Ontario Business Financing

The province of Ontario is an economic engine in Canada, with substantial concentrations of businesses in transportation, automotive manufacturing, technology, and other sectors. Most of these companies have one thing in common: they will need business financing at some point if they want to grow.

However, finding business financing can be difficult. Most banks and lending institutions in Canada have conservative standards and will only provide funding to companies with substantial assets, solid income statements, and multi-year track records of growing revenues. Obviously, most larger companies have the resources to qualify for funding. However, smaller companies and start-ups usually find it difficult to secure funding.

A common financial problem

One of the most common problems for small and mid-sized companies is cash flow shortages that are often the result of having to offer trade credit to commercial clients. Trade credit gives clients up to 60 days to pay an invoice; however, it also ties up your financial resources for up to two months. Many companies can’t wait that long for payment because they have expenses to cover: payroll, suppliers, and others.

If you are unable to get conventional financing to solve this problem, consider factoring your invoices.

Using invoice factoring to improve cash flow

Factoring offers a simple solution to this common problem by enabling you to finance invoices from creditworthy commercial clients. The solution allows you to capitalize on your receivables immediately, without having to wait 60 days for your clients to pay. Factoring provides you immediate liquidity and enables you to offer payment terms to clients.

Most transactions are fairly simple. The factor finances your invoice in two installments: the advance and the rebate. The advance covers about 80% of your receivable and is provided as soon as the work/product is delivered and verified by your client. The remaining 20% is rebated, less a fee, once your client pays on their usual terms.

To learn more, please read “What is factoring?

Advantages

One of the most important advantages of factoring is that it works for small companies because it has simple qualification requirements. To qualify, your company should be well managed, have unencumbered receivables, and work with creditworthy clients.

Also, this solution provides an ideal platform for growth because the line can increase automatically with your sales – as long as the sales are to qualified clients. This flexibility can be helpful if your company is growing quickly but is low in working capital.

Evaluating companies

If you are considering invoice factoring, evaluate several Ontario factors before making a selection. The best qualified companies usually have experience in your industry, have accounts of your size, and have been in business for at least five years.

Why should you work with us?

We are a leading financing company in Ontario and have offices in Toronto. We can offer competitive factoring and purchase order financing plans to companies in most industries. For an instant quote, please fill out this form.

We believe that our customers should be able to make an informed decision, which is why we have one of the most comprehensive sites about factoring in Canada. And if any of your questions are not answered on this website, please call us toll-free at (877) 300 3258.