How Can Cash Flow Problems Be Solved ?

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Fixing The Cash Flow Problem

How To Correct Cash Flow Problems - Here at 7 Park Avenue Financial we aren't so sure there's a case for the regular blues, but if the challenges that come with working capital deficiencies and cash flow are ' top of mind' with your business it might be refreshing to know we have some solid solutions , tips and techniques to solve those key issues . We suppose you can call them a ' cure for the cash flow blues '.


When a company can properly address the issue of working capital, cash management and ensure accounts receivable and inventories are being managed properly that helps ensure daily and long term survival, while at the same time improving owners overall return on investment, aka ' R O I '. Proper management of the current assets on your balance sheet, relative to your sales growth simply brings a double whammy of benefits to your business.

So what about those ' current asset ' accounts on the company balance sheet that we have been talking about . Having a poor handle on receivables and inventory can severely impact your overall company performance. We're speaking of two things, how you manage those assets, and how to finance working capital. It's a dynamic situation, because those two asset categories - a/r and inventory literally change every hour - sales get generated, invoices are issues, receivables get paid and inventory gets shipped as more goods are purchased. Talk about ' dynamic '.


Canadian business owners and financial managers often have a poor handle on their current asset accounts - primarily of course receivables and inventory. We can forgive them for that, because those balances changes pretty well every couple hours. Talk about a moving target! .... Invoices get issues, receivables get paid, inventory gets shipped... and more goods are purchased.

How Do Cash Flow Problems Occur?

Simply speaking it revolves around the fact that if you are mismanaging these accounts, or not financing them properly you lose the ability to deploy funds more productively - i.e. growing your business. That’s when the total ' mix ' of your assets becomes important.


Clients of 7 Park Avenue Financial might sometimes tire of our focusing on the importance of isolating which type of financing is going to fix the company working capital problem. Solutions vary and they include:

Short Term Working Capital Loans

Long Term Loans

More Owner Equity

Asset Monetization ( We confess that's our favourite )


There is a very simple way of matching the financing you need to your assets. The solution - use financing of similar maturity to your assets. A quick example ?

Utilize leasing /equipment financing for long term more permanent assets. Another example? Utilize a receivable financing program for your Accounts Receivable

Why Do Cash Flow Problems Occur ?

Another solid rule of thumb is to always not forget that the longer it takes for a dollar to flow through your firm (your cash conversion cycle) the more working capital financing you will need). That is critical to identifying the long term solution for your business, which often is industry specific as industries vary as as to being asset intensive, service oriented, etc.


Business owners and their financial mgrs should focus on proper management and financing your accounts receivable in a manner suited to your business.

Here's a shocker - there’s a cost to carrying receivables and inventory . Receivable financing, aka ' factoring ' is a solid tool when you can get a good handle on net savings using this type of short term financing . Never forget (everyone else seems to!) that stronger sales, asset turnover, and more profits can easily justify the use of a receivable finance facility.

There needs to be a solid balance to the overall problem your firm might be facing. The ' text book answer ' is that if your are able to manage your working capital accounts properly you can better assess any financing risk and cost for the overall cure to cash flow shortages. That perfect balance is what your firm should constantly try for .


As we noted cash flow accounts change daily and require a lot of vigilance. Solutions to your business financing needs include:

A/R Financing

Inventory Finance

Purchase Order / Supply Chain Finance

Asset Based Non Bank Credit Lines

Unsecured Short Term Working Capital Loans

Tax Credit Financing

Sale Leasebacks


Seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success who can assist you with your business finance needs.


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

When Cash Flow Problems Become A Crisis . The Power Of Proper Financing Solutions

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Want To Avoid A Cash Flow Crisis? Here’s How!

Information on cash flow problems faced by Canadian business. Financing solutions and working capital management avoids a business crisis .

Can a problem become a crisis? You bet it can and when your business cash flow is a problem potentially verging on a crisis financing solutions and some analysis into what happened and how you fix it sure helps! Let's explain.

A ' constant juggling act ' is how many clients and business people we talk to describe the day to day challenge (let alone planning!) of business operations and growth when it comes to operating and funding your business.

Looking for one more good analogy? One author described cash flow management along the lines of juggling bowling pins, spinning knives, and flaming torches. Enough said!

We've often spoken about the very simple problem around cash flow that doesnt even involve the solution yet. It understands what it is. The hard core cash is of course what you have in your bank account, but when it comes to ' flow ' everything changes. It becomes the dynamic of sorting out where you are using and getting cash, and where you are able to get cash by perhaps managing your business in a different manner.

So how is cash flow managed then? We can also say that you can improve cash flow by taking on debt, increasing profits and, our favorite and most important... ‘Managing assets '. We're not huge fans as you can guess of taking on long term debt, or giving up ownership equity. Who wouldn’t be!

We all know the results of a cash flow crisis gone bad. They include supplier/vendor relations, employee morale, and lender concern. The path to these problems becomes very steep when operating losses continue, wrong financing is put in place, and creditors sue for payment or attempt to realize on security you have provided.

Some solid cash flow planning helps in a number of ways - You are in a position to plan cash needs, lenders feel more confident about your plans, etc.

Cash flow financing solutions in Canada include:

Asset based credit lines

Receivable Finance

Tax Credit Financing

Inventory finance

Supply chain /PO finance


Ultimately the business owner by experience and planning can put the right plan and solution in place. Your goal: Creating cash and then using it!


In summary then, what’s the best way to avoid cash flow problems, or even a crisis? Yes, you can borrow more; sell equity, but the easiest and as important? ... Convert working capital into accounts (A/R and inventory) into cash faster. Oh and by the way, if along the way you can increase sales and reduce some costs you're a true cash flow superstar!

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can get you out of working capital crisis mode!

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

Click here for 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 .

' 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 And A Cash Flow Problem ? Fear No More!

Curing the Cash Flow Blues In Canadian Business Finance


OVERVIEW – Information on solving your cash flow and working capital problem in Canada . Techniques, tips and tools to analyze, monitor and solve Canadian business financing challenges



We're not sure there's a cure for the regular blues;

but if working capital challenges and a cash flow problem are top of mind in your Canadian business we do in fact have some solutions, tips, tools, and techniques... yes we guess we could call them cures!

And if there is every some good news in a problem its the fact that if you address working capital, cash management and a/r and inventory properly you're now in a position to enhance your overall return on investment, while at the same time minimizing the risks that come with these types of problems . Talk about our ' double whammy’

Canadian business owners and financial managers often have a poor handle on their current asset accounts - primarily of course receivables and inventory. We can forgive them for that, because those balances changes pretty well every couple hours. Talk about a moving target! ....

Invoices get issued, receivables get paid, inventory gets shipped... and more goods are purchased.

So what's the problem then? To put it simply it revolves around the fact that if you are mismanaging these accounts, or not financing them properly you lose the ability to deploy funds more productively - i.e. growing your business. That’s when the total ' mix ' of your assets becomes important.

Clients sometimes probably tire of us advising them that they need to get a handle on which category of financing is going to fix the cash flow problem. Those categories are short term debt, long term debt, equity, and asset monetization. (If we had a favorite ... we confess ... its asset monetization)

There is a very simple way of matching the financing you need to your assets. The solution - use financing of similar maturity to your assets. A quick example - use something such as leasing /equipment financing for long term more permanent assets. Another example? Utilize a receivable financing program for your A/R.

Another solid rule of thumb is to always not forget that the longer it takes for a dollar to flow through your firm (your cash conversion cycle) the more working capital financing you will need).

Focus also on managing and financing your accounts receivable in a manner that suits your firm. Here's a shocker - there’s a cost to carrying a/r. Receivable financing, aka ' factoring ' is a solid tool when you can get a good handle on net savings using this type of short term financing . Never forget (everyone else seems to!) that stronger sales, asset turnover, and more profits can easily justify the use of a receivable finance facility.

Is there a perfect balance for solutions to working capital and a cash flow problem you might be having. We guess the ' textbook ' type answer is that if you properly manage your working capital accounts and are comfortable with the amount of financing risk you are taking you have achieved a cure for the working capital blues. But we toil in the real world, so remember that you also having finance solutions such as :

Asset based credit lines
Commercial bank facilities
Purchase Order Financing
Tax Credit Monetization
Receivable Financing/Factoring
Inventory Finance

Remember that your cash flow accounts change daily and require a lot of vigilance. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your business finance needs.

7 PARK AVENUE FINANCIAL
CANADIAN CASH FLOW 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 10 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/cash-flow-problem-working-capital.html





7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653
Email = sprokop@7parkavenuefinancial.com






Stan Prokop

Growth Financing Challenges ? Don’t Trade Off Growing Due To A Cash Flow Problem !

Canadian Growth Finance Problems .. and Solutions!


Information on growth financing challenges in Canada . Don’t let a cash flow problem prohibit your company growth!




Growth financing in Canada. It's a harsh reality for many business owners that with new found revenue growth comes a cash flow problem. Knowing why that problem exists and what to do about it is what we're talking about today.

Cash flow goes higher and lower with growth. Simple as that. But why those changes ? That is the key question. It's because your working capital accounts change all the time, every day in fact. Those working capital accounts are receivables, inventory, and your payables on the other side of that balance sheet.

So if there is any one point you can take away here its that as your assets and payables increase your business cash flow goes.... DOWN! It therefore goes without saying (almost) that if your sales go up and your working capital assets such as inventories and A/R stay the same or decrease your working capital cash flows get ... Better!

It’s your ability to either finance, or turnover those working capital accounts that will ultimately make you successful in growth financing and solving any cash flow problem you have.

The big take away here, again, is that you have to watch your receivable and inventory growth. Not all companies have an inventory challenge, such as service Type Company, but pretty well all of us have A/R. One internal way you can address a cash flow and working capital challenge is to slow down payables. As we have pointed out in the past that is a very double edged sword given that you value your supplier and vendor relationships which can often be key to long term success.

Don't forget also that when your sales go down for whatever reason that also has, somewhat ironically a positive effect on your working capital. The trick here is to also reduce some of your expenses as much as you can.

It's also a good tip, over time, to monitor your levels of inventory and A/R in conjunction with sales going up and down. That's because it’s simply a great tool for predicting better or worse cash flow in the coming months based on history.

So is a cash flow problem necessarily a bad thing. Ironically, definitely not. It's all about the reason for that issue, which typically in a good environment is growth.

We've talked a lot about internal issue and knowing when and why a problem might exist. But a better questions form clients is of course ' what solutions exist?! '.

Here the key rule of thumb is to match the right type of financing with the actual problem. To put it even more clearly, finance shorter term working capital with short term cash flow solutions. In this case we're talking about some traditional and not so traditional solutions.

In Canada they included bank lines of credit, receivables financing, working capital facilities, non bank in nature that finance both A/R and inventory, as well as purchase order or supply chain financing. If you have a SRED claim you can even finance that for short term cash flow, as these loans don’t even carry monthly payments!

Speak to a trusted, credible and experienced Canadian business financing advisor for solutions to growth financing.

7 PARK AVENUE FINANCIAL

CANADIAN GROWTH FINANCING SOLUTIONS




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/growth_financing_cash_flow_problem.html