collect payments directly from your customers, ensuring timely recouping of money by collecting on the invoices.
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Most Factoring Companies: Compare the operations and characteristics of most factoring companies to understand the similarities and differences in their services and how they operate.
CONCLUSION
Invoice factoring for working capital is a popular solution in SME Commercial finance in Canada.
Receivables factoring via a trusted finance company partner delivers the funding you need to run your business on a day to day basis without short term business capital worries.
If you want to maximize the availability of working capital from your asset base, call 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can assist you with your asset-based financing needs.
FAQ
What is AR factoring?
AR factoring is a financial solution where businesses sell their accounts receivable to invoice factoring companies in exchange for immediate cash.
How does AR factoring benefit small businesses?
An accounts receivable factoring company provides immediate funds for eligible accounts receivable, improving cash flow and enabling small businesses to manage operations more efficiently. Many industries, ie trucking companies as an example, are huge users of this method of financing their businesses.
What are the costs associated with AR factoring?
Factoring fees from accounts receivable factoring companies typically include a percentage of the invoice value and may vary based on the factoring agreement.
Can AR factoring help with cash flow management?
Yes, AR factoring improves cash flow management by providing quick access to funds from outstanding invoices.
What is the difference between recourse and non-recourse factoring?
Recourse factoring holds the business liable for unpaid invoices, while non-recourse factoring transfers that risk to the factoring company as the factoring company assumes the risk of bad debt .
How do I choose the right AR factoring company?
When selecting an AR factoring company, consider fees, terms, industry experience, and customer service. Additionally, look for companies that offer accounts receivable management services, including credit checks and risk assessment, which can be particularly valuable.
How does AR factoring compare to traditional bank loans?
AR factoring provides quicker access to funds without the need for extensive credit checks, unlike traditional bank loans, which may take longer to process
