New financing sources in Canada can be a challenge for firms that are in one of three categories when it comes to alternative finance. They might be a start up, or perhaps they are in hyper growth mode (traditionally banks and certain other institutions don’t like hyper growth!), or, finally, the company might be recovering from major challenges. They are in fact in turnaround mode and the faster the better.

Even firms that might be coming off a bad year, with solutions in place do in fact find that new sources of finance are difficult to achieve.

Why is that? Well, forgive us for sounding like father time here, but the word ‘ credit ‘ as in ‘ business credit ‘ comes for the Latin word ‘ credo ‘ which is to ‘ trust and believe ‘. And, surprise, surprise, your vendors, or your current bank, or worse yet, your valued suppliers can probably be forgiven for mistrusting a bit after your firm has gone through a challenging period.

So the goal of the Canadian business owner and financial manager is, of course, to reinstate that relationship to its former glory!

That’s where asset finance comes in, because your business asset, ie receivables, inventory, equipment, and perhaps real estate allow you to focus on mending that reputation, or loss thereof , you have with our three aforementioned parties .

If it was a perfect world, (apparently its not) the best route would be standard ‘ traditional’ financing as we know it in the Canadian marketplace. That typically comes from a bank, is has great flexibility, rates are low (they are lower than ever these days!) and are easily achieve, if (here it comes …!) you have solid business creditworthiness. That of course means profits, clean balance sheets, and cash flow and debt ratios that make sense… to the bank.

That is why asset based loans and financing, whether they be bridge loans or straight asset monetization of working capital accounts.

Asset based lending in North America goes back to the early 1900’s. In Canada it has gained significant traction in recent years, simply because specialized non bank asset lenders are comfortable with your business collateral .Although rates are typically ( not always, but typically ! ) higher than the Canadian chartered banks they provide great liquidity for receivables, inventory, fixed assets, and even a real estate component can be thrown into the mix .

If you are not the ‘ investment grade ‘ credit that is sought by banks and insurance companies then investigate asset based lending financing sources in Canada . Typical advances of A/R and inventory are 90% and 5-80% respectively.

Speak to a trusted, credible, and experienced Canadian business financing advisor for alternative asset finance solutions in Canada.