Canadian Accounting Market

Seeking for a job is indeed a challenge. Yes, this is true to any, if not, to most professions. Some job offers or job postings are not well publicized, so more effort is needed to get the right and best job that suits each individual. However, there are a lot of ways that a professional can get a job, take for example an accountant in Canada. There a lot of opportunities in the Canadian Accounting Market. One could either go to further trainings to further advance and enhance one’s knowledge and skills, and increase their chances of landing a job. One could also go through recruitment agencies to help expand their chances of getting an employer all over Canada.

J.R and Associates Training for accountants provides accounting job training and a CO-OP program for those who wish to become an accountant in Canada, but still do not have any working experience in North America as either and accounting student, a fresh graduate or a new immigrant. After completing the accounting coop program, you will be able to land any accounting related entry-level or intermediate level jobs such as Tax Assistant, Accounting Clerk Accountant Assistant, Intermediate Accountant, A/R Accountant, A/P Accountant, Payroll Clerk, etc.

The students who enrolled in this job training and CO-OP program are now successfully working in various industries such as government, banks, TV stations, retail chains, accounting firms, financial institutions, manufacturing, distribution and wholesalers, etc. Fortunately for many students, the had the chance to joined well-respected organizations such as Tim Hortons, CIBC, Sleeping Country Canada, Scotiabank, Revenue East Asia Bank, Deloitte, Canada Agency, Ministry Finance, GE, TVO, etc. Some students also got the chance to enter into different CA firms. Luckily to some of the first enrollees of the said program, they have been promoted to supervisor, Accounting Manager, or Controller from their entry-level or intermediate level jobs.

There are a lot of recruitment firms that can help accountants land a job in the Canadian Accounting Market. One accounting firm is the Santif Group Job Placement where in their extensive research and staffing industry experience has enabled them to develop thousands of contacts in Canada that will help job seekers land with the best employers the industry has to offer. This recruitment firm promise to provide exciting career opportunities for aspiring accountant job seekers, successfully matching them with the positions they are looking for in Canada and aligning their professional skills with opportunities that fit their goals, personality, and interests. They claim to be a well-established firm with a respected reputation; therefore many of the best jobs come directly to this firm.

Another recruitment agency that can help an accountant job seeker is the David Aplin Recruiting which specializes in placing top-tier accounting and finance professionals with companies offering exciting accounting and finance jobs in Canada. Their accounting and finance consultants have been in the business for a long time and have already specialized in these areas, making them experts in putting the job seeker into the best career opportunities.

A Canada Internet Merchant Account

If you knew that a Canada Internet merchant account could dramatically improve profits and reduce overhead costs, would you get one? Well, the good news is that it can and you should! A merchant account conveys a host of benefits that can help your business expand to meet the demands of today’s time-conscious consumers. To apply for your merchant services account, simply follow the following easy steps.

1. Apply for a Canada Internet merchant account through a reputable banker, loan agent, or financial underwriter. You may be able to work with a banker with whom you have already established a business relationship. Or you can shop around for a better deal if you feel your bank is asking too much money for too few benefits. These accounts can be quite competitive, so it pays to browse a host of providers in your town or on the Internet, where financial offers are waiting for your perusal. Just do a search for merchant accounts or merchant services, and you will soon find that a number of potential lenders will pop up on your screen. You also may want to get the names of other financial institutions from colleagues, friends, and family members who already have successful merchant accounts.

2. Check out possible Canada Internet merchant account providers by running their names through a business checking service, like the Better Business Bureau. While this is not a comprehensive background check or a certification of the lender’s ability to meet your needs or keep its promises, it does provide a starting place for ensuring that the provider is not a total fraud and may be somewhat likely to live up to its promises. You also can check out online testimonials or ask for references. If the company has a longstanding history of providing merchant services, there is a fairly good chance that it will work out well for you, too.

3. Browse available services offered by Canada Internet merchant account providers. Perhaps the most sought-after benefit is the ability to offer credit card payment processing services to clients who shop at your Internet site. Find out how much this service will cost through your choice of Canada provider, and determine whether the benefits are worth the asking price. You may end up paying some of the expenses yourself, such as a domain registration and site-hosting fee, but this is to be expected from just about any provider. It is important to compare fees among various lenders to get the most affordable package. Some underwriters will ask for an application fee or an annual membership fee, as well as several other types. Look for the lowest available costs before deciding on the provider you want to work with.

4. Find out which services will by covered by your choice of Canada Internet merchant account underwriter. Some companies may provide free monthly statement printouts while others charge for this service. You also need to check service rates, which typically are billed by a few cents per transaction or via a low monthly interest rate. Set up your company budget and evaluate your customers’ buying patterns to figure out which billing method will work most in your favor.

Transfer Money to Canada Using Your Preferred Method When You Move Or Visit

Whether you are moving to Canada or taking a long vacation, it is recommended that you open a bank account if you plan to stay for more than three months. Unlike some countries that depend largely on cash transactions, most Canadians use their bank daily. You can get direct deposit into your account once you get a job, pay bills online, and use your debit card at ATMs. In other words, Canadian banks work a lot like banks in the United States.

If you choose to open an account, you will likely find that it is easy to transfer money to Canada from your current account to your new one. Some countries allow you to open an account before you arrive, but Canadian banks require both government-issue ID, such as a driver’s license, and proof of address. This means you will have to wait until you move to get an account. You will probably also need a reference letter from either your employer or your bank in the United States.

You might choose to open an account a bank that also exists in the United States, such as HSBC or ING. You could also switch to one of the larger banks in Canada, such as TD Canada Trust, Bank of Nova Scotia, Royal Bank of Canada, or Bank of Montreal, to name a few. Keep in mind that the currency of Canada is the Canadian dollar, and $1 USD is equal to about 1.09073 Canadian dollars. Also, be aware that many banks charge a monthly fee for an account unless you are a student. The fee is typically anywhere from 2 to 10 Canadian dollars per month.

If you do not want to wait until you arrive to open an account and transfer money to Canada from your U.S. account, you have other options. One of the cheaper solutions is to obtain a prepaid debit card. You can take one with you into Canada and then add funds to it from your U.S. account to hold you over until you can open a new account. The fee to add money to the card is about $5, and you can add as much as you want at one time for that amount. You can either use the card at stores that accept debit cards, or electronic banking machines. These are called ATMs in the United States, but they are referred to as automatic banking machines, or ABMs, in Canada. They are widespread, typically found at banks and gas stations.

You should choose the best method for you before you arrive. If you like to use cash as much as possible, then exchanging your American dollars for Canadian dollars might be a good idea for you. If you can wait until you arrive and get settled in to start spending money, you may opt to just open a bank account and transfer money to Canada from your account in the United States. If you enjoy using a card and want money the instant you arrive, a prepaid debit card might be best for you.

Starting a Business in Canada


I write this piece to share my personal and professional experience with all of you aspiring entrepreneurs in out there regarding issues that you will likely have to face when starting your own business. Please note that some of the legal topics in this piece apply to someone starting and operating a business in Ontario, Canada.


Experience and education

You need the technical education and experience in your area of interest to provide a great service or product, whether you’re an accountant, a furniture salesman or a web-designer. But if you have only this, it only qualifies you to be great employee. It doesn’t mean you are able to run a business.

To successfully run a small business, you need to be a “jack of all trades” with a working knowledge in the areas of sales & marketing, accounting & finance, business law, and human resources management.

No one expects you to be an expert in these areas to be a successful entrepreneur, but you should know enough to identify potential problems or issues so you can hire an expert to deal with them quickly before problems get worse. If you cannot even identify a problem, then you’re setting yourself up for some major trouble.

If you’ve considered starting up a business, you ideally should first find a job with a successful employer in the industry that interests you and learn all aspects of how the business is run. You should also enroll in some introductory courses in accounting, finance, business law and marketing at a local college or university.

Personality traits

From our experience, most successful entrepreneurs have the following personality traits:

1. They are highly organized

2. They love their work – they are truly passionate about what they do and that gives them an edge over their competition. This translates into a strong work ethic, and the best entrepreneurs are considered “workaholics”.

3. They have a broad range of interests and talents. In the context of running a business, they are good at selling, financial management and working with people. This goes back to being a “jack-of-all trades” in order to succeed in business.

4. They can tolerate risk but carefully assess risks before making any major decisions.

To be more specific, there are people who are highly intelligent and educated, but require the emotional security blanket of having a job with a steady paycheque. At the other end of the scale are business people who will make decisions recklessly without first getting facts, analyzing them and then weighing the risks. Neither of these types can be successful entrepreneurs in the long run.


Why? Because you need to know who you’re selling to – what’s the point of being in business if you can’t sell your product or service?

You also need to know how much it’s going to cost to set up and run your business. After all, if you spend more than what you sell, you’ll be losing money. Why be in business if you’re losing money all the time?

Finally, unless you already have a lot of money in the bank, you need to figure out how you’re going to finance the start up costs of your business.

Who are you selling to (define your market)?

If you took our advice previously and worked for a company specializing in your industry of interest, you should have an idea of who you can sell to and at what price.

If you didn’t, and have no idea whatsoever, then stop right here – you shouldn’t be starting a business at all.

Will I make any money (preparing a cash-flow projection)?

The most common costs you’ll incur can be separated into two categories:

Setup costs

Legal fees if you’re incorporating your business
First and last months rent if you’re operating from rented premises
Costs of setting up an IT network, phone and fax system
Office furniture

Monthly operating costs

Inventory purchases if you’re selling goods
Professional fees (accounting, legal)
Leasing costs for business equipment

Once you’re able to estimate what you can sell and your cost of doing business, you (or you and your accountant) are in a position to put together a cash-flow projection.

The purpose of putting together a cash-flow projection is to determine if it makes sense to go into business in the first place.

Therefore, get accurate information about what how much you can sell and how much it costs to set up and operate. If you don’t do this before proceeding with actually going ahead with the business, it could lead to disaster.

Getting financing

You’ve now estimated how much it will cost to set up the business. It’s now time to get the start-up capital. You have a number of options:

Your own money

Many people get the start up money they need by mortgaging or re-mortgaging their homes, or selling property or possessions
Banks and other lenders rightfully expect you to make a personal financial commitment – this is called putting “skin in the game”.

Family and friends

If you’re fortunate enough to have them believe in your ability to succeed, family and friends may be willing to provide a business start up loan
Never, ever approach friends and family unless you have a detailed business plan that will demonstrate why your business will succeed.
If you cannot factually demonstrate how your business will succeed, and how you’ll repay them, you are just throwing their money away
We’ve seen this scenario play out, which results in broken friendships and strained family relationships

Canada Small Business Loan Program

Administered by Industry Canada. Although you borrow the money from a bank, the Canadian government basically guarantees that the bank will be repaid in the event your business fails
Provides up to $500,000 of financing
You must be carrying on business for profit with gross annual revenues of $5 million or less
Loan proceeds can only be used to purchase business equipment, leasehold improvements to leased premises, or to purchase land for business operations
You cannot use the proceeds to finance working capital, like inventory or accounts receivable
You apply by completing a loan application at your bank. If the bank decides to grant you a loan, they register it with Industry Canada
If you give a personal guarantee, you’re only personally liable for 25 percent of the initial amount borrowed. This is a big advantage over conventional loans, which usually require you to personally guarantee 100 percent of the loan borrowed by your business.

What Non-Married Same Sex and Heterosexual Couples Need to Know When Immigrating to Canada

When applying for immigration to Canada via Citizenship & Immigration Canada (CIC) you must always have a principal applicant. This is the person who can fulfill the criteria of the particular immigration route you are choosing. It does not have to be the head of the household, nor does it have to be the male in a mixed sex relationship. You should look at the criteria and determine which family member will gain the most points or have the correct work history in order to qualify.

The principal applicant can then name spouses and dependent children as family members to be included in their application. Many people wrongly assume that a couple has to be heterosexual and married in order for their relationship to be recognized by CIC as valid, but this is not the case. CIC recognizes common-law relationships as well as same-sex relationships, but you do have to be aware of certain criteria that have to be met in order for your relationship to be accepted.

CIC Definitions:

Spouse: Two people of opposite or same-sex in a legally recognized marriage.
Common-law: Two people of opposite or same-sex who are living in a conjugal relationship and have been doing so continuously for at least one year.
Conjugal: Two people who live together and have significant commitment to one another i.e. financial, emotional, children etc.

Some issues may arise when applying for immigration to Canada that may never have been a factor before and could actually prevent the CIC from recognizing your relationship as common-law. If you know before hand what these issues might be you can prepare in advance and get your affairs in order so that when the time comes you have no problems proving your relationship. Muchmor Canada Magazine outlines the main problems and how you can prevent them.

When CIC accepts common-law relationships both heterosexual and gay or lesbian it has to receive proof from the couple that their relationship is real and not being used for the benefit of immigration. This means that you will need to prove that your relationship is conjugal. Evidence that you share a home, support each other financially, are in an emotional relationship and perhaps have children will all be taken into account.

This might not sound as if it could be a problem, but lets take a look at a couple of scenarios:

Scenario 1:

Jack and Ben are a gay couple who have been in a relationship for six years and have been living as a common-law couple for four years. Jack owned the property they live in before he met Ben and all the bills, mortgage etc are in his name only. Ben contributes toward the food and general living expenses as well as holidays the couple take. They each have separate bank accounts. This arrangement has worked well for them both and they have seen no reason to change.

Problem: Because on paper Ben has no connection to the property they live in there is no proof that they are living as a couple, other than their “word.” Although Ben pays as much financially into the relationship he has no bills, mortgage or household costs that can be shown to the CIC. Neither do they share a bank account and do they have no obvious financial commitment to each other. Therefore this may give rise to CIC rejecting their common-law relationship and refusing their application.

Scenario 2:

Mark and Sue have lived together for two years. Mark works full-time and is the only earner in the home as Sue is a stay-at-home mum to a daughter she has by another relationship. Mark has always looked after the bills and rent and Sue’s name is not on any of the official documentation i.e. rent, utility bills etc. They do have a joint bank account, but this is used for savings and holidays and not for the payment of household bills which come out of a bank account in Mark’s name only.

Problem: As with Scenario 1 CIC could refuse to accept their common-law relationship as on paper Sue has no connection to the joint home and cannot prove commitment to the relationship. Although they share a bank account, this does not prove a relationship as any two individuals can open a join bank account without being in a relationship. Remember all the bills come out of an account in Mark’s name.

Scenario 3:

Sally lives with her same-sex partner Amy in a rented apartment. The rental agreement is in Sally’s name as she lived there before she met Amy about 18 months ago. The rent includes all utilities, so no living expenses other than groceries and everyday living costs are payable. If they add Amy to the rental agreement it will prompt a new contract being put in place, increasing their monthly rent, so they have left things as they are. They both have separate bank accounts.

Problem: Once again one partner in the relationship cannot prove that they are in any way committed to the relationship or the property they live in. Again CIC could refuse to accept this relationship and refuse their application.


Fortunately most of these issues can be easily rectified well in advance of you needing to supply the information to CIC. By following Muchmor Canada Magazine suggestions you can prevent problems.

The key to this is preparation and timing. As soon as you know you will want to apply for immigration to Canada you should look at mortgage or rental agreements, utility bills such as electricity, gas, water, internet, television etc. bank accounts and investments. Make a list and note who’s name is included on each.

The next thing is to try to get as many of these items in both names as possible. Some will be easier than others, but perhaps the easiest is a joint bank account which you then use to pay your bills. If you can show that both your incomes go into one account and all your expenses are paid from that account it helps prove financial commitment to one another and a shared liability for the “marital” home.

Next try to add the additional name onto utility bills. Some companies will do this readily, others may take some patience and paperwork. If you cannot get all changed over, don’t worry. As long as you can show that many of your bills are in joint names this is okay. After all even legally married couples don’t always have all their bills in both names.

The biggest obstacle will be mortgage or rental agreements as these will require a legal change and may it may be to your financial disadvantage to change them. This is something you will have to discuss with your mortgage lender or landlord. Again if you cannot easily get this changed, do not despair. As long as you can get a joint bank account in place and can prove you share all or most of the household expenses you should be good to go.

The CIC understands that not every couple married or common-law will share absolutely everything. Many married couples still have separate bank accounts or pay separate bills or only have one wage earner who pays everything. But it is taken for granted that a married couple living in the same house are financially and emotionally committed to each other. The same consideration is not extended to common-law couples who rightly, or wrongly have to prove this fact.

Because CIC require you to be in a common-law relationship for at least one year before applying, you should get all these things in order as soon as possible. The information you give on your application needs to be relevant at the time you complete it, not at the time you expect it to be processed by CIC.

Always read, re-read and read again the application criteria to make sure you are complying correctly. It is easier to start things off right than to have to correct things later which may delay your processing time, or mean it gets rejected altogether.

Bank Account For Canadians

Banking in Canada is effortless and uncomplicated, as there are very few rules and regulations. Canada’s banking sector is similar to that of the United States of America. Almost all Canadian banks offer online banking accounts to their customers.

Customers can also avail the service of Automated Banking Machines (ABM) all over the country, which is similar to the ATMs in America. These quality banking services has made the life easier for Canadians in terms of handling their bank accounts.

If you are migrating to Canada for any purpose and need to bank, then you will need to open a bank account here. In the long run, you will definitely require a bank account, if you have shifted to Canada for work purposes to deposit your salary. Next, you will again require a bank account for gas, electricity, phone connection, renting or buying an accommodation, and for few other basic requirements, while staying in Canada.

Safety Side:

All Canadian Banks are government certified. The Canada Deposit Insurance Corporation (CDIC) is a centralized firm offering depositary cover, and thus providing solidity to the monetary organization. They are involved in these operations, since 1967 and are similar to that of Federal Deposit Insurance Corporation (FDIC) of America.

FDIC differs from CDIC in a way they cover your total cash. FIDC handles individual bank account deposits up to $100,000, whereas CDIC covers around $60,000 individual deposits.

There are many options for opening a bank account in Canada. It is always advisable to ask for help to explore many things. Every bank has different processing fees.

After selecting a bank, visit its nearby branch. Always choose a bank, which offers security, close by in terms of location, and good products. Also, check if any bank is providing some reasonable worthy package, and special concessions for the university or your office. This will be useful, as you will have to pay minimal banking fees to operate your bank account there.

Complete all the required formalities and documentation procedure to open a bank account. Choose the kind of service and facilities you require. Both, temporary and permanent residents need to offer identification proof.

You can offer any two identification proofs recognized by the Government such as Canadian driving license, Social Insurance Card, Passport, or Provincial Health Card. The bank may also ask for any residential proof in the form of any utility bill. If you are an immigrant, then the bank might ask for reference from your firm or university.

You can open a bank account without any prior deposits in Canada. Even those who are unemployed can open an account in the bank of their choice. For day-to-day banking affairs, it is good to have a Checking account. The bank will provide you a debit card, which will contain a PIN number to withdraw cash from your account through ABMs.

You have to pay certain fees such as check fees, monthly account fees, and withdrawal fees. Monthly account fees might range from $2 to $15. It is important and beneficial to keep a track of the following things, if you are planning to open an account in a Canadian Bank.

Always prefer to withdraw cash from your bank’s ABM.
Always prefer online transactions. They are mostly free of charge.
It is advisable to keep a track on your bank account on a monthly basis.

Banks to Consider:

Royal Bank of Canada, Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, and, TD Canada Trust are some of the leading and prevalent banks in Canada.

You can also find some international banks in Canada such as HSBC, ING Bank, and Citibank. Finally, there are several regional banks and credit unions banks in Canada.

Non-Resident Bank Account in Canada

Non-Resident Bank Account in Canada:

Americans have the ability to open a bank account easily in Canada, if you hold a legal work permit or are a civilian of Canada, then you can open a resident bank account in Canada. However, if you are not a resident of Canada, then you have the option to open a non-resident bank account with the help of your photo identity, which includes passport or driving license. You have several banks to select from, but deciding which one to use can be overwhelming.

Things to Consider:

Below discussed are some vital considerations to think, while deciding to open a bank account in Canada:

1. Transfer of Money

At times, you may need to send and receive money from or to your bank account situated across the nation. In addition, it can be very expensive to send and receive money across international bank accounts. You have numerous international money transfer services, which do not require bank accounts, though the service charge is quite high. If sending and receiving money with international transfer service is a top priority, then you may have to consider a bank that has a special account for immigrants or reduced international transfer charges in Canada.

2. Transfer of Money within Canada

Not every country follows the rule of paying rent through checks, as when you pay rent through checks, the bank may charge say around $5 to cash your check. Hence, property owners ask their tenants to deposit their rent (cash) directly into their bank accounts or through electronic transfers. Therefore, choose a Canadian bank, which offers online banking facility to transfer money without visiting the bank in person to deposit the money in your account.

3. Payroll Transfer

Often employers pay salary directly into the account of employees. However, if your employer pays a bearer check (or cash if you lack work permit), then you may need to visit that particular branch and cash in. In case, you go to your bank or any other bank other than your employer’s bank, you may have to pay a fee of $4 to $6 for cashing the check. Therefore, you need to consider a bank, which accepts your payroll check without charging heavy service fees or else, try to open a non-resident account in the bank of your employer, as this will help to do all banking deals at one place without the hassle of visiting multiple banks and paying additional charges.

4. Branch Nearer to Home or Office

The banking hours of banks in Canada have to be considered, while deciding to open a non-resident bank account in Canada. Most banks function from Monday to Friday, while few others function from Monday to Sunday. It will be of great use, if your bank works until 6 p.m. If you think you need to daily transactions, then open an account with a bank that has branch close to your office or home. In addition, you can apply for debit card from your bank, since these days, banks even offer debit cards to non-resident citizens too.


While looking for a best bank to open a non-resident bank account in Canada, you will be surrounded with too many options. On the other hand, it is wise to take suggestions from other people, who hold accounts in the bank, wherein you decide to open an account in Canada.

In addition, you need to consider the bank charges, as the fees charged may vary from one bank to another. The leading banks in Canada are the Canadian Trust and the Canadian Imperial Bank of Commerce. Besides these, you can also find some international banks in Canada.

Employment Insurance For Self Employed Individuals (Canada)

In January, 2010 the Federal Government extended Employment Insurance benefits to self employed individuals/small business owners. The following represents some of the key details:

* You will not be able to claim weekly income replacement benefits in the event that you become unemployed, however you will be entitled to the following benefits (these are the same benefits available to Canadians who are employed):

Maternity benefits up to 15 weeks parental benefits up to 35 weeks sickness benefits up to 15 weeks compassionate care benefits up to 6 weeks

* You will need to wait for one year from the time of registration and payment of premiums before initiating any claims

* For 2010 the rate of EI premiums is 1.73% (1.36% in Quebec) upto a maximum of $43,200 i.e. maximum premiums payable are $747.36 (Quebec = $587.52)

* The benefit is calculated at 55% of the insured (earnings) amount. The maximum weekly benefit is $457, which is subject to reduction if there are earnings from other sources.

* Once you have received benefits, you can not opt out of the program; you will have to pay premiums for as long as you earn self employment income. Prior to receiving benefits you can apply to terminate the agreement.

* In order to make a claim, you will need to have earned a minimum of $6,000 (and paid premiums) in the previous calendar year.

You can register online with Service Canada with a Service Canada Account

Opting into the plan is probably most beneficial if you are planning to start a family, and you anticipate a significant reduction or cessation of your self employment income. If you do not intend to take advantage of the maternity and parental benefits, it may not be worth initiating coverage since you cannot opt out of the plan once you have started to receive benefits. Alternatives include contributing to a private health and disability insurance plan or simply setting up a savings account earmarked for rainy days.

Why Sub Prime Is Not Likely to Affect Canada

The Canadian housing market is better shaped and more professional than the US housing market. It is because, the housing market in Canada has very little of sub prime mortgage activity, comparatively limited and restricted speculative structure and also the housing stocks are not more than what is desired. The best thing about all this activity is that you have good amount of construction activity on the run in the Canadian housing market.

Moreover, as per the current statistics, the affordability costs in Canada’s housing sector are also slated for increase, with Bank of Canada having slashed the rates by 150 basis points since December. The results shall be perceptible in the form of contraction of mortgage spreads and house price gains coming down.

The sub-prime mortgage market in Canada accounts for about 5% of outstanding mortgages, while, in the United States, sub-prime mortgages account for roughly 14% of the outstanding mortgage market. Speculative investing is also much tamer in Canada. Investor-owned mortgages account for roughly

2% of all mortgages in Canada compared to about 10% in the United States and the United Kingdom.

The Government of Canada has also recently taken action by proclaiming that it is all ready to purchase a maximum of $25 billion in pooled mortgage loans from various financial institutions operating in Canada, via reverse auctions. This is based on the research taken by Canadian Mortgage and Housing Corporation (CMHC).

In this manner, the Canadian lenders will have the opportunity to get away with their loan debts in balance sheets for hard cash during imbalanced liquidity. The Government’s risk in all this is practically nothing, and moreover, the pooled mortgage loans are limited to ones insured by CMHC, and all the pooled mortgage loans are prime quality loans.

The entire mortgage system is expected to do well, primarily due to streamlined auction process and lower cost borrowings of Government of Canada. These will enough of credit for both, the government as well as banking sector in Canada.

On Oct 16, 2008, the first $5 billion worth of mortgage pool auctions were organized, and on this occasion, the rate average paid by Canadian banks was 132 basis points, which was above the cost of funding for the government of Canada. Moreover, the Canadian banks borrowing rate was 230 basis points.

This clearly showed positive swing in the transaction process, and as the result, the financial institutions received finances at low interest rates much lower than available through normal credit channels. Baring a few financial institutions in Canada, which have incurred losses due to credit crisis, the overall scenario looks healthy and workable altogether. This is the basis of sound Canadian financial system.

Accounts Receivable Factoring

Recently an Importer in Ontario Canada after having exhausted its efforts in seeking a Business Loan from its local banks in Toronto, Ontario, Canada looked to a Commercial Finance Broker.

Their customers are all across Canada and they have plans to expand into the US market and due to growing orders they had been maxing out their Operating Line of Credit consistently. Their bank had then capped at $50,000 and would not increase it.

The terms with their suppliers in China are 30% with the order placement and the balance before the product leaves the warehouse. These are quite popular terms when dealing with China for goods.

The sales for the company are $1.5 million per year with typical days sales outstanding of 45 days, which is quite common, and in many industries considered quite good. The average amount in Accounts Receivable is $200,000 so you can see the $50,000 Line of Credit was of little use to them.

The company had to carry inventory since their customers expected orders to be shipped within 1 week of receipt and the fact the main supplier was in China meant they had to have sufficient stock to carry them for a months sales at any given time.

Against the owner’s wishes, they had to use personal loans to cover the cash shortage so that they could operate and carry the required inventory.

The cash flow crunch was cured by setting up a new Business Line of Credit for the company using Accounts Receivable Factoring.

The Importer now can take advances up to 85% of their outstanding Accounts Receivable to carry the needed inventory, pay off the bank that was not willing to help them and even pay off the personal loans they had taken. Imagine the relief.

Because the new Funding Line was based on outstanding sales, the Line increased as the sales increased. So as sales grew, so did the availability of funds.

Wade Henderson

Wade Henderson is a recognized Expert in Business Finance with over 16 years Experience in the Commercial Lending Field and a strong reputation for getting the deal done. Visit his Commercial Finance Website to put his experience to work for you.