Considered An ABL Asset Based Secured Business Line Of Credit ! Is The New Year The Right Time For Your Company?

Looking For A New Way To Master Business Financing?

Information on a secured business line of credit for Canadian business financing . Let an ABL asset based facility solve working capital needs.. differently .



What Canadian business owner or financial manager hasn't wondered if they have properly considered all the financing alternatives available to their firm in today's challenging borrowing market? One mechanism not fully known or understood properly is the secured ABL asset based business line of credit. Is it for your firm? You'll decide shortly!

Although Canadian commercial bankers still proudly trumpet the fact that chartered bank commercial credit facilities are widely available hundreds or thousands of businesses in Canada are unable to meet the qualifications for such financing. Basic qualifications for a bank credit facility that margins receivables (and hopefully inventory) are not complicated to understand. They are of course difficult to achieve or provide! They include clean balance sheets, income statements that show profitability, and positive cash flows, both historical and current. Oh and by the way, owners must often back stop these facilities with guarantees that often require personal assets to be either pledged, or collateralized.

Don't get us wrong. Bank financing in Canada is available, it’s cost effective, it’s simply just a bit harder to get if you can't qualify under out criteria we set out above.

So, enter the secured ABL facility. Here's business working capital and cash flow financing with an emphasis on only one word: ' Assets'! The ABL lender is focused. That focus? Your key business assets of receivables, inventory, unencumbered fixed assets. You borrow against the total current market value of these assets via a revolving secured business credit facility. If there is a bottom line it’s a simple one - a focus on collateral, not ratios, covenants, or outside collateral.

A common question from clients revolves around what dollar level of facilities is either the entry point or the cap on such secured facilities. The good news is that there is no upper limit on ABL deals in Canada. In fact, unbeknownst to many some of Canada's largest companies utilize ABL facilities, having forsaken bank facilities which no longer make sense for their business.

We consider a solid entry point for such facilities to be in the 250k range, which more often than not is a combination of receivables and inventory. We hasten to add that there must be a reasonable mix as typically A/R has a higher borrowing value. However, there is always an exception to the rule, so a good example of a great ABL solution is the financing of inventory for retail chains, etc.

Pricing on secured ABL facilities fluctuates widely in Canada. Pricing can be either below bank comparables, slightly higher, than or as high as 1.5-2% per month depending on whom you choose to deal with. Mid market firms who have assets are great candidates for this type of business financing,

A proper submission for an ABL facility should include financials, proper aged payables, receivables and inventory, as well as miscellaneous information you would associate with any type of business finance application.

So why consider an alternate method of financing in the New Year? It's about increased borrowing power, easier qualifications, and competitive pricing commensurate with your overall credit and asset quality. Speak to a trusted credible and experienced Canadian business financing advisor on reasons to make a change in your finance strategy.





Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com


Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/bank_financing_commercial_business_banking.html

Heard About The Revolution? How ABL Lending Revolutionized Canadian Business Line Of Credit Financing

Canada’s Revolving Line Of Credit Evolution







Information on how ABL lending via an asset based line of credit has revolutionized business line of credit financing for Canadian businesses of all size.





We checked... a revolution is a ' complete or marked change in something'. So why do we maintain that ABL lending, i.e. asset based non bank lines of credit are, of all thing revolutionary? Here's why.



When Canadian business owners or financial managers are exploring new business lines of credit they are in one of small number of situations - those include ; financial distress, acquisition finance, growth, start up, etc.



Any one of the above situations has is a challenge - lets look at one that can be realistically position as a ' larger challenge ‘... aka THE TURNAROUND.



Is there anyone more challenging for a business to change the financial course and direction? We personally doubt it (although makings sales is sometimes as tough!). Many business owners and financial controllers associated credit risk with the pricing of their financing. That’s a reasonable assumption. So logically banks, who only offer great pricing, are... you guessed it... some risk averse to financing a turnaround. Even we agree with that... and by the way... did we mention we love Canadian banks.



But if that’s the case... how can a legitimate turnaround be financed? Good question? We've got an answer - an asset based line of credit, via ABL lending in Canada.



The reason an asset based business line of credit works when a traditional alternative doesn’t is two fold - you have business collateral and assets and the fact that a true asset based lender prices risk, quite somewhat unlike our chartered banks.



Typical situations in a turnaround are quite logical - financial losses, being put into ‘Special Loans’ or your firm is perhaps ' off covenant '. Off covenant is of course when certain ' number relationships' in your financials don’t make sense. In many cases we see clients are also in debt to CRA, those good folks at ' the government '.



The asset based lender is often the solution that both you, and your bank! are looking for. This financing attempts to fix the problem that you and the bank cannot. The good news is that often your firms reputation and expertise are of course worth saving.



Typically your ability to prove that you can still generate sales growth is a key element to an ABL lending turnaround situation. When that can be validated a finance offer typically includes high margining of receivables and inventory, with those funds often being used to restructure some debt, clear CRA arrears, all the while leaving some working capital for growth .



Often times an appraisal of any fixed assets is required... however this ultimately benefits the customer by adding in an additional borrowing base that now becomes a part of the overall credit facility.



And besides growing those sales and operating efficiently again, what are your responsibilities under this type of business line of credit financing. It all comes down to proper and timely reporting of sales, receivable collections, and inventory and fixed asset lists.



So, is a business financing turnaround achievable in Canada? It absolutely is, and one of the ways that can happen is via ABL lending, a revolutionary concept in Canadian Biz finance. Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in formulating a financing turnaround, with a business line of credit that makes sense to your current needs.







Stan Prokop - founder of 7 Park Avenue Financial -





http://www.7parkavenuefinancial.com



Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing .Info re: Canadian business financing & contact details :





http://www.7parkavenuefinancial.com/abl_lending_business_line_of_credit_financing.html

Important First Step - Understanding Why An ABL ( asset based lending) Business Line Of Credit Is Different

ABL is a compelling business line of credit that utilizes the concept of asset based lending. But why does this type of financing differ from traditional bank lending?

Simply because when you utilize this type of operating financing your company is ' running on all cylinders ' when it comes to maximizing your financial borrowing ability. Let's examine why.

An ABL facility in effect creates a borrowing umbrella around your assets. This allows you to meet all your short term business operating needs, at the same time addressing key issues of both growth and any seasonality or cycles in your business.

On many occasions if your company has inventory as a key current asset you are going to be in a position when that inventory and your receivables fluctuate dramatically. Typically in our experience a traditional Canadian bank line of credit is unable to hand large fluctuations in business line of credit needs. Typically that’s because the bank lines have fixed limits, and are focusing on your historical needs, not your current ' bulge ' requirements.

The credit qualifications that you might be associating with a typical bank line of credit essentially don’t come into play with ABL asset based lending. In fact you can say all those rations, covenants, outside collateral, personal guarantees, etc are thrown out the door.

We've got nothing against a bank business line of credit by the way. And no one more than us is as strong a supporter of the strong and credible Canadian banking system. It's just that the majority of clients we meet are unable to access all, or even any, of the business line of credit that they need. That then hampers growth, ability to compete, etc.

Clients can be forgiven for understanding how an ABL business line of credit works or how they differ from whats generally available in Canada , That’s simply because the trend toward asset based finance has only received ' traction ' over the last number of years . We’ll also add that that traction, in effect our ' firing on all cylinders ' analogy gained a lot of steam during the global 2008-2009 credit recession when business financing dried up and came to as about as close to a standstill that we can imagine .

The essence of the ABL business line of credit could not be more fundamental - a facility is created under which you borrow against your assets on a revolving basis. You repay this business line of credit as your business fluctuates on a daily basis.

The key difference is simply you must have assets to borrow against ( inventory, a/r, equipment or real estate ) and you must be able to produce proper ( usually monthly) reports on key business metrics such as balance sheet, incomes statement, aged a/r and aged a/p and inventory lists . We submit if your business can't produce these already you might have bigger problems!

Investigate ABL asset based lending. You might well find that this type of non bank business line of credit not only differs significantly from what you thought it was, but moreso, might be the solution you didn’t know existed for your financing needs. Speak to a trusted, credible an experienced Canadian business financing advisor on why ABL works for you!




Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/asset_based_lending_abl_business_line_of_credit.html

Turbo Charge Your Banking Via A Business Line Of Credit ABL Revolver !

Small, medium or large? We're not talking about a coffee cup size... we're referring to the fact that no matter what your size of business your access to a business line of credit is the lifeblood of your company . That's why an ABL revolver (ABL = asset based line of credit) is potentially the solution to turbo charge your working capital and cash flow. Let's examine how.


Clients seem to always wrestle with the fact that they don't really understand the differences between this type of business financing and banking as opposed to a ‘regular’ operating facility with the bank. The differences could not be more dramatic. While a bank facility (by the way, we are all for them also, when they work! ) focuses significantly on your balance sheet ratios and over all profitability , etc the ABL revolver solution hones in on one issue only - your assets and their overall quality and size . It is on that quality and size that the ABL business line of credit is structured.

Borrowing power is what business lines of credit are of course about. When you utilize the ABL approach you in effect leverage all the power of the assets, which certainly isn’t like what we like to call ' traditional bank borrowing '.

So, why would a business such as yours want to unlock that borrowing power? The reality is there are some very recurring needs for firms which choose this type of business financing. First of all they either can’t get or can’t get enough working capital borrowing power against their inventory, receivables and equipment. Secondly, all sorts of other problems, challenges, and yes opportunities can e overcome with an asset based line of credit.

Many examples exist of firms who have doubled and in some cases tripled their business financing access via this type of finance. The answer is simple - it’s based on asset size, not ratios and covenants and external collateral.

Those include firms which have large seasonality issues, companies who which to merge with or acquire a competitor on an asset financing basis, and, most commonly, firms that view themselves in turnaround or restructuring mode when it comes to where they are at in their life cycle - i.e. coming out of a challenging economic time or negative business event (operating losses, etc).

Did we just say ' operating losses ‘? Yes, the reality is that even firms who are experience operating losses and could otherwise not achieve maximum operating cash flow are excellent candidates for ABL financing. We should mention that the type of facility you get, the pricing on that facility, and how the facility works vary within ABL revolver financing depending on your overall transaction size and asset coverage .

We must never forget also that these type of facilities never bring debt to your balance sheet, you view them similarly as an operating line, in that you are just monetizing your assets for working capital and cash flow - the only difference is you've got tremendous flexibility around borrowing power - because you are borrowing against a base of receivables, inventory, unencumbered equipment, and in some cases real estate also.

In summary ABL revolver financing gives you a full service business financing, its cost effective, addresses almost every financing problem you have had related to cash flow, and is available in facilities from 250k to many millions of dollars .

It somewhat of a secret to many that some of Canada's largest corporations choose this type of financing over a traditional bank facility. Speak to a trusted, credible, and experienced Canadian business financing advisor on why ' ABL ' give you that ' turbo charge' boost in cash flow we've talked about.

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Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/business_line_of_credit_abl_revolver_banking.html

Requirements for a Business Line Of Credit in Asset Finance and ABL Lending in Canada .

Let's cut rate to the chase, that’s often the best strategy in assessing a business decision. You are in the process of investigating ABL lending under and asset finance scenario as a replacement for your business line of credit.

More of than not you are either self financing currently (that’s not a perfect growth strategy by the way) or your ability to secure the business credit you need simply is not happening with your current banking or financing partner.

So lets look at whats required to bring you the full advantages of an ABL facility, that term being the acronym for ‘asset based lending' . The reason you are contemplating this type of business financing is simply, you want to maximize your borrowing power based on receivables, your inventory, and other potential assets which can actually be margined for temporarily liquidity. Think unencumbered equipment as an example.

Let's examine some of the key requirements for this type of facility. That will allow you to determine your overall success in securing a facility that meets all your needs, and comes at a cost that is commensurate with your situation. We mention cost briefly here in the context of our subject because many firms experience varying degrees of cost of financing in an ABL lending facility for their new business line of credit.

That is because asset finance pricing is based on criteria such as the overall financial health of your company. However, don’t despair because ABL lending actually works even if your company is in bankruptcy proceedings, because it always comes back to the same issue - if you have assets then an asset finance solution is possible!

So lets get back to those requirements - they include receivables that are under 90 days, which typically are margined at 90% of their value. Next comes inventory, and here is where it can get tricky. Although your new ABL facility and business line of credit margins your inventory you must be able to demonstrate that the goods are saleable in some form - whether that be work in process, raw materials, or finished goods . Most companies usually have a combo of all three types.

Asset finance often doubles your borrowing power under this type of business line of credit. That’s because the firms that offer it are experts in their business - typically, more often than not, they are not banks, but private boutique type firms that specialize in business asset financing. But, and here is the ' but ' you need to demonstrate proper accounting and regular financial statements - i.e. on a monthly basis, and you should be able to provide accurate reporting on things such as aged receivables, perpetual inventory reporting , and, in some cases, an appraisal on your other business assets - since these are temporarily margined for liquidity .

What we are simply saying of course is that in order to borrow in an ABL lending environment you have to have solid business records and demonstrate you are in control of your key assets. That quite frankly should be your goal whether or not you are borrowing at all, don’t you think?

Speak to a trusted, credible, and experienced Canadian business financing advisor who can help you maximize the benefits of asset finance and assist you in achieving full success in this non bank business line of credit facility that is becoming more common everyday.
--

Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.parkavenuefinancial.com/abl_lending_asset_finance_business_line_of_credit.html

The Dirty Little Secret Your Banker Won’t Tell You About Asset Based Lending and Asset Finance

Can you blame someone for not telling you about a good thing? Especially when that thing is better than their thing! No surprise then that asset based lending is the dirty little secret in asset finance that that bankers in Canada don’t want to let you know.

We hate to burst their bubble... but what the heck; we'll share that secret with you and touch on why it’s such a powerful non bank financing strategy.

To understand why an asset based lending solution is so different we need to understand what we are comparing it against. The comparison is of course an operating line of credit with a Canadian chartered bank. They are great, low cost, and run smoothly on a daily basis. If... and we repeat if... you can get one and get it increased as you need it.

Your ability to access a business line of credit with the bank focuses in on everything you probably feel isn’t necessary. You have assets; you have growth, so whats the problem. The chartered banks, in their wisdom allocate these lines of credit based on yes... the assets... but as importantly ratios, covenants, personal guaranteees and outside collateral. By the way, we think they do a great job of that... mainly because they are lending you my money which is on deposit at their bank. So all power to safe lending practices, and that’s why Canadian banks are some of the strongest in the world.

That’s all great say our clients, except it does nothing for us when you want to access business credit. That’s brings us to our secret - asset based lending in Canada and why this type of asset finance is a powerful working strategy. And could it be simpler. Not really. It focuses on the two things you have always had... assets and growth potential for sales and profits.

Asset based lending is the ability of your firm to borrow, daily, as you need it , against receivables, inventory, as well as equipment and real estate if they factor into the picture .

It supports you credit needs, and does not, we repeat , does not revolve around those other requirements the banks have, i.e. rations, covenants, emphasis on personal net worth, outside collateral , etc.

Want to know an even more surprising secret. Some of the Canadian banks actually have small boutique divisions of asset based lending. In our experience these divisions don’t communicate properly with regular commercial bank divisions around what their offering is.

So who actually offers this type of asset based lending. In Canada it’s a relatively small handful of firms, some of which are U.S. based, and who have a tremendous expertise on the things you already have, inventory, receivables, and purchase orders and contracts.

Asset finance can cost the same as the chartered bank offering, in ,many cases it costs a bit or a lot more, depending on the size of your transaction .A business line of credit via an asset based line of credit generally starts at 250k and goes up to anywhere up to 50 Million or more!.

Accessing and navigating the maze of this boutique financing is difficult for the Canadian business owner and financial manager. Speak to a trusted, credible and experienced Canadian business financing advisor on why asset based lending is the secret you want to know more about. And why the heck didn’t your banker tell you about it sooner!
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Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 6 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/asset_based_lending_business_line_of_credit.html