Working Capital And Cash Lifelines In Canada
OVERVIEW – Information on cash flow finance solutions and alternatives in Canadian business .
Cash flow finance in Canada continues to be recognized as the lifeline for your business. We're always preaching that, so to get a little bit of vindication once in awhile is a good thing. On Jan 26/2013 one of Canada's two national daily business journals again touted in it's headline ' CASH FLOW - THE LIFELINE TO BUSINESS SUCCESS '.
So how does the business owner address and solve the issues created by the need for working capital survival and growth. In the article in question it was pointed out that having proper cash management in effect ' stabilizes' your company. It was also pointed out that most of the important decisions your company makes ultimately involve cash considerations of some type.
Let's explore some techniques, and, as importantly, some solutions that come with the challenge of cash flow finance. At the start you have to have some sort of meaningful info. A lot of the business owners and financial managers we meet, certainly in the SME sector, have the data; they just don’t know what to do with it!
In effect you need to constantly be looking for ' clues ‘
in your company financial info that will allow you to resolve, with practical solutions, the challenges you face in financial management.
How solvent is your firm? It’s not the worse question for the owner/manager to ask herself or himself. In the past it was bankers that would always be addressing this issue, today there are numerous other finance providers that are in a position to ask the same question. They are in fact looking for ' link' in you data and, dare we say it, the probability of business failure.
A lot of financial types focus on one calculation called the ' current ratio '. There probably isn’t a more misleading piece of data, in our opinion, given that it does not reflect asset turnover, it just affects asset size. Simply speaking, if you have a lot of a/r and a lot of inventory your current ratio is high - but if you're not collecting properly, or inventory is obsolete or slow turning.... well we think you get the point.
Other ' relationships ‘(some call them ratio ... we don’t) are a lot more effective in understanding your cash flow problems, and needs. They include a gross cash flow calculation, which is simply your income plus depreciation. We actually encourage clients to look at the rate of inventory and receivable turnovers which can be calculated with just a couple ' data points ' from your financials.
So that brings us to some of those working capital and cash solutions available to your firm today. What are they?
They might include, but are not limited to:
Receivable financing
Inventory finance
Non bank asset based lines of credit
P O / Supply Chain /Contract financing
Monetization of tax credits
Sale leasebacks
To understand how you can better asset cash flow finance issues see out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in both techniques of analysis, and , more importantly, implementing those solutions.
CANADIAN CASH FLOW FINANCE 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-finance.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
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