Business Financing Sources In Canada: Are Cash Flow & Capital Loans What Your Company Needs Today?

Business Financing More Confusing Than A Fun House Mirror ? Here’s Some Solutions

OVERVIEW – Information on business financing sources in Canada. The cash flow and capital from the right loans helps grow sales and profits

Business Financing Sources must seem like a ' fun house mirror' for Canadian business owners and financial mgrs. They want to know the potential sources of working capital financing & other funding so they can profit from sales and growth opportunities. The challenge? Knowing what's available and what's appropriate for their company! Let's dig in.

Operating capital is viewed as one of the most critical aspects of ongoing financial liquidity; simply put, the ability to meet your short term and long term obligations. The solution for that more often than not is a traditional (or alternative finance!) business credit line. The more access you have to this type of financing helps guarantee chances of overall financial success. It's a simple bottom line - accessing capital and cash flow to expand and grow.

The textbooks of course to a great job of defining working capital. However the real world use and understanding of that term differs somewhat!

Finance books tell us working capital is calculated by subtracting current liabilities from your current assets. The major current assets are receivables and inventory. When we meet with clients to discuss their working capital needs we focus more so on two issues within those working capital components that the finance textbooks don't really often touch on!

They are:

- Turnover of working capital

- Margining of working capital

So the key point for business owners is not really what the text books says, it is that you need to be able to understand how to convert these assets into cash ! We do of course agree thought that positive working capital (what you have) is better than negative working capital (what you owe)!

Sitting down and working through changes in their working capital is one of the most valuable tools in understanding your current and future cash flow needs.

A fine balancing act is created, one in which you are liquidating your receivables and inventory on an ongoing basis, but at the same time managing to keep your short term obligations to suppliers current.
Another hard reality of business financing is that working capital varies by company and in general by industry. The amount of turnover in inventory and A/R varies considerably in every business.

We have discussed the definition and importance of working capital. So what are the sources of those funds? In a perfect world your company should have that aforementioned overdraft or operating line of credit with the bank.

The is the cheapest and lowest cost method of financing short term cash and working capital needs in Canada. The challenge is of course being able to meet the banks criteria for lending, which include personal guarantees, additional collateral possible, and imposed loan covenants and ratios.

A growing and more popular solution is asset based lending, this has little focus on the bank qualities demanded by Chartered banks and is more focused on what we discussed above, your firms ability to margin and leverage current assets and turn them over more quickly, thereby increasing sales and profits, albeit at a higher financing costs.

Other solutions to the business financing need include:

A/R Financing

Inventory Loans

Equipment Leasing

Bridge Loans/Sale Leasebacks

SR&ED Tax Credit Financing

Ultimately each Canadian business owner must understand their working capital needs and determine which solution works best for them.

Plan for growth, and seek out and speak to a trusted, credible and experienced Canadian business financing advisor to understand what sources of capital are available and which work best for your company.



Stan Prokop - founder of 7 Park Avenue Financial –
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 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 & Contact Details :
http://www.7parkavenuefinancial.com


7 Park Avenue Financial

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

' Canadian Business Financing with the intelligent use of experience '


ABOUT THE AUTHOR

Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.


Stan Prokop