Info: Avoid Scam on Asset Based Financing

Two types of asset based financing for your information to avoid factoring scams. For Working Capital. Shaw Capital Management and Financing offers asset based lending for companies that need to maximize their borrowing capacity using accounts receivable and inventory as collateral. Receivable based financing combined with inventory finance has become a useful tool for many undercapitalized businesses.

Shaw Capital Management and Financing evaluate a client's business assets as its primary focus to establish the borrowing base. The result is usually far greater borrowing power than can be achieved from a traditional cash flow banking approach due to our expertise in industry specialization.

 Bank Financing. Shaw Capital Management and Financing offer higher advance rates due to our experience in receivable valuation. In the event where the client already has a bank line of credit, an Inter-creditor agreement is made between the bank and Shaw Capital Management and Financing where the receivables are assigned to Shaw Capital Management and Financing and therefore allows the client to borrow at higher advance rates.

“Due to the recession, many businesses have seen their credit rating dwindle and in most instances, the credit of small businesses is based off of the business owner's personal credit rating. Small businesses have not been the only businesses that have been affected by the recession and stricter lending standards however. Many large scale companies are getting rejecting for unsecured loans that they would have qualified for five to ten years ago.
After the markets started crashing a few years ago, most people thought that asset based lending and subprime loan companies would be put out of business forever. While subprime mortgage lending took a big hit, it has been found out that asset based lending for businesses is actually making a big comeback. With credit companies refusing to issue loans to companies that they may have leant to prior to the recession, businesses have had to find a way to obtain the financing that they need. Asset based lending companies have stepped in full force and are quickly growing in popularity.
Asset loans use a company's liquid assets to determine whether or not they are going to lend to them rather than using a credit score. Credit scores are still obtained but they are not the ultimate and definitive deciding factor with asset based lending. Liquid assets can be defined as the company's equipment, accounts receivable, restaurant assets and in some cases even real estate if it is owned by the business. The business enters into a contract that uses their assets as collateral in the event that they ever default on the loan. What used to be considered subprime lending is now becoming a very popular and widely used method of obtaining loans for business owners.
There are a few downfalls to pass around to asset based lending as well. The first major downfall is that if the business defaulted on the loan, then the lender has the right to seize physical assets and future payments that are due to the company depending on what asset is being held in collateral. Second, the interest rates are often above 10%, which is typically higher than standard lending rates. And last, the lending limits may be lower than traditional lending, as most asset based lending companies will only lend an average of 60% of the value of physical and hard assets and 80% of the value of future accounts receivables. By Vanessa Sweeney”

Shaw Capital Management and Financing provide same-day-funding. We can help you meet your cashflow needs immediately without entering into a long term factoring relationship. The money you get for the freight bills we purchase is payment in full.

Shaw Capital Management and Financing offer a complete line of factoring services, purchase order funding, asset based financing, accounts receivable management, and other related financial services.
Shaw Capital Management and Financing offer funding for a wide range of industries and flexible funding requirements that most businesses can easily qualify for.
Based in Baltimore, Maryland. Importing into the tri-state area mostly from the far east such as China, Thailand, Taiwan and South Korea.

Avoid Scam, Learn About Asset Based Financing

Shaw Capital Management and Financing tips on Why A Business Asset Based Loan Financing Is The Perfect Solution For Cash Flow In Canada

Shaw Capital Management and Financing provide same-day-funding. We can help you meet your cashflow needs immediately without entering into a long term factoring relationship. The money you get for the freight bills we purchase is payment in full. You are a Canadian business owner and financial manager looking for info and guidance on a business asset based loan. What is asset based loan financing, sometimes called cash flow factoring - how does it work, and why could it be the best solution for your firm's working capital challenges.

Let's cover off the basics and find out how you can benefit form this relatively speaking new form of asset financing in Canada.

A good start is to always understand and cover off some basics around what this type of financing is. Simply speaking the facility is a loan arrangement that is drawn down and repaid regularly based on your receivables, inventory, and, if required, equipment and real estate should your firm possess those assets also.

By collateralizing your assets you in effect create an ongoing borrowing base for all your assets - this feasibility then fluctuate on a daily basis based on invoices you generate, inventory you move, and cash you collect from customers. When you need more working capital you simply draw down on initial funds as covered under your asset base.

Your probably can already see the advantage, which is simply that if you have assets you have cash. Your receivables and inventory, as they grow, in effect provide you with unlimited financing.

Unlike a Canadian chartered bank financing your business asset based loan financing in effect has no cap. The alternative facility for this type of working capital financing is of course a Canadian chartered bank line of credit - that facility always comes with a cap and stringent requirements re your balance sheet and income statement quality and ratios, as well as performance covenants and personal guarantees and outside collateral. So there is a big difference in the non bank financing we have table for your consideration.

Your asset based lender works with you to manage the facility - and you are required to regularly report on your levels of A/R and inventory, which are the prime underpinnings of the financing.

Smaller firms use a particular subset of this financing, often called factoring or cash flow factoring. This specific type of financing is less transparent to your customers, as the cash flow factor might insist on verifying your invoices with customers, etc. A true asset based loan financing is usually transparent to your customers, which is the way you want it to be - You bill and collect our own invoices.

If our facility provides you with unlimited working capital then why have you potentially not heard of it and why aren't your competitors using it. Our clients always can be forgiven for asking that question. The reality is that in the U.S. this type of financing is a multi billion dollar industry, it has gained traction in Canada, even more so after the financial meltdown of 2008. Some of Canada's largest corporations use the financing. And if your firm has working capital assets anywhere from 250k and up you are a candidate. Larger facilities are of course in the many millions of dollars.

The Canadian asset based financing market is very fragmented and has a combo of U.S., international and Canadian asset finance lenders. They have varying appetites for deal size, how the facility works on a daily basis, and pricing, which can be competitive to banks or significantly higher.

Speak to a trusted, credible and experienced business financing advisor and determine if the advantages of business asset based loan financing work for your firm. They have the potential of accelerating cash flow, giving you cash all the time when you need it ( assuming you have assets ) and essentially liquefying and monetizing your current assets to provide constant cash flow, and that's what its all about. Stan Prokop is founder of 7 Park Avenue Financial - http://www.7parkavenuefinancial.com