Tweet

Can A Financing Receivables Strategy Save Your Company ! A Perfect Solution Via Business Finance Companies ?

Guest post by: Stan Prokop

Article Overview: Information on financing receivables in Canada via business finance companies . Let a Confidential factoring solution save and grow your business!

Can A Financing Receivables Strategy Save Your Company ! A Perfect Solution Via Business Finance Companies ?

Survival. Growth. Are they different concepts? Business financing in Canada addresses of course both those basics. And one type of financing, the financing receivables offered by business finance companies seems to address both those issues very well thank you, in the SME sector. Let's examine how that works, what are some of the key benefits, and if in fact one optimal solution exists with this type of financing.



Clients we talk to are often frustrated in their attempts to achieve cash flow and working capital financing in an efficient, simple matter. They are looking for both flexibility, and speed in closing a solution - unfortunately they don’t always find it.



Receivables financing fits somewhat perfectly into solving the desires of Canadian business owners and financial managers. However the array of types of business finance companies that offer that solution, and how that solution is delivered can sometimes be confusing to clients.



So, the basics... a receivable finance (aka invoice discounting/factoring) facility is the sale, on a one of, or ongoing basis of your billed receivables. That sale allows you to receive cash, in advance of course, of the collection of that receivable. We've been watching the age of Canadian business receivables get older and older of the years and while the norm ' in the old days' used to be 30 the new norm is of 60-90 days... unfortunately !



Clients are always asking when the correct time to consider such a facility is. Some key factors that will help them achieve both survival and growth are as follows - double digit growth in sales, requests from customers for extended terms, pressure from suppliers for accelerated payments from your firm, etc. Any or all of those points can come together in a final decision to include a receivables financing strategy into your survival equation.



So if in fact you made that decision can you expect to receive benefits that are tangible and offset the cost of this financing, which is very typically higher than bank finance rates? The answer is ' yes '!



Key benefits include the ability to achieve higher revenues due to the working capital infusion you have just arranged. Your cash flow now becomes very predictable given that you receive funds as you generate sales - a lot of the seasonality and bulges around your business ups and downs disappears. And, contrary to what some clients believe, you're not borrowing funds and incurring debt, you are simply monetizing the left side of your balance sheet. Your A/R account simple reads ' cash on hand'! and that’s a good thing.



So what about the cost of this financing? In Canada it’s typically between 2-3% per month. That cost can be offset in a number of manners. The challenge we see clients face is in the way in which financing receivables in Canada is in fact presented by business finance companies. Rarely is the fee represented in a one time clear explanation - its masked with various miscellaneous issues.



Is there one type of facility that we recommend as optimal to clients? There is. It’s a confidential working capital/factoring financing that allows you to bill and collect your own receivables. You maintain the benefits of this type of financing, while being in control of your own destiny, and that growth and survival we spoke of!



Speak to a trusted, credible and experienced Canadian business financing advisor who can help you steer your way through the myriad of offerings in the Canadian business space.

Related Articles
  The Only Disadvantage Of Factoring Receivables And Why Confidential Accounts Receivable Finance Works!
  Your Choice - Right Way / Wrong way ? Canadian Accounts Receivable Financing & Business Factoring
  Study : Can Financing Receivables Via A Confidential Receivable Factoring & Funding Solution Save Your Company?
  Factoring Receivables ? It’s Up To You - Pick The Right Business Finance Company As Your AR Factor Partner
  Why Canadian A/R Finance Is Your Optimal Business To Business Lending and Cash Accounts Receivable Finance Strategy
  We’re Sharing the biggest Secret in business funding today and why factoring of accounts receivables isn’t what you thought!
  Requirements for a Business Line Of Credit in Asset Finance and ABL Lending in Canada .
  Where Cash Flow Factoring Fits In The Jungle Of Business Financing And Short Term AR Finance
  Don’t Let Your Company Collapse For Lack Of Cash Flow Financing . Canadian AR Finance For Receivables .
  What If .. Accounts Receivable Finance was the Perfect Answer to Your Cash Flow Financing ?
  The Unknown Secret In Canadian Accounts Receivable Finance - C I D Business Factoring And Financing in Canada
  Is Factoring A Solution for my Cash Flow Challenges in the Canadian Business Financing Environment?
  Heavyweight Canadian Invoice Finance Funding '" C I D Credit Financing & Factoring for Your Firm
  Imagine! Canadian Accounts Receivable Loans That Work – Financing Receivables The Right Way
  5 Advantages Of AR Accounts Receivable Finance In Canada. Using A Business Factor Funding Program Works.
  Want Some Business Financing Privacy ? Canadian Confidential Receivables Financing Is An Alternative To Commercial Finance Factoring Funding
  Excuse Us For Pumping Types Of Accounts Receivable Funding In Canada ! Intrigued By Factoring Finance In Canada?
  Receivables Purchase Finance In Canada . Don’t Get Caught Misunderstanding AR Financing strategies And Costs
  At Last ! New Method To Finance A Business - Canadian Confidential Financing Factoring Receivables
  Canadian Asset Based Finance Has All The Best Ingredients For A Business Line Of Credit – Business Receivables Financing

Article Tags: business finance companies, financing receivables



Related Forum Posts
How to valuate a business - Hi Garth - here is how we did it at Northern Crown Capital when I was helping them raise venture capital for Toronto-based entrepreneurs. Assume the start date is 2003 so 2008 projections are 5 years out: How Northern Crown Capital Valuates a Business 2008 Financial Projections Earnings Before Tax $5,865,000 Tax Rate 42% Taxes $2,463,300 Net Earnings $3,401,700 Amount Seeking to Raise Today $3,500,000 Discounted Value of Future Opportunity, 5 Years Out 2008 P/E Ratio 15 Value of Company in 2008 $51,025,500 Discount Rate Applied 30% Year 2008 $51,025,500 Year 2007 $35,717,850 Year 2006 $25,002,495 Year 2005 $17,501,747 Year 2004 $12,251,223 Value of Company at Investment in 2003 $12,251,223 Less: Investment Amount $3,500,000 Present Value $8,751,223 Discount for Risk & Private Company 40% Less: Discount for Risk & Private Company $3,500,489 Private Company Value $5,250,734 Present Value (What the Owner Keeps) $5,250,734 60.00% Financing (What the Investor Gets) $3,500,000 40.00% Total $8,750,734 100.00% I hope this helps!
Re: Google's April 2012 Update - As far as I understand, Google's main search mission is to deliver The Best Solution Possible, when you type in a query. This means that they kind of _cant_ teach people how to "game the system" and rank themselves. The way I see it, by the time Google's done evolving their algorithm, the only way to get to the top is going to be "Be A Fantastic Solution Provider... across the board... for your niche/keyword."
Re: Finance is the primary requirement of business - [quote="rauljoseph":36x8dadn]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.[/quote:36x8dadn] Good point. I'll just add that if I was going into business for myself and could only have one skill it would be Sales & Marketing. You need to be able to create customers first and foremost. Finance is more of a support function for entrepreneurs.
Book: Secrets of Six Figure Women - Secrets of Six Figure Women: Surprising Strategies to up your earning and change your life Barbara Stanny, 2002 Jacket: Maybe you've noticed - a subtle trend is gathering steam. Quietly and steadily, the number of women making six figures or more is increasing, and it continues to rise at a rate faster than for men. From entrepreneurs to corporate executives, from white collar executives to free lancers and part timers, women are forging careers with considerable financial success. Through extensive research and hundreds of interviews, including dialogs with more than 150 high earners whose annual incomes range from $100,000 to 7 million, Stanny discovered that ...they all had certain traits in common: 1) a profit motive 2) Audacity 3) REslience 4) Encouragement 5) Self-awareness 6) Non-attachment 7) Financial knowhow She amplifies on these in the book itself. Table of Contents Intro: Welcome to the era of the six-figure woman 1. The Queen in the Countinghouse 2. The Lowdown on low earners 3. Raising the bar 4. Strategy 1: The Declaration of Intention 5. Strategy 2: Letting go of the ledge 6. Strategy 3: Get in the Game 7. Strategy 4: Speak Up 8. Strategy 5: The Stretch 9. Strategy 6: Seek Support 10. Strategy 7: Obey the rules of money 11. Claiming our power Appendces: Resources and websites Tips for getting out of dent Investing Basics: Wealthbuilding 101
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.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Using your social media profiles to drive traffic

The Strong Leadership Formula

Are You Too Good for Your Job?

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.