Why Canadian Merchant Cash Advance And Business Credit Card Loan Facilities Are Popular forms OF Small Business Finance

There certainly aren’t countless options for small business, retailers, restaurants, etc for achieving working capital and business financing success in Canada
So let's discuss the new and up and coming kid on the block, who goes by a variety of creative names - including but not limited to : merchant cash advance , small business loan, and credit card advance sales loan.
What are these facilities, how do they work, and are they perhaps tailor made for your short and intermediate term cash flow and working capital needs.
The merchant cash advance became popular clearly as a result of businesses such as yours, probably retail in nature who have seen traditional sources of financing either disappear, and quite frankly perhaps weren’t even there in the first place!
While this form of financing is more expensive than traditional financing, as alternative financing goes, it does the trick, providing you with working capital and cash flow based on future sales.
And we can assure you that we spend a lot of time with clients carefully explaining that it’s not a loan per se that brings onerous debt on to your balance sheet. You are simply receiving an ' advance ' against future sales. Other commercial business makes sales, and then immediately finance their receivables to generate cash flow. In the case of your business, either a retail establishment or a restaurant ( basically any business that takes credit cards on a regular basis ) your are simple cash flowing those future sales, getting funds today, and repaying the advance via a percentage of future sales that you feel confident will be made .
Using a simple example, if you are advance , again just as a example here, $ 10,000.00 for your working capital needs a per cent age , typically 10 -30 per cent of future sales is used as a repayment of that advance your firm has just been provided with . Where this works best is if you have a solid credit card sales revenue model, and your have solid gross margins on your services, products, etc.
So is it a good idea for you firm? Well, certainly as we said, it’s a newer form of alternative financing. In most cases we see when discussing the options it is clear to all parties that traditional bank financing options have been fully exhausted. As we said, thousands of firms sell and finance their receivables - all you are doing is selling and financing a portion of your future sales - so for many it does make sense.

And by the way, it’s clearly a form of financing that is unsecured, because the collateral is in fact future sales that hopefully will materialize, but might not!

A good rule of thumb we use is that it’s an excellent short and intermediate finance strategy. Over the longer term you should be working on a long term strategy to probably finance your business.
A merchant cash advance business credit card loan is also very easy to achieve. The main focus is your ability to demonstrate your sales revenue via bank or credit card processing statements. Small business owners can expect of course to be a guarantor on this type of unsecured loan financing.
So, that’s the offering. If you are scrambling on a daily basis in a retail or restaurant type business environment speak to a trusted, credible an experienced Canadian business financing advisor about merchant cash flow advance financing.


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/merchant_cash_advance_business_credit_card_loan.html

Get A Fast Merchant Cash Advance And Business Cash Flow Loan in Canada

A merchant cash advance for business cash flow continues to grow and become more widely used in smaller sized firms in the Canadian business environment.

Smaller Canadian firms who do not have major investments in receivables and inventory do not have the financing alternatives enjoyed by their larger company counterparts. Larger corporations use the concept of securitization as a method of financing working capital and enhancing balance sheets. This type of sophisticated financing allows firms to improve liquidity and satisfy lender loan covenants.
Smaller firms, usually do to cost, lack of financial sophistication, and size are unable to utilize such alternative financing. Additionally, in the current 2009/2010 financial environment many firms are struggling with their ability to maintain bank credit facilities, let alone increase them!

The discounting of future sales, for cash today , allows firms to convert working capital into immediate cash. This comes with a cost which we will also discuss.

It is critical to note that when a firm sells, or factors, or discounts (they all mean the same thing) they retain no ownership or interest in the future sale .

Depending on how the merchant advance facility is structured they may or may not have responsibility for the ultimate non- collectibility of the account. Lenders address that issue in a variety of manners.

Smaller companies in Canada aren't able to enter to large multi year arrangements, with lower costs, that would allow them to achieve the benefits of a true securitization.
But ... ! .. you can sell sell future sales under a discounting agreement. This can be done with a minimum of cost and deals can be structured uniquely to the customers situation, and their is a lower cost and no reliance on lawyers, advisors, etc.
If used on a regular basis the merchant cash advance discounting process continually generates new working capital, allows the customer to generate better rates as time goes on, and, most importantly, relieves the financial stress of managing working capital.
It is very important to note that smaller companies have some distinct choices that on occasion the larger firms don't have. They can on a one time basis, or periodically choose to utilize this alternate financing method.
Ultimately the business owner does have to pay back the lender or generate sales that will allow the repayment .
Typically the costs in business cash flow financing vary greatly. Rates range from 1.5 - 3% on a monthly basis. Most customers view this as an ' interest rate ', while the lender tends to view it as discount rate.
Generally the facility can be set up in a couple of weeks! We have seen our clients set up a facility in a matter of days !
As we can imagine it takes the larger corporations many months (and many thousands of dollars) to set up their large dollar securitization facilities.



In summary, more and more firms are turning towards a merchant cash advance business cash flow loan to manage their working capital and liquidity challenges.
Firms are strongly advised to search out experts in this area who know the Canadian marketplace, as it differs substantially from the U.S. environment in this unique method of alternative financing.

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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_cash_flow_merchant_cash_advance.html

How To Get Approved For Cash Flow Funding Via A Merchant Cash Advance In Canada

There isn't a day these days when we don’t meet or talk to a small business client who is having cash flow funding challenges. One solution becoming increasing popular in Canada is a merchant cash advance.

With the right partner firm we have found this type of financing to be a solid interim solution for cash flow financing and working capital. Let’s look at how this type of financing helps our clients achieve working capital success and why it might be right for your firm.

You can call it non traditional or alternative, but quite frankly its becoming more popular everyday and thousands of businesses are taking advantage of this type of business cash flow funding . The success of merchant cash advance financing always seems to come back to the issue of your business not being able to secure working capital financing from what we call our traditional sources, i.e. banks, finance firms.

And the reality around this type of financing is that it is quick and easy, and , more remarkably, often unsecured , depending solely on your ability to generate sales based on historical performance and projected profits . Even though the government continues to encourage banks to pay more attention to small business financing the reality is that traditional financing is 99.9% of the time secured via collateral, personal net worth’s, strong personal credit scores of the owners, and generally stable financial performance from a historical perspective.

The above is all well and good, but tends to eliminate the hundreds of clients we meet who have real business challenges and can’t meet some or all of the aforementioned lending criteria.

So how does this type of financing work. You may have heard of the business financing known as factoring. This, in a nutshell, is the financing of your receivables as you generate them. - I.e. same day cash for sales you make. However, thousands of firms, perhaps yours, have a major revenue component made up of cash and credit card sales, and you still need financing for the same reasons: purchasing inventory, reducing payables, making loan payments, etc.

That’s where the merchant cash advance comes in - in essence you receive cash today for future credit and cash sales. Isn’t this risky for the lender, asks our clients? That may or may not be... but the reality is that if your firm, as an example , can demonstrate via bank statements or credit card sale stats that you have solid sales then the merchant advance lender is prepared to advance you funds today for a percentage of those future sales . A quick example is that you could receive , again, as an example, an $80,000 cash flow loan today and repay it, by agreement, with , for example, 20% of all future cash or credit sales . You are receiving cash today, allowing you to fuel further growth in sales and profits.

Speak to a trusted, credible, and experienced Canadian business financing advisor as to how your firm can benefit today from this innovative and valuable cash flow financing.

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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/merchant_cash_advance_cash_flow_funding.html