Cash flow finance solutions allow your business to comfortably strengthen your firm’s decision ability as well as financial future. One method employed by thousands of business owners/financial managers is account receivable funding, and in particular we’re talking about Confidential Receivable Finance, allowing you to bill and collect your own receivables. And no ‘ secret phone call ‘ is required! Let’s dig in.

Planning your cash flow with the right external financing solution allows your business to better identify growth opportunities as well as avoiding the proverbial ‘ cash flow crunch’ that comes with the ebb and flow of sales.

And the right solutions will always help you ensure profits without the risk of lacking working capital. While businesses have numerous traditional and alternative capital raising mechanisms those needs must also be properly communicated to any lender.

If your firm has ‘ sales ‘ it’s always a candidate for A/R financing. Thousands of firms that can’t attract a bank finance solution have the comfort of knowing their sales can be financed via receivables funding. This is short term financing at its best, allowing you to pledge / sell your customer accounts to fund obligations such as payroll, inventory/materials, and… growth in those sales! It’s critical to understand that this solution is not a ‘ loan ‘ – there are no fixed payments – it’s a continuous revolving credit facility.

The confusion that exists between bank A/R financing and non bank financing lies in the way the collateral (i.e. your A/R) is documented. In the case of the bank its ‘ pledged ‘ while Confidential receivable finance via a 3rd party commercial finance firm stipulates specific receivables are ‘ sold’ as opposed to pledged. Simple as that.

While a non bank solution will always be more expensive than the bank it’s a solid, effective way to finance your business. And more often than not it’s a ‘ bridge’ to getting back to a formal chartered bank relationship. which in the case of financing receivables is , in essence ‘ Unsecured Financing ‘.

There’s a whole range of reasons thousands of Canadian businesses gravitate towards 3rd party commercial receivables finance. Has your business ever been in any of the following categories?”

Banks refused to grant you the amount of business credit you need

You have a bank line but it’s not enough!

Your firm is relatively new

One or a few customers represent a large portion of your sales – (known as ‘concentration ‘)

How then does CONFIDENTIAL RECEIVABLE FINANCE work? At the core is the fact that, unlike traditional ‘ FACTORING’ offered by 99% of commercial A/R financiers, no notification is required to your customers. So financing is clearly on the ‘ honor system ‘ given that you’ve received funding for your accounts and are obligated to pay back when your clients pay. Business owners are quick to see the positive impact of maintaining 100% of their client relationships, from sales to final invoicing and collection.

If you feel your firm can benefit from a winning recipe for A/R funding seek out and speak to a trusted, credible and experienced Canadian business finance advisor who can assist you with your cash flow finance needs.