YOUR COMPANY IS LOOKING FOR A RECEIVABLE FACTORING FIRM!
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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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7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8
Email = sprokop@7parkavenuefinancial.com
Receivable factoring companies in Canada. Can a good one save you money on A/R financing costs, while delivering the benefits of Canada's newest cash flow financing tool? We think so .. and here's why.
As most business owners and managers know, it's not always about the obvious in business. Sometimes those ' subtle nuances ' are quite important! So while the obvious benefit of AR Finance is simply receiving the majority of your cash for sales you generated that day this overall financing strategy has other benefits also. And while key benefits might be the same, the type of firm you deal with and how they price their financing is key. That's where the ' saving money ' concept comes in where we're doing apples to apples comparison.
One way that many firms in fact do not assess a receivable finance offering is the concept of being able to alter their payment terms strategy. If the business owner/manager was previously unable to compete with others offering your clients better payment terms you have now levelled the playing field. As long as your gross margins can absorb the cost of that 30 days of extra financing, or 60???.. you're in a position to potentially gain more business with the use of receivable factoring companies.
So back to those nuances. What do you really need to focus on after you have decided to adopt an A/R financing strategy? First of all you need to understand how the receivable finance firm makes it money, as all businesses are of course focused on making reasonable profits relative to their risk.
In factoring your pricing is going to come from an analysis of your total sales volume, how much you’re going to finance on an ongoing basis, the average size of your invoices, the number of clients, and the overall general creditworthiness of your firm and your clients. With A/R finance your firm doesn't have to have the same level of bank quality financial statements that you would in fact require to be able to borrow these sums from the bank.
So let's get back to some of those nuances, which, when understood make your firm a winner in the cash flow and working capital game. It feels like a game sometimes, doesn't it? as do other aspects of business.
A solid receivable factor company won’t insist you finance all your sales, especially if you don't need that extra cash. Remember also that a good partner finance firm will be charging you on a per diem basis, with no tricks in between that. What does that mean? Simply that if your client pays in 42 days as an example that you are in fact only charged for 42 days, not the nearest increment of 45 or 60 days!
We encourage clients, either on their own or with a credible financing advisor to understand the true benefits of asset turnover. Prior to cash flow financing using factoring your firm was unable to significantly grow sales and borrow all the working capital you need to achieve that goal.
So when you use factoring to eliminate the cash flow gap you will find that your income statement and revenues and profits are nicely positioned to enhance your business significantly. Profits don't equal cash flow as most business owners painfully find out - and that’s where A/R finance solves the mystery of growing your business with all the capital you need.
One final tip. And as far as nuances go, it’s a big one. Consider a confidential invoice factoring strategy. You will achieve all the benefits of the ' main street' ' ' traditional' factoring offered by most companies while at the same time maintaining full control of all your billing, collecting and client relationships.
Want to understand some of those ' nuances' in a better fashion. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with a working capital solution and strategy that makes sense.
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Stan Prokop 7 Park Avenue Financial/Copyright/2020
