Is Debt Consolidation For Me?

People with large debts always assume they just can’t afford to get out from under their debts, so they let them pile up dollar-by-dollar, year-by-year. No one has to live with large debts, there is always a way out. Debt consolidation is for anyone who has debts and cannot currently afford to make their monthly payments. It’s so easy for multiple monthly payments to add up to the point where you just can’t do it anymore. So, you put it off for one month, and one month becomes three, three months become six, and before you know it you can’t possibly catch up. Debt consolidation can get you out of the debt trap that you’re in. Anyone who has debts that they cannot pay should at least consider debt consolidation before taking more drastic and permanent steps.

Only in very extreme cases is bankruptcy a good idea, most people can handle their debt through consolidation. Bankruptcy will leave a scar on your credit history for a long time, much longer than the seven years that people say it will. Unless a professional advises you that there really is no other way out of your debt, bankruptcy isn’t the answer! Debt consolidation is the perfect alternative to bankruptcy because with consolidation you can pay off your debts, and while it isn’t instant, it will improve your credit in the long run.

Debt consolidation works by gathering all of your debt, and working with the people you owe money to, to reduce interest and even take a small portion of the principal amount due off the bill. Doing this with each bill will lower your personal debt up to twenty percent, and when you are talking about large amounts of debt twenty percent can be a lot! Twenty percent can mean the difference between doable and bankruptcy. Twenty percent can mean keeping your home or having it foreclosed upon!

The first step after gathering all your debts and reducing them as much as possible is to do an income to debt comparison. This ratio will determine if debt consolidation really will work for you. For instance, if you make fifty thousand dollars a year and only have ten thousand dollars worth of debt, you’ll definitely be able to work out arrangements because your debt doesn’t greatly outweigh what you can bring in over a couple years time. But, if your income is only twenty five thousand dollars a year and you have a two million dollar debt, it may be difficult to ever get on top of that. Your debt needs to be something that you can realistically expect to pay off within a few years time. A debt consolidation professional can take a look at your specific debt to income ratio and let you know if you are a good candidate, of if you really need to consider bankruptcy as a last resort. Not paying on the debts isn’t an option, because bad credit robs you of your buying power, and you need that!

Even if you think that your debt is outrageously high, you should still consult with a debt coordinator. Even if your debts are high now, you should see what a debt consolidation company could do for you as far as reducing interest and debts. Don’t be discouraged until a qualified professional (or two!) can tell you that consolidation really isn’t an option for you. Don’t give up until you’ve tried everything, you can’t just roll over and taint your credit without being one hundred percent sure it’s your only option.

The majority of people do qualify for debt consolidation, which is great! Even though no one wants to pay a bill, many consolidators are able to get all of your debt into one monthly payment. One monthly payment takes the stress out of paying the bill, and also makes it fast and convenient. Your consolidator will work with you and your debt to determine what you can afford and what will make your debt collectors happy. Often, debt needs to be consolidated in two or three parts, to fit within your monthly payment. It would be ideal to do it all at once, but celebrate the fact that you are able to pay on your debts at all!

Debt consolidation isn’t easy, but it is the answer for all those bills and collection agencies that are calling you. Once the process is started, debt consolidation is easy, and relatively stress free. Be sure to be honest about what you can afford monthly, so as not to lapse on your consolidation payments. The last thing you want to do is take steps backward after you’ve come so far. Each time you make a payment on your debt you’ll feel the weight lifting, and you’ll be able to sleep better at night knowing you are making a dent in the debt you have.

No one tries to go into debt, but it’s easy to fall into a debt trap. Medical issues, financial strain, or job issues are common reasons for debt. Getting into debt isn’t fun, and getting out isn’t much fun either, but once you are there it’s worth the effort. And, living debt free is a lot more fun because you’ve regained your buying power. You’ll have a lot more respect for yourself and your ability to follow through, and other companies will be willing to give you a second chance when they realize you have righted your wrongs.

So, who is debt consolidation for? Everyone! Everyone should at least consider consolidating his or her debt. There is no easy way out of monthly payments that cannot be met, but this is the best way to get control back of your life and your finances. Even if you have huge debts, contact a debt consolidation company in your area for a free consultation! You’ll be so glad you did, because you’ll gain confidence, respect, and get some much needed guidance to succeed in the future!

How Credit Law Protects Consumers

Consumer credit laws were designed to provide protection in a variety of ways that affect consumers fair access to credit. This can refer to the consumer’s right to understand the credit and loan terms prior to agreeing to them, every consumer’s fair and equal access to credit, limitations on loan and credit interest and terms, and so on. Even a basic understanding of these important laws and Acts can help individuals understand their rights.

Understanding consumer credit rights is the first step to ensuring that you’re being treated fairly by creditors. These credit laws also provide consumers with avenues to have their concerns addressed. The Federal Trade Commission, for example, is charged with overseeing some of these consumer credit laws.

Outlined below are several laws of particular importance for consumers. In today’s economic climate, many consumers are particularly concerned with repairing bad credit reports and scores, and for this reason, the laws of particular importance to those individuals interested in credit repair efforts are placed in their own category.

Consumer Credit Laws

Laws of special importance to credit repair services and a general overview are provided below.

The Credit Repair Organizations Act was designed to ensure that those seeking credit repair services from credit repair organizations are provided with the information necessary to make an informed decision. It aims to ensure that consumers are protected from deceptive or unfair advertising and unscrupulous business practices.

Examples of unscrupulous practices include suggestions that a consumer change their identity or that a consumer lie about their past credit history to potential creditors.

Credit Repair Organizations that violate the law can be sued for damages and attorney’s fees. Violations of the Act can be reported to the Federal Trade Commission and/or your local state attorney general. A consumer has 5 years to take action against an organization once they have learned of a violation to the Act.

The Equal Credit Opportunity Act prohibits the denial of credit because of sex, marital status, race, religion, national origin, age or because a person receives public assistance. This law offers protections to consumers when they deal with any people or organizations who participates in the decision to grant credit or in setting the terms of that credit. This includes banks, credit unions, credit card companies, loan and finance companies, retail stores, and real estate brokers.

The law ensures that consumers have the right to know whether their applications for credit were accepted or rejected within 30 days of filing a complete application and to know the reasons why an application was rejected. It also protects the rights of consumers to know the reason(s) why they have been offered less favorable terms than requested, but only if that consumer rejects the less favorable terms being offered.

A number of federal agencies are charged with the enforcement of the Equal Credit Opportunity Act, including Federal Deposit Insurance Corporation, the Federal Trade Commission, the National Credit Union Administration, to name a few. Where a consumer directs complaints depends on the complaint itself. A starting point for consumers is to visit the Federal Reserve website or call 1-888-851-1920.

The Fair Credit Reporting Act (FCRA) gives any individual the right to know what information is being distributed about them by any credit reporting agency. It regulates the collection, dissemination, and use of consumer credit information. The FCRA was passed in 1970, and along with the Fair Debt Collection Practices Act (FDCPA), it constitutes the core of credit law in the US.

Critical to the Fair Credit Reporting Act are the rules and responsibilities outlined that Credit Reporting Agencies must follow. Credit Reporting Agencies (CRAs) are the entities that collect and store credit information on every US consumer. The FCRA also provides regulations that those who provide the CRAs with information must follow. Examples of these information furnishers are creditors such as credit card companies, mortgage companies, and automobile financing companies. Other information furnishers include employers, bonders, and courts that enact judgments against individuals, such as bankruptcies.

The Fair Credit Reporting Act is enforced by the Federal Trade Commission. The FCRA is arguably the most powerful piece of legislation used by credit repair companies who seek to have out of date and/or incorrect information removed from a consumer’s credit report.

Notices of Rights and Duties under the FCRA (July 1, 1997) were published by the Federal Trade Commission as amendments for the Fair Credit Reporting Act. The Notices must be distributed by Credit Reporting Agencies and include a summary of consumer rights under the FCRA; a notice that sets forth the responsibilities under the FCRA of those who furnish consumer information to consumer reporting agencies; and a notice that outlines the obligations for any person who uses information covered by the FCRA.

These Notices were designed to enhance the Fair Credit Reporting Act in an effort to promote accuracy, fairness, and the privacy of information in the credit files created by all credit reporting agencies.

The Federal Trade Commission oversees the proper implementation of the FCRA and the Notices of Rights and Duties.

The Truth in Lending Act (TILA) is a US federal law that was enacted in 1968 and is contained in Title I of the Consumer Credit Protection Act. It’s intent is to protect consumers by requiring that any lender, prior to entering into a credit transaction, provide written disclosures of the costs of credit and the terms of repayment.

Excluding some high-cost mortgage loans, the TILA doesn’t regulate the charges that may be established for consumer credit. What the Act requires is standardized disclosure of costs and charges for credit. This protects consumers by helping them shop and compare the costs and terms of credit and make informed decisions about where and from whom they access credit.

Other benefits to consumers include the right to cancel particular credit transactions that involve a lien on a person’s primary dwelling and the regulation of credit card practices. It also includes mechanisms to protect a consumer’s timely resolution of credit billing disputes.

The Truth in Lending Act is enforced by the Federal Reserve System, the Federal Deposit Insurance Corporation, and several other agencies. Those creditors that are not under the jurisdiction of any specific enforcement agency answer to the Federal Trade Commission.

Other Consumer Credit Rules and Acts

The Consumer Leasing Act is a federal law that requires leasing companies to inform a consumer in writing about the details involved in a contract. It outlines requirements regarding the cost and terms of any leasing agreement, including a statement of the number of lease payments and their dollar value, penalties for reneging on timely lease repayment, and whether a lump sum payment is due at the end of the lease agreement.

This Act helps consumers understand the important details of any lease agreement so that they can shop for the best leasing terms. It also helps a consumer compare the cost of leasing with actual purchase costs. In addition, it regulates lease advertising by penalizing unscrupulous or unfair advertising practices.

The Act applies to leases including personal property leased by an individual for the period of more than four months for personal or household use, long term rentals of items such as cars and appliances, and other personal property.

The Consumer Leasing Act is enforced by the Federal Trade Commission.

The Fair Credit Billing Act (FCBA) is a US federal law that was set forth as an amendment to the Truth in Lending Act. The Act outlines guidelines and procedures for resolving billing errors that may appear on credit card and charge card accounts, and protects consumers from unfair billing practices.

The procedures outlined in the FCBA include the proper dispute process for consumers. Consumers may send via mail a written dispute of perceived billing errors to their creditor within sixty days of the statement date on the account statement. The creditor is obliged to acknowledge and investigate the dispute, and within 90 days, make the requested correction or inform the consumer in writing that no correction with be made the reasons why.

Examples of billing errors covered by the Act include: charges not made by the consumer; incorrect charge amounts; charges for goods not received by the consumer; charges for goods not delivered under specified terms; charges for damaged goods; failure to update account payments made; calculation errors; charges a consumer either requests proof of or wants clarified; and payments mailed to the wrong address.

Overall enforcement of the Fair Credit Billing Act is the responsibility of the Federal Trade Commission; however, enforcement for banks falls under the domain of the Federal Deposit Insurance Act.

The Fair Debt Collection Practices Act (FDCPA) sets out guidelines and procedures for collections companies that prevents debt collectors from using unfair or deceptive practices to collect overdue bills. Debt collectors regulated under this Act include collection agencies, lawyers who regularly collect debts, and companies that buy delinquent debts from others and endeavor to collect them.

The debts covered under the Act do not include debts incurred by businesses. They do include family, and household debts, such as money owed on credit card accounts, medical bills, auto loans, and mortgages.

The Federal Trade Commission (FTC) is charged with the enforcement of the Fair Debt Collection Practices Act.

The Home Ownership and Equity Protection Act (HOEPA) is an amendement to the Truth in Lending Act and was implemented by the Federal Reserve System in 1994. It was designed to protect consumers by restricting certain terms of high cost home loans in situations where the interest rate or fees are above specified levels.

This Act applies to the sub-prime mortgage market and home equity lending, and it has therefore been discussed at great length in recent times.

The Home Ownership and Equity Protection Act applies primarily to refinancing and home equity installment loans, provided that these loans meet certain criteria and fall under the definition of a high fee or high rate loan. The Act does not apply to reverse mortgages, loans to build or buy a home, or home equity lines of credit.

As with the Truth in Lending Act, enforcement of HOEPA falls under the jurisdiction of the Federal Trade Commission.

Credit law exists to protect consumers. The Fair Credit Reporting Act and the Credit Repair Organizations Act are of particular importance to those who provide credit repair services and those seeking to repair bad credit reports on their own. Understanding these laws and where and how they are applied and enforced is critical for any consumer interested in protecting their rights in any credit or leasing arrangement.

Credit and Mortgages: What First Time Home Buyers Need to Know

What Makes Up a Credit Score?

If you’re looking for financing, your credit score will affect several factors including the amount you can borrow and the interest rate you will pay. That credit score will give you access to financing for a house, a car, college tuition, store credit and more. A higher score will put you in a lower risk category of borrowers. A lower score will lead to higher interest rates and fees. So it’s important to understand what goes into a credit score.

  • On-Time Payments: 35% Paying bills on time has the biggest effect on credit scores. Late payments and judgments have a major negative impact. Recent delinquencies (in the last 2 years) carry more weight than older items. During the mortgage process, every point can affect your interest rate. Be sure to discuss any financial move, like paying off debt, with your mortgage consultant.
  • Capacity Used: 30% Also called a debt ratio, this is the outstanding balances on your credit lines. It marks the difference between your available credit and how much you’ve used. Keeping the outstanding balance below 30% of the maximum is key when considering a mortgage in the next 6 months or less.
  • Length of Credit History: 15% Lenders want to see a track record of credit history. A longer history of solid payments and credit makes you a stronger borrower.
  • Types of Credit Used: 10% Just like you want a diverse investment portfolio, a mix of credit is desirable. A mix of auto, credit cards and mortgages is better than just credit card debt.
  • Past Credit Applications: 10% Inquiring on your credit report often can impact your score. In the span of a year, each inquiry (up to 10) can impact your score as much as 5-to-30 points, depending on the credit reporting service. So it’s good to wait on pulling credit until you’re ready to act.

Credit Reports and Your Rights

Your credit report is yours, and you have the right to know what’s on it. Thanks to the government, you actually have the legal right to get your credit report once a year from each of the 3 credit bureaus. That means you can actually check your credit report 3 times per year.

Stagger Reports

While you’re entitled to one report from each of the credit bureaus every year, it’s a good idea to space them out over the course of that year. For instance, start the year with a report from Equifax. Four months later you could check in with Experian. Wait another 4 months and check in with TransUnion for the latest on your credit history. This way you’re keeping a constant watch over your credit history and the safety of your identity (This is simply an example. You can check with any of those credit bureaus in any order you’d like).

Don’t Pay For It

Getting your credit report should be free. Quite often, the commercials you see and hear talk about free credit reports, but many of these actually require a fee or enrollment in order to see what’s yours: your credit history. Instead, the government helped set up the website Annual Credit Report so getting your report is actually free.

It’s Your History, Not Your Score

Checking with Annual Credit Report will give you your credit history. It does not give you your FICO score. If you want to find out your actual credit score, you will need to pay a service fee. However, you have an option. Talk to a trusted mortgage advisor. They should be able to explain the report and help you determine your score. It’s typically part of the service a lender will offer.

I Paid My Bills. Why Did My Score Drop?

Seemingly innocent actions by a consumer can have unintended consequences on a credit score. Working with someone who has experience in the world of credit and finance can help keep your FICO score on solid footing. Even when you’re working hard to keep your score up, you may inadvertently drop your score. Let’s look at 4 reasons your actions could negatively impact your credit.

  1. One Day Late. Paying a bill even one day late could get you slapped with a 30-day late notice. Creditors generally don’t distinguish between one day and 30 days. Late is late in many financial company’s eyes.
  2. Paying Off Old Collections. An old collection on your credit report may not affect your credit score. Paying it off might actually bring the account “recent” and punish you with a lower credit score. While it may seem unfair, the credit scoring model puts more emphasis on your recent activity than your past. Paying off an old debt makes it look like it’s new. Hold off on these until you talk to your mortgage professional.
  3. Paying Off a “Maxed Out” Balance. If you max out a credit card, but pay it off at the end of the month, your score could still suffer. Maxing out an account adjusts your credit ratio. So even paying it off in the same month could end up showing your current status as “at the limit.” This raises your debt-to-income level and lowers your credit score.
  4. Paying Off and Closing an Account. Paying off debt is a good thing. But hold off on closing the account. Remember, there are 5 factors that go into determining your credit score. This means credit history and “types of credit” you could suffer a score drop if you close your account. After all, some of your biggest debt load could be your oldest.

Because credit is one of the most valuable tools you have at your disposal when it comes to the mortgage process, consider working closely with someone to make sure your credit score is stable and viewed as a good score. Let us know what other questions you have, and how we can help.

4 Steps to Rebuilding Credit Now

You’ve heard the stand-by advice that negative credit stays on your “record” for 7 years. While it is true that credit reports go back 7 years or more – public records like bankruptcy, judgments or tax liens can last up to 10 years – it doesn’t mean that all is lost when it comes to rebuilding your credit. You have several options when it comes to making a positive impact over the next year. In fact it’s possible that you could even qualify for a purchase or refinance in the next 6-to-12 months. Below is a look at 4 steps to get you on the road to recovery.

  1. Monitor your credit. Get your credit report and look it over. Dispute any discrepancies. Then work with a professional to take the next step in improving your credit standing. Working with a mortgage consultant will get you started. Ask if your advisor knows a professional credit repair company they trust if you need more in-depth help on your credit history.
  2. Use credit cards sparingly. Long-term credit cards show a good credit history (long history), which is 15% of your credit score. But use credit sparingly. Keep debt at least 30% below the limit in order to keep your debt-to-income levels manageable. Use your cards for items you can pay off at the end of the month, and make the payments on time. This can help build a strong credit history.
  3. Open a secured credit card if you don’t have one. The key to this step is secured. This means you deposit funds (often less than $500) into the account to begin with. It puts you in a low-risk category since you have skin in the game. Be sure to pay the bill on time every month, to show a stabile credit history. {Another option for some borrowers would include opening a credit account with a co-signer. Just remember, you and the co-signer are responsible for the debt. So if your partner makes bad decisions, you get punished as well. Also, “authorized user” doe not equal co-signer. Simply authorizing someone on an account in good standing has no impact on that users credit history.}
  4. Talk to a mortgage consultant before making any debt decision. In the months leading up to signing into a mortgage, any major credit activity should stop. This includes new debt, paying off old collections or closing accounts. It’s important to talk to a mortgage consultant to make sure any activity you’re considering will not negatively affect your credit score.

Build Credit the Old School Way

Building credit is a task that takes a little effort, a lot of time, and even some money. In most cases, to build credit you have to use credit, and this almost always means incurring an interest charge. Fortunately, you can use these strategies to keep your interest payments down while getting the biggest boost for your credit score.

Building good credit is simply a matter of jumping into the credit cycle. You first acquire some credit, and then store it until you need it. Then you use it when needed, and repay as required. After a period of this activity, you acquire some more and store it until you need it, and so on…

By making small charges to your account and paying them before the due date, you slowly build your credit and become eligible for credit line increases.

You continually increase the quality of your credit as well as the quantity. You’ll replace store charge cards with those from major lenders. You’ll convert secured lines of credit to unsecured ones. You’ll increase your borrowing power with your relationships. Before you know it, you have built a substantial credit portfolio.

Let’s start at the beginning, with steps to establish or re-establish credit for someone who either never had credit or suffered a credit abuse meltdown. If you already have credit, the challenge is to make sure your credit grows in a positive way. Let’s get started.

1. Open a checking account. Use the account regularly and don’t bounce any checks or fall below your minimum balance. You can use this account as a credit reference.

2. Open a savings or money market account. Just having a savings account says to a potential lender, “I think about saving money”. If you are still practicing get out of debt strategies, add just the minimum to this account until you are through with your debt reduction program.

Add small amounts to this account regularly and keep it above the minimum balance. This is a great place to put the funds from paying yourself first. Don’t withdraw money!

3. Three loans, three banks, three months! For fast track credit building, you will need to spend a little money. First, locate three local banks or any size that report their accounts to a credit agency. Go ahead and tell the banker that you are looking to build credit for yourself or your business.

Take a small sum of money-as little as $1,000 will work. Deposit that money into a three month CD at Bank # 1 and take out a line of credit secured by the CD. Banks will routinely make this transaction, since they have a completely secured loan at this point.

Take the $1000 you borrowed and go to Bank #2 and do the same thing. Repeat the process in Bank #3.

You can do this for as many banks as you can afford the interest payment on for those three months, plus any loan fees you are required to pay. Make sure that none of these loans has a prepayment penalty. Finally, deposit the money into a savings account and don’t touch it.

Spend three months paying the bill on these loans. Some say that making triple the monthly payment will grow your credit faster, but a single payment is sufficient. The goal is to demonstrate a payment history.

At the end of the three months, withdraw your $1,000 from the savings account and use it to pay off the first loan, then cash out the CD. Take that money to the second bank and repeat the process. You now have three satisfactory positive credit accounts on your credit report.

While this is a powerful and proven method for rapidly growing credit, there are a couple drawbacks. First, it will cost you money. Your secured loans will have an interest rate between 5-10% and you’ll be paying that three times, or 15-30% annualized interest. Since you are using this strategy for at least three months, you could be paying $300 to grow your credit.

The second drawback is in using the CD to secure the loan. Although the bank will like this better than a passbook savings, a CD does have an automatic rollover provision. If you don’t liquidate one of the CDs along the chain in time, you may not have the funds to pay off the loan and incur the interest for a much longer period of time. With proper timing of the accounts, you can entirely mitigate this risk.

4. Apply for a department store or oil company card. These are much easier to get than a VISA or Mastercard. You can start with a small credit line. Be sure to do this when you are making an already scheduled purchase, since you will often receive a discount on the bill at that time.

Use this card every month for a purchase you are already going to make. For this reason, cards like Target that have household items are a good choice for personal credit building. Office supply stores are a great one for building business credit. Pay the bill on time to prove your credit worthiness. For these types of cards, never carry a balance. The interest rate is just too high!

5. Get a secured credit card. After keeping your account current for a year, ask them to refund your deposit. If you simply had little credit, but not bad credit, you may skip this step.

I really struggled with whether to include this among the list of steps to grow your credit. There are so many secure credit card programs that are really financially ill-advised, that their benefit on the whole is questionable.

Be aware that there are high fees on some of the cards that are advertised nationally, and some names of cards are a red flag to lenders and don’t help you build credit at all! If you can skip this step, I’d recommend it.. However for some of you with really bad credit, it may be a necessary step between a store card and a major imprint card.

6. Apply for a MasterCard. It is rumored in the industry that these are easier to get than Visa cards. Likewise, it’s easier to get a card that doesn’t give you anything in return, such as cash back or miles. Regularly use the card, and occasionally carry a small balance.

Before you apply for your MasterCard, call a few numbers on the applications and attempt to determine which credit bureau they use to evaluate the credit score of their applicants. Many of the companies will share this information with you. If you can find a MasterCard preferred lender that pulls credit scores from the bureau you have the highest score with, you increase your chances of getting your application accepted.

7. Start applying for as many credit lines as possible. Keep applying until you get denied. This is an indication that you are maximizing your capacity. It’s a myth that getting denied credit will hurt your credit score. It has no effect on your score at all.

There is the slight possibility that your lender will look at your credit report, which is usually more than five pages and sometimes as many as 25, and go to the end where the inquiries are, then page through your report looking to see if the inquiry granted you credit. As you can imagine, mostly lenders have better uses for their time. Most just look at the FICO score. Your inquiries make up only 10% of your score, so any effect they may have is minimal.

8. Build your All-Star Credit. Continually work on improving all the elements of 5-star credit by working on improving those 5 Cs: character, capital, collateral, capacity and conditions.

9. Now that you have established a good credit base, continually improve and upgrade your credit sources. If you have a secured card, first ask for a line increase without providing additional security. After a few months, ask for the card to be unsecured or apply for a new card and replace the secured card. Go from retail store cards to national imprints, secured bank lines to signature lines.

10. Work on building a relationship with one or two banks. At the highest levels of credit use, lending is all about relationships. Create a relationship with a bank that’s large enough to meet your goals over the next few years, but not too large so that your business isn’t important to them. Choose a mid-sized local bank. The longer you establish your credit profile, especially with a particular lender, the wider credit vault doors will open.

The Key To Working Capital Financing – Asset Based Lenders

Wondering how your competition seems to have all the working capital financing they need and you don’t – the key to that answer might just be asset based lenders and the asset based lines of credit they offer to Canadian businesses such as yours.

Let’s examine how this relatively new and unique method of business financing can totally alter your business financing success.

The acronym for this type of financing is A B L; simply speaking its daily cash flow provide against your current, and sometimes now so current assets. What do we mean by that? Simply that this facility allows you to margin your receivables, inventory, and in most cases, should you choose, fixed assets and real estate. You are probably saying to yourself that you could arrange financing on your own re those fixed assets and real estate – but we are talking about using those assets as collateral for your daily revolving line of credit. So you aren’t borrowing, you are not bringing debt on to your balance sheet, you are just leveraging your ‘ assets ‘ (that’s the ‘A’ in ABL!) for daily cash flow and working capital.

And why are we claiming that this type of working capital financing just might be your key to business success. Simply because you have probably found it has been challenging to get the full amount of business credit you need. In some cases you might have discovered its been a challenge to get business lines of credit of any manner.

So if your competitors are using this type of financing today, who exactly is eligible for it, and is your firm a candidate. The answer is simply that if your firm has a combination of 250k in working capital assets you are immediately eligible for asset based lines of credit. We would add that firms with smaller asset sizes can still monetize those receivables via invoice financing or discounting, but that’s not our key focus for today’s information exchange.

So now you now the offering are out there. But why should you consider it. Simply because your firm might be in one of a number of special situations – that includes issues such as your need for increased daily operating cash, you wish to merge with or finance an acquisition, you have been unable to obtain inventory financing elsewhere, you are growing to quickly for traditional Canadian chartered banking financing, etc! We are pretty sure you get the picture now!

The benefits to this type of business financing must by now be pretty obvious. It’s all about access to working capital financing and cash flow that you couldn’t access before. Assets that couldn’t be financed are now financeable, and inventory financing, previously limited or unavailable now looms on your growth horizon.

Who are these asset based lenders, and what is the cost of this financing? We’ll leave that one for another day, but if you want to investigate asset based lines of credit for your firm ( remember, your competitor probably already has ) then speak to a trusted, credible, and experienced Canadian business financing advisor who will assist you with identifying benefits and the best solution for your current strained needs in business finance.