Business Turnaround Strategy Needed ? Consider A Cash Flow Doctor

Information on business cash flow solutions. Implementing a financial turnaround requires specialized expertise. Avoiding business doomsday !

Business turnaround strategy required. That turnaround might cover a lot of issues, but we're talking about the ' CASH FLOW ' issue today. Let's dig in.

Business owners and financial managers know the importance of cash flow and working capital as generated by their accounts receivable and inventory accounts. What is the ultimate effect of a lack of cash flow and working capital - we know the answer - it is a business failure.

It's all about understanding the problem, and then... you guessed it... fixing it! When it's not an intuitive realization, there are some technical ways to assess the problem. That's when you might need what we can only describe as a business cash flow doctor.

You should be looking for someone that understands your financials and business, has a solid track record and experience, and can facilitate cash flow turnarounds by offering up solid and sometimes creative working capital solutions.

Business owners can utilize a financial analysis technique that finance textbooks call the 'DOOMSDAY RATIO '. What is that ratio and what is its significance?

The Doomsday ratio is calculated by the following easy formula:

Cash divided by Current Liabilities.

This is one of the most powerful and effective solvency ratios that a business owner can utilize. Business people might be aware of two other similar ratios, the current ratio and the quick ratio. The current ratio included the firm's current assets, including accounts receivable and inventory. The Quick ratio did the same but excluded inventory.

The business owner can quickly see that the doomsday ratio focuses solely on Cash! We can call it a very demanding ratio because it focuses solely on the liquid gold within the company, cash! As liquid as your receivables and inventory are, they aren't cash yet, and everyone knows the day to day business challenges of converting receivables and goods into a final cash customer payment.

Really the best way to look at the Doomsday ratio is to view it as an ongoing measure of the firm’s cash 'buffer'. The bottom lien is that it will show the business owner what 'cushion' of cash the firm has. Business owners could even choose to monitor the ratio daily, as it could very well warn against impending shortages of working capital.

Many business owners know that it is also not productive to carry cash on hand, particularly in today's low interest rate environment. So it makes common sense that the doomsday ratio may in fact be less than one, but at least we have a number that, on an ongoing basis, we can monitor.

Each business over time has a philosophy and business practice around how much cash is kept on hand. Naturally it's also obvious, and important to know that if you reduce your operating line of credit with you cash you still have the full liquidity of your operating line, but you aren't paying any interest to borrow. That's a good strategy also.

Customers can also enhance their position by factoring or selling their accounts receivable, which would put them in a strong position to generate cash and maintain a positive Doomsday Ratio.

In summary, the analysis technique is a valuable took to monitor cash flow/working capital for any business.

And don't forget to see that CASH FLOW doctor who can implement solutions such as:

A/R Financing

Working Capital Loans

Bridge Loans

Sale leasebacks

Non bank asset based revolving credit facilities

Tax credit monetization

PO Financing

Seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success for that business turnaround strategy you require when it comes to refinancing.


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 - 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.

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













Article Source : http://internationalexpertdirectory.com/search-articles/content/finance-tax-banking/business-turnaround-strategy-needed-consider-a-cash-flow-doctor.html

Business Cash Flow & Working Capital Funding In Canada : The Money Bottom Line!

Everything You Thought You Knew About ‘ Business Money ‘!

OVERVIEW – Information on business cash flow and working capital funding in Canada . Do finance and money needs remain a top priority

Funding working capital needs for Canadian business comes with both legal , often personal ramifications, and of course costs. Some call it business cash flow, we can even refer to it as ' business money ' - The reality is that the movement of money/funds through your company has some dramatic implications. Let's dig in.

What’s bugging you ? As one top expert recently put it business owners/ financial mgrs find themselves constantly ' bugged' by the cash flow financing challenge. While the might be comfortable with sales and those ' paper profits' their ability as owners to access real cash for corporate and personal needs becomes a constant challenge.

One' rule of thumb' in business is to always have a buffer against unexpected cash needs. Not having those creates constant pressures that come from suppliers, your bank, even staff.

Bank business lines of credit are of course one of the optimal ways to achieve cash flow needs. Some clients we meet are actually in arrears with CRA due to those liabilities being ' rearranged ' for other purposes. That strategy by the way has some serious ' personal guarantee ' issues and is not recommended.

Many business financing alternatives such as:

A/R Financing
Inventory loans
PO Finance
SR&ED tax credit loans

can alleviate ' bulge' needs in business cash flow. Whether ' temporary' or ' seasonal' it's good to know your alternatives.

Stats tell us that a large majority of business owners in Canada spend more each subsequent year on replenishing or purchasing fixed assets. Here's it good to understand your equipment lease financing options as those capital expenditures can take a large bite out of working capital if allocated improperly.

Those ' CAPEX ' needs will always arrive with three questions -

How much can we spend on new assets/technology?
How much internal funds can be used for asset purchases
What outside financing is available?

What then are some solid key considerations in understanding your business cash flow?

They include:

Understanding your real profits

Why are receivables and inventory going up without the same increases in sales?


What options are available to finance new assets

The whole area of working capital, and in particular cash flow is a very misused term as its often neither real ' cash ' , or real ' flow '! If you're looking for straight answers on ' business money ' and company financing techniques and solutions seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with funding your business properly .






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

Business Cash Flow Solutions : Feeling Under Fire On Financing Sales Revenues?

Mad? Disappointed ? Here’s Your Where And How On Business Cash Flow Sales Financing

OVERVIEW – Information on business cash flow solutions for Canadian business owners and financial mgrs. Financing sales revenues comes from the proper use and combination of debt and cash flow monetization. Here’s the where and how

Financing sales revenues and the ability to access business cash flow solutions often leaves business owners / financial mgrs feeling disappointed and even... mad.


Feeling ' under fire '

on such a critical part of your business isn't necessary if you follow some of the following rules and guidelines. Let's dig in.

Microsoft founder Bill Gates had a rule that, unfortunately, most companies can't follow. That rule? Have enough cash in the bank to cover off one year of sales revenues. You only wish, right? So the alternative is therefore to ensure you have the right combo of debt and cash flow financing/asset monetization strategies

The challenge with any form of debt financing for your business is a combination of interest rate and the ability to access that capital. Canadian chartered banks are very focused on your current debt and capital structure when it comes to bank borrowing. Typically they look for a maximum ration of 2:1 vis a vis that debt to equity relationship, with cash flow coverage closely resembling that same ' ratio'

Business owners often also might not realize that when they access senior bank debt they are also in fact tying up ' all ' of the assets of the business. The refusal of the bank to give up collateral can put companies in the difficult solution of not being able to access other capital.

For firms with good cash flow one solution around the above mentioned problem is an unsecured' cash flow loan '. It’s in effect a ' bridge ' between your ' senior' debt and your ownership equity. This allows you to access business cash flow for both working capital, fixed assets, or even make an acquisition of a competitor.

One alternative to senior bank debt and bank revolving credit lines is the asset based line of credit. While it has a higher cost than bank interest rates it provides almost an unlimited ceiling on cash flow needs provided your firm has growing sales and good assets.

The actual sources of debt and cash flow financing are:

Owners

Government (i.e. the Govt Small Business Loan - which comes with a govt guarantee to your lender

Banks - credit lines, term loans

Commercial Finance Companies (these firms are often niche lenders and provide solutions such as A/R factoring, equipment leasing, sale leasebacks, purchase order financing)

When focusing on either a debt or cash flow solution looks for a lender that will provide some creativity around your business needs- this works best when you have up to date financials and an owner/mgmt that can provide a solid overview of the business.

Eliminate that ' mad' and ' disappointed' feeling around your business capital needs. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you on the ' where and how ' of financing sales revenues and your planned 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 - 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 :


7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS CASH FLOW FINANCING EXPERTISE




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

Fax = 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

Working Capital Financing - Why Asset Based Lines of Credit Work

Information on working capital financing in Canada. Asset based credit lines are the strong alternative to business cash flow challenges

How can Canadian business owners and financial mangers secure working capital financing and cash flow financing for their business at a time when it seems that access to business financing provides significant challenges?

The answer is that a potential solid solution exists by the name of an 'asset based line of credit 'otherwise what we call a 'working capital facility'. What is this type of financing is it new to Canada, and more importantly - how does it work and what are the benefits and risks?

Although asset based lenders tend to be specialized independent finance firms many business people are surprised to find that deep in the bowels of a few Canadian bank there exists small, somewhat boutique, divisions who specialize in asset based lending. Ironically they are many times competing with their peers down the hall in more traditional commercial corporate banking.

The most active assets these firms finance tend to be ongoing receivables and inventory, but in many cases, utilizing an expert advisor or partner you can structure a facility that also includes a component of equipment and real estate.
Generally speaking a good way to think of an asset based line of credit is one that for a temporary period, typically a year or so in our experience, allows you to margin up and get higher advances on receivables and inventory. That translates into more cash flow and working capital.

One of the main attractions of an asset based lending facility (insiders call it an ABL facility) is that your firms overall credit quality doesn't play the largest role in determining if you can get approved for this type of financing. As its name suggest, financing is on your 'assets '! And doesn't really focus on debt to equity ratios, cash flow coverage, loan covenants, and outside collateral. Business owners who borrow from Canadian chartered banks on an operating or term loan basis are of course very familiar with those terms - in some ways we could call them ' restrictions '

Most lawyers and accountants will tell you that any type of business borrowing should in fact be entertained only with a respected, trusted and credible business financing advisor who can guide you through the roadblocks and pitfalls of any commercial financing arrangement. Missteps in business financing can lead to long term negative effects around such issues as being locked into a facility, giving up too much collateral, or being locked into pricing that isn't commensurate with your overall asset and credit quality.


What are the key issues you should consider when considering such a financing facility?

Primarily they are:

-Advances rates on each asset category (A/R, inventory/equipment)

- How is pricing defined (asset based lines of credit and ABL lending is general is more generous in overall facility size, but you should ensure you are only paying for what you use

- Contractual obligation - in a perfect world (we know its not!) you should be focusing on the ability to pay out at any time, or at a minimum with some form of nominal breakage fee

- Ensure that the asset based lending facility, which generally costs more, will allow to you remain or focus on profitability; we spend a significant amount of time with clients on how that can defer the additional costs of Abl facilities by several different strategies

So whats the bottom line. As always it's simple - consider asset based lending and an ABL facility as a solid alternative for financing your business. Work with a trusted, credible and experienced Canadian business Financing Advisor with a track record of success as sometimes this type of financing is generally either misunderstood or not too well known in Canada. Be selective in structuring your facility around issues that work best for your firm re benefits derived.That's solid business financing sense.


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 - 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.


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

Fax = 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




Article Source: http://EzineArticles.com/4458555

Business Cash Flow : Funding Your Business Via The Right Finance Solution

How To Get Business Cash Flow To A Constant Positive Hum

OVERVIEW – Information on business cash flow solutions . Finding the right funding to finance your firm

Funding your business properly is a key for all business owners/mgrs. How does then do we finance business cash flow to the point where we have the right financing in place to continue and grow the business? The goal? A constant positive hum in cash! Let's dig in.

A great way to think of cash flow is simply focusing in how funds move via your incoming revenues and outgoing expenses. Pretty basic, right? , but when profitable business can even fail when cash flow fails that ' pretty basic' statement becomes all important.

Having the right financing in place is of course only one solution to the challenge, albeit an important one. For start up or earlier stage firms that is all important; yet at the same time the wrong financing at the wrong rates and structures is also a double edged sword , especially when financing is secured by your key assets.

We're all for growing sales revenues, but when you over extend credit and are improperly financed problems quickly arise. Those challenges are most often solved by monetizing current assets - your A/R and inventory. Finance solutions available? They include:

Bank revolving credit lines
A/R Commercial financing
Inventory loans
Asset based non bank lines of credit (They combine receivables, inventories as well as fixed assets into one credit line)

Some alternative funding solutions for current assets include SR&ED tax credit financing, royalty finance, and PO financing.

Those above noted solutions keep cash flow ' humming ‘, keeping suppliers, lenders, and employees ' happy'.

Another potential major drain on our ' cash flow hum ' is the need to acquire assets to run your business. While the temptation from such ideas as ' pride of ownership ' has some business owners/mgrs purchasing assets outright that can be a huge drain on our cash flow hum. The optimal solution here, more often than not is Equipment Financing/Leasing. Financing assets from daily operations is rarely the right thing to do.

We'll also mention that for those firms that have inventories the key to inventory mgmt is solid asset turnover and maintaining the right levels of inventory - always a challenge!

A good way to look at the 'big picture' in business cash flow is to isolate the movement of cash into what you can call the ' constant daily hum' of regular selling and collecting, while assessing ' non regular' outflows such as asset purchases, seasonal bulges in your business, new or large contracts.

When you're looking at the putting the right lending facility in place for managing business cash flow seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can ensure you're tapping into the right financing sources for your... cash flow hum.


Stan Prokop
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 . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS CASH FLOW FUNDING EXPERTISE

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

Tried & Tested Working Capital Funding & Business Cash Flow Solutions

You’re In The Right Place For Cash Flow Information & Solutions

OVERVIEW – Information on working capital funding and business cash flow solutions for Canadian business

Business cash flow solutions are sought by thousands of Canadian businesses everyday. Which solutions are ' tried and tested' and will work for your firm? Let's dig in.

It's the finance function and structure of your business that will drive your need for working capital funding. Here we're talking about short term financing needs, not debt or equity capital. (Some businesses do take on working capital term loans if they can demonstrate solid cash flows) The type of industry you are in, as well as how you compete is also a key factor to consider.

Companies that aren't growing sufficiently or are operating at a loss have even more of a challenge of course - the question becomes clear - how does the owner/ manager transform this loser into a winner?

The management of your working capital revolves around 2 key issues:

Ensuring you have the right financing mix in place for inventory, receivables,

Ensuring your finance solutions come at a cost that makes sense relative to your overall credit quality

We find that many companies get caught up in the technical definition of working capital - defined simply as the relationship of current assets on your balance sheet to current liabilities. That definition is fine but doesn't take into account the movement of those assets and liabilities, especially when it comes to turnover of receivables and inventory. Bottom line?

Focus on mgmt and financing of your current assets, not the ratios!









For businesses that sell on credit the management of accounts receivable is where it's at. Financing of receivables can be achieved in a number of ways, foremost of which is simply collecting your A/R to your terms or even sooner. When external financing is needed your solutions include:

Bank revolving credit lines

Non bank A/R Financing (our recommended solutions is Confidential Receivable Finance)

Asset based lines of credit which consolidate your A/R and inventory assets into one borrowing facility. These are predominantly non bank solutions offered by commercial finance firms

It's important to note that while cash flow

comes out of the management of your current assets it also comes out of delaying payables to the extent that your firm can still maintain it's relationships with suppliers as well as staying solvent.

The type of financing you need for working capital and cash flow solutions also depends on the industry you are in, your cash conversion cycle, and the amount of gross margin your firm commands on product and services you offer.

If you're looking to maximize financing for your cash flow and working capital needs seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success
who can assist you with your needs.



Stan Prokop - 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 90 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS CASH FLOW FINANCING EXPERTISE




Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:
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 '

Stan Prokop

Business Cash Flow Challenges : The Case For An AR Factor

Always Business Cash Flow Challenged? Here’s Why And One Solution


OVERVIEW – Information on business cash flow solutions in Canada . How does the role of the AR factor contribute to a positive cash flow and working capital financing balance


Business cash flow pretty well always comes with challenges. The A/R factor has emerged as a solid solution that has stayed constant through turbulent and normal times. What then are the benefits of such solutions, which type is best, and just how do things work? Let's dig in.

In business it's all about performance and the ability to generate cash flow and working capital from A/R financing can be a solid contributor to that performance.

Why does a business owner/manager choose an ' AR FACTOR’ more traditional Canadian chartered bank financing? The process seems simple enough once we explain it to clients - it’s the ability of your company to generate immediate cash against your sales. This can happen, at your choice, periodically, i.e. weekly, monthly, etc, or constantly... ie all the time!

It should be no secret that the primary ' collateral' of this method of Canadian business financing is your actual accounts receivable. Bank lending, in contrast, relies on that same collateral, but places a very large amount of emphasis on historical and present profits, clean balance sheets, and business and personal collateral. Suffice to say that that latter combination provides a strong safety net for our Canadian banks.

Utilizing an AR factor in Canada is almost always a short term or intermediate solution to a growing company, or one has faced and is fixing some challenges. Using Europe as example top experts tell us that anywhere from 15-30% of all businesses in the SME sector (small to medium enterprise) have used A/R financing solutions as offered by commercial finance firms. Those same experts also draw a very clear conclusion that financing A/R outside of the bank plays a large role in economic development.

Cash flow that is generated from an A/R factor solution is used for a variety of reasons - it’s ' asset monetization' and is not term debt of any sort. For that reason the business owner/manager has the flexibility to use funds for immediate needs primarily related to growth and operations. Think of it as a ' buffer ' to ongoing working capital requirements.

So why don't more business access business cash flow via A/R financing. Studies tell us that one major reason is Canadian business simply doesn't know about this solution. They also tell us that there are key misconceptions around what type of company is using these methods. It might surprise many business owners/managers that the largest and most well known of corporation’s access this same financing vehicle... in certain cases the Bay street gang just gives it a fancier name - such as Securitization.

Cost also plays a factor in the adoption of the use of an AR Factor. It's critical to understand also that this method of financing works best in a normal or high growth environment. Companies that are in a downward sales spiral would not benefit from the solution.

Still others feel its complex to administer on a daily basis. While that might be true our recommended client solutions, CONFIDENTIAL RECEIVABLE FINANCING allows for the business to bill, collect and cash flow their sales in a completely confidential manner.

So bottom line, the AR factor solutions is NOT a loan, it’s not a bank overdraft facility, it’s simply a method to cash flow sales on an ongoing basis in an unlimited manner. Seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with your A/R financing and growth needs.







Stan Prokop - 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 90 Million $ of financing for Canadian corporations . Info /Contact :


7 PARK AVENUE FINANCIAL = CANADIAN AR FACTOR FINANCING EXPERTISE




Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:
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 '



























Stan Prokop