Tuesday, January 21, 2014

Business Line Of Credit Loans : Rethinking Business Finance !ternati"es #n Canada

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&ood Business Credit Line Cost '

O()R(#)$ * #nfor+ation on the a,i!ity of Canadian ,usiness to se!ect the right ty-e of financing .hen it co+es to ,usiness !ine of credit !oans / Bank and other Co++ercia! financing a!ternati"es are discussed

What does a good ,usiness !ine of credit cost? Actually there are some definite answers to that question regarding business line of credit loans in Canada , but the better question , in effect your rethink might well be what does it cost if your business doesnt have access to this type of financing. et!s dig in. A re"o!"ing credit !ine "it#s not a loan per se$ is almost always a requirement for any type of business that sells on commercial credit to business clients. "%etailers and others that sell on cash are often deemed to be self financing without the need of revolving facilities$ A lot of the demand for a business credit line is driven not by the ebb and flow of your business, but by seasonal demands and bulge requirements around things like !arge -urchase orders and contracts awarded your firm. &'perienced and successful business owners and financial managers plan well for repayment of their ! term! debt ( but its )ust as important, and possible , to take the same approach in a revolving business credit line. A very common question posed to us by clients is in fact ! how much of a revolving credit facility will we actually need and apply for?! *he actual need can actually be nicely mapped out by certain key !assumptions! you make in some key components of your business. And those key components? *hey include things like your starting cash balance, anticipated collections based on your terms and collection e'perience, and the rate of interest charged on by your bank or commercial finance firm partner. *he right si+e facility will allow you to draw on cash flow needs as your firm requires, while avoiding

huge negative outflows that will impair your abilities to run your business , i.e. payroll, loan payments, supplier commitments, etc. -tart up or early stage companies have a huge challenge when it comes to obtaining true bank lines. .ecause they don#t have profits, historical cash flow and other outside collateral more often than not they need to address non bank sources of business credit. *hese include/ 0R Financing sset ,ased non ,ank !ines of credit Ta1 credit ,ridge !oans #n"entory Financing Contract02O Finance *hese solutions allow business owners to not have to raise outside equity, offer up personal collateral, or put personal credit history at risk. Business credit !ines are used to run and grow your business , they can also be key components of a ma)or growth plan, or even when you are considering merging with or acquiring another business. 0n many cases firms that have found themselves sin dire straits use these types of facility to help manage a ! turnaround# A. !Asset based ! credit lines are non bank in nature and best suited to this type of strategy. 1h, and what does a business credit line cost? Current bank rates are at all time lows so typical rates are in the 2,34 range, sometimes lower, sometimes higher. 5on bank rates can provide double the liquidity but are 6,2 times more e'pensive, but deliver on capital and cash flow you require. 1ur advice 7 focus as much on access to capital as cost of capital . .oth are important . -eek out and speak to a trusted, credi,!e and e1-erienced Canadian ,usiness Financing d"isor .ith a track record of success who can help you ! rethink! financing requirements.

3tan 2roko- , 4 2ark "enue Financia! / htt-:00.../4-arka"enuefinancia!/co+ .usiness financing for Canadian 8irms , speciali+ing in working capital, cash flow, asset based financing , &quipment easing , franchise finance and Cdn. *a' Credit 8inance . 8ounded 9::2 , Completed in e'cess of ;: <illion = of financing for Canadian corporations . #nfo 0Contact :

4 2ark "enue Financia! 5 Business Credit Line )1-ertise

6a"e 7uestion 0Co++ent On Our B!og Or Canadian Business Financing !ternati"es ' CO8T CT: 4 2ark "enue Financia!

-outh -heridan &'ecutive Centre 9;>: -outh -heridan Way -uite 6:> 1akville, 1ntario ?@ A@B %irect Line C 2>? 6>; 3A?; Office 5 ;:3 B9; 9?36

)+ai! 5 sprokopDAparkavenuefinancial.com 9 Canadian Business Financing .ith the inte!!igent use of e1-erience 9

3tan 2roko-