Do commercial finance solutions seem out of reach – want a simple solution? Go visit a Canadian chartered bank and get all the business credit you need! Unrealistic… maybe, maybe not, but one sure fire solution for your problems might be an asset based lender.
For many years now the non bank asset based lenders have been working with firms such as yours on credit facilities that fit the real world need of your company when it comes to inventory, receivables, equipment and real estate.
Canadian business owners and financial managers are probably asking themselves why they haven’t heard of this before – we’ll hit you with another shocker, some of the Canadian banks even have internal divisions of asset based lenders that compete with their regular commercial banking business!
Anyway, the bottom line is that this Canadian business financing solution might be your ultimate cash flow and working capital solution.
For the uninformed asset based lending is essentially a revolving line of credit which provides you with working capital, cash flow to cover your operating expenses and growth needs. Why is it different then from a typical bank type operating loan? Simply because there is only one focus, the assets. And because the asset based lender is a specialist in commercial finance and the value of your assets you ability to draw on those assets intensifies greatly – in many cases you will obtain 50-100% more leverage on your current assets than you ever have before.
Again, why is this so different – its because the focus is on your personal credit, your company’s current or past challenges… its solely on, you guessed it..’ the assets’!
In certain cases even a purchase order financing type facility can be put in place, and more often than not the asset based lender will accommodate what we term as ‘ bulges’ or unusual temporary needs of your business based on seasonal cash flow, large new orders or contracts, etc.
As a business owner we think you can see that the total focus now seems to be on your future sales ability and the overall bench strength of your assets. It certainly is not untypical to receive 90% financing on receivables and 50% or often more on your inventory as ongoing advances for your cash flow needs. We also tell clients that unencumbered equipment can be factored into the facility also, so you in effect have a fixed asset that provides you with working capital. That’s creative financing!
Clients always asked what the approval criteria are – the truth is that the criteria that an asset based lender requires are significantly less demanding than those imposed by bank, the latter focusing on rations, covenants, external collateral, strength of persona guarantees, and on it goes.
Commercial finance made easy is a great by line for an asset based line of credit. After a standard business financing application and submission of back up date which would include aged receivable, inventory listing, equipment list, recent financial statements, etc you would typically receive an expression of interest. After initial due diligence on your overall asset size and quality typical security documentation and registration takes a couple of weeks.
Speak to a trusted, credible, and experience Canadian business financing advisor who can provide you with clarity on cost, process, and most importantly, the benefits of an asset based line of credit or working capital facility.