Negative equity describes a situation wherein you have more outstanding debt than your business assets are worth. For example, if you took a loan to acquire your property and the value has dropped to the point that you owe more than the property is worth, or if you owe more for leased equipment than income you are receiving from that investment, it is considered negative equity. Essentially, negative equity means that an investment is yielding less than it is worth.
Companies who find themselves in this situation often struggle to obtain business financing from lenders due to the perceived risk associated with a history of financial losses. As a leading invoice factoring company in Canada, our innovative invoice factoring options offer an alternative solution by funding based on accounts receivable. Now you can attain the cash flow you need to service your financial obligations and keep your business running.
Does Your Business Have Negative Equity?
For businesses that require funding but are burdened by negative equity, financing from traditional lenders is usually not a viable option. Due to their conservative nature and focus on the bottom line, conventional financial institutions such as banks generally do not lend money to companies who have suffered past financial losses. To a new business or a company who is growing, this often can cripple a company and allow competition to take the opportunities that pass by. Alternatively, a company may be able to secure a form of financing through high interest rates which often come with lengthy contracts that tend to ruin any long term growth. This is the unfortunate story for many businesses, as cash flow issues are a leading cause for new businesses to fail.
How Can We Help?
The good news is there is growing awareness developing in Ontario, Alberta, BC, and throughout Canada of alternative financing solutions. Financing solutions that are able to completely get around issues such as negative equity, not by ignoring it or by charging higher rates, but by finding a way around it. How is this done? Through invoice factoring!
We work with businesses throughout Canada to provide negative equity financing, so that sudden financial loss doesn’t hinder you from getting your business back on track. We look beyond the balance sheet and base our financing on accounts receivable, allowing you to meet your financial obligations and increase cash flow. You can click here to learn more about invoice factoring services and how they work, but in short we provide funding based on bills which you issue to your customers. Our Toronto factoring company enables businesses throughout Canada to focus on their business and alleviating worries surrounding cash flow related issues. Best of all, it’s faster, easier, and more affordable than most of the competition!