Quality Cash Flow Solutions, And How To Get Them!
OVERVIEW – Information on cash flow management via receivables financing . Inventories also play a key role in working capital needs
Let's go ' one on one ‘ on a critical subject to Canadian business financing success, and that’s' cash flow management '. Typically that involves key current assets such as inventories and receivables, but things like debt load and your firm’s success in generating sales are also key factors.
We meet many clients who simply either directly, or indirectly admit that there current processes just aren't working! They want to know how they can access financing solutions that would make their company more competitive, successful, and effective.
Your ability to access the right type of financing depends on how credible your business is when it comes to having proper financials and reporting in place. So we can make the case that you not only have business assets, but your firm’s credibility is also key to financing and operational success.
So how do you in fact attract the financing that you need from lenders, perhaps other shareholder or investors, etc. That's where performance counts and when it comes to managing receivables and inventories you're going to get ' maximum credibility ' when it comes to loan and financing approvals.
Do lenders actually know how good or bad shape your ' current assets ' are in? (Current assets = A/R, inventory, prepaid and corresponding current liability - payables). They sure do!
There is a great story around a famous Wall Street speculator called Bernard Smith... he simply toured the back of companies - if the smoke stacks weren’t busy and inventories were piling up he sold the company short on the stock market and reportedly made millions .
Things are a lot different today, but it certainly proves our point that a lender and investor has the tools , probably even more so today, to monitor your performance in cash flow management . Smith was an investor, not a lender, but both those two share the same position on the right hand side of your balance sheet - either having a claim on your assets or your ownership!
If you have the ability to show that you understand the relationship between inventories, receivables and sales experts in the field of finance will tell you that you are very ahead of the game. And that’s a good thing.
Let's take a look at A/R as an example. Most business owners (hopefully) know that they can track their A/R performance by a simple calculation called day’s sales outstanding... But you can further enhance your management of A/R, (and inventory) by also tracking the relationship between sales and A/R. Just carrying those extra receivables has a huge cost to your company.
Our bottom line, if you ignore these key relationships your company clearly runs the risk of being accused of poor cash flow management. Additionally you will have difficulty in accessing cash flow financing solutions such as:
Bank credit lines
A/R and Inventory Finance
Asset based lines of Credit
Receivable Financing
Etc!
So, that’s some ' person to person ' advice on how to not have our previously mentioned Mr. Smith not make any judgments on your firm.
Speak to a trusted, credible and experienced Canadian business financing advisor on cash flow management solutions in Canada.
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/cash_flow_management_receivables_inventories.html
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