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ABL Loans Are The Newest Trend in Canadian Asset Finance – Why Lenders Offer This Revolver For Asset Finance

Guest post by: Stan Prokop

Article Overview: Information on ABL loans in Canada . What lenders offer this type of asset finance working capital facilities and why this type of operating line of credit, known as an ABL ‘ revolver ‘ can be the best thing that ever happened to your company .

ABL Loans Are The Newest Trend in Canadian Asset Finance – Why Lenders Offer This Revolver For Asset Finance

Over the last year or so business financing availability has declined for many firms. Let's examine how one strategy, business equipment financing - can be turned into an opportunity for your firm to succeed. Leasing finance works and we'll show you how with valuable inside tips.

How many options does your firm have when it acquires new equipment? To our way of thinking, only three - you purchase it, you lease it, or you arrange for term loan financing. The math around leasing finance often shows you it might be marginally more expensive than outright purchase. That’s because more financially astute firms have the ability, and do, to run extensive lease versus buy scenarios.

So why would you typically want to choose a financing option such as business equipment financing via a lease if it turns our it’s a bit more expensive.

We think the compelling reasons to utilize lease financing revolve around some very important ' real world ' issues such as quick access to credit, conserving operating working capital, accounting issues such as keeping the asset potentially off your balance sheet , and , getting down to brass tacks .. You as a user don’t want to end up owning a ' boat anchor ' of an asset that is still on your books but has little use or very little economic and financial value.

If your time is at a premium, and which business owners time is not, then you will surely be pleasantly surprised that the life cycle of acquiring your asset and financing it is much short via an equipment financing solution.

We have already shown you that financing options are limited, so why not choose the easiest and quickest route to approval - which more often than not is business equipment financing. The majority of approvals can be arranged within a week or so if you have a basic package that includes the asset quote or descriptions, your financials, and some basic business overview material on your firm and industry.

Many times the business owners challenge is what to do with equipment at the end of the lease - a lot of things can change in 3 or 5 years, which are the most typical lease terms. (By the way, it’s not unusual for some assets to be financed via leasing finance over 7 - 10 years; but you'll need to demonstrate company viability and asset value at end of term).

But back to that end of lease scenario - think of all the challenges - which might include: do you want to own the equipment, will you choose to return it, and will the asset be required for some indefinite time at the end of the lease...? Etc. All of those are unknowns, or challenges to your business financing. Yet leasing finance solves all of those - a carefully constructed operating lease can give allow you to face all three of the above challenges head on, and be in control of your asset destiny.

In summary - all business financing tends to be a challenge. In some cases of asset acquisition the challenge is layered with elements of risk and a lot of the unknown. Speak to a trusted, credible an experienced business financing advisor on how you can turn asset acquisition challenges into controlled opportunities for growth, asset management, and profit.

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Article Tags: abl loans, asset finance, lenders, revolver



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$1,000,000 - Hi Evan, Are you talking about US Dollars? If so, that would be approx £500,000 in the UK. The Canadian Dollars differs also from the Australian Dollar. In any case, one needs to solve problems to help people to get money. The more solutions are given to people's needs to solve their problems, the closer one gets. Finally, are we talking about 'Income' or can we talk about 'Asset'? Kindest Regards Beat "Unlock People's Potentials!"
Finance is the primary requirement of business - Finance is very important in a business. It is all about managing the business' money and other assets. Finance includes the study and analysis of processes, financial institutions, markets and instruments that are involved in the transfer of money or anything that has a monetary value among consumers, businesses and government.
Which kind of industries are you interested in? - Ecological or E-business or Investment or Finance or Management or Non-Profit or Retailer or others.
Different Types of Funding - Finance for business can be obtained through a number of different sources. Let's review some of those channels to help you decide what's right for your business needs: Grants There are over 930 different EU and UK grants and loans available from over 100 issuing bodies. This is the cheapest form of finance and an important part of the funding package that companies and individuals need. We can help you find your way through this maze. Technology Micro Projects: 50% of eligible costs up to £20,000 Research project: For a technical and feasibility study of an innovative idea for new technology 60% of costs up to a grant of £75,000. Development project: For development up to pre production 35% of costs up to a grant of £200,000 Developing an innovative idea: valuable for small companies and individuals at the start of a technical project: 75% of costs of hiring a mentor and consultants. Export To start exporting or moving into new markets grants of 50% of costs up to £20,000 each. Training and Education Knowledge Transfer Partnerships, Achieving Best Practice in Your Business, Investors in People Modern Apprenticeships New Deal for various grants. Environment BOC Foundation for the Environment: 25% to 50% of Project cost, typically £20,000 to £100,000 Clean up Fund: Emission reducing equipment up to 75% of cost Community Chest Fund: Up to £25,000 for projects near active SITA sites High Impact Fund: £150,000+ for larger projects near SITA sites Assisted Areas Regional assistance grants of between 10 and 35% for capital expenditure in less favoured areas of the UK. Loans Loans are an excellent source of finance if you have suitable security to borrow against or a reliable earnings stream. This needs to be planned and presented well to obtain funds. Credit cards Provides up to 56 days free credit if you play the game! Overdraft Banks are surprisingly supportive when presented with a well thought through plan and competent management. Bank Loans Lenders tend to look for a good business plan and security. Typically the loan is approved by a centralised back office function rather than the person you meet. Terms and rates depend upon the risk. Repayments can be very flexible to meet your specific needs. Mortgages These can include flexible repayment terms to meet your business needs. This can even be incorporated into your overdraft finance so that you have one flexible account for both personal/ business mortgages and overdraft Small Firms Loan Guarantee Scheme Up to two years trading: Up to £100,000 Over two years trading: Up to £250,000 However these are difficult to obtain and are a loan of last resort. Export Guarantee Scheme This is government backed insurance against appropriate export documentation. Mezzanine This is a halfway house between loan and equity. It can be an innovative way of raising funds for the more established business. Mostly for expansion capital. Equity This is not as easy as the papers would have you know. Only 1% of business plans received by Venture Capital Funds are successful. However, a good business proposition consisting of a strong demand for the product or service, management track record and a sound financial plan will enhance the chance of success. Business Angels These are high net worth individuals who are successful businessmen looking for investment opportunities. They can provide both time expertise and money. Typical investment size is £25,000 to £250,000 but can go as high as £2m for the right opportunity. Exit within 3-5 years. Venture Capital These are investment funds seeking high rates of return. However typically investments are over a million pounds. Some funds are targeted at lower amounts depending upon the sector and region. 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Invoice discounting Invoice Discounting can be Confidential or Disclosed; it depends upon the strength of the financial information. The service is the same as Factoring, except that the sales ledger administration and the debt collection is the responsibility of the client and not the Factor. Pre payment of the approved sales invoice is still up to 95% and the factor will still have a first charge on the book debt and therefore own the debt. This service can also have credit protection cover. All sales invoices need to be for a business to business debt, and some proof of delivery is generally required. Trade Finance This is funding provided against stock purchases, signed contracts and orders whereby the funder will prepay a certain percentage of the value Pension fund It may be possible to use your pension funds for a loan back to the business What do u think about it?


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