Getting Enough? Business Cash Flow Financing!

Are You Managing For Sales Or For Cash Flow And Profits?


Information on business cash flow financing in Canada . Cash management and Financing solutions for Canadian Business


Business cash flow financing. Is your firm getting enough? It's probably just us but we have never met a client who, unlike larger corporations, has just too much ' cash on hand'!

The whole idea of having enough cash flow and working capital is to allow you to have enough liquidity for your daily operating needs while at the same time allowing you to grow your firm.

The challenge therefore becomes how much cash do you need, and where do you get it. (There are only 2 places to get this cash).

If the Canadian business owner and financial manager has a good handle on his or her cash flow needs you're in a position to pay back any secured debt and run your firm.

So what factors in fact determine if you're ' getting enough '? Well, first of all it’s about the level of risk you want to take in running your firm on a daily basis with either just enough cash, OR ACCESS TO CASH, or with a buffer that you're comfortable with.

While your debt payments might be fixed... in fact they probably are, the reality is that there are circumstances that occur to all firms that make your cash inflows fluctuate.

So how can you ensure you have access to capital for short term operating needs? That's the $50,000.00 question. You can of course access bank financing if you qualify for a Canadian chartered bank business credit line, but that might come with commitment fees for unused balances, compensating balance requirements, and the challenge of dealing with the bank when sales and financial performance declines.

We referenced only two sources of business cash flow financing previously. In essence they are first of all internal profits and operations, and secondly external working capital financing. It's as simple as that.

So can the business owner / manager actually accelerate cash, ensuring you’re ' getting enough' from an internal perspective. You sure can!

That can be done by accelerating collections, understanding your ' float time ' re cheque processing, lock box operations, etc.

We actually think there are firms out there they invoice once a month. Nothing could be worse... so invoice your clients as soon as you have earned the right to do that by shipping your products or completing your service delivery.

In some cases you should revisit customer terms and perhaps require deposits for work to be done.

Delaying payments requires a fine line of management thought. You should of course pay creditors to terms, but not before then - stretch them as long as possible without altering vendor relationships which can be valued highly. If you have a sales force compensation plan you could adjust commissions relative to receivables collected, not sales made. We fully realize we've just made an enemy of the sales force by the way, but it’s a cruel world!

Business cash flow financing externally consists of bank lines of credit, working capital facilities that are non bank in nature which secure receivables and inventories, and don forget the new kid on the block, asset based business credit facilities. In some cases the business owner can consider sale lease back or tax credit financing where appropriate.

So, getting enough? If you aren't speak to a trusted, credible and experienced Canadian business financing advisor for assistance on working capital needs for business cash flow financing.

7 PARK AVENUE FINANCIAL

CANADIAN BUSINESS CASH FLOW FINANCING EXPERTISE





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_flow_financing.html