Receivable Financing Transforms Accounts Receivable into Instant Working Capital
Stan Prokop
Canadian Business Financing | Cash Flow Financing | Asset Based Lending | Equipment Finance | Lender Financing | Purchase Order Financing | Acquisition Financing | SAAS Financing | Acquisition Financing
Unleash the Power of Your Unpaid Invoices
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YOUR COMPANY IS LOOKING FOR CONFIDENTIAL A/R FINANCING!
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 - [email protected]
7 Park Avenue Financial South Sheridan Executive Centre 2910 South Sheridan Way Oakville, Ontario L6J 7J8
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"Receivables are the lifeblood of a business. Manage them well, and your business will thrive." - Anonymous
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Tired of waiting for payments? Turn your invoices into instant cash with Financing Receivables!
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7 Park Avenue Financial originates business financing solutions for Canadian Businesses – We offer Receivable Financing solutions and working capital solutions ?– Save time and focus on profits and business opportunities
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7 Park Avenue Financial: “Canadian Business Financing with the intelligent use of experience”
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Receivables Financing in Canada
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AR Cash flow financing in Canada should be on your terms. When our clients choose financing and growth funding options utilizing Receivable finance solutions, they prefer that it be their business, not somebody else’s, i.e., their suppliers, customers, and, as importantly, their competitors.
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On the other hand, accounts payable represents the money a company owes to suppliers and is categorized as a current liability on the balance sheet, differentiating it from accounts receivable. But is there a ‘Discreet‘ way to achieve this? There is, so let’s dig in.
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WHAT IS THE MOST POPULAR METHOD OF SHORT-TERM CASH FLOW FINANCING
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One of several cash flow finance solutions is receivable financing.
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Naturally, other solutions are also available for financing a business, but next to cash, your A/R represents the most liquid source of capital, followed by actual cash itself!
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Your ability to monetize that asset achieves full-circle cash flow financing success and is one way to address the debt, equity, or asset monetization challenge.
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HOW DO COMMERCIAL ACCOUNTS RECEIVABLE FINANCING? WORK AND HOW DOES IT? DIFFER FROM BANK FINANCING
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The process is simple; in practice, it’s not unlike a bank line of credit. It’s just secured and collateralized differently by your chosen commercial financing firm.
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While the bank takes an ‘assignment’ of your receivables (just in case!), the accounts receivable financing solution simply requires you to enter into a one-time agreement to sell or transfer ownership of the invoices to the financing entity to fund operating activities.
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This method allows businesses to use their accounts receivable as collateral in receivables financing, providing an interim loan based on the value of outstanding invoices.
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WHY CHOOSE A NON-BANK SOLUTION LIKE INVOICE FACTORING
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Why, though, would clients want to choose a non-bank solution?
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Isn’t it more expensive? Categorically, it is, but when you understand two key points, many other things make sense - especially regarding quickly achieving positive cash flow.
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Invoice discounting is a form of receivables financing that allows businesses to advance money for their outstanding invoices.
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First of all, you’re probably considering A/R financing because you don’t qualify for bank financing for a number of reasons—e.g., uneven financial performance, lack of collateral, owner credit history, etc.
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ARE YOU PUNISHED BY FAST GROWTH
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Other situations might include the double-edged sword of business: fast growth, which is difficult to finance as traditional lenders prefer a more ‘calmer’ sales revenue chart.
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They don’t seem to like the hockey stick exploding sales chart, which of course creates temporary negative cash. (By the way, there are reasons for that)
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Early payment through receivables financing can help businesses manage cash flow during periods of fast growth or seasonality by allowing them to receive funds before invoice due dates.
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Other situations include seasonality in your business and bulges in one-time or ongoing orders and contracts.
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Companies that are capital intensive have a lot of cash going out before cash goes in as they have to invest in equip., human resources, perhaps R&D, etc.
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Your cash flow statement as a part of your financial statements will show inflows and outflows of funds from financing activities and will demonstrate the need for funding solutions.
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It’s an immediate way to assess your company’s cash flow.
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It’s also important to view funding as a short-term need or a business need for the long term, as different funding solutions work for both based on your balance sheet strength.
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领英推荐
HERE'S ONE BUSINESS FINANCE SOLUTION THAT WORKS: ASSET-BASED LENDING.
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So, having said all that, is there a discreet financing solution that works here? We term it ‘ CONFIDENTIAL A/R FINANCING ‘.
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It allows you to generate cash as you sell products and services instantly. And who is in control? As you bill and collect your invoices, you, the business owner / financial manager, generate cash and finance all the growth you can imagine.
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A factoring company can also help finance receivables by purchasing invoices, but this comes with trade-offs.
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While it can provide immediate cash flow, outsourcing collections to a factoring company may raise concerns about client relationships and company reputation.
Most importantly, it’s about your ability to take advantage of and (diplomatically) tell suppliers, clients, and competitors they can mind their business. Let them guess how you have achieved cash flow nirvana.
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KEY TAKEAWAYS
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Two uncommon takes on Financing Receivables:
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CONCLUSION
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Financing Receivables empowers Canadian businesses to transform unpaid invoices into immediate working capital, revolutionizing cash flow management.
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Does your firm qualify for CONFIDENTIAL? A/R FINANCING?
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You are a candidate if you require financing of over 250k to millions.
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Call 7 Park Avenue Financial, a trusted, credible, and experienced Canadian business financing advisor with a track record of success who can assist them in AR Cash flow financing solutions that put their firm back in control of the cash crunch and help their business grow and prosper.
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FAQ
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How does Financing Receivables improve my business's cash flow?
Financing Receivables converts your unpaid invoices into immediate cash, eliminating the wait for customer payments and providing a steady stream of working capital.
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Can Accounts receivable factoring help me take on larger projects or orders?
By providing quick access to cash from your receivables, invoice financing allows your company to confidently accept larger projects or orders without worrying about upfront costs or delayed payments.
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Is Financing Receivables a good alternative to traditional bank loans?
Absolutely. Unlike bank loans, Receivables finance does not create debt on your company's balance sheet and is based on your customer's creditworthiness rather than your own.
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How can Financing Receivables support my business growth?
By freeing up cash tied in unpaid invoices, i.e. accounts receivables, you can invest in new equipment, hire staff, or expand your operations without waiting for customer payments.
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Will using Financing Receivables affect my relationship with customers?
Not at all. Most financing arrangements are confidential, and your customers continue working directly with you, maintaining valuable business relationships.
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What types of businesses can benefit from Financing Receivables?
Any business that invoices other companies and experiences a gap between delivering goods or services and receiving payment can benefit from Financing Receivables.
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How quickly can I access funds through Financing Receivables?
Typically, you can receive funds within 24-48 hours of submitting an invoice, depending on the financing company and your agreement terms.
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Are there any upfront costs associated with Financing Receivables?
Most Financing Receivables providers charge a fee based on a percentage of the invoice value rather than requiring upfront costs. Always review the fee structure carefully.
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Can I choose which invoices to finance, or do I need to finance all of them?
Many providers offer flexibility, allowing you to select which invoices to finance based on your cash flow needs. This is often called "spot factoring."
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What happens if my customer doesn't pay the invoice?
This depends on your agreement. Some financing arrangements include "non-recourse" options, where the financing company assumes non-payment risk.
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How does Financing Receivables differ from a business line of credit?
Financing Receivables is based on the value of your invoices and doesn't create debt. A line of credit is a loan that you must repay with interest, regardless of your sales.
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What information do I need to provide to start Financing Receivables?
Typically, you'll need to share your accounts receivable aging report, customer list, and recent financial statements. The financing company will assess your customers' creditworthiness.
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Can Financing Receivables help improve my business's credit score?
While it doesn't directly impact your credit score, Financing Receivables can improve your overall financial health by enhancing cash flow, which may indirectly benefit your creditworthiness.
' Canadian Business Financing With The Intelligent Use Of Experience '
?STAN PROKOP 7 Park Avenue Financial/Copyright/2024
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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