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We Predict You’ll Love asset financing credit facilities when seeking business finance loans

Guest post by: Stan Prokop

Article Overview: Information on credit facilities and business finance loans via asset financing and asset based lines of credit . Why will this type of financing become the standard, not the alternative?!

We Predict You’ll Love asset financing credit facilities when seeking business finance loans

Making a prediction is a sometimes risky scenario , potentially damaging to your credibility , but we're quite confident in saying that Canadian business owners will recognize non bank asset financing as credit facilities for business finance loans to be the best thing they every heard of when it comes to financing their business .

Quite frankly we don't think we exactly going out and making a stretch comment because, hundreds if not thousands of Canadian firms are investigating and utilizing this type of financing.

As the Canadian business economy turns itself around going into 2011 most of are clients are finally focused on growth again .But how is that growth to be financing, since lending standards and criteria at institutions such as the banks don't appear to have been liberalized at the same pace that your company hopes to grow at!

That's where our trend prediction comes in. Asset based lending focuses on your assets and growth opportunities - it doesn't focus on rations, tangible equity in your company, rations, covenants, cash flow coverage, etc, etc, etc!

So you are picking up on the opportunity, let's see how things work. Asset based lenders keep it simple, they lend a very high value against your ongoing assets. What are the typical assets lent against - you can almost guess what they are. They are receivables, inventory, unencumbered equipment and real estate.

The big mystery around based lending']);"> asset based lending in Canada, based on conversations with our clients, is that business owners don't really know or understand who these firms are. So we'll tell you.

They are specialized firms, both Canadian and U.S. based, that focus solely on providing credit facilities and business finance loans with your assets as security. They take the same security as a Canadian chartered bank would, and you manage your facility on a day to day basis, drawing down cash as you need it. Funds are wired into your account as you need them, based on... guess what ... assets! That really is the one key difference that our clients pick up on, that the total focus of this type of assets financing is the collateral itself.

We already know your next question... because we've heard it a hundred times before. Its' how much can we get '... followed by what does it cost.

Speaking in general terms your receivables are financed at 90% of their value, and because of the nature and marketability of different types of inventory this type of collateral is margined anywhere from 25-75% . Recall we had noted that unencumbered equipment can be drawn against also. Typically an appraised current market or liquidation value is agreed upon with you and the asset financing provider.

Costs vary around this type of financing. On occasion it is competitive with bank financing - and giving you twice the liquidity - but more often than not it's more expensive. You offset those costs by greater access to credit facilities that will grow your business and profits.

Speak to a trusted, credible and experienced Canadian business financing advisor who can walk you through the Canadian landscape of business finance loans in the based lending']);"> asset based lending area. You'll quickly find, we think, that our prediction is becoming more true every day, asset based financing is hot! And here to stay.

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Article Tags: asset financing, business finance loans, credit facilities



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The Double Close/Escrow - Hello, I was in business for many years and have decided to buy another. Retirement isn't what it was cracked up to be. BITD if I needed a piece of equipment or bought another business I just put up 20 percent and the bank did the rest. I have been reading about another way however and hope some of you can fill in some blanks for me. What I am reading about is the double closing which uses a swing loan and an asset lender to purchase the assets of a business to use as the down payment. As below: 1.You arrange a swing loan for the down payment amount from the bank and give this to the seller. Supposedly after the paperwork this transfers title of the business and its assets to you. 2. In another room you have a second closing set up with a asset lender who loans you the amount of the swing loan which you use to pay off the swing loan. Now the asset based lender owns the assets as collateral for his loan and the seller is owner -financing the remaining balance. Now , I get a double escrow close in real estate circles but there are a couple of things about this business purchase situation that I don't understand. If the seller of the business is owner financing it and has the first lien what is his motivation to allow his assets to be used for collateral to the asset lender? Does the asset lender take a second lien on the asset loan he has just made( the down payment)? Or does it truly mean that during the first closing where the seller received the down payment that the right to do whatever I wanted with the assets was truly transferred to me and I can now give the asset lender a first lien position? This seems very strange to me but I continue to read about it in numerous places and the methodology never varies. Again, its been awhile since I did all this and we were much simpler back then. However, even then it took an act of God and Congress for any first lien holder to give up that position. Even for a very large down payment. Any help you guys and gals could give me would be greatly appreciated. All the Best!
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