Friday, April 12, 2024

The key to working capital funding – asset-based lenders


You are wondering how your competition seems to have all the financing of working capital they need and do not do it – the key to this response might simply be lenders based on assets and credit lines based on assets they offer Canadian companies such as yours.

Let’s look at how this relatively new and unique business financing method can completely change the success of your commercial financing.

The acronym of this type of financing is a B l; Just talk about its daily cash flows supplied against your current assets and sometimes as current. What do we mean by that? Simply that this installation allows you to mark your receivables, inventories and in most cases, if you choose, fixed assets and real estate. You probably say you can organize funding on your own fixed and real estate assets – but we are talking about the use of these assets as a guarantee for your daily renewable credit line. So, you do not borrow, you do not bring debt to your balance sheet, you simply pull out of your “assets” (it’s the “A” in ABL!) For daily cash flows and the working capital.

And why do we claim that this type of working capital funding could be your key to business success. Simply because you have probably found this has been difficult to get the total amount of the business credit you need. In some cases, you may have discovered that it was a challenge to get business sectors in any way.

So if your competitors use this type of funding today, who is eligible exactly to this and is your business a candidate. The answer is simply if your company has a combination of 250,000 rolling assets, you are immediately eligible for asset-based credit lines. We would add that small asset sizes companies can always monetize these receivables through financing or a reduction of the invoice, but it is not our main objective for the exchange of information today.

So now you now, the offer is there. But why should you consider it. Simply because your business could be in one of the special situations, which includes problems such as your need for a daily liquidity increase, you want to merge or finance an acquisition, you have not been unable to Get inventory financing elsewhere, you are growing rapidly for traditional charter bank financing in Canada, etc.! We are pretty sure you get the picture now!

The benefits of this type of business financing must now be quite obvious. This is access to the financing of working capital and cash flow that you have not been able to access before. Assets that could not be funded are now funded and funding inventory, previously limited or unavailable is now on your growth horizon.

Who are these asset-based lenders and what is the cost of this funding? We will leave that one for another day, but if you want to investigate credit lines based on assets for your business (remember, your competitor probably already already already), then speaks to a Canadian financial advisor. Trust, credible and experienced that will help you by identifying the benefits and the best solution for your current business finance needs.

Zayd Dana
the authorZayd Dana