Success Stories
Real Life Stories From Our Clients:
Story #1: Do Not Let The CRA Bully Your Company
Story #2: Fleet Street Creative Financing
Story #3: Factoring Helped With A Partnership Buyout
Story #4: New Business Factoring Success
Story #1: Do Not Let The CRA Bully Your Company
It is not uncommon for a company to run into a problem with the Canada Revenue Agency (CRA). If your company has a problem with CRA, do not let their bullying tactics force you into a repayment schedule that will cripple your company? Firstly, you should understand that CRA has an obligation to help you pay the taxes that are owed without jeopardizing the future of your business. There are a number of options available to protect your business and pay the taxes owing to the CRA.
- Make arrangements to repay all of the outstanding dept while you are staying current on your regular monthly remittances. Depending on the outstanding amount and the size of your business, your repayment schedule could be from three months to five years.
- The arrangement can be a fixed monthly payment amount or one with escalating payments throughout the term of repayment.
- Seek the help of a professional Trustee (Bankruptcy). This does not mean that you are going bankrupt but does show that you are serious about correcting your tax problem. The Trustee can immediately stop any garnishment on your account and negotiate directly with CRA for a reasonable repayment schedule.
I have had my share of experiences with CRA. Here is one example; I was approached by the owner of a company that did repairs to heavy equipment in the steel industry. His business not only had a cash flow problem but he was also behind with his remittances to CRA and they were threatening to garnish his account. With the threat of garnishment, I was not able to purchase this client’s receivables and help him with his cash flow problem.
The circumstances were:
- The CRA wanted their money immediately.
- The client did not have the money to give CRA nor could he commit to a fixed payment per month on the debt.
- If CRA garnished his receivables then his company would be bankrupt and ten employees would be without jobs.
I came up with a solution which I thought would help everyone:
- CRA would not garnish the receivables and they would give Fleet Street permission to purchase the receivables without the threat of garnishment.
- The client would stay current on his new remittance payments.
- Fleet Street would send all holdback rebates to CRA to pay down the old debt.
By setting the repayment schedule this way the client did not have to worry about making a fixed payment each month to CRA. The CRA relied on Fleet Street to make the payments from the holdback.
Some months there was no payment and other months there was 4 or 5 payments made. Over the next 18 months the client had kept current with his remittances, the old debt was repaid in full and the client no longer needed factoring.
If your company is being pressured by CRA, give Fleet Street a call and we will help you negotiate a fair repayment schedule.
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Story #2: Fleet Street Creative Financing
A long distance reseller approached Fleet Street Financial Corporation for financing on its receivables.
The problem was that the company sold its services to 1600 clients, most of which were individual people. Not only were most of the clients individuals but the amount of the invoices averaged $20.00.
This is not a situation that a factoring company looks for. The invoices are mainly from individuals, which is a NO for a factoring company. The invoices average $20.00, which is a NO for a factoring company. There are 1600 clients, which is a NO for a factoring company.
Why are these all “no” situations for a factoring company? A factoring company bases its credit decision on the payor being creditworthy. In principle, individuals would not meet this criterion (even though most if not all will pay their bill). A factoring company cannot make money mailing out and collecting $20.00 invoices. A factoring company cannot handle and do a satisfactory job administrating the collection of 1600 bills, which is what this client was looking for.
So how was Fleet Street able to finance this company with all three road blocks in the way?
Fleet Street allowed the client to have it’s mailing house send out the invoices to the client’s customers (which normally the factoring company would not allow). Next as to the size of the invoices: Fleet Street did not treat the 1600 invoices as 1600 invoices but as weekly group billings of approximately one invoice. The third problem was the collection of these invoices. Fleet was not going to collect on 1600 invoices per month. However, the client had set up their customers on pre-authorized payments and credit card payments. All of these payments had been directed to go into the same account at the Bank of Nova Scotia.
To protect Fleet Street the client turned over the account signing privileges to Fleet Street. Fleet Street was now the only signing officer on the account (this is not the norm but the only way it could work in this case). When the bank balance reached an amount equal to the oldest invoice, Fleet Street would write a cheque on the account payable to Fleet to pay off the outstanding invoice.
The company is now profitable and growing as fast as they can sign up clients with absolutely no financing worries.
For more information on how Fleet Street Financial Corporation can help provide the financing your company needs to grow your business please contact Michael Yasny at 416-929-9272
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Story #3: Factoring Helped With A Partnership Buyout
A potential client, Steven, approached Fleet Street to help him buy out his silent partner. Steven’s business was a temporary employment agency specializing in transport drivers. The company had financing from the silent partner and a $125,000 line of credit at the bank secured by a collateral mortgage on Steven’s in-laws’s house.
The problem was that Steven had no money to purchase the shares from his partner and Fleet Street’s business is not to lend money but to buy receivables. The question was how could Fleet Street help Steven with the purchase without lending him the money to buy the shares?
Since the silent partner was willing to do a vendor take back on the deal, the question now was how could Steven raise the down payment? Steven was able to use the Corporation’s outstanding receivables to fund the share purchase.
Steven and his partner came to an agreement on the purchase price of the business, which was to be made up of a down payment and a vendor take back.
Fleet Street was able to help complete the purchase by factoring the outstanding invoices. This raised the necessary funds to make the down payment.
Next the company needed money to finance the day-to-day operations. That was not a problem for the company or for Fleet Street. The company was running and producing new invoices each week and Fleet Street was able to factor the new invoices and provide Steven with the necessary funds to carry on the business.
Things went so smoothly for Steven that within seven months he was able secure a new line of credit of $250,000, the collateral mortgage on his in-laws’s house was discharged and he no longer needed factoring from Fleet Street.
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Story #4: New Business Factoring Success
NEW BUSINESS, $1.8 MILLION IN SALES, NO CASH FLOW PROBLEMS,
PRICELESS!!!
Three years ago, Chris Casey, the owner of Corrugated Pallets Inc. came to Fleet Street with a new business making corrugated pallets. His customer targets are large manufacturing companies who were using wood pallets and were looking for a more environmentally friendly product.
Chris had visited a few of the Canadian banks. Although they all liked his business idea they were not interested in financing his new business for only one reason it was a new business.
The fact that it was a new business was of no concern to Fleet Street. Fleet Street was interested in financing this business because of the creditworthiness of Chris’s customers.
Although Fleet Street does not lend money, it does finance new and existing businesses by purchasing some or all of their accounts receivable.
Chris might have been giving his customers 30-60 day terms but by using the services of Fleet Street he was effectively selling COD to these companies. Chris was able to turn his limited cash flow several times a week instead of once every 30 – 60 days.
By factoring his receivables with Fleet Street, Chris was able to deliver all of his orders, which amounted to $1.8 million in his first year. Not only were all of his orders delivered on time, but all of his suppliers were paid on time, resulting in larger credit limits and better prices from these suppliers.
Factoring will provide you with:
- Cash flow to grow your business.
- Peace of mind that you have the funds to pay suppliers and employees.
- The ability to extend credit to large customers without any effect on your cash flow.
- No need to deal with your bank for financing.
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