WELCOME !

Thanks for dropping in for some hopefully great business info and on occasion some hopefully not too sarcastic comments on the state of Business Financing in Canada and what we are doing about it !

In 2004 I founded 7 PARK AVENUE FINANCIAL. At that time I had spent all my working life, at that time - Over 30 years in Commercial credit and lending and Canadian business financing. I believe the commercial lending landscape has drastically changed in Canada. I believe a void exists for business owners and finance managers for companies, large and small who want service, creativity, and alternatives.

Every day we strive to consistently deliver business financing that you feel meets the needs of your business. If you believe as we do that financing solutions and alternatives exist for your firm we want to talk to you. Our purpose is simple: we want to deliver the best business finance solutions for your company.



Showing posts with label business cash. Show all posts
Showing posts with label business cash. Show all posts

Monday, May 8, 2023

Working Capital Strategy And Structure / The Fix Is In For Business Cash Solutions




 

YOUR COMPANY IS LOOKING FOR   WORKING CAPITAL FIXES!

Guide to Boosting Your Business's Working Capital

You've arrived at the right address! Welcome to 7 Park Avenue Financial

Financing & Cash flow are the  biggest issues facing businesses today

ARE YOU UNAWARE OR   DISSATISFIED WITH YOUR CURRENT  BUSINESS  FINANCING OPTIONS?

CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs

EMAIL - sprokop@7parkavenuefinancial.com

7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8


From Cash Crunch to Cash Flow: Transform Your Business with Effective Working Capital Management

 

Working Capital Strategy?  Clients don't believe us at first, but believe it or not when it comes to business cash flow the Canadian business owner /manager has almost as many choices as there are types of apples!  Understanding key issues as well as getting the right working capital structure is key. Let's dig in.

 

INTRODUCTION

 

Working capital solutions are strategies and business financing solutions that a company can use to manage cash flow while ensuring the business has enough funds to cover day-to-day operations. A business can also focus on asset turnover strategies to optimize cash flows in the business. Whether it is optimizing inventory turnover or focusing on days sales outstanding while managing payables will all help a company secure financing in key areas of its business.

 

That working capital structure will be the lifeblood of a business and is typically measured by the difference in current assets and current liabilities on the balance sheet. Poor or negative working capital will often lead to financing distress in the business.

 

 

WHY IS BUSINESS LIQUIDITY IMPORTANT - 3 ASPECTS OF FAILURE IN A WORKING CAPITAL STRATEGY 

 

Your business liquidity is the company's ability to access cash or convert key current assets such as account receivables and inventory into cash - allowing your business to meet day-to-day obligations.  Business owners should monitor key ratios/relationships on the balance sheet and cash flow statement to better understand the financial health of the business - They will signal a company's ability to calculate working capital and address cash flow issues and protect from insolvency. 

 

Does the owner/finance manager really have to be over-worried when it comes to cash flow availability concerns?  When you don't address those issues what in fact can happen? Lots actually.!

 

We're the first to focus on the negative and downside but cash flow unavailability leads to:

 

Employee issues

 

Potential downsizing of your business

 

Inability to grow and expand

 

 

MORE CASH FLOW = BEATING THE COMPETITION!

 

Working capital structure and tools come from your ability to plan, analyze and make the most of using your assets to monetize capital.  Doing these sorts of things right often puts you well ahead of competitors, who we can assure you have their own problems!

 

 

Stay Ahead of the Game: Essential Working Capital Management Techniques

 

Those Bay Street folks call it the ' working capital ratio ' - which many lenders look at also. It's simply the relationship of short term assets to current liabilities, and believe us, you want more of the former! It's a short-term measuring stick for your cash flow and ability to pay short-term debt obligations such as leases, loans, suppliers/accounts payable, and employees!

 

Accounts receivables and inventory management are all about asset turnover, leading to more positive financial ratios that are acceptable to owners/lenders and those holding term debt on your company.

 

 

Revolutionize Your Business's Cash Flow with Proven Working Capital Techniques 

 

If there's any good news it’s the fact that growth and asset growth allow you to access more cash flow solutions. But you have got to know how to do that, what amount and type of financing you need, and what the cost of some of those solutions are.

 

CONVERTING ASSETS INTO CASH

 

The essence of working capital strategy and structure is knowing the amount of liquidity in your business. One of the greatest ironies of business is that a company can have abundant and significant assets, but if you can't convert those into cash, or monetize them with the right finance solutions ... well... you know the outcome of that.

 

So it’s the management of your working capital accounts (cash on hand or available, inventory, accounts receivable ) that allows you to stay in ' positive mode '. Oh, and by the way, those payables on the other side of the balance sheet can drastically affect your overall working capital and business cash success. Managing payables to the max in a positive manner affects cash flow from your operations!

 

 

THE CASH CONVERSION CYCLE  

 

Business owners in the SME sector quickly realize that your overall cash flow success drastically affects your sales, buying, planning, and asset acquisition. When you think of it all of that essentially becomes your whole ' cash conversion ‘ story -  in a term we use often it's really the story of how 1 Dollar flows through your company, from start to finish.

 

Remember also that your current or future lenders are looking at your cash flow ability all the time. They're evaluating their risk relative to the amount you are borrowing.

 

 

 

 

SOLUTIONS FOR YOUR WORKING CAPITAL STRATEGY AND STRUCTURE  

 

How can you address the right cash flow structure? Best solutions in a business loan  include, but are not limited to:

 

 

A/R Financing  -  Both  managing and financing accounts receivable properly will optimize your overall cash flow and working capital - funds from sales can be deposited into the business account the same day a company generates sales from its products or services


Inventory Loans  -  Inventory turns are key ensuring you are not tying up cash in excess inventories - Companies should focus on supply chain management and just-in-time inventories to ensure cost-effective inventory practices.


Access to Canadian bank credit


Non-bank asset-based lines of credit


SR&ED Tax credit financing - filed claims or even accrued expenses for r&d  can be financed in a sr&ed loan to aid in a company's liquidity around their research and development projects


Equipment / fixed asset financing


Cash flow loans


Royalty finance solutions

 

Purchase Order Financing

 

Short-Term Working Capital Loans / Merchant Cash Advances  - A permanent working capital loan or short-term loans such as a  merchant cash advance will provide additional business liquidity and help the net working capital position when negative cash flow occurs. A personal guarantee and good credit score of business owners is required for ' MCA's"

 

Securitization

 

Government small business loans and grants are also available for many small business owners, and changes in the program in 2022 added significant borrowing capability to the program.

 

WHAT FACTORS DETERMINE THE WORKING CAPITAL YOUR BUSINESS NEEDS

 

Factors determining working capital business needs include -

 

The business model of your industry

The operating cycle of your business - ie how long does it take for a dollar to flow through the company- it is the timing around outlays of cash required to sell or produce goods and services to the time of receiving payment - every industry will vary

Efficiency and asset turnover  in receivables and inventory- Here is an excellent article by Harvard Business Review on internally managing cash

Cash Flow

Business goals of the owner

 

 

CONCLUSION - WORKING CAPITAL STRATEGIES TO BUILD A SOLID FOUNDATION FOR YOUR BUSINESS

 

Business owners know managing and financing working capital properly ensures short-term financial health - By monitoring key liquidity indications in your financial statements, a business can implement best practices of financing and managing working capital around key assets such as receivables, inventories, as well as obligations around account payable. 

 

Working capital loans and other funding solutions will strengthen a company's financial position and help ensure long-term success.

 

Call 7 Park Avenue Financial,  a trusted, credible, and experienced Canadian business financing advisor who can assist you with your working capital structure and needs.

 

FAQ: FREQUENTLY ASKED QUESTIONS PEOPLE ALSO ASK MORE INFORMATION

 

What is Cash Working Capital

Working capital is the amount of cash and other current assets a business has available after all its current liabilities are accounted for. Understanding the working capital requirement how much working capital you have on hand to pay bills as they come due is critical to the success of an organization focused on working capital management.

 

What is the relationship between cash and working capital? 

 

Working capital represents the current assets minus the current liabilities on the company's balance sheet - known as the working capital formula. Current assets include cash and cash equivalents, inventories, and accounts receivable. The cash flow is a flow quantity that is generated by every financial transaction and has an effect on the liquid funds of the company from a goal of positive working capital for business needs and reflecting the importance of working capital.

 

What are Working Capital Management Best Practices

Effective management by small business owners of working capital involves closely monitoring cash, inventory, accounts receivables, and accounts payables. Optimizing these elements ensures a sufficient level of working capital to fund interest payments, allowing businesses to operate without disruption and allowing for potential business growth. Best practices for working capital management include improving collections procedures, maintaining optimal inventory levels, and negotiating favorable payment terms with suppliers. Additionally, businesses can explore various working capital funding solutions, such as lines of credit, invoice factoring, and trade financing. Cash flow projections will help project related expenses the company may incur.

 

How Does Managing Accounts Payables Affect Cash

Optimizing accounts payables management and other short-term obligations is a key factor in cash flow from operations - Payable terms can often be negotiated with suppliers and a business can reduce costs by taking advantage of prompt payment discounts.

 

 


 

Click here for the business finance track record of 7 Park Avenue Financial

Monday, May 5, 2014

Reversing Business Cash Flow Shortages ! Revisit Your Working Capital Needs














What Happens When You Don’t Like Your Business Cash Flow Options ? You Investigate These!


OVERVIEW – Information on business cash flow choices in Canada . How does the business owner/financial manager address working capital needs when things ‘aren't working’











Business cash flow
is, more often than not, ' top of mind ' when it comes to solving the working capital conundrum for Canadian business owners and managers. Typically clients we meet want to reverse shortage and find out about other options! Let's dig in.

All business owners / financial managers know that moving a business forward. Factors that affect cash flow include if and how your sales revenues are growing, what financing your business can bear/attract, and the inability in certain times to address financial distress. Of course the perfect world lets you ' self finance ' operations and borrow at low rates only when you need to. Bottom line - it's rarely a perfect world.

So how then does the owner/manager determine when and how to access working capital solutions. Don't forget also that how you manage and access capital forces your behavior on investing in new assets, growth strategies, etc.


Certain clients we meet have an even larger challenge - addressing export markets and non North American clients. More often than not, in fact almost always traditional and alternative lenders alike will insist on things like credit insurance, letters of credit, etc.

Interested in a recap of your actual business cash flow solutions in Canada? They include:

Canadian chartered bank credit facilities

Factoring

Confidential Receivable Financing

Inventory Finance

Tax Credit Monetization

Asset based non bank business lines of credit

Working capital term loans (Secured/Unsecured)

Purchase Order/Contract Financing

EDC Credit Solutions


Royalty Financing




Any business financing solution that you undertake should have you focusing on how that solution will aid you to either operate, or grow the business. You are only going to access incoming cash from the following methods:

Generating sales and collecting receivables
Borrowing
Financing Assets
Selling Assets


We note that selling assets is rarely the optimal owner strategy, but refinancing them using such strategies as the sale leaseback option is a solid way to go about things on occasion. Remember also that borrowing involves taking on debt, so both managing and monetizing existing assets is more often than not the way to run/grow your business.

All too often clients we meet and talk to are flummoxed by the fact that sales and (paper/accounting) profits are great... so they wonder whey they are going broke! Here rules to live by include:

Maintaining a cash flow forecast
Watch term debt obligations carefully
Using short term cash flow financing only when needed
Establishing bank or non bank credit lines

Start up or early stage firms will also have a larger challenge in arranging cash flow financing. Firms that are primarily inventory based also face that challenge.

Our bottom line - if you don’t like your current working capital financing situation , reverse that feeling and seek out a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist .



Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :


7 Park Avenue Financial = CANADIAN BUSINESS CASH FLOW AND WORKING CAPITAL SOLUTIONS






Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:

7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line
= 416 319 5769

Office
= 905 829 2653



Email
= sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '
































Sunday, April 28, 2013

Working Capital Strategy And Structure . The Fix Is In For Business Cash Solutions







More Choices Than Kinds Of Apples .
Working Capital Solutions


Information on working capital strategy in Canada . The proper structure of cash flow solutions creates business cash solutions for operations and growth.




Working Capital Strategy?
Clients don't believe us at first, but believe it or not when it comes to business cash flow the Canadian business owner /manager has almost as many choices as there are types of apples! Understanding key issues as well as getting the right working capital structure is key . Let's dig in.

Does the owner/finance manager really have to be over worried when it comes to cash flow availability concerns? When you don't address those issue what in fact can happen? Lot's actually. We're the first to not want to focus on the negative and downside but cash flow unavailability leads to:

Employee issues

Potential downsizing of your business

Inability to grow and expand


Working capital structure and tools come from your ability to plan, analyze and making the most of using your assets to monetize capital. Doing these sort of things right often puts you well ahead of competitors, who we can assure you have their own problems!

If there's any good news it’s the fact that growth and asset growth allow you to access more cash flow solutions. But you have got to know how to do that, what amount and type of financing you need and what the cost of some of those solutions are.

The essence of working capital strategy and structure is knowing the amount of liquidity in your business. One of the greatest ironies of busines is that a company can have abundant and significant assets, but if you can't convert those into cash, or monetize them with the right finance solutions ... well... you know the outcome of that.

So it’s the management of your working capital accounts (cash on hand or available, inventory, A/R) that allows you to stay in ' positive mode '. Oh and by the way, those payables on the other side of the balance sheet can drastically affect your overall working capital and business cash success. Managing payables to the max in a positive manner affects cash flow from your operations!

Business owners in the SME sector quickly realize that your overall cash flow success drastically affects your sales, buying, planning, and asset acquisition. When you think of it all of that essentially becomes your whole ' cash conversion ‘ story - in a term we use often its really the story of how 1 Dollar flows through your company, from start to finish .

Remember also that your current or future lenders are looking at your cash flow ability all the time. Their evaluating their risk relative to the amount you are borrowing.



There are some classic stories around the loud buzzers that go off when a working capital strategy doesnt work. How can you address the right cash flow structure?

Best solutions include, but are not limited to:

A/R Monetization
Inventory financing
Purchase Order Financing
Sale leaseback strategies
Asset based non bank revolving credit lines
Commercial bank lines of credit
Securitization
Working Capital term loans
Merchant Advances


Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your working capital structure and needs. Put the fix in!


Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :


7 PARK AVENUE FINANCIAL = WORKING CAPITAL STRATEGIES AND SOLUTIONS



CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653
Email = sprokop@7parkavenuefinancial.com



















Wednesday, August 10, 2011

Financing Working Capital For Business – Canadian Business Cash Flow Alternatives






Management and Sourcing of Working Capital Finance For Canadian Business Owners

Information on working capital for financing and what alternatives business owners and financial managers in Canada can seek and utilize . Management of business cash flow and monetizing current assets should be a owner/manager priority .







Looking for some facts and ' real world ' information on working capital for financing purposes in Canada? Business cash flow is at the center of your firms day to day operations, here’s some great ideas for Canadian financing; let's unlock some of those secrets your competitors are using... and give you some vital insights into business financing success.

You may or may not be in a liquidity crisis - we're pretty sure though that you would prefer to avoid one! Naturally that sort of ' crisis' or just plain challenge revolves around how you have chosen to finance your firm from an operational point of view. So yes, it’s all about (unfortunately) ratios and balance sheet structures, which you in many cases have chosen not to deal with. So let’s determine how you can get some cash flow predictability into your business.

So how do you go about addressing business cash flow? It’s more simple than you thing, you have to accelerate business receivables, control your cash outflows, and address those balance sheet issues we referenced above. It absolutely does not mean you have to take on additional debt, if in fact that is even possible in some cases. There are numerous ways to monetize your balance sheet. We have always gotten somewhat of a ‘kick ' out of the standard metric that banks and other financial lending institutions use to measure your business ' cash flow '.

The reality is that there are tens of different meanings and interpretations to cash flow (don’t panic, we're not going to cover them off today!) but the one 99% of people gravitate to is the ' current ratio ‘. It's the simple calc that takes your current assets over current liabilities and gives you a ratio (we call them relationships). We're told bigger is better in this calc, and that a 2:1 final number is preferred.

But... guess what? If your inventories aren’t moving and receivables are slow to collect and perhaps even over 90 days is that number relevant anymore. The most effective way to measure cash flow is really ' operating cash flow ' - it tracks business cash based on the changes in working capital accounts. For example, if your sales are going up and receivable levels went down then you are generating that positive operating cash flow we just spoke of.

We can assure you we have learned by now that clients don’t visit us looking for classroom lectures on ratios, and debates on what measurements lenders use or don’t use ineffectively. What they do want is ways to liquidate or monetize those current assets.

In Canada you have numerous alternatives to working capital financing. These include traditional bank lines, receivable financing, asset based lines of credit that are non bank in nature, and the monetization of any tax credits such as a SRED credit. (Yes, Sred credits can be cash flowed today!).

So is there a bottom line..?? if there is it’s simply that you can improve your working capital yourself by accelerating A/R and inventory turn overs, creating a sale leaseback on assets owned, or, even consider a permanent working capital injection via a term loan.

Or, as we have stated, consider re monetizing your balance sheet today in the 4 methods we've noted above. Want assistance in whats right for your firm. Speak to an expert Canadian business financing advisor who is experienced, trustworthy and credible. Don't underestimate the need to address these issues today.




Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com


Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/business_cash_working_capital_for_financing.html