Tweet

Who Are The Best Asset Based Lenders ? Looking for loan financing companies in Canada for Working Capital?

Guest post by: Stan Prokop

Article Overview: Picking the best Asset based line of credit for your firm is easy !Information on asset based lenders in Canada . What loan financing companies offer this type of working capital financing and why it makes sense for your firm to consider it . What is an asset based line of credit explained

Who Are The Best Asset Based Lenders ? Looking for loan financing companies in Canada for Working Capital?

We know where you are at. You've heard about asset based lenders, are a bit confused about this type of loan financing (It’s not really a loan) and you want to know which companies in Canada best suit your working capital needs.

Everything seems to be going ' viral ' these days, and we strongly feel that based lines of credit']);"> asset based lines of credit from Canadian asset based lenders are right up there - to put it simply, they are ' trending up ' in popularity .

Let’s examine the key basics of the service offering of asset based lenders in Canada and determine how you pick what's best for your firm. That is the real challenge.

So, again, what is the service offering really about when you're looking for an asset based lender? It’s actually a bit more simple to understand than you think. Clients we talk to are of course 100% familiar with a bank operating line of credit - that’s been available forever - if , and its a big if, you qualify.

Loan financing companies offering asset based liens of credit are simply finance firms, usually private and independent , that offer you an operating line of credit - based on the true value of your receivables , inventory, and in many cases fixed assets or real estate that don’t have other liens on them . Simple as that.

We know you're struggling to see the difference between that bank facility and this newer version of it. The key differences are simply, and that’s why hundreds, probably thousands of firms are moving to this type of working capital and cash flow facility. We'll summarize the benefits of that facility quickly and easily. They are as follows: easier approval, less collateral, covenants and guarantees from owners, more liquidity, and unlimited financial borrowing power.

Let's cover off those last two points a bit more; they are the ones that most intrigue our clients who are considering the switch. Asset based lenders approve many firms for either more working capital than the client would have received from a bank , or often times approvals are based on facilities that never would be approved by a bank in any circumstances .

Don't believe us? Actually many firms who are even in special loans or coming out of bankruptcy can, in many circumstances, access asset based lenders. Why? Because they have the one thing an ABL (that’s the acronym for the industry) needs: ASSETS!

So we think we've got you onside with the benefit of an based line of credit']);"> asset based line of credit from loan financing companies in Canada that offer these type of revolving facilities. But which one is best for your firm.

Here's what you need to know. We speak of a ' loan ' but keep in mind this is basically an operating line of credit for your firm. The factors that affect who you are best to deal with are as follows - the size of your facility, the current financial situation your firm is in, where you are located, and the mix between A/R, inventory, and those other assets you might have on hand. These type of facilities work best when they are in the 250k and up range. And by the way, up in our case means anything up to 50 Million dollars, or more!

If your firm doesn’t qualify from a size perspective there are still some unique business financing strategies for current assets that makes sense.

Speak to a trusted, credible, and experienced Canadian business financing advisor. You'll be on the road to improved working capital health in a short time!

Related Articles
  Sources of Financing for Working Capital Cash flow in Canada
  Is There A Better Way To Finance A Business Loan ? Consider An Asset finance strategy.
  Asset Based Lending Canada - Why An ABL Working Capital Loan is Your 2011 Finance Solution
  Why A Business Asset Based Loan Financing Is The Perfect Solution For Cash Flow In Canada
  What’s Your ABL Finance IQ? Info On Canadian Financing By Asset Backed Lenders !
  Asset Based Lines of Credit – Canadian Financing Solutions
  Working Capital Finance Loan Advice – What Business Credit Is Available For Your Firm ?
  Worth Considering – Why A Canadian ABL Lending Facility & Asset Based Loan Is Unique
  SBL Loans In Canada. Degree In Rocket Science Not Required For The Canadian Small Business Loan
  The Myth Of Inventory Finance Companies
  Understanding Canadian Working Capital Finance – Cash Flow and Institutional Loans & Private Lenders
  Asset Based Line Of Credit and Working Capital
  Why an Asset Based Lender Is Your Working Capital Solution
  Is Asset Based Lending a Viable Option For Canadian Firms?
  It’s No Secret That This Type Of Canadian Business Credit Line Works – Here’s Why!
  Does An ABL Loan Deserve A Full Chapter In ‘ The Book Of Awesome’? Asset Revolving Line Of Credit Facts For Canada !
  Asset Based Lending Facilities for Canadian Firms
  Is ABL lending And Banking the Fountain of Youth Of Business Financing ? Financing Via Asset Loan Lenders
  Asset Based Financing in Canada – 3 Things You Must Know
  Asset Based Lines of Credit - Canada – The ‘ ABL ‘ Solution for Business Financing

Article Tags: asset based lenders, lenders in canada, loan financing companies, working capital



Related Forum Posts
interested but... - Nana- That was an interesting article, however, it's been my experience as a financial advisor who works SBA franchise loans of 100K - 3 million (daily) that when anyone finances a business via personal resources rather than a business loan, they cannot obtain a working capital loan later on. Should they need it to keep going, they may find themself in trouble. It's better to build a track recrod with a lender right from the start (for future use). It's always better to be in business debt rather than personal debt Lenders tend to take on the attitude that you didnt need them before, so why should they help you now! They simply won't take on the risk. I dont recommend anyone financing themself.
Re: Women and Financing - It's Difficult! - I found this paragraph of interest (in the article from Nana's link: [quote="Nana":3r7womqv]Other studies show that women operate more service and retail establishments than men, which might explain their difficulty in getting financing since financial institutions often consider these two sectors more risky. However, although women are generally less inclined than men to apply for financing, when they do, they are more likely to get it. According to a study by Industry Canada on SME financing in Canada, in 2000 majority female-owned SMEs obtained a loan approval rate of 82%, which is slightly higher than the approval rate for majority male-owned businesses (80%). This suggests that when they do apply for financing, businesswomen submit excellent applications. [/quote:3r7womqv] They say, "Women are more likely to get [financing]." But the difference is only 2 percentage points! Big deal! And, that was only for one year, 2000. I'd like to know what the 10-year average is. Numbers can be manipulated to mean anything you want them to mean...it all depends on what you want to show.
Business Cash Advances - Typically, businesses that are open for at least 6 months and do at least $3,500 a month in credit card sales are usually eligible for cash advances or working capital. Based on credit card sales, these type of companies, rather than using your personal credit and/or assets for collateral will fund you based on your past and present credit card receivables. They are generally repaid on a fixed percentage each time you close out your merchant terminal until your loan is satisfied. No specific loan terms. It differs from a business loan or lines of credit because your personal credit doesn't come into play,you dont need a down payment, you dont need a business plan and generally for loans under 100K they do not even require tax returns or other financial documentation. There is also no specific term for the time you have to pay it back. Has anyone had any experience working with companies like this? Was it a good experience or a bad experience; and why?
Getting financed - It has always been my experience that it will always be better to be in business debt rather than personal debt, but I suppose when you can run your business out of your home and have so little overhead, it could be better to simply finance yourself and secure a business line of credit just in case you need it. On the flip side, when it comes to businesses outside the home, you want to secure financing and SBA is probably the way to go (depending upon what your total project will cost). Banks that provide SBA loan products prefer the loan be 100K or more. Then there are Micro Loans (loans that go up to 35K) and Signature Loans that are unsecured loans and mainly based on your credit score (680 or higher), they can finance anything in between and then some. It's been said in some of my other posts that when you obtain business loans its beneficial because you are building a track record with a lender for future use. Should you get financed via a business loan and later you need additional working capital to keep your business going (or to expand) the lender is going to be more apt to help you because they have already taken on the risk of your loan. Now, they would prefer you better yourself whether it be expansion or to pull yourself out of a hole so you do not default on the 1st loan... and if that means helping you further, believe me they will do it. However, if you finance yourself, who's going to help you with additional working capital if you run into trouble? Lenders won't help you because you financed yourself...they tend to take on the attitude that you didnt need them before, so why now? What if you had originally financed yourslef with home equity and still haven't paid it back...now you have a first mortgage a second or Home Equity line of Credit and your business is in touble and you have no way out.
canada resources - I used to have a connection to a franchise consultant in Canada at "Franchise Officer" in Toronto. I wish I could remember his name ( but I can check my files at the office tomorrow). Anyway, he had a lot of connections to banks in Canada. He may know of them and may be able to offer some feedback. If you are looking for a business loan, Canada has similar business loan programs to that of the USA's Small Business Administration (SBA). I think its SLBS in Cananda, and I probably have the list of it's lenders in my office also. Do you think either can be helpful? If so, I can get back to you with this information tomorrow. Let me know!


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

Web Design in 30 Minutes - Can this be Right?

3 Key Factors For Raising Capital

How Promotional Caps became a Fashion Trend

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.