faster by factoring, it can then pay its own suppliers faster, often obtaining discounts. Companies also use factoring to eliminate the risk of non~payment by key customers, or to improve their balance sheets by increasing their working capital.

Factoring deals can be concluded quickly, often in a day or two. A factor does not need to examine a client's financial records at length.

"The process is simpler," says Laurie Ford, senior business development manager for JD Factors, one of Canada's largest factoring companies, based in Mississauga, Ont. "We don't need to do the type of audits that are involved with an ABL or a line of credit. Customers' credit is what we are looking at. Our security is primarily a first position on accounts receivable."

What should a prospective client look for in selecting a factor?

"One of the most important things is the strength of the funding source behind the factor," Ford says. "We are privately funded and have a line of credit with the TD Bank. "Most of the larger factors will have that kind of financial backing."

Other selection criteria should include the turnaround ,times offered by factors in arranging transactions and delivering payments, Ford says.

Fred Paatz, CEO of Express Commercial Services Inc. of Burlington, Ont., advises prospective clients to watch for hidden or transactional fees charged by factors. Express Commercial charges an all-in discount fee of 2% to 3% of the value of receivables.

"The most important part of choosing a factoring company is the type of reporting that it provides to clients," says Paatz. Express Commercial provides daily reports

to clients on individual transactions, and summary reports once a week with details on the status of every factored invoice.

The company provides what is called full-recouise factoring, in which the factor purchases an invoice for a period of time, leaving responsibility for collection and customer relations in the hands of the client. In non-recourse factoring, the factor assumes all the risks of collection, but also takes over the job of interacting with the client's customers.

Resources and Information American Cash Flow Association http://association.americancashflow.com Commercial Finance Association www.cfa.com

Association for Corporate Growth www.acg.org

Turnaround Management Association www.tumaround.org

Asset-Based Lending Conference, Sept. 14, 2004 Toronto www.insightin{o.com

Selected ABL lenders (*also factors) Bank of America Business Capital www.fleetcapital.com

Bank of Montreal Asset-Based Lending www.bmo.com

CIT Business Credit Canada (with CIBC) www.citcommercialfinance.com*

Congress Financial of Canada www.congressfinancial.com

Express Commercial Services www.ebf.ca*

GE Canada Finance www.gelending.com

GMAC Commercial Finance www.gmacfs.com*

LaSalle Business Credit (ABN AMRO

www. Bmkl asallebank.com

Montcap Financial Corporation www.montcap.com*

Royal Bank of Canada Asset-Based Finance www.rbcroyalbank.com/business/abf-what

Selected A ~ t o u n t i n g (Field Audit) Firms BDO Dunwoody Limited www.bdo.ca Bennett Gold Chartered Accountants www.bennettgold.ca Dopkins & Company, LLP www.dopkins.com Fuller Landau www.fullerlandau.com

Elected Appraisers also factors **also asset .based lenders) entury Services Inc.

www.centuryservices.com* Danbury Sales www.danburysales.com** Gordon Brothers Group www.gordonbrothers.com Hilco A praisal Services Co. http://h i P coappraisal.com

Selected Factors also asset-based lenders) Accord Financia r Corporation www.accordfinancial.com Express Commercial Services Inc. www.ebf.ca* Greenfield Commercial Credit www.greenfieldcredit.com* JD Factors www.jdfactors.com Nate rt division of National Bank of canaT www.nbc.ca Textron Financial www.textronfinancial.com*

If managing your accounts receivable is interfering with growing your business, turn to a bank who can help.

Through its NatExport division, National Bank of Canada offers you financ- ing programs to purchase your domestic and foreign accounts receivable. You'll not only improve your cash flow, but also reduce the financial risks associated with your receivables. For more Information, call us: Quebec and Atlantic: 1 866 360-6188 Ontario and Western Canada: (905) 882-7563

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