If Things Are So Bad Why Is a Canadian ABL Facility Business Line Of Credit So Good ? How Asset based Lenders Work

The Worse Your Financing Challenges The More An Asset Based Line Of Credit Should Appeal To Your Company

Information on why and ABL facility from Canadian asset based lenders and why this type of business line of credit is extraordinary in terms of delivering more financing to Canadian business .



Does it every get easy? It's probably just us but doesn’t it seem like there’s never a time when there isn’t some major economic turmoil these days that simply add to the constant challenge of being able to be successful in business financing for your firm.

That’s why an ABL facility... a business line of credit from asset based lenders is very much a total breath of fresh air. With the Canadian economy see sawing back and forth between good news and bad news the likelihood of your company getting the business credit it needs is never 100%.So is there a way to improve those odds? We think there is, and it’s an asset based line of credit, the technical term being ABL.

It is somewhat ironic that the asset based lender actually tends to do better in more difficult times - that’s easy to understand because the unique facility it offers has a much higher chance of approval for firms such as yours. And, as always, it’s about the assets, not the ratios. Coupled with the fact that the industry in Canada, relatively speaking is still quite new and somewhat fragmented , well , bottom line, its just seems to get more traction everyday.

Stats in other countries , and we think they are reflective of Canada also , show that 80-90 % of the firms that utilize asset based lending for their business line of credit are in fact small to medium sized corporations . It is sometimes overlooked that some of the biggest corporations in Canada also use this type of financing, abandoning the traditional Canadian chartered bank line of credit.


When we meet with clients to discuss their needs for an ABL facility it's often necessary to spend a bit of time explaining some of the mis information that exists with this type of facility. That is partly because this type of lending has some subsets, they include receivable financing, and in some cases purchase order financing.

The key benefit of an ABL business line of credit always comes back to one word - ' margining '. Typically this type of revolving facility margins 90% of receivables and anywhere from 30-75% of inventory, depending on the type of inventory your firm carries/requires.

Additionally, the key difference in the facility is the fact that your business access to working capital and cash flow grows with your needs, pretty well automatically! Now that’s the type of borrowing facility that every business owner dreams about!

So, when the bank is not the solution, (those hoops keep getting more difficult to jump all the time!) and your company is either reluctant or unable to raise additional equity speak to a trusted, credible and experienced Canadian business financing advisor on the benefits and requirements for an ABL business line of credit.






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_facility_asset_based_lenders_line_of_credit.html

Canadian Asset Based Finance Has All The Best Ingredients For A Business Line Of Credit – Business Receivables Financing

A winning strategy for business lines of credit in Canada


Information on asset based finance facilities in Canada – Why ABL working capital facilities are a solid line of credit solution for business receivables, inventory and equipment finance.



Asset based finance is a solid working capital solution for a business line of credit as an alternative to bank financing. An ABL (asset based lending) line of credit provides an operating line of credit facility for a combination of both receivables and inventory. This can be achieved in Canada via a traditional receivable financing facility for firms that have both domestic and out of country receivables.

Often times this type of facility provides cash flow when your company is growing, or perhaps wants to acquire another firm... even a competitor. If we had to label many clients that are searching for the right asset based finance facility we would quite frankly put them in the category of being in a turnaround or restructuring situation.

Proceeds from this facility can be viewed in many positive ways, one of which is to simply give you leverage and negotiating power with suppliers for pricing and discounts ... and why? Because you now have cash flow that allows you to buy smarter, purchase larger quantities of materials - all of which are on top of your new found ability to feel more comfortable about day to day financial burdens such as payables, salaries/wages , etc.

Many Canadian companies that approached asset based finance solutions have often exhausted traditional financial solutions. We stress to clients that asset based finance solutions are the last thing from ' lending of last resort '. In fact they in some cases can be more cost effective, and almost 99% of the time, in our experience, provides clients with more liquidity and access to capital.

And don’t forget also that when you approach asset based finance from a business receivables or inventory financing point of view you are no longer forced to consider scenarios such as raising additional equity and diluting ownership .. and that’s a good thing if you're a business owner in Canada.

So how exactly do asset based finance solutions provide that much more liquidity, than say... a traditional Canadian chartered bank line of credit. They do that by margining you receivables at higher levels, or margin rates that banks, and also include additional borrowing on that same facility based on inventory, equipment and real estate, all of which are rolled into one day today borrowing facility.

In order to qualify for this type of financing it becomes a question of controls and reporting. Your firm should be in a position to report on an on going basis on aged receivables, payables, inventory counts, etc. It's that level of business control that will get your firm the highest asset based finance facility.

Look at business receivables financing via an ABL facility as a type of financing that becomes the bridge for your firm to either move to a Canadian chartered bank facility or a true tier one ABL facility with comparable bank rates and structures.

When you are not aware of all the possibilities available to your firm for a business line of credit option speak to a trusted, credible and experienced Canadian business financing advisor who can help you reach the higher ground in asset based financing in Canada.



7 PARK AVENUE FINANCIAL

Canadian Business Financing

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