Cash Flow Financing In Canada : The Long Hard Trail To Working Capital Solutions

Tweet


Is Cash Flow Financing A Bit Of A Jigsaw Puzzle ? Not Anymore!

Information on cash flow financing solutions in Canada . Here’s how to take the mystery out of the working capital needs your business has .. today!

Cash flow financing can often feel like a jigsaw puzzle complication to Canadian business owners and financial mgrs - it can be a long hard trail to the path towards proper working capital financing. We've got some solutions for that - Let's dig in.

Cash flow financing is typically what makes or breaks your company as your firm grows or struggles to overcome temporary challenges. We'll provide some real world immediate solutions for that working capital challenge that is always top of mind.

We haven't found anyone who does not disagree that working capital management tends to be the single most important measurement for your firm on a daily and ongoing basis - it’s always comes back to that ' cash flow is king' fellow !
If your liquidity is limited you need to recognize that.

Your accountant, with all due respect will easily and quickly calculate your working capital and potentially advise you that you're in a great position. He or she does that by going to your balance sheet and subtracting current liabilities from current assets. Let's say he or she came back and gave you the great news - that you have 4 dollars of current assets for every one dollar of payables. Sounds great so far, right?

Wrong, because you might find that your actual cash on hand is only .30 cents for every dollar of payables due, and all your money is tied up in - you guessed it, receivables and inventory that are slow paying and slow turning, respectively.
The day to day ' real world ' measurement of cash flow is your being comfortable to pay bills, loans, leases, wages for employees, etc !

So, why do you have a cash flow financing need, and what is the cost of a working capital cash facility that makes sense? Sitting down with clients and talking about their cash flow needs often revolves around the same key issues they are going through:

Temporary financial losses

Lack of long term financing (i.e. buying or leasing noncurrent assets without good long term debt solutions)

Growth!

Dramatic increases in sales, as great as they sound, lead to cash flow financing needs.

The internal do it yourself solution? Turnover of your receivables and inventories - easy to say - difficult to achieve.
The external solution? Monetizing receivables and inventory and in effect your future sales, via a cash flow financing facility.

If you firm is in a great industry, has clean balance sheets, and makes money your bank facility for a revolving line of credit will typically be in the 5-10% per annum range for cost of financing.

If your firm doesn't qualify for bank financing should you abandon ship? Definitely not. Working capital financing via receivables financing and asset based lending can solve all your problems and in effect turn your firm into a cash flow machine.

That new found cash flow comes at a price- Rates tend to be in the 1.5 - 2% per month range , , but you are actually paying that now by carrying A/R and inventory and losing out on the opportunity cost of turning capital into new sales and profits.
Other cash flow solutions:

A/R Factoring/ Confidential Receivable Financing

SR&ED Tax credit loans

Sale leasebacks / equipment financing

Working Capital loans - short term or long term

Speak to a trusted, credible and experience Canadian business financing advisor for your cash flow financing solution that makes optimal sense for your company.



7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .


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