Are Cash Flow Financing Challenges Managing You?

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Who’s The Boss? Business Working Capital Management

Valid question, right? When it comes to your business working capital and cash flow financing who's running the show, you, or are those two culprits seemingly running your company?

We're remind of one of Yogi Berra's (many) great lines - ' when you come to a fork in the road, take it ‘! That's probably where you are now in many cases. Determining who will win the ongoing cash flow battle for supremacy.

The reality is that you can probably be forgiven for feeling ' Who's the boss ' as statistics show that 82% of business owner don't feel in control or comfortable about their cash flows. So how in fact do you regain that feeling of control that every business owner treasures.

A good start is to know what you're talking about. We've repeatedly said that cash flow is such an over used and misunderstood concept or term. We can get really technical (net income plus deprecation plus or minus changes in working capital components) but unless we're at an accounting trade show/convention that's not really what we're looking for here!

To make things more complex we can make a case that your ' cash flow ' has to do with historical, present, and future needs, making it even tougher to get a handle on.

There are some great tools and also solutions to manage your cash flow financing needs. And again, we're talking about real cash, not income statement profits. That frankly though is a good place to make a very important comment - if your cash flow statement ( it's component # 3 of every financial statement ) differs significantly from your income statement over time you probably will never really regain cash flow control/supremacy.

So lets examine some solid ways to make sure you feel good about that ' WHO'S THE BOSS' question we posed earlier.

First of all, keep your financials up to date and understand them. A small handful of key ratios or relationships you can easily, and we mean very easily monitor over time will allow you to feel ' in control ‘. Simple things like receivable days turnover, inventory turns, sales to fixed assets, etc.

It sure doesn’t hurt to do some methodical cash flow planning. Also, take a look at your overall capital structure from a viewpoint of debt and equity. This allows you to properly take advantage of market growth opportunities, even an acquisition perhaps.

We know we sound like a broken record sometimes, but understand your operating cycle; it’s the amount of time it takes for a dollar to flow thru your company. Match a financing solution to that selling cycle.

Hottest tip today on cash flow generation? It's dont pay anyone! But seriously, managing your payables and disbursements is critical, but we're the first to recognize the importance of supplier relationships. If you have a sales force you might consider paying them commissions when sales are paid, not made. Talk about incenting the collection focus!

If your assets aren’t turning over quickly focus on that. You can also monetize your current assets via bank lines, asset based lines of credit, working capital lines, receivable financing, inventory financing, and supply chain finance.

Who's the Boss when it comes to cash flow? Hopefully you. Speak to a trusted, credible and experienced Canadian business financing advisor on cash flow financing and business working capital analytics and solutions.





7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

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 .

' 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

Confused About Canadian Working Capital Finance ? Cash Flow Financing Techniques That Work !

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Financing Of Working Capital – Here’s How !

Information on Canadian working capital finance . What are solid real world solutions to financing and cash flow challenges that businesses face every day

Clear answers... no, even better, clear real world solutions. That’s what Canadian business is looking for in working capital finance . And that type of financing and cash flow solutions has been tough to come by over the last several years.

Let’s examine why your understanding of working capital and your ability to measure the need and the solution is as critical as ever in the competitive environment you fight every day.

Let's focus on some of the hard facts first. If you don’t have working capital key issues such as payrolls, loan and lease payments, inventory purchases, etc can become big issues pretty quickly!

So how can you change assets and sales into the financing of cash flow? It's a one word answer - monetization! You need to use a razor sharp focus on monetizing (i.e. changing!) receivables, inventory, and sales into working capital to address those key issues we just mentioned above.

The better you do this you will find the better the patients health will be and that patient is of course your company.
Canadian business owners and financial managers know that their balance sheet and income statement are related. Today we're focusing mostly on the balance sheet - The amount and relationships between those current assets such as A/R, inventory, and payables can let you zero in real quickly on what some of the problems might be. (We won't forget telling you about those solutions also!).

Yes, you do need positive working capital to ' stay healthy ' from a working capital and cash flow perspective. And talk about a balance act, if you are growing too quickly your investment in A/R and inventory hinders cash flow, and if sales are shrinking then your receivables shrinks also.

So, we've done the usual pretty good job (we think) of telling you what your problems are. But that’s not why you came here, right? Let’s address solutions.

Are there in fact real solutions that allow you to fix today’s financing of cash flow challenges, and at the same time address these issues in a long term manner . Here's the good news. There are.

We tend to review 6 major methods of addressing your working capital challenges.

They are :

Asset Based Lending Facilities

Working Capital Lines

A/R Finance

Inventory & Purchase Finance

Cash Flow Term Loans

Merchant Advance Loans ( Retailers )

And, guess what? Almost all of these solutions are non bank independent finance company solutions! We bet you did not know that?

All of these solutions have different levels of criteria for approval and success. Some are size based, and some are viewed as alternative, but boy do they work! Pricing is a factor also, and each of those solutions brings a different level of financing cost to the table.

If you want to investigate any of our 6 proposed solutions to both immediately and from a long term perspective fix your financing and cash flow issues seek a trusted, credible and experienced business financing advisor. Those solutions are just around the corner.


Click here for 7 PARK AVENUE FINANCIAL
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

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 .

' Canadian Business Financing With The Intelligent Use Of Experience '

Solving Cash Flow & Working Capital Finance Challenges In Canada ! SME Commercial Financing Solutions

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You Don’t Need A Fortune Teller To Predict Business Cash Flow Challenges Ahead

OVERVIEW – Information on cash flow challenges faced by small and medium business owners in Canada. Solving the working capital finance challenges creates a path for sales and profit growth

Working capital finance challenges in Canada don't require a fortune teller to know that cash flow challenges exist or will exist in your company.

It would be great to hear our clients say they have no problems in this area of Canadian business financing. Unfortunately that's rarely the case. Let's dig in.

Let's look at the root of some of those working capital challenges; what are the real issues, and what's really causing the problems? Next step after that? Solutions!

It's of course great to have sales - and sales and profits are even better. In general when you have those you have the essence of a healthy business. But those are in effect what we could call paper transactions and it always comes back to 100 year old clichés such as ' cash is king ' and 'the sale isn't made until you're paid '.

That cash is required for all those boring things, paying suppliers, paying employees, and meeting your obligations on loans and leases and other business commitments.

Your challenge is typical - how then do you create a flow of cash in the long term, as well as addressing short term bulges to ensure you have liquidity.

Naturally when you have a good handle on cash flow everyone views you in a positive light, most importantly your suppliers and lenders.

The solutions to cash flow challenges often come out of inability to plan or address the right type of cash flow solution. You run the risk of liquidity problems when you current assets aren't able to be converted in a timely manner into cash - those assets are typically receivables and inventory.

There isn't a day when we don't run into a textbook type of working capital finance challenge - it's as simple as requiring product to satisfy regular or new large orders, generating invoicing, and then waiting 30, 60 or 90 days for payment. That is the textbook challenge when we talk to clients asking us for assistance in solving cash flow problems.

So hopefully we have done a pretty good job of telling you what your problems and challenges are - let's address some real world solutions!

At the core of working capital finance challenges are you inability to access business credit. We encourage all customers to seek Canadian chartered bank business credit when they are in a position to do so.

The problem though? Unfortunately many clients can't meet business net worth, personal net worth, and liquidity ratios and covenants your bank might require. Also we strongly believe that inventory financing by banks in Canada is increasingly more difficult to achieve.

Our recommended solution? Don't borrow - monetize. That's the best advice and plan we set out with clients in order to solve cash flow problems. You could get a working capital cash flow term loan, but that just creates additional debt on your balance sheet. Instead, take those assets you already have on your books and monetize them - those assets are the previously mentioned inventory, A/R, and in some cases tax credits due your firm as well as unencumbered equipment.


Liquidity for those assets can be achieved by a receivable financing program, an asset based line of credit, or a short term bridge loan on an asset such as a tax credit or paid for fixed asset such as equipment.


Many of these solutions are outside the chartered bank system in Canada - they are the new world of alternative finance ‘and can be accessed by talking to a trusted, credible and experience Canadian business financing advisor.
Your ability to monetize your assets, keep suppliers paid and current as well as having the ability to grow your business is key to long term business success.


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 13 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

Liquidity Problems? Cash Flow Challenges? Bank Problem? Here’s Your Next Step

Solutions To Big Financial Dilemmas

Information on solutions for Canadian firms who have cash flow challenges or a problem at the bank. Answers for liquidity problems .




Liquidity problems and cash flow challenges plague thousands of Canadian business owners and financial managers. A lot of this challenge revolves around a company's inability to properly access bank financing in Canada. If that's the case what is the next step then?

We think that next step understands your alternatives, ensuring you understand why you are in a liquidity crisis, i.e. that cash strapped feeling, and finally understanding what might get you back on the right course at the bank.

As we have stated in the past Canadian chartered banks are the first ' go to ' when it comes to securing capital and Canadian business financing. Yet many business owners often find that the bank is either not suited or pre-disposed to solving their cash flow and working capital challenges.

Is there an easy way to a business owner of finance manager to assess the overall probability of achieving bank financing? For our purposes it comes down to your ability to understand 4 key issues. What are they?

First of all, as a general rule you have to be able to show profitability. We can't count the number of firms we meet who are in either a bad year financially or in many cases in the throes of a turnaround back to profitability. Unfortunately in general that doesn’t count at the bank. Banks take the approach that you will pay the loans or working capital financing back from profits. If you can’t demonstrate that there is an immediate obstacle to bank financing success.

Your firms overall collateral position is the 2nd focus from a bank perspective. Certain types of collateral are more preferred than others. They include real estate, receivables, uncollateralized equipment, etc. In general inventory is rarely viewed as appropriate collateral by the bank.

The third focus from the bank is your overall balance sheet. Aside from ensuring it balances..!! .. you must have the right combo of debt and equity. Is there a rule of thumb in this area? Typically the answer is that you must have a dollar of equity in your firm for every 2 dollars in debt.

Finally, is there anything more uncomfortable than the issue of personal guarantees? It's all about ' putting it on the line ‘, which of course many business people are reluctant to do. Your logic is of course that you incorporated to avoid guarantees, and that there should be some risk sharing. Again, that’s your view, not the banks.

We do believe, and have seen that in many cases a strong financing proposal might eliminate all or at least part of a guarantee, so be prepared to address this issue delicately and properly.

Although Canadian chartered banks are among the absolute best in financial strength, management, services and infrastructure it's of course still easy to cast dispersion and doubt on their stated goals of helping Canadian businesses, particularly small and medium business .

So when you or the Canadian chartered banking system have lost faith in each other what’s next? The reality is that many non-bank institutions and independent commercial finance firms provide a variety of cash flow solutions to your business. They include non bank asset based lines of credit, receivable financing, equipment financing and sale leasebacks, and supply chain and tax credit financing. And these solutions work, and in many cases compete directly with bank offerings.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in identifying the next step in Canadian business financing alternatives for your firm.





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/liquidity_problems_cash_flow_challenges_bank.html