Factoring Trade Finance: April 2019

4/6/19

How to Choose a Car Finance Broker - Some Useful Tips

Financing a car is a very important process and today with the availability of many car finance brokers it has become an easy choice to get a safe car loan. At present, the financial brokers of these cars also play an important role in helping car buyers. In fact, consulting and taking broker car assistance can definitely be the most appropriate choice if you don't have a clue about what to see according to your budget. Financial brokers are the most experienced personnel and have instructions on how to approach investors in a way that can persuade them to approve a loan. They usually have good relationships and reputations with lenders as reliable, so they know which lenders tend to be open to clients.

How to Choose a Car Finance Broker
How to Choose a Car Finance Broker
In general, they act as the main source and offer services such as finding new or used car models that customers want and within the budget range. Sometimes, these car brokers even help car buyers negotiate with used car sellers. However, currently, there are many car financing services and making the right choice turns out to be a very complicated process. You need to understand that not all car financing services are fair. Therefore, if you are looking to finance a car or choose a car financing service then here are some important points to remember when making a choice:

Standard Car Finance Broker


You must confirm whether your car finance consultant or broker is a member of FBAA or COSL and also these two industry associations. While the Australian Financial Brokerage Association Ltd (FBAA) is one of Australia's leading membership bodies for financial broker professionals, Credit Ombudsman Service Limited (COSL) is an independent organization that is primarily involved in handling complaints about financial brokers. You can easily confirm the membership of a financial consultant by searching through their member list. In addition, the WA Finance Broker License is another additional requirement for financial brokers serving in Western Australia. However, if you are looking for a financial broker and live in the state of WA or other Australian states, it is important that the broker must have a WA Financial Broker License. A broker holding a WA Financial Broker License requires a series of checks, educational requirements, and comprehensive operational requirements.

Accreditation for Car Finance Broker


While choosing a car finance broker also ensures you know about the various accreditations of their lenders. The accreditation range owned by the broker regulates the various options that they can offer. You should note that broker accreditation cannot only change the range of financial options available to you but that it can even affect the quality of those options.

Experienced Staff


You must choose a car financing service that recruits and maintains professional and knowledgeable staff. Brokers must be experienced professionals who can show and explain why a particular product is highly recommended or even according to your specific circumstances. If possible, make sure you even ask for testimonials from previous clients, which in turn can help you confirm their experience.

Services Offered


As mentioned earlier, there are currently many financial services available on the market. Therefore, you must find out more about the additional services that brokers can provide. You should expect your financial consultant to provide detailed information about the time frame, and any additional costs or costs associated with your finances. The key point is if a broker can clarify the level of comparison of vehicle financing that you recommend and the overall cost of your financial package then that is a sign of the quality of a good financial broker.

How to Choose a Car Finance Broker
How to Choose a Car Finance Broker
These are some important points that can help you in choosing your car financing service easily. Today many responsibilities go hand in hand with buying a car and taking financial assistance through a car broker. Just by taking care of a few important steps can help you choose your car broker and then buy a good new or used car.

4/5/19

Tips and Secrets of Purchasing Order Financing for Canadian Companies Looking for Financial Trading

The nightmare of your worst business just happened. You get an order/contract! Now what?!

Purchase order financing is a great tool for companies that have unusual purchase orders and financing needs for sales contracts but potentially cannot access traditional financing through their own bank or capital resources within their company. How does trade finance work, does your company qualify, how much does it cost, and how does it work? Good question, now let's explore some answers!

Purchase Order Financing

Usually, Canadian companies that are looking for this type of financing are distributors, manufacturers, or maybe wholesalers. Various industries in Canada have access to this type of financing, but certainly, they tend to be typical companies that need help.

Your need for financing purchase orders arises from what we call the classic working capital gap. What do we mean by that? This is the case for your supplier who needs payment in advance or within 30 days, with your company unable to generate funds for payments and therefore cannot fulfill large purchase orders and contracts as you wish. Your supplier requests your payment in advance or 30 days, and you will not receive payments for at least 60-90 days, it may depend more on your build cycle, etc.

Of course, you do not want to reject orders or lose competitive market positions.

The obvious solution for large amounts of low-cost funds is Canadian banks, but our observation is that many companies cannot meet bank requirements for this type of financing to occur. If your company grows, is profitable, has a clean balance sheet and strong historical cash flow and history You certainly have a strong opportunity to meet bank requirements, but that usually doesn't happen, certainly in the number of clients we talk to who are looking for alternatives to challenges their growth!

When you access financing you can feel comfortable that your supplier will be paid, and at the same time, you generally have access to all the funds you need. Typical purchase order financing applications take between 2-4 weeks to complete and involve basic financial due diligence on the ability of your company to fulfill orders, who your customers are (they must be creditworthy), and your appropriate supplier sources must be identified and examined. As simple as that.

So what are the basic requirements for P.O? Financing agreement? Naturally, your company must have a contract or order that cannot be canceled by your client. PO finance companies manage to pay your suppliers directly, which reduces all of your cash flows and working capital problems. The transaction is complete when you ship your goods and your receivables are generated on sale. At this time the purchase order finance company expects to be paid, and this is usually handled by your company to get money from receivables through banks or factoring facilities. Factoring facilities are a great partner for PO financing strategies because their use guarantees payments to your PO company.

Let's cover some tips and secrets about the cost of financing purchase orders - These are generally in the range of 2-3% per month in Canada, and that means you have to have a strong gross profit margin to be able to maintain financial costs. But let's be honest, let's say your company has made 750 thousand revenue over the past few years and you have finally got a large order from a major customer of 1 million dollars. Would you not give 2-3% of your profit margin to make a sale that is equivalent to business throughout your year? We think you should consider that positively! It is clear that the higher costs of this type of financing include the complexity and risks that financial firms must pay to pay for goods, wait to be paid, and have confidence that your company will fulfill contract orders.

It has been our observation with certain clients that the success of completing your purchase order financial transaction significantly improves your relationship with your main suppliers and of course customers, it is a secret benefit that is intangible but invaluable at the same time.

Is P O financing for everyone. Probably not. Could it be a solution to the main working capital needs if your business grows and cannot be traditionally financed - of course, we think so? Talk to a trusted, credible, and experienced purchase order financial expert to explore your options.

4/1/19

Are Inventory Financing Lenders and P O Factoring Solutions Your Best Business Financing Bet?

Your worst business nightmare has just come true - you get orders and contracts! What now? How can Canadian businesses survive financial difficulties when your company cannot traditionally finance large new orders and sustainable growth?

The answer is factoring and the ability to access lenders financing inventory when you need it! Let's look at real-world examples of how our clients achieve business financing success, get the kind of financing needs to get new orders and products to fulfill them.

Loans or Advances to Inventories
Loans or Advances to Inventories

Here is your best solution - contact your banker and let him know that you need to bend financing immediately to double your current financing requirements because you have to fulfill new large orders. Okay ... we will give you time to lift yourself up from the chair and stop laughing.

Even though it's serious ... we all know that most small and medium-sized companies in Canada cannot access the business credit they need to resolve dilemmas in acquiring and financing inventory to meet customer demand.

So everything is gone - obviously not. You can access purchase order financing through independent financial companies in Canada - you only need to get help navigating whose minefield, how, where and when.

New large orders challenge your ability to satisfy them based on how your company is financed. That's why factoring is a possible solution. This is a transaction solution that can be once or continuously, allowing you to finance purchase orders for large or sudden sales opportunities. Funds are used to finance the costs of purchasing or making inventory until you can produce products and collect your clients.

Is the lender financing the perfect solution for every company? There is no financing ever, but more often than not it will give you the cash flow and working capital you need.

P factoring is a very stand-alone and defined process. Let's examine how it works and how you can use it.

The main aspects of the financing are the net purchase orders that are determined from your customers who must be creditworthy type customers. Charter factoring can be done with your Canadian customers, U.S. customers, or foreign customers.

PO financing requires your supplier to be paid in advance for the product you need. Inventories and receivables generated from these transactions are guaranteed by financial companies. When your invoice is generated an invoice is financed, so that clears the transaction. So basically you already have your inventory paid, your product billed, and when your customer pays, the transaction is closed.

Factoring and inventory financing in Canada is one of the more expensive forms of financing. You must show that you have a solid gross margin that will absorb an additional 2-3% of the financial cost per month. If your cost structure allows you to do that and you have a good product and good order, you are the right candidate to take factoring from an inventory finance lender in Canada.

Don't want to navigate the labyrinth itself? Talk to a trusted, credible and experienced Canadian business finance advisor who can ensure you maximize the benefits of this increasingly popular business credit financing model.