Staying Afloat Via Cash Flow Financing - Cash Flow for Business Solutions

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5 Great Cash Flow For business Solutions

So we're all in agreement, right? Staying afloat is better than sinking... and talking to clients seeking cash flow for business seems to be mostly what we are doing these days.

 

Cash flow financing for your business, whether you like it or not is at the top of the ' worry pile' for Canadian business owners these days.

We'll discuss the problem, how you measure the problem, and, most importantly, some great solutions both traditional and alternative. And by the way, alternative is fast becoming traditional, but more about that later!

In talking to clients about business financing and business cash flow we always get the distinct impression they feel their business is unique - and that may be so but the truth of the matter is that the cash flow financing challenges you face are being faced by everyone else in and out of your industry.

As a business owner you can be forgiven for thinking your

business cash flow

financing challenges are unique, probably because of the mix. What do we mean by the mix? Simply that each h company and industry has difference levels of inventory, receivables, payables, all of which factor uniquely into the working capital challenge.

In fact, whether you like it or not, about 80%, yes 80% of all you assets are in receivables, inventory, and to some extent prepaid.

Your ability to ' turnover' these assets is what makes your business successful, or not.

Each industry has different gross margins, and if you have great gross margins then you can withstand a bit less turnover that is required in inventory and receivables. If you are in a low gross margin business turnover is absolutely critical. And you measure that turnover by three key metrics, inventory turns, days sales outstanding or collection turnover, and finally days payable outstanding.

Turnover drives working capital and many business owners kind of know that, but more often than not aren't focusing on improving that turnover.

So, lets get back to staying afloat, which is what its all about!There are a number of cash flow financing solutions that allow you to address cash flow financing for your business. If it was a perfect world you would have all the liquidity you need from you bank, but bank financing is always a challenge for business, and in many cases inventory is not part of the financing mix that is available.

There are at least 5 great cash flow for business solutions available to help you succeed in Canadian business financing. These include the selling of your receivables, which can be done confidentially, and thereby generating instant cash flow for your company. For firms with 250k+ in assets and receivables you are in a position to be a candidate for a fully margined A/R and inventory working capital facility, available through a non bank solution. Larger firms with significant investments in working capital (receivables and inventory) are eligible for asset based lending which is in our opinion the ultimate Canadian working capital solution.

Most business owners don't know they can access cash flow financing via the financing of Purchase Orders (p o' s) and contracts. They allow you to consider orders significantly higher than you could have ever handled in the past. And, finally firms with relatively good financial standing can access unsecured cash flow working capital term loans via non bank lenders.

So whats it all about. We think we have been fairly clear, and hope you agree. It's about understanding your cash flow financing challenges, measuring them via the turnover of working capital accounts, and finally, accessing any one of the five, yes 5! solutions we have provided.

Speak to a trusted, credible and experienced Canadian business financing advisor as to what makes sense for your firm.





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











Article Source: https://EzineArticles.com/expert/Stan_Prokop/432698


Article Source: http://EzineArticles.com/5597737

Staying Afloat via cash flow financing – Cash Flow for Business Solutions

So we're all in agreement, right ? - staying afloat is better than sinking... and talking to clients seeking cash flow for business seems to be mostly what we are doing these days. Cash flow financing for your business, whether you like it or not is at the top of the ‘ worry pile’ for Canadian business owners these days.

We'll discuss the problem, how you measure the problem, and, most importantly, some great solutions both traditional and alternative. And by the way, alternative is fast becoming traditional, but more about that later!

In talking to clients about business financing and business cash flow we always get the distinct impression they feel their business is unique - and that may be so but the truth of the matter is that the cash flow financing challenges you face are being faced by everyone else in and out of your industry.

As a business owner you can be forgiven for thinking your business cash flow financing challenges are unique, probably because of the mix. What do we mean by the mix? Simply that each h company and industry has difference levels of inventory, receivables, payables, all of which factor uniquely into the working capital challenge.

In fact, whether you like it or not, about 80%, yes 80% of all you assets are in receivables, inventory, and to some extent prepaid.

Your ability to ' turnover' these assets is what makes your business successful, or not.

Each industry has different gross margins, and if you have great gross margins then you can withstand a bit less turnover that is required in inventory and receivables. If you are in a low gross margin business turnover is absolutely critical. And you measure that turnover by three key metrics, inventory turns, days sales outstanding or collection turnover, and finally days payable outstanding.

Turnover drives working capital and many business owners kind of know that, but more often than not aren’t focusing on improving that turnover.

So , lets get back to staying afloat , which is what its all about !There are a number of cash flow financing solutions that allow you to address cash flow financing for your business . If it was a perfect world you would have all the liquidity you need from you bank, but bank financing is always a challenge for business, and in many cases inventory is not part of the financing mix that is available.

There are at least 5 great cash flow for business solutions available to help you succeed in Canadian business financing. These include the selling of your receivables, which can be done confidentially, and thereby generating instant cash flow for your company. For firms with 250k+ in assets and receivables you are in a position to be a candidate for a fully margined A/R and inventory working capital facility, available through a non bank solution. Larger firms with significant investments in working capital (receivables and inventory) are eligible for asset based lending which is in our opinion the ultimate Canadian working capital solution.

Most business owners don’t know they can access cash flow financing via the financing of Purchase Orders (p o’ s) and contracts. They allow you to consider orders significantly higher than you could have ever handled in the past. And, finally firms with relatively good financial standing can access unsecured cash flow working capital term loans via non bank lenders.

So whats it all about. We think we have been fairly clear, and hope you agree. It’s about understanding your cash flow financing challenges, measuring them via the turnover of working capital accounts, and finally, accessing any one of the five, yes 5! solutions we have provided .

Speak to a trusted, credible and experienced Canadian business financing advisor as to what makes sense 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 6 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/cash_flow_for_business_cash_flow_financing.html

Why Confidential Factoring Discounting Is Your Secret Cash Flow For Business Weapon!

In terms of a secret weapon in business one assumes if you had this one you would have a competitive advantage? And that’s what we think confidential factoring discounting will deliver once you understand why it might just be a solid alternative for cash flow for business in Canada.

We're talking about regular and special here. Regular factoring or invoice discounting or receivable financing (all these terms are interchangeable) is the financing of your receivables for instant cash flow and working capital,

This type of financing is becoming more commonplace everyday. When we talk to clients about what they perceive the financing to deliver on the two most common issues they bring up are that they don’t really like how it works on a day to day basis, and secondly, the cost factor seems to always come up.

We think we can dispel both of those issues when it comes to providing a better alternative to address both concerns and misconceptions that our clients have.

We need to step back a bit though and first understand what this type of factoring discounting is, and why the current ' vanilla ' offering in Canada doesn’t work for clients.

At its core the facility is simply ' monetizing ' (a fancy word for ' turning into cash’) your receivables for immediate cash. Your ability to collect your receivables faster creates cash flow and eliminates a lot of business stress! If you have the ability to obtain conventional bank financing naturally you probably would be financing your receivables through the bank - yet in the current economic environment bank credit is more difficult to achieve, and, to make matters worse in many circumstances we see the amount of credit you can get from a commercial bank in Canada is simply not enough for your needs. That’s where the working capital challenge sets in.

So, ' regular ' factoring for cash flow for business works as follows - you generate an invoice, you sell the invoice and receive cash, usually the same day. Sounds great so far right. However, now what happens is that your customer is contacted by the factor firm and they verify the invoice and receipt of goods and services. They also are in collection mode directly with your clients, according to whatever your terms are. The cost of this type of financing in Canada ranges anywhere from 7-8% per annum to 1-3% per month. Factors determining prices are your firm’s general financial profile, the size of the facility you need, and the types of customers and industries you sell into.

So that’s ' regular ' and we can here our clients now saying this sounds kind of ok , but the customer intrusion level is highly undesirable .

That’s where confidential factoring discounting comes in. Here's the kicker. You bill and collect your own invoices! You have now regained total control of your factoring facility, are achieving all the benefits, and it is you who decides what amount you wish to finance on a daily, weekly or monthly basis. And whats more ' special' is simply the fact that the costs of confidential factoring discounting are essentially the same. We also spend a lot of time with clients showing them how they can offset a huge part of the cost of this type of financing via some time worn cash management strategies .

One or two caveats are that the facility should generally involve a receivables portfolio size of at lease 250k, and you have to be able to demonstrate solid operations regarding maintaining updated financials, billing cleanly and properly, and posting payments to the ledger properly.

Not everyone in Canada knows or is aware of this type of financing. Speak to a trusted, credible and experienced business financing advisor as to how this type of financing gives you a major competitive edge over firms using the ' regular' version!

-

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 6 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/factoring_discounting_cash_flow_for_business.html

How Receivable Financing and Factoring turns Cash flow for Business Challenges into Opportunity

The chance for business owners to turn adversity into opportunity comes around rarely. The ability of your company to turn cash flow for business challenges into a major win in working capital and cash flow might just come from one of Canada's newer forms of business financing, called ' receivable financing ' .. more commonly known as factoring .

For small and medium business it seems to always come down to two basics - getting the order, and then getting paid. The old ' cliché' of ' the order is not complete until it’s paid for ‘... as trite as that sounds, seems to hold true even today.

Many clients we meet with are in the enviable position of getting larger orders and contracts than they might have imagined based on their innovative products and services. But with that success, as we noted, comes the challenges of cash flow financing. During the past few years with all the economic turmoil it seems Canadian business financing options seem either limited or have disappeared - that’s certainly how many clients feel. The impact of accounts receivable growth is a huge challenge, not to mention inventory also of course.

So we have waxed eloquent on the problem- That’s easy to do . let’s talk about the solution. Receivable financing, also known as factoring addresses the issues of your customers paying you in 30.60, or dare we say it, 90 days. You can carry those receivables, or.... utilized factoring as a method to turn your sales into immediate cash.

Let's cover off some of the basic requirements around how this innovative method of business financing works. When you sold the product or service you hopefully had enough gross margins in your cost of sales to make the sale profitable. If you are able to sustain another 1- 3% of gross margin erosion you can use receivable financing to turn sales into same day cash, which is what this financing is about.

Let’s reveal and recap in a manner you can understand how this financing works. Your purchase orders or contracts must be ' clean ' from a viewpoint of being able to demonstrate you can recognize revenue on your shipment. We should interject at this point that the banks will finance your receivables also, but that comes with much stricter criteria and limits on the amount you can finance.

That is why factoring has risen in popularity, it provides unlimited... yes... unlimited same day cash flow for your sales. Your challenge is to work with a trusted, experienced and credible business financing advisor who can steer you to the right partner with the type of facility that works for you. Although traditional factoring along the lines of the U.S. model requires your customer to be notified we are in fact a fan of this type of facility that allows you to bill and collect your own receivables, for all the obvious reasons.

It's important for clients to understand at its most basic how factoring works. You are advanced, on the same day as you invoice approx 90% of funds for your invoice. The remaining 10% is a holdback which creates a reserve and also covers the financing charges. When you customer pays you or the factor you receive the remaining 10% of your invoice amount, less the financing charge.

In Canada cost of factoring ranges from 1-3% a month. It turns adversity into opportunity because you grow sales with larger gross and net margins, and if you utilize the financing properly you are actually in a position to reduce much, in some cases all of your financing costs by taking discounts with your own suppliers or buying smarter and in larger quantities . Reversing the cash flow for business problem - That’s a win win in the language of business.

--
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 6 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/cash_flow_business_factoring_receivable_financing.html

Understanding Cash Flow For Business and Why Receivable Factoring Just Might Be The Solution

Choices. Alternatives. Robert Johnson, an old blues legend wrote of being at the ' crossroads ' and had choices.
That’s what Canadian business is looking for more than ever when it comes to the Canadian business financing marketplace for small and medium size businesses. (We suspect the big guys want the same thing!).

If your business can't obtain any (or enough) cash flow for business growth then receivable factoring just might be an option. Naturally you're the client, so we'll let you decide.

Clients always ask ' why can my firm obtain working capital financing via receivable factoring when we can via the bank. The answer is really not that mysterious - it’s a case of your new financing partner looking solely at the asset and not the big picture, which our friends at the bank tend to be focused on.

And don’t get us wrong, if you firm can obtain ' all ' the financing it needs from a Canadian chartered bank you clearly have the ultimate cash flow security in place... however the reality is that we havent really met many of those firms in the tumultuous environmnet post 2008-2009 global business financial meltdown.

So yes, the cost of factoring in general is more expensive (in some cases it actually might be cheaper!) but with receivable factoring your are operating your business in an entirely different manner.

As a Canadian business owner and financial manager you should not feel embarrassed that you haven’t heard a lot about receivable financing via a factoring working capital facility. It’s been around as a financing tool for quite some time, but it’s been a little under the radar, and oft considered an alternative tool for Canadian business financing.

Essentially it is the sale, on a one of, or ongoing basis (it’s your choice) of your receivables to a third party. You receive funds instantly, and we mean basically same day! And the total focus is very simple and straightforward - the transaction is only about the value of your receivable, its not additional debt for your balance sheet, and it monetizes your receivables to the extent that you choose.

Control is the key word here, as you control what you need to borrow, when, and what those funds will be used for. Traditionally all our clients use the funds for just one purpose - financing their business for more growth and profits.

Perception is often confused with reality, and the perception is that a receivable factoring strategy to generate cash flow for business is expensive. Yes, no... Maybe! The cost of this type of financing tends to be in the 1-3% per month range. What many of our clients miss is that putting yourself in this type of facility assures you unlimited sales and profit growth. Your investment in receivables (and inventory) has essentially been monetized on a long term basis. Also, the funds you obtain from this type of financing allow you to take supplier discounts, enhance supplier relationships, purchase smarter and in larger quantities, and increase your A/R and inventory turns, which technically play a huge role in your return on equity.

So, is receivable financing and factoring your working capital solution for business cash flow - only you can decide, but you do have choices and alternative you previously might not have been aware of. Speak to a trusted, credible, an experienced Canadian business financing advisor to ensure you choose the right method of financing when you're at the crossroads!
--
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 6 years - has completed in excess of 45 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/receivable_factoring_cash_flow_for_business.html