Asset Loans and Accounts Receivable Financing Solutions

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Adriana N.

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Finding Easy Financing Solutions For Mortgage

By Adriana N. | Submitted On May 10, 2010
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If you are dreaming of buying your own home, then you need to find the right type of loan that will give you the freedom to pay it back comfortably. Fortunately, these days there are many financing solutions for mortgage that gives you more choice and control over the terms of the loan.

There are various lending institutions and banks these days that can help you to secure your dream home. In fact, there is far more choice than there was in the past and there are a variety of terms, conditions, and rates that are offered if you do your research around the different banks.

There are various ways that banks can offer help when you are looking at mortgages. There are options for first time home buyers, purchasing a new home, investment properties, refinancing of loans and mortgages, debt consolidation, self-employed loan applicants, building your own home and a whole range of other possibilities.

If there is one thing that the banks and lenders have learned in the turbulent last few years is that not all lenders have the same needs. This has been a wake up call to the industry and prompted them to really focus on their clients more and provide services and mortgage solutions to match individual needs and situations.

Part of the solutions that they offer is help with accessing much of the additional funding and grants that may be available to you through the federal government or your state government. The lender that you apply to should have good knowledge of the different schemes and be able to point you in the direction of where to apply for the thousands of dollars in assistance that you could be eligible for.

There are also professional mortgage brokers that can help you to compare loans and locate the one that is best for you. These companies have access to a lot of information about different banks and lenders and the terms that they can offer. It can provide a fast and easy way to find the loan that best matches your current lending needs. They may also be able to offer you advice about different ways of financing your home purchase that you had not previously considered.

Even though there are many different types of lenders that are around lending through banks is still the preferred option and many people end up going with their regular bank as often if you do your banking through them they will have special rates for you and you already have a certain level of trust and relationship established with them as your usual bank.

If you are thinking about buying into the property market in some way, then you will need to think carefully about the type of loan that you get in order to save yourself as much money as you can on charges and interest and pay the loan off as soon as possible. By investigating financing solutions for mortgage options, then you will be able to make an educated choice of lender or bank and get the very best deal for your own circumstances.

Global Financial institution offering commercial and personal banking services including online banking, credit card, loans, Trinidad and Tobago mortgage, money management, Bahamas finance and more.

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Asset Loans and Accounts Receivable Financing Solutions

Canadian business, during its search for new and innovative financing solutions keeps hearing about asset loans and accounts receivable financing solutions. These two types of financing for Canadian business owners and financial managers are a subset of what is known as an asset based line of credit.

The financing is newer to Canada, growing in traction and popularity, and still widely misunderstood as a total financing strategy for your company. Let’s clarify some of those myths and explore some of the benefits of these terms.

One of the main differences of an asset loan is that typically is financed through a non bank arrangement. You should seek this type of loan if you are unable to generate sufficient working capital to finance your business in a traditional Chartered bank environment in Canada.

In essence your receive financing and operating facilities, depending on how they are structured, around the various asset categories of your business – the two main asset categories are:

Accounts receivable

Inventory

In many circumstances you can also leverage equipment, and occasionally real estate.Clients then ask us why this is different from what they are used to – which is bank financing around these same assets. The answer is that a very strong focus is placed on the true underlying value of your assets – less reliance is placed on balance sheet rations, loan covenants, outside collateral, etc.

Most leases and operating facilities in a traditional bank environment are very cash flow focused. The irony of these types of calculations is very evident to the business borrower – that irony being that historical cash flow is used to forecast future cash repayment abilities. That quite often doesn’t work for many companies who are experiencing temporary challenges.

Asset loans, and asset based lines of credit focus on the collateral. Many clients we deal with have the collateral in A/R, inventory, purchase orders and new contracts, equipment, etc but can’t satisfy traditional cash flow lending requirements. That is why they are prime candidates for an asset loan, an asset based line of credit, or at its simplest and most basic form, a receivable financing that fully margins their accounts receivable with no set limit on future growth.

So now we understand what the facility is. How does it work on a day to day basis our clients ask? The answer is simply that it’s a facility that goes up and down, frankly every day, with your borrowing needs. As your receivables and inventory fluctuate you draw down against their current value. This optimizes the amount of cash flow and working capital available for sales growth and profit generation.

The security mechanisms around these facilities are very similar to any type of bank financing – that is to say that a first charge lien is placed on the assets being financed. Advances rates on accounts receivable and inventory are established and as cash is advanced and then repaid by your customers the cash is turned over to pay down your revolving balance. It’s as simple as that. The true beauty of the facility is that as you grow your facility grows with you – that is probably the most powerful aspect of such a financing.

These working capital facilities, predominately A/R an inventory based are becoming more traditional in nature ever day. Speak to a trusted, credible and experienced advisor in this area – if you are not getting the financing you need to grow and prosper competitively then this type of solution may be exactly hat you are looking for.

Why Business Is Grateful For Equipment Leasing and Financing and Asset Finance Solutions!

Many Canadian business owners and financial managers are under the impression that equipment leasing and financing solutions for their asset finance needs are more expensive than other forms of financing.

However, at the same time thousands of businesses everyday flock to the lease finance solution when they are acquiring equipment. How can a finance solution perceived as ‘ expensive ‘ be one of the most sought after business financing facilities day after day.

It’s because it’s all about the benefits and flexibility. In pure theory if you were paying full price cash or entering into a term loan you could make a technical financial case that lease financing is more expensive.

But it’s never always about price in your personal life, and that’s certainly the case in business. The reality is that the additional benefits of a lease often over weigh any concerns about cost or interest rates. And quite frankly with interest rates at all time lows in Canada companies with fairly decent credit profiles can get equipment financing in the 7-8% range. And, on top of that, if your company doesn’t have a pristine credit profile you still can get approved because Canadian equipment and leasing and financing professions are experts in asset finance, and a lot of emphasis is placed on your company prospects and the asset itself.

Accounting isn’t one of our favorite subjects when clients ask us for leasing assistance, but the reality is the when you use lease finance effectively – for example operating leases, then you are in a position to increase overall return on assets and your banker or other senior lender isn’t overly concerned about that always omnipresent debt to equity ratio he or she is talking about.

When clients talk to us about leasing we can talk about ten or 15 different issues – but to be honest they only often have one – can we get approval for a rate, term and structure that makes sense for our firm? That’s the essential question more often than not. And that’s more often when lease finance steps up to the bar! Lessors take, on balance greater credit risk than financial institutions, and in our words, they are more likely to ‘ buy into your story ‘ – whether that be a turnaround year, a new project coming up, etc.

Lease decisions from your point of view are often driven by the simple question – can the acquisition of this asset grow sales and profits. Asset finance firms understand that and they essentially become your business partner with the additional capital they put into your equipment financing needs. You on the other hand can use that additional cash flow and working capital for general operating purposes. You have matched long term debt – i.e. the lease, with long term capital – your lease finance strategy.

Speak to a trusted, credible and experienced Canadian business advisor in equipment leasing and financing. You” be surprised at the financing approval turnaround and the benefits you didn’t know you could achieve.

Finance Solutions For Companies Venturing In The Import Industry

Importing pertains to the process of bringing in goods or services from another country. They come from foreign countries and are usually brought in for resale. Many companies find this type of business quite attractive since the products or services from other countries are really affordable and they can be resold for a nice profit margin.

Although the process of importing and reselling goods seems like a simple concept, entrepreneurs who are considering starting this kind of business will have to overcome various hurdles. One of these is finding the right financing solution.

At present, there are various finance solutions or methods you can choose from. The most recommended one by finance experts are:

Factoring in accounts receivables.

Also known as asset-based loans, this method involves selling your credit accounts or accounts receivable to a bank, lending company, or other financing institution. Accounts receivables are usually sold at a discount, between 80-90% of the face value of your credit accounts. An advance payment will be given to you by the factoring company, about of 2-3%, for the accounts you would normally have to wait on for payment.

Purchase order financing.

This method has similarities with asset-based loans. The main difference with this financing solution is that you take your invoices or purchase orders and assign or sell them to a financing company. This company will then assume the risk and the task of billing and collecting. When the goods are produced, the financing company collects the payment from the customers, takes its cut of the proceeds, and pays you the profit. This option is highly recommended if your profit margin is high enough on the goods you are importing. Having a good and reliable supply chain and creditworthy customers are important factors to consider as well.

Inventory financing.

Although inventory financing is an expensive solution, it is still a highly effective way of financing an importing business. Under this method, you will have to use your present inventory to secure a loan that will permit you to buy the imported goods your customers want or need. Because of this, you can effectively increase your inventory without impacting your cash flow. However, with this option, it is crucial to make sure that you can service or repay your debt. Inventory financing comes in three types: blanket inventory lien, floor planning, and field warehousing. Choose the type that best meets your requirements.