Pick The Best Canadian Receivables Factoring and Financing ! Cost and Rates Of Invoice Finance

We encountered a great term the other day when it comes to business financing - the term was ' expansionary finance ‘. Is it just us or does this term seem to perfectly cover off factoring and receivables financing.

Often though three key issues come up when Canadian business owners and financial managers consider this type of financing. What are those 3 issues ?They are the total cost of this type of financing, the rates associated with this facility, and probably most importantly what type of firm offers the best facility to match your company's own specific needs .

Let's learn and cover off those issues, which will allow you to get more comfortable we think with this type of Canadian business financing.

So, why should you even be considering receivables factoring? Simply because it has become a common way for Canadian business to cash flow their accounts receivable and generate working capital based on your own policy of extending credit terms to your customers.

And, as most business owners know, sales does not equal cash flow and when business financing of your A/R is not available from your bank a logical place to turn to is to an independent finance firm that offers invoice financing.

But, what does this type of financing cost, and who offers it, and an even better question... ‘How do you pick the best factoring partner?

In Canada the financing and factoring of A/R varies widely. As a general rule we can say the cost is between 1-3% per month based on the size of the facility, your overall financial condition, and most importantly, whether you have sought out and picked the finance firm that best suits your needs.

Let’s clarify our comment on your overall financial condition. Receivable financing places much less emphasis on your firms overall financial health - in fact a huge amount of Canadian firms that utilize this type of financing are in stages of turn around, high growth, experiencing temporary financial losses, etc . So don’t despair that your firm isn’t eligible. But, as we said, your client base, the size of your A/R portfolio on a monthly basis and some other factors will dictate your overall pricing.

Frankly the best costs in factoring finance in Canada start to be achieved when your monthly financing capability for A/R is greater than 250k. Is there a ceiling on the amount of facility? Absolutely not, and facilities that go into the several millions of dollars on a monthly basis happen everyday in Canada.

Clients often ask our favorite most recommended type of facility. That’s a simple one - its called C I D - which stands for confidential invoice discounting, allowing you to be in total control of billing and collecting your own a/r without any notification to clients that comes with the U.S. and U.K.versions of a/r finance .

Remember also that when you are addressing the always top of the list issue with firms such as yourself, ' Cost ' that you need to factor in things you might never have thought about. They include your ability to grow your business and generate more profits simply because you now have the capital to do so, albeit at a higher cost. And couldn’t you offset some of the cost of factoring by taking discounts with your own suppliers (and improving relations with them along the way!), as well as purchasing more effectively with your new found working capital?


So , in summary , if you need a financing partner when you are considering a receivable management and financing solution seek out and speak to a trusted, credible and experienced Canadian business financing advisor who will ensure your cost and partnership with your factoring firm is focused on a mutually beneficial relationship for financing success .




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/factoring_receivables_invoice_rates_cost_financing.html

Supersize Your Canadian Business Accounts Receivable Finance Success via Confidential Invoice Discounting Factoring

Surprised? Clients often are, when we tell them that they have the ability to ' super size ' their level of working capital and cash flow via a little known business accounts receivable finance strategy known as C I D - confidential invoice discounting or factoring .

What do we mean exactly by the reference to supersizing? Simply that it is highly possible that on utilization of this type of financing you will often double, in some cases triple your access to immediate cash flow and working capital. And in some cases where you would have been self financing or had non financing in place whatsoever, well, your firm has it now.

So what’s C I D - how does it work, what can we compare it to, what does it cost, and why is it so innovative. That’s a lot of questions, so let’s get to some basic answers.

C I D, as we stated is our terminology for confidential invoice discounting, more commonly also called factoring. This type of financing is used by firms of all sizes (even major corporations, by the way) but in reality seems to be more common in the S M E (small and medium enterprise sector). It even accommodates start ups if you can believe it, as any type of financing for a start up is often a major challenge for the business owner.

As a Canadian business owner in the business to business market you typically have a large investment in accounts receivable. But how do you finance that investment when traditional capital is not available, or the reality is that you dont qualify?

That's exactly where business accounts receivable invoicing and discounting comes in. Your ability to sell those invoices as you generate them, using the A/R as collateral allows your company to turn into an instant cash flow machine.

So that’s the essence of factoring, or invoice discounting, but where does our key benefit of confidentiality come in. Right about here! Because the key difference of C I D and business factoring is that you are in control of your sales ledger and customer base, not the factor firm. That’s where you immediately gain superiority over other firms who use this type of financing but are forced by their factoring agreement to make their customers aware of how they are financing their firm.

On a daily basis C I D work in the same manner as what we will call ' traditional ‘ accounts receivable finance and invoice discounting. It’s a simple process. You generate invoices for the products and services that your firm provides and you receive immediate same day funds for 90% of the invoice value. The remaining 10% is held back until you client pays, you then receive the 10% less a finance fee of anywhere from 1-2.5% per month.

Clearly the advantages of this type of business financing couldn’t be more pronounced - its quick financing, its easy to administer ( you bill and collect your own a/r) and you use that valuable working capital and cash flow you have just achieved to run your business on an operating basis .

So, does Confidential Invoice Discounting seem like the proper accounts receivable finance strategy for your firm? Ultimately you will decide that - we're simply letting you in on the secret and letting you be the decision maker around super sizing that cash flow. Speak to a trusted, credible and experienced Canadian business financing advisor on how this type of business financing can put you ahead of the pack!



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/accounts_receivable_finance_business_invoice.html