Whether he or she likes it or not Canadian business is somewhat obsessed with growth. It might come from the perception that to be successful you in fact have to grow. We’re not 100% sure we disagree, but if your firm is in fact placing a high priority on growing financing is probably a challenge your consistently facing.

We do admit there might be some risks to not growing a lot – they might include the ability of competitors to run all over you, even going as far as stealing some of your people and clients.

One of the ways to feel a lot better about ‘ growth ‘ is the utilization of Receivable finance as a method to enhance your overall return on capital. Your growth in fact can come from only 4 areas… they include acquiring business your competitors previously had, raising your prices, seeing your industry grow as a whole, and finally .. your potential acquisition of a competitor.

So, we suppose you could say we’re getting a bit more converted to the concept of ‘ growth ‘… when it’s done properly. Sales growth, properly achieved, does in fact bring more value to your company, but how do you get the financing to get there. One of those solutions is factor funding.

Receivable financing, considered ‘ expensive ‘ by some in fact is a vey critical and valuable form of business financing in Canada… and becoming moreso everyday. It’s simply an agreement between your firm and your chosen finance partner (choose one carefully!) to provide you with cash as soon as you generate sales. All of a sudden your balance sheet and perhaps some temporary operating losses aren’t holding you back to… you guessed it… growing!

The Canadian business owner and financial manager can probably immediately see the advantages here of this method of finance. You are now in a position to improve relations with suppliers, take prompt pay discounts with cash now that you never had before, and all along the way you don’t have to deal with restrictive bank covenants. Oh and finally, all of a sudden you’re eon equal footing with those competitors who have been taking that business away from your firm. Finally… a level playing field.

A common questions from clients who suddenly are seeing the benefits of factor funding and growth is as follows – ‘ so what is the limit of the financing here?’ The answer? There is no limit – your sales in effect determine the limits you can finance against.

So when does financing your A/R work best? The following conditions create a perfect storm for this method of finance:

Good gross margins
Pricing ability on your products and service

And quite frankly, whether you consider the pricing of factor funding ‘ high’ the ability to quickly and flexibly get all the funding you need in place is probably very much worth considering .

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your Receivable finance needs.