Business Debt Financing : What’s Going On With Your Company Cash Flow Needs?

Tweet







Time To Outsource Your Thinking On Business Debt Financing And Company Cash Flow Needs

OVERVIEW – Information on business debt financing in Canada. Company cash flow finance solutions come from various sources and have various positive and negative implications

Business debt financing sometimes requires a fresh look by owners/financial mgrs. In effect we’re asking if you're ready to ' outsource' your thinking when it comes to company cash flow finance, especially when your current strategy isn't working. Let's dig in.

If financing a business isn't one of the largest challenges entrepreneurs/owners face it's certainly right up there in priority.

When it comes to taking on additional debt in the there are some key words to live by. Those words:

Ensure you have matched the term of any loans to the timing of your needs

Be cognizant of the interest rate options and costs

Ensure you understand who offers solutions for your business finance needs - It might be time to ... outsource your thinking in this area!

Stay on top of your financial performance


All 'debt ' doesn’t necessarily add obligations to the ' liability' section of your balance sheet. Take receivable financing/factoring for example. It simply collateralizes your receivables and provides an ongoing amount of cash flow. It's a business credit line with no ceiling provided your sales are growing and your collections are turning over. It's all about those days sales outstanding.

Why does asset monetization in the form of A/R financing and inventory finance continue to grow as an alternative to the bank solution in Canada. The key reason is that it provides a fast and efficient solution to ongoing cash requirements. Another reason is the ability for new or smaller growing companies to access cash flow for sales in Canada, as well as taking on larger contracts or orders in the U.S. or even overseas. (Outside North America will often require some form of credit insurance on your sales/receivables)

A/R Finance isn't always the ' holy grail '

for owners/finance mgrs. The reason for that specifically is that this form of finance requires solid decent gross margins that can handle the additional finance costs. One way to alleviate that substantially is to continually focus on good receivable collection performance.

Company cash flow finance via A/R factoring is successful when you adhere to the following advice:

Understand your collection cycle, especially if you have slow paying clients

Realize that traditional finance often is unable to handle rapid growth

Understand the A/R Finance price model - what you are paying for - keep an eye on those gross margins which should be at least in the 20% range in general

Realize that alternative finance solutions such as AR Financing are often short and intermediate solutions, typically lasting a year or two

If you're willing to ' outsource ' your thinking on both traditional and alternative finance 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 your business finance needs.



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 FINANCE 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

Its 11 P.M. Do You Know Where Your Business and Debt Financing Is? Funding Canadian Business Via Proper Debt Finance Solutions

What Type Of Business Debt Financing & Funding Is Right For Your Company . Debt Finance 101 !

Information on business debt financing and funding in Canada. What is the right amount and type of debt finance for your company.





Business debt financing and funding for Canadian companies. When other forms of financing such as equity or more esoteric arrangements aren’t available the Canadian business owner and financial manager turns to debt funding via a number of different short or long term debt finance strategies.

There is sometimes a fair amount of pressure to take on new debt to satisfy production, sales and marketing growth. The question very simply becomes - how much debt can your firm handle, are you aware of the different debt options and which one or ones might be best for your firm?

There's a great little analogy about why those lenders you might be looking to borrow from are somewhat cautious on occasion .It's apparently rooted in the fact that when the first caveman made a loan of a spear someone it was never returned, and when it was it was broken . The reality in Canadian business financing, we feel is when both the lender and the borrower have created a solution satisfactory to both.

And sometime debt is not always the answer. We find clients gravitating to debt solutions when they start to experience serious fluctuations in cash flow. When that cash flow and working capital is properly managed, or assets are properly monetized you might find yourself thinking less of taking on debt.

It's a fundamental discussion point in business that leverage, i.e. taking on debt aggressively can either pay off or put your company out of business. Talk about two different sides to the story!

The reality also is of course, that when you take on more debt to grow or fix the company you might find in fact that opposite has occurred and you are feeling somewhat restricted in the flexibility you may have once had in growing your business.

When that debt is short term in nature any refinancing becomes a bit more of a challenge. So the challenge is very simple then - take on the right debt for the right reason. Bottom line, rethink your financial structure. Naturally with more debt you do in fact increase your Return on Equity, but at the same time your breakeven point increases because of those financing costs.

Debt that is of course structured properly, against solid assets can be a good thing. And if those assets are part of revenue generation even better.

Historically in Canada companies have relied on traditional sources of capital, i.e. ' The Bank '. What more and more business owners and managers are doing are exploring newer forms of financing that might include asset based lines of credit, tax credit monetization, receivable financing and securitization, sale leaseback scenarios, interim bridge loans, etc.

The bottom line today? Speak to a trusted, credible and experienced Canadian business financing advisor about sources of capital available to your company in good... and tough ... times!




7 PARK AVENUE FINANCIAL
Canadian Debt 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 7 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/business_debt_financing_funding_debt_finance.html