Unlocking The Mystery Of Cash Flow Solutions For Companies In Canada !
Information on a solid working capital formula and solutions for cash flow financing in Canadian business.
We're not even sure ' Positivity ' is even a word... but... if it is... it seems like a great description for what Canadian business owners and financial mangers are looking for when it comes to cash flow financing and knowing the working capital formula they are searching for has finally arrived .
We pretty well never get tired of explaining to clients that sales and profit growth, unfortunately, does not equal cash flow in the same amounts! Over the long run, yes, but in the short run... never. And when there is a very serious lag in that gap it’s important to understand the activity in between, and, as importantly the solutions you can undertake to beat the cash flow gap.
When we talk to clients about the working capital formula and solutions we're the first to point out that those cash flows from profits are a key source of cash. At the same time cash flow financing solutions are:
Receivable financing
Inventory financing
Asset based lending
Sale leasebacks
Tax Credit Monetization
Purchase Order / Trade Finance
And, dare we say it, bank lines of credit and term loans.
As the business owner quickly finds out, it’s a two pronged challenge, knowing how to finance those working capital needs, and knowing you have the solutions in place when you need them. I.e. timing.
The good news here is that although revenues can often fluctuate widely the business person should be able to have a strong sense of expenses
So... back to those sources of financing. Again, we're talking about an evolution over the life of your business, and when you are a relatively new business or start up the challenge to finance cash flow is a lot more elusive. At the end of the day sources of financing at this point in your business history often tends to be your own funds. The proverbial ' friends and family ' and access to working capital via credit cards, personal collateral etc.
As the business matures a solid form of cash flow financing actually becomes your management of 2 key aspects of your business"
Receivables
Payables
As your accounts receivable ((and inventory by the way) grows these can be both managed, and financed. Hopefully both!
Very few term loan solutions are available for cash flow ' Positivity '. And given the fact that term loans bring debt to the balance sheet and require fixed repayments that's not necessarily a bad thing.
Many Canadian business people assume the Canada Small Business Loan program can bring working capital and cash flow ‘positivity’
It can't, as this program only finances assets, leaseholds, computer software, real estate, etc.
An action list or summary that we often provide to clients challenged for cash flow solutions includes the needs for a cash flow budget outlining the amount of financing you need and how it will be repaid,
And our final advice today... simply that when you are starting to be quoted as saying ' cash is tight ' it might be a little bit late sometimes. Speak to a trusted, credible and experienced Canadian business financing advisor on cash flow 'positivity ‘solutions.
CANADIAN CASH FLOW FINANCING SOLUTIONS
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/working_capital_formula_cash_flow_financing.html
The above information given here that is really true and helpful for us. I was searching these kind of information and got it here. Thanks a lot..
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