Asset based lending companies have come a long way baby! Seriously though, business funding has dramatically changed in Canada – it was always a challenge – 2008 Global implosion happened, and guess what, business financing is more challenging than ever. Every Canadian business owner and financial manager for companies of all size and industry knows that.
We’re all heard that when the going gets tough the tough get … well you know what we mean. So business financing via asset based lending was slowly becoming more popular in Canada (It’s huge in the United States) and has become, can we say ‘ ultra popular’ in our current time.
Asset based lending as new as it is in Canada certainly can’t really be called ‘ innovative ‘- it simply focuses on, guess what ‘ assets ‘! It is essentially a great financing solution for companies that are normal, distressed, leveraged, experiencing high growth, etc.
The problem we have with the term asset based lending or asset based finance is simply that it is a bit of a catch all when it comes to being used or explained to business owners. We define this type of business funding as revolving lines of credit based on asset quality, receivable discounting, inventory and trade financing, which sometimes can actually include purchase orders or contracts.
The reality is that this type of financing can be customized to every industry for companies of all size, although typically we tell clients that the facility works best on transactions of 250k+.
Asset based lending companies can help you manage and grow your business, with the focus on ‘ grow’,
The biggest mis understanding around asset based lending is that typically it is not done via a bank; it is managed through private independent finance firms that are very experienced in asset valuation and funding. Their experience allows them to take a look at your financeable assets and maximize what is known as an ongoing ‘ borrowing base’ for those assets. Typically we are talking about receivables, inventory, equipment, and as we noted, in some cases purchase orders and contracts.
The benefits of working with asset based lending companies are that it is a fast, innovative method of financing your company that is not focused around the requirements that a Canadian chartered bank would typically impose. We can honestly tell clients we have never seen an asset based line of credit not deliver on significantly more financing that the customer would have ever achieved with a bank revolver.
So what’s the bottom line – simply that by investigating this method of business funding you potentially have the ability to enhance your overall business financing for growth and success. Speak to a trusted, credible and experienced business financing advisor who can put you on track to better business financing! That’s a good thing.
Stan Prokop is founder 7 Park Avenue Financial ; Originating financing for Canadian companies,specializing: working capital, cash flow, and asset based financing , the 6 year old firm has completed in excess of 45 Million $ of financing for companies . For info / free consultation on Canadian business financing / contact details see: