Is Your Cash Flow Shrinking Faster Than Plane Seat Sizes?
OVERVIEW – Information on working capital finance in Canada. Business financing solutions must be tailored to your firms specific needs and ability to monetize assets
Working capital finance must, for many business owners/managers, must often feel like airplane seat sizes today - shrinking fast and almost always uncomfortable. Let’s put your business in a more 'comfortable' position by addressing some business financing solutions that will give your firm that cash flow ' comfort' feeling. Let's dig in.
There are not a lot of things more important than business cash flow - it's never good when you're in ‘ #HASHTAG FAIL’ mode in ongoing working capital needs. Many business people don't realize they can somewhat easily predict their cash flow crisis by simply putting together some realistic cash flow projections. They should realistically include any plans you have for growth, large revenue increases, new contracts, and predictive customer payments according to your pay terms with your clients.
That type of simple cash flow spreadsheet has saved many a business owner from the surprise of a financing crisis- the irony of which is often brought about by that great positive in business - sales revenue increases! It's the great irony of business that high growth leaves your firm with paper profits and no cash.
Depending on how your business is currently financed other issues that need to be addressed in your business projections include:
New personnel needs
Asset requirements/replacement
Ability to repay any current long term debt obligations
So bottom line it's all about cash inflows and outflows.
Naturally your ability to manage your current assets is also what working capital finance is all about. In this case we're talking about inventory turnover and A/R mgmt. Combined with your ability to get a handle on sales these current assets ultimately determine your financing needs.
Knowing when you have the proper financing in place is pretty easy to spot. You should strive for the following:
- Knowing you have the cash you need when you need it
- You have the ability to consider growth and investment
- Your A/R and inventories have acceptable turnover ratios
- You're comfortable with the costs of your financing - namely that those costs are achieving the return on investment
What then are the finance solutions that address working capital? While a cash term loan might be the answer (provides cash but takes on debt on your balance sheet) more optimal solutions include:
A/R financing
Inventory finance
Commercial bank lines of credit
PO Financing
Tax credit finance - (SR&ED)
Asset based lines of credit
Unsecured cash flow loans
Securitization
Sale leaseback of owned assets
Technically speaking if you can’t meet short or long term obligations - that infers insolvency or business failure.
Seek out and speak to a trusted, credible and experienced Canadian business financing with a track record of success and get back that ' comfortable ' feeling knowing you have accessible financing solutions for survival and growth.
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 :
7 Park Avenue Financial = Working Capital Finance Solutions
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CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Email = sprokop@7parkavenuefinancial.com
Stan Prokop
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