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Asset Based Lending - What you wanted to know and were afraid to ask!

Guest post by: Stan Prokop

Article Overview: The articles reviews asset based lending in the context of its continuing rise in Canada as a business financing alternative for growth and capital

Asset Based Lending - What you wanted to know and were afraid to ask!

Asset Based Lending - Canadian business owners and financial managers continue not to take advantage or investigate one of the most powerful business financing strategies available to Canadian firms today.

While asset based lending, or ABL lending as it is sometimes called is a very common U.S. and European financing tool Canadian business has been slow to catch on and investigate this option.

ABL lending is coming into popularity on a slowly but increasing basis in Canada because it provides your firm with increased liquidity - i.e. more working capital and cash flow! Asset based lending is certainly not the only choice - your firm can be financed by a Canadian Chartered bank line of credit, a single factoring or invoice discounting facility, or possibly by some other mix financing strategies .

When we meet with business owners and talk about why based lending']);"> asset based lending is coming into vogue it is our opinion that this is not a fad, but a financing solution and reality brought about by the 2008 and 2009 liquidity crisis in Canada which affected every aspect of Canadian business financing. New, start up, and even established corporations found it more difficult to get business financing that suited their needs, so, necessity being the mother of invention, Canadian business owners looked to see what was working where! ABL, or based lending']);"> asset based lending in Canada is a huge industry, with many market participants. The Canadian market place, similar to other aspects of Canadian and U.S. business comparison is smaller, more fragmented geographically, and a bit less robust.

We strong recommend that business owner's work with a trusted, experienced and credible advisor in this area to map out an based lending']);"> asset based lending solution that works best for your firm, as each industry differs with respect to asset based and capital requirements.

We have all heard the term 'perception versus reality 'and based lending']);"> asset based lending is a great example of that phrase. By that we mean that many perceptions exist about based lending']);"> asset based lending that simply aren't true, or if they were perhaps true once they certainly are not now . As and example your firm might not be willing to entertain asset based financing because 'ABL 'is simply unknown to many of your business peers. The reality is that many of the largest and most successful organization in Canada, some of them public entities utilize ABL solutions.

Asset based lending is clearly an 'alternative financing 'form for your business liquidity. Many customers view the word 'alternative 'as a negative statement, which might infer financial problems etc. ABL should simply not be viewed in such a negative way. If your Canadian firm had an asset based financing facility that gave you more working capital, greater cash flow turnover, less restrictive covenants, and competitive pricing would you view that as a negative? We clearly don't think so!

In summary, investigate based lending']);"> asset based lending for your firm as an alternative long term source of working capital and cash flow. Work with a dependable and experienced advisor to structure a facility that meets your working capital needs. You might quickly find that other firms in your industry and your competitors start to realize that your firm differentiates itself in a very positive manner based on your new financing facility - i.e. access to more working capital, better relations with suppliers, ability to finance more inventory and receivables and grow your business. ABL - investigate and inform yourself of the possibilities.

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Article Tags: abl financing, asset based lending, asset based lending canada



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Re: Quote of the Day - "Don't be embarrassed about asking "stupi - One of my favorite requests when leading a class, workshop, lecture, interview, whatever... There are no Stupid Questions, don't be afraid to ask - someone else has the same question, but is afraid to ask On the other hand - try anticipate the questions Back to the first hand - Some People ARE dummer than a ROCK
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How to get financed - We looked at doing the same thing. Problem is you own the truck out-rite, so most require a add on to your title or release of title to them for liability should you default. Contact Kevin at RV Lending, he assisted us with our stacker transporter, pretty easy to deal with and straight up with the answers before you give all you personal information. Good luck
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