Tuesday, May 20, 2014

Business Cash Flow Challenges : The Case For An AR Factor

Always Business Cash Flow Challenged? ere!s "hy And #ne $olution
#%&R%'&" ( 'n)or*ation on +usiness cash )low solutions in Canada , ow does
the role o) the AR )actor contri+ute to a -ositi.e cash )low and wor/ing ca-ital
)inancing +alance
Business cash )low pretty well always comes with challenges. The A0R )actor has
emerged as a solid solution that has stayed constant through turbulent and normal times.
What then are the benefits of such solutions, which type is best, and just how do things
work? Let's dig in.
In business it's all about performance and the ability to generate cash flow and working
capital from A0R )inancing can be a solid contributor to that performance.
Why does a business ownermanager choose an ' !" #!$T%"& more traditional
$anadian chartered bank financing? The process seems simple enough once we e'plain it
to clients ( it&s the ability of your company to generate immediate cash against your sales.
This can happen, at your choice, periodically, i.e. weekly, monthly, etc, or constantly... ie
all the time)
It should be no secret that the primary ' collateral' of this method of $anadian business
financing is your actual accounts recei*able. +ank lending, in contrast, relies on that
same collateral, but places a *ery large amount of emphasis on historical and present
profits, clean balance sheets, and business and personal collateral. ,uffice to say that that
latter combination pro*ides a strong safety net for our $anadian banks.
-tili.ing an !" factor in $anada is almost always a short term or intermediate solution to
a growing company, or one has faced and is fi'ing some challenges. -sing /urope as
e'ample top e'perts tell us that anywhere from 01(234 of all businesses in the $M&
sector 5small to medium enterprise6 ha*e used !" financing solutions as offered by
commercial finance firms. Those same e'perts also draw a *ery clear conclusion that
financing !" outside of the bank plays a large role in economic de*elopment.
$ash flow that is generated from an !" factor solution is used for a *ariety of reasons (
it&s ' asset moneti.ation' and is not term debt of any sort. #or that reason the business
ownermanager has the fle'ibility to use funds for immediate needs primarily related to
growth and operations. Think of it as a ' buffer ' to ongoing working capital re7uirements.
,o why don't more business access business cash flow *ia A0R )inancing. ,tudies tell us
that one major reason is $anadian business simply doesn't know about this solution. They
also tell us that there are key misconceptions around what type of company is using these
methods. It might surprise many business ownersmanagers that the largest and most well
known of corporation&s access this same financing *ehicle... in certain cases the +ay
street gang just gi*es it a fancier name ( such as $ecuriti1ation,
$ost also plays a factor in the adoption of the use of an !" #actor. It's critical to
understand also that this method of financing works best in a normal or high growth
en*ironment. $ompanies that are in a downward sales spiral would not benefit from the
solution.
,till others feel its comple' to administer on a daily basis. While that might be true our
recommended client solutions, C#2F'3&2T'A4 R&C&'%AB4& F'2A2C'25
allows for the business to bill, collect and cash flow their sales in a completely
confidential manner.
,o bottom line, the !" factor solutions is 8%T a loan, it&s not a bank o*erdraft facility,
it&s simply a method to cash flow sales on an ongoing basis in an unlimited manner. ,eek
out and speak to a trusted, credi+le and e6-erienced Canadian +usiness Financing
Ad.isor with a trac/ record o) success who can assist you with your !" financing and
growth needs.
$tan 7ro/o- ( 8 7ar/ A.enue Financial :
htt-:00www,8-ar/a.enue)inancial,co*
+usiness financing for $anadian #irms , speciali.ing in working capital, cash flow, asset
based financing , /7uipment Leasing , franchise finance and $dn. Ta' $redit #inance .
#ounded 933: ( $ompleted in e'cess of ;3 <illion = of financing for $anadian
corporations . 'n)o 0Contact :
8 7AR9 A%&2:& F'2A2C'A4 ; CA2A3'A2 AR FACT#R F'2A2C'25
&<7&RT'$&
a.e A =uestion 0Co**ent #n #ur Blog #r Canadian Business Financing
Alternati.es ?
C#2TACT:
> ?ark !*enue #inancial
,outh ,heridan /'ecuti*e $entre
9;03 ,outh ,heridan Way
,uite 230
%ak*ille, %ntario
L@A >AB
3irect 4ine C :0@ 20; 1>@;
#))ice C ;31 B9; 9@12
&*ail ; sprokopD>parka*enuefinancial.com
> Canadian Business Financing with the intelligent use o) e6-erience >