Looking For The Phoenix Effect When It Comes To Growing Your Business?
Proven Information On Business Growth Strategies Financing Funding In Canada
Business growth financing strategies financing and business funding in Canada, no secret here, present cash flow and capital funding challenges. The Canadian small business owner and financial manager dreams of his or her firm being able to achieve the Phoenix effect. That’s the Egyptian fable that has the Phoenix Bird rising from the ashes and signifying resurrection and hope.
SALES AND CASH FLOW - THEY ARE DIFFERENT!!
Let’s dig in. We're never surprised these days, in talking to our clients, that many owners/managers sometimes don't associate growth with a cash flow drain. Their logic is: ' Sales are great, we've just got those new contracts and PO's, and we’re introducing a new product ‘...etc...Etc. In their minds, and rightfully so, those expanded revenues will generate more profits. It's a perfect world, right?
Not so fast! The owner/manager has forgotten in those growth scenarios we noted that cash goes out quicker than it goes in. It's a fundamental cornerstone of business finance- Growth eats cash!
WHEN SALES GROW YOUR CURRENT ASSETS BUILD UP!
The reason is of course is that you must invest more in inventories, receivables, equipment, as well as ' beefing up ' other areas of fixed costs - i.e. people, etc.
RECOGNIZING A FINANCIAL CRISIS
So even if the business owner/manager recognizes the problem what then is the solution to avoiding a financial crisis of some sort? Frankly, we see things go awry quickly because when you firm is in cash crisis mode that is not viewed by commercial lenders and banks as a lending opportunity to your firm!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! You don't want to be caught in your lenders board room explaining that you didn’t see it coming.
BUSINESS LINES OF CREDIT CAN PROVIDE THE SOLUTION
The most common solution for these sort of growth stories is the business line of credit. That type of financing can be achieved via a Chartered bank credit facility, or a newer solution these days, the Asset Based Line Of Credit, offered by non-bank commercial lenders. These facilities of course monetize your 'current assets ' and allow you to borrow on a revolving basis.
WHY IS ASSET TURNOVER KEY TO GOOD CASH FLOW
A word to the wise, don’t let accessing either of these two facilities lull you into a false sense of security. Your focus should still be on strong asset turnover to the best of your ability, so inventory turns and collecting A/R in high growth situations should be a top priority.
HOW TO PLAN FOR CASH FLOW NEEDS
Many business owners still don’t realize that they can plan effectively for cash flow needs. A simple spreadsheet tracking your sales, collections will identify the amount of your cash needs. That allows you to be proactive in planning for business growth financing. By the way, that sort of simple analysis will always be viewed positively by your cash flow lender.
WHAT STAGE OF GROWTH IS YOUR FIRM IN?
Naturally, there are different stages of ' GROWTH' when it comes to business funding solutions that can be all the way from start-up to explosive growth scenarios. All stages of business growth come with different financing solutions - some short term, others long term.
Small businesses aren't exactly the candidate for those Bay street venture capital folks. We've referred to bank credit lines, as well as non-bank ABL lines of credit. Other cash flow growth solutions include:
Access to Canadian bank credit
Non-bank asset-based lines of credit
Equipment / fixed asset financing
Short Term Working Capital Loans/ Merchant Advance
CONCLUSION
Which type of financing will make your growth successful? Let your firm experience the PHOENIX EFFECT... seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with growth funding.
7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Click Here For 7 PARK AVENUE FINANCIAL website !
7 Park Avenue Financial provides value-added financing consultation for small and medium-sized businesses in the areas of cash flow, working capital, and debt financing.
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.
Stan has had a successful career with some of the world’s largest and most successful corporations. He is an experienced
business financing consultant
.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 financing 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.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
7 Park Avenue Financial/Copyright/2020
