Working Capital And A Cash Flow Problem ? Fear No More!

Curing the Cash Flow Blues In Canadian Business Finance


OVERVIEW – Information on solving your cash flow and working capital problem in Canada . Techniques, tips and tools to analyze, monitor and solve Canadian business financing challenges



We're not sure there's a cure for the regular blues;

but if working capital challenges and a cash flow problem are top of mind in your Canadian business we do in fact have some solutions, tips, tools, and techniques... yes we guess we could call them cures!

And if there is every some good news in a problem its the fact that if you address working capital, cash management and a/r and inventory properly you're now in a position to enhance your overall return on investment, while at the same time minimizing the risks that come with these types of problems . Talk about our ' double whammy’

Canadian business owners and financial managers often have a poor handle on their current asset accounts - primarily of course receivables and inventory. We can forgive them for that, because those balances changes pretty well every couple hours. Talk about a moving target! ....

Invoices get issued, receivables get paid, inventory gets shipped... and more goods are purchased.

So what's the problem then? To put it simply it revolves around the fact that if you are mismanaging these accounts, or not financing them properly you lose the ability to deploy funds more productively - i.e. growing your business. That’s when the total ' mix ' of your assets becomes important.

Clients sometimes probably tire of us advising them that they need to get a handle on which category of financing is going to fix the cash flow problem. Those categories are short term debt, long term debt, equity, and asset monetization. (If we had a favorite ... we confess ... its asset monetization)

There is a very simple way of matching the financing you need to your assets. The solution - use financing of similar maturity to your assets. A quick example - use something such as leasing /equipment financing for long term more permanent assets. Another example? Utilize a receivable financing program for your A/R.

Another solid rule of thumb is to always not forget that the longer it takes for a dollar to flow through your firm (your cash conversion cycle) the more working capital financing you will need).

Focus also on managing and financing your accounts receivable in a manner that suits your firm. Here's a shocker - there’s a cost to carrying a/r. Receivable financing, aka ' factoring ' is a solid tool when you can get a good handle on net savings using this type of short term financing . Never forget (everyone else seems to!) that stronger sales, asset turnover, and more profits can easily justify the use of a receivable finance facility.

Is there a perfect balance for solutions to working capital and a cash flow problem you might be having. We guess the ' textbook ' type answer is that if you properly manage your working capital accounts and are comfortable with the amount of financing risk you are taking you have achieved a cure for the working capital blues. But we toil in the real world, so remember that you also having finance solutions such as :

Asset based credit lines
Commercial bank facilities
Purchase Order Financing
Tax Credit Monetization
Receivable Financing/Factoring
Inventory Finance

Remember that your cash flow accounts change daily and require a lot of vigilance. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your business finance needs.

7 PARK AVENUE FINANCIAL
CANADIAN 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 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 :

http://www.7parkavenuefinancial.com/cash-flow-problem-working-capital.html





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






Stan Prokop