Fresh counts, whether we’re at the grocery store or in today’s example, the business credit line known as the ABL revolver, aka ‘ asset based lending ‘.
Canadian business owners and managers don’t often realize that that they have more of a choice in business credit lines than they think. And when it comes to choice and flexible terms all of a sudden asset based lending facilities are getting… you guessed it… popular!
That’s of course great news for companies in Canada who are looking for alternatives for day to day operating financing. The traditional small handful of firms who offer this type of financing is growing to the point where you might not realize it, but there are people willing to fight for the ability to provide you with business credit. That’s the type of competition we like.
Cost is always a factor in business financing, and there is a broad spectrum of pricing in Canada that is primarily based on two factors you can pretty well guess – facility size and credit quality.
In case you havent heard of this method of business credit its simply a comprehensive credit line based on the asset of your business – those assets include inventory, receivables, fixed assets, and land and buildings if that fits into your overall capital structure.
The Canadian business owner / manger can use the ABL revolver facility for a number of reasons, and they include day to day operating capital, restructuring, acquiring another firm (yes, buying your competitor!) and our favorite reason – growth! That growth reason is one of the most important, because the asset lending line of credit allows you to grow your business without the constraints you face sometimes with chartered bank commercial facilities.
We’re often asked about the ‘ size requirement ‘ in this type of business borrowing. In general we tall clients that they qualify from a low of 250k all the way up to facilities in the many millions of dollars.
Quite frankly there isnt really an upper limit, as long as you have the total assets to back up the facility. The reality is that ABL credit is very close to becoming ‘ mainstream’ in Canada, and thats a good thing we think.
To be honest many firms in Canada tend to use asset based credit lines as a bridge to other financing. This often means that the facility is used for a year or two, sometimes longer, as the business owners work towards the more traditional financing that is recognized in Canada, i.e. our banks. Many simply s are very comfortable with asset based lending lines and choose to remain with ABL!
As we said, the bottom line is ‘ ASSETS ‘, so if your firm has them consider Canada’s newest form of business financing, the ABL REVOLVER , whether you’re looking for something new, or an alternative to your current situation.
Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your total financing needs when it comes to the business credit line.