YOUR COMPANY IS LOOKING FOR BUSINESS RECEIVABLE FINANCE
SOLUTIONS THAT WORK!
LOOKING FOR A GREAT ACCOUNTS RECEIVABLE FACTORING COMPANY?
UPDATED 10/17/2025
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Stop Funding Your Customers' Cash Flow With Your Own Survival
Factoring companies offer some of the most accessible and flexible cash flow financing solutions in Canada
Breaking Free from the Payment Waiting Game
Your invoices sit unpaid while rent, payroll, and suppliers demand immediate payment. The stress compounds as growth opportunities require capital you can't access.
Let the 7 Park Avenue Financial team show you how AR factoring companies advance up to 90% of your invoice value within 24 hours, eliminating the cash flow gap that's strangling your business potential.
Factoring receivable company solutions offer some of the most flexible and accessible cash flow financing methods in Canada. One of these options stands out as more effective than the rest, though many Canadian business owners and financial managers may not know it. Why does this specific type of financing deliver such strong results—and what makes it better? Let’s dig in.
WHAT IS YOUR CASH FLOW GOAL?
Whether your business is a start-up, SME, or large corporation, the goal is always to maximize cash flow for operations and growth. Along the way, prudent management also seeks to maintain low or acceptable bad-debt losses.
IS THERE A BANK ALTERNATIVE TO FINANCING ACCOUNTS RECEIVABLE
When companies cannot access traditional bank financing or business lines of credit, they look for alternatives. In recent years, that alternative has been factoring—also called receivables financing. Enter the factoring company.
Business owners often prefer not to take on new debt through loans. The ability to monetize assets they already hold—such as accounts receivable—creates a significant advantage.
LET 7 PARK AVENUE FINANCIAL HELP YOU UNDERSTAND THE TERMINOLOGY
It’s not always intentional, but the industry often confuses business owners with unclear terminology, fees, and contract structures. Understanding how factoring works—and what it truly costs—is essential.
Factoring is short-term financing at its best. Financing receivables for a monthly fee can make sense for many companies. Remember, the factoring fee is a service charge, not an interest rate.
Accessing cash within 24 hours of issuing an invoice transforms your firm into an automatic cash-flow generator. Understanding fees and contract terms ensures you maximize the benefits of receivables financing.
WHAT IS YOUR FIRM’S INVESTMENT IN ACCOUNTS RECEIVABLE
Any company selling on credit to business or government clients can access accounts receivable financing. Different industries have unique client profiles and payment timelines.
Verticals such as staffing companies, trucking firms, and wholesale distributors to major retailers all face varied payment terms.
The 7 Park Avenue Financial team can help you find a factoring partner that understands your business model and industry.
4 USES OF A/R FACTORING
The most common use of invoice factoring and receivable financing is to fund daily operations and growth. However, A/R factoring also supports a range of strategic needs:
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Introduction of new products or services to Canadian or U.S. clients
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Seasonal sales or financing fluctuations
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Start-up working capital
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Management buyouts and acquisition strategies
ALL RECEIVABLES CAN BE FINANCED
Some Canadian companies serve both domestic and international clients. In those cases, receivables can still be financed—but they often require credit insurance, especially when selling outside North America.
WHAT IS THE BEST FACTORING TYPE SOLUTION FOR FACTORING OR ACCOUNTS RECEIVABLE?
The recommended option is Confidential Receivable Financing—also known as Non-Notification Factoring.
Under this structure, your firm bills and collects its own receivables. You maintain full customer relationships while accessing immediate cash from each sale. With the right facility, rates are competitive, and contracts remain flexible.
HOW DOES CONFIDENTIAL FACTORING WORK?
The day-to-day operations of a confidential A/R facility are simple. As invoices are generated, your company can finance up to 90% of their value immediately.
When clients pay, the remaining balance—minus a small financing charge—is released to your bank account. Rates are competitive with traditional factoring services.
You can choose between recourse and non-recourse factoring, depending on your credit-risk tolerance. This structure eliminates slow-paying receivables and improves working capital without adding debt.
Discover how factoring receivable company solutions help Canadian businesses unlock working capital, improve cash flow, and grow—without new debt. Learn how confidential receivable financing works and why it’s the best factoring option.
CASE STUDY: AR FACTORING COMPANY BENEFITS
Company: ABC Company, a mid-sized Ontario metal fabrication firm serving the automotive and aerospace sectors.
Challenge: ABC Company landed a $2.4 million automotive contract requiring $1.2 million in materials and labor before payment. Their $300,000 bank credit line couldn’t cover the costs, and the bank refused an increase due to existing equipment loans. Without extra working capital, the company risked losing the order and future business.
Solution: ABC Company partnered with a Canadian AR factoring firm specializing in manufacturing. Within 48 hours of invoicing, they received 85% of the contract value—$2.04 million in total. The advance allowed them to buy materials at a discount, hire skilled labor, and complete production ahead of schedule.
Results: After factoring fees of 2.5%, ABC Company earned $380,000 in profit and secured a long-term customer generating $4.2 million in annual revenue. Factoring improved cash flow, enabling acceptance of three more major contracts and 65% revenue growth. Within 18 months, they qualified for a higher bank line and continued using factoring strategically for large projects.
Key Takeaways
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Factoring receivable solutions are a leading alternative to traditional bank financing in Canada.
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Businesses can convert unpaid invoices into immediate cash flow without adding debt.
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Factoring fees are service charges—not interest rates.
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Confidential (non-notification) factoring lets you keep client control while accessing fast funding.
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Accounts receivable financing supports start-ups, seasonal growth, and acquisition financing.
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Receivables from U.S. and international clients can be financed—often with insurance.
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Partnering with an experienced company like 7 Park Avenue Financial ensures transparency and the best fit for your industry.
CONCLUSION
If your business struggles with cash flow due to unpaid invoices, factoring receivable company solutions can help you accelerate growth, maintain supplier relationships, and avoid new debt.
Done right, it’s your version of the ultimate business credit line.
Small businesses across Canada face ongoing working capital challenges. Access the right A/R finance or factoring solutions
Call 7 Park Avenue Financial—a trusted, experienced, and credible Canadian business financing advisor ready to help you find the right solution for your needs.
FAQ
What is an AR factoring company and how does it work?
An AR factoring company buys your unpaid invoices at a discount and advances up to 90% of the value within 24 hours. Once your customer pays, you receive the balance minus fees. This turns receivables into instant working capital without taking on debt.
Why choose AR factoring instead of a bank loan or credit line?
Factoring offers fast, flexible funding based on your customers’ credit—no collateral or long approval process needed. Unlike bank loans, available funding grows automatically with your sales.
What should I look for in an AR factoring company?
Choose a factoring company with industry expertise, transparent fees, fast funding, and flexible contracts. Prioritize firms experienced in your sector that protect customer relationships and understand Canadian financing laws.
BUSINESS ELIGIBILITY AND APPROVAL
Which businesses benefit most from AR factoring services?
B2B companies with commercial or government clients on net-30 to net-90 terms benefit most—especially manufacturers, distributors, staffing firms, and transportation companies.
How do factoring companies approve a business?
Approval focuses on your customers’ credit, payment history, and valid invoices—not your own credit. Even startups or businesses with limited collateral can qualify.
Can startups or businesses with poor credit qualify?
Yes. Since approval depends on your customers’ credit, not yours, startups and credit-challenged firms often qualify for factoring when banks decline.
What documents are required to start factoring?
Most companies request business registration, AR aging reports, sample invoices, bank statements, and customer contact details. Setup is usually completed within five business days.
FUNDING, COST, AND FLEXIBILITY
How fast can I get funding after submitting an invoice?
After approval, most factoring companies advance 80–90% of invoice value within 24 hours. Ongoing funding becomes routine once accounts are verified.
What does AR factoring cost compared to bank financing?
Typical factoring fees range from 1–5% of invoice value, depending on customer credit and terms. Unlike bank loans, fees apply only to factored invoices.
Can I choose which invoices to factor?
Yes. Selective factoring lets you choose individual invoices, while whole-ledger factoring lowers costs by factoring all approved accounts.
What happens if a customer doesn’t pay?
In recourse factoring, you buy back unpaid invoices. In non-recourse factoring, the factoring company assumes credit risk if your customer becomes insolvent.
CUSTOMER COMMUNICATION AND CONFIDENTIALITY
Will customers know I’m using a factoring company?
Usually yes—customers are notified where to send payment. Non-notification options exist but may cost more. Most buyers view factoring as standard practice.
FACTORING VERSUS OTHER FINANCING OPTIONS
How does AR factoring differ from invoice discounting or asset-based lending?
Factoring sells your invoices for cash. Invoice discounting is a loan secured by receivables, while asset-based lending uses multiple assets for a credit line. Factoring is fastest but typically has higher transaction costs.
BENEFITS OF AR FACTORING
How does AR factoring improve supplier relationships?
Steady cash flow lets you pay suppliers early, capture discounts, and strengthen relationships—often offsetting factoring costs.
How can factoring help my business grow?
Factoring frees up cash to accept larger contracts, fund payroll, or buy materials upfront. It removes growth limits caused by slow customer payments.
How does factoring reduce cash flow stress?
It eliminates payment delays and cash juggling. With predictable cash flow, you can focus on operations instead of collections or credit control.
Can factoring help me win more contracts?
Yes. You can offer flexible payment terms and take on larger projects without cash constraints—helping you outbid competitors.
Does factoring improve my business credit over time?
Consistent payments supported by factoring strengthen your credit profile, helping you later qualify for traditional bank financing.
COMMON CONCERNS AND USAGE
Is AR factoring considered a loan?
No. It’s a sale of receivables, not debt. Factoring doesn’t affect your balance sheet or require monthly loan payments.
Which industries in Canada use AR factoring most?
Staffing, trucking, manufacturing, oil and gas, construction trades, and wholesale distribution are the most common users of AR factoring.
Can I use factoring occasionally or must it be ongoing?
You can factor invoices only when needed (“spot factoring”) or on a regular basis. Many companies start occasionally and expand as cash needs grow.
Will factoring affect my future bank financing?
Properly structured factoring can enhance your bank creditworthiness by maintaining positive cash flow and supporting steady growth.
How long do businesses typically use factoring services?
Some use factoring temporarily during expansion, while others maintain long-term partnerships because the flexibility supports ongoing growth.
STATISTICS ON AR FACTORING
- The global factoring market exceeds $3 trillion annually, with North America representing approximately $350 billion in factored receivables.
- Approximately 80% of factoring clients are small to medium-sized businesses with annual revenues between $500,000 and $10 million.
- Average factoring fees range from 1% to 5% of invoice value, with the median around 2.5% for 30-day payment terms.
- Businesses using AR factoring report average funding times of 24-48 hours compared to 3-6 weeks for traditional bank financing.
- Studies indicate that 65% of businesses cite improved cash flow as their primary reason for using factoring services.
- The Canadian factoring market grows approximately 7-9% annually, outpacing traditional commercial lending growth.
- Research shows that 73% of factoring clients remain with their factoring company for more than two years.
- Businesses using factoring services report 30-40% faster growth rates compared to similar companies relying solely on traditional financing.
CITATIONS
- Klapper, Leora. "The Role of Factoring for Financing Small and Medium Enterprises." Journal of Banking & Finance 30, no. 11 (2006): 3111-3130. https://www.sciencedirect.com
- Soufani, Khaled. "On the Determinants of Factoring as a Financing Choice: Evidence from the UK." Journal of Economics and Business 54, no. 2 (2002): 239-252. https://www.elsevier.com
- Bakker, Marie-Renée, Leora Klapper, and Gregory F. Udell. "Financing Small and Medium-Size Enterprises with Factoring: Global Growth in Factoring—and Its Potential in Eastern Europe." World Bank (2004). https://www.worldbank.org
- Summers, Bruce, and Nicholas Wilson. "Trade Credit and Customer Relationships." Managerial and Decision Economics 24, no. 6-7 (2003): 439-455. https://onlinelibrary.wiley.com
- Cuñat, Vicente. "Trade Credit: Suppliers as Debt Collectors and Insurance Providers." Review of Financial Studies 20, no. 2 (2007): 491-527. https://academic.oup.com
- Industry Canada. "Financing Small and Medium Enterprises: Canadian Lending Practices." Government of Canada (2023). https://www.ic.gc.ca
- 7 Park Avenue Financial ." Finance Factoring Receivable Financing Canada" https://www.7parkavenuefinancial.com/finance-factoring-receivable-financing-canada.html
- Mediu/Stan Prokop ."Receivables Factoring Explained: Fast Cash Flow Solutions for Canadian Business"https://medium.com/@stanprokop/receivables-factoring-explained-fast-cash-flow-solutions-for-canadian-business-92a41567bc16
