Something that works. We all want it. And in the financing of new business realities 2010 and 2011 supported by asset loans may be your new choice for Canadian business financing.
Asset-based credit pathways become more popular every day. This is just a loan method for a new Canadian business with a total focus on assets. ‘Assets’. That’s the key word. Where are they assets? Ask the client. Usually this includes inventory, engine receivables and equipment in your fixed asset section of the balance sheet, and in some real estate cases. In some cases a very unique IP, or intellectual property, LA patent, etc. can be financed.
Another general general category is tax credit, such as SR Ed (SR & ED) tax credit. Tax credit applies to accounts receivable, money because you are from the government in the form of unpaid type grants. So it monetizes the asset as soon as you can give you to hire cash more efficiently in your business.
Our clients usually imagine inventory and receivables as the only items they can margin liquidity with their banks. The reality is that even inventory financing becomes more difficult in the bank environment rented, of course to start, smaller and medium. Therefore, it is a major difference in loan facilities and working capital of supported assets; In its simplest form, it’s just margining all other assets to capture maximum liquidity.
So who actually uses this type of cash flow facility, and why they are a very solid alternative for what is called ‘traditional’ bank financing. (We are not so sure today that the ‘traditional’ bank financing is used as it used to be – what do you think?!)
The truth is that this type of Canadian business financing is an alternative to bank financing, which is actually available, and allows you not to consider more unpleasant options such as increasing new equity and dilute your ownership.
We are all for bank loans safe … if your company can qualify for all those needs. But if you have financial challenges, consider the assets supported by loans as a solid choice. What are the ‘challenges’ that we are talking about may not allow you to get Canadian vacation bank financing … problems such as temporary losses, new turnover, ownership, balance sheet ratios and agreements that may not work for banks, etc.
Finance-based assets don’t really care about all these problems – yes they are discussed, but always return to ‘assets’ – and if you have it, you can margin them every day for working capital and cash flow.
So what is the catch. While we feel the advantage of the row of credit-based assets far exceeds alternatives, the reality is that 95% of this type of financing time is more expensive. It also requires more continuous reporting, although most of the business owners that we talk to will be happy to pay more financial costs and ok with reporting if they are in fact have all the cash flow they need to grow and get profit in a competitive environment At the moment. You can also expect a little more complete test on the quality of your assets as a whole when you set up facilities.
There is always a bottom line in business, and in our case today is that the line of credit facilities supported is a new and developing working capital financing that provides your company with all growing liquidity. Talk to credible, experienced and trusted Canadian business financing advisors to determine whether this type of working capital and credit facilities benefit your company.