Receivable Financing Powers Invoice Cash In Canada . Why You Should ( And Perhaps Shouldn’t) Use Factoring For Cash Flow

The Power of Cash Flow Finance Solutions

OVERVIEW – Information on receivable financing as a cash flow solution in Canada . How does invoice cash via factoring suit the need of the growing Canadian business and what do business owners need to know about the importance of working capital management and solutions .





Could you be underestimating the power of a receivable financing arrangement, one that generates invoice cash based on your sales and revenue growth?

Whatever they may wish to call it, ' factoring ', ' invoice discounting ', and ‘a/r finance’ etc the situation just might be that you have underestimated this powerful financing tool. Alternatively you might have been focusing on other solutions that either aren't available for your firm or don’t bring you the liquidity you need. Let's explain.

While a huge portion of Canadian business owners and financial manager’s focus on growth, assets, profits etc they are often forgetting the requirement of cash flow to power their company.

In many ways a solutions such as receivable finance gives you the strongest measure of current and future liquidity. Your creditors, lenders, etc are always watching you, whether you know it or not, in an effort to evaluate the risk of doing business with your firm.

When it comes to invoice cash facility it’s all about short term financing. You are simply monetizing assets, i.e. receivables! to create a cash resource for your firm. Your ability to immediately produce cash from revenue (that’s what factoring does by the way) allows you to avoid potential problems when it comes to lack of working capital and liquidity.

In the old days (unfortunately we remember them!)

companies regularly, even without the legal requirement to prepare a cash flow statement, calculated what was known as a ' source and use ' of funds. It would give the business a solid opinion on whether you were going to be in trouble based upon where all the cash was going.

Today all sorts of financing solutions are available to finance a firm. Some are short term and some are longer term in nature. A/R financing (factoring) is a short term solution to generate cash flow.

While accountants, commercial lenders, even banks will often use rations such as ' current ratio ', and other to determine your liquidity they don’t accurately measure your current challenges in cash flow finance. Factoring delivers on the only thing your business needs to survive and grow - Cash!

We've used a great example over the years of a department store in the U.S. that was called W.T. Grant. Right up to the end things looked great - a huge asset laden balance sheet, profits (on paper) and sales growth. The problem? Assets such as receivables and inventories were growing and weren’t being financed properly. In the end its demise and implosion surprised everyone, however history tells us that if we had focused on cash flow and asset monetization things would have been a lot different. That's a U.S. company example of course, but the Canadian business battlefield is laden with many firms that run out of cash flow. We love reading about those sort of things.

If you want to generate enough cash to immediately solve your working capital needs consider an A/R finance/factoring solution.

Are there times when an Invoice cash facility doesn't work ? We advise clients that have low gross margins or declining sales that receivable finance is not really the best solution as opposed to a concentrated turnaround strategy .
Our recommended facility is a confidential invoice cash facility, one in which you can bill and collect your own receivables.

If cash is critical to your business (hello??!!) seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with a receivable finance solution that makes sense for your firm.

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/receivables-financing-invoice-cash-factoring.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