What Are Alternative Financing Solutions In Challenging Times

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Alternative Financing Options - Work !

Business finance funding sources for many Canadian firms often seems just out of reach for many owners/financial mgrs. Those owners and managers might even feel as if their financial challenges are somewhat impossible especially in times of industry or economic turbulence.

In some cases your business financing prospects may fee somewhat similar to the July 12 Disco Demolition Fiasco? ! (On that day a Chicago DJ organized a ' disco sucks’ protest at Chicago's Comiskey Park. The 5000 invited fans turned into a riot of 70,000 of epic proportion and damage). Unexpected events in business can wreak havoc on any company , large or small, or new !

Most business people feel that bank financing is often critical for the ultimate success of a company. Traditional Canadian chartered bank financing might not always be available though. The good news is that there is access to business finance today in numerous other forms.

These solutions tend to fill the ' growth gap ' that perceived / real credit crunches deliver to the stifling of a firm’s growth.

In some cases it is all about ' the turnaround ' , the ability to turn a business around via strategies that will benefit your company immediately and in the long term.

When you are looking to fix your company's immediate financial position it's all about the ability to both control current cash flow, as well as generate additional cash flows. The ability to control costs, generate sales, and ensure you have the capital to finance those sales is what that immediate turnaround is all about .

While ownership and mgmt might possibly be capable of addressing internal costs and sales and cash flow issues ultimately specialized expertise from a trusted, credible and experienced Canadian business financing advisor will probably generate more success.

When it comes to low cost and low risk our Canadian chartered banks deliver on the many longer-term solutions for business finance needs. Although bank requirements are pretty basic, and common sense, many firms, perhaps yours, are unable to prove or provide stability in cash flow, historical profits, and the collateral and or covenants and personal guarantees required in our Cdn banking system.

Alternative Financing Options

6 sources of business financing you may not have considered are:


Asset based lending / non bank lines of credit - These facilities combine your receivables, inventory, and even equipment and real estate if desired, into one borrowing facility and revolving line of credit


Factoring/ Confidential Receivable Finance


Sale Leaseback On Assets You Own -


Purchase Order Financing


Equipment Financing (Lease finance is often both a traditional and alternative method of acquiring and financing new assets) Almost any new or used equipment asset can be financed these days, even software, to run your business!


Start-up and early stage growth firms should well consider the Canadian govt small business guaranteed loan program, providing a govt guaranteed loan via your bank for 90% of the loan amount, which now is up to $1,000,000.00 as a loan amt cap.

We always point out to clients that various forms of equity finance could be considered; these include bonds, private capital pools, private equity, angel investors, crowdfunding, etc. However these solutions are a road less traveled and take so much time with only the smallest percentage of firms ready or succeeding in these areas. No secret also that these aforementioned ' equity ' type solutions dilute business ownership percentages, often undesirable in early-stage or growing companies.


If you're looking to feel better about business finance alternatives available to your firm seek out and speak to business finance expert with a track record of business finance success who can assist you with identifying the right mix of solution and funding/capital amount your business needs.. to grow!)



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

How To Obtain Business Financing In Canada

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Could You Put Some New Business Financing To Good Use?

Business financing in Canada has never been as important as in recent times - A company can fail in the best of times, whether it's poor finance practices around your existing financing strategy or simply the inability or lack of knowledge around business capital , cash flow, and working capital solutions . At 7 Park Avenue Financial we believe any firm can benefit from a better overall financing strategy.

And boy have things changed ! Long gone are the days when funding a company simply revolved around low interest long term bank loans, when approval seemed cumbersome but ultimately successful.



7 Park Avenue Financial's vision was founded specifically on that landscape that changed. No secret that these days not all business borrowers fit the mold of traditional financiers such as the Canadian chartered banks.

Many businesses try online lenders - yet while the applications and loan process is viewed as online there is a distinct lack of personalization that your company and industry might need. Even worse is that the multitude of on line lenders simply confuses the business owner, if not downright deception in a few circumstances.

In the case of the short term working capital industry, which evolved out of the U.S. Merchant advance loans many Canadian borrowers have found they can approach and get approved by several lenders.. in effect they ' stack ' new loans on top of each other

When investigating on line solutions we encourage clients to ensure they are dealing with a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success to eliminate any disastrous financing.

A proven solution towards the path of solid business financing is simply to analyze short and long term cash flow needs ( a cash flow plan ) that allows your company to understand where liquidity is needed.

An ' informed ' business borrower armed with proper knowledge around the types of financing and cost of their financing needs is the best scenario to strive for. In many cases your industry will typically benefit from a type of financing used by many of your competitors and that can assist your own firms funding journey.


While many owners/ mgrs and entrepreneurs in general focus on sales revenue growth as the key metric to success that motivation has to be complemented with good cash flow management & financing solutions geared to your cash flow and asset monetization needs .


Sales will drive a lot of your financing choices and will in many cases dictate or suggest what type of debt finance or asset monetization you will utilize. While it's important to be optimistic about sales growth that same revenue issue can be a source of stress when it comes to cash flow.


One reason why ? Simply because building inventories and receivables and investing in new assets are cash uses, not sources, as our good friends accountants would say.


While cash flow and sales budgets are important and reflect good mgmt the real world dictates that Murphy’s law will often kick in , which might mean:

Large New Sales or Contract Opportunities

Seasonal cash flow needs

Loss of a major customer

What Is The Best Solution To Finance Sales Growth ?

ANSWER : A traditional or alternative business line of credit ( tradional = non bank )


1. Canadian Chartered banks


2. Non bank commercial finance asset based credit lines



It often also takes new/used assets to build and grow a business, i.e. equipment, machinery, rolling stock, technology a la computers, software, etc. In that case equipment lease financing is your best bet as it conserves cash flow and matches the benefits of the asset in question to cash outflows. From start up to mega corporations 80% of businesses of all size utilize lease based asset financing.

Business Financing For Smaller Companies / New Companies

Newer businesses, mostly start ups should consider the Canadian Govt Small Business Loan - aka the ' SBL ' loan. That loan is guaranteed by the govt and only requires a 10% personal guarantee against the loan which can be anywhere up to 1 Million dollars depending on the asset you wish to finance.


Cash flow concerns boil down to liquidity. The 2nd most liquid asset you have on your balance sheet is receivables. Collecting them promptly and financing them properly is key to business success.


For those firms that can't access or get approval for the amount of business credit line they need numerous solutions are available, the most popular often being A/R financing via a ' factoring' or 'Confidential Receivable Financing ' program. This solution monetizes sales as you generate revenues - instant cash. Key advantages include: instant liquidity and no additional debt on your balance sheet.


Businesses in the SME sector in Canada (small to medium enterprise) will never have too much cash. Increasing sales, buying assets, hiring people drains cash- sometime slowly, other time not so slow!


Some other solid real world solutions to cash flow and loan needs include:


SR&ED Tax Credit Financing


Sales Leasebacks


Unsecured cash flow loans


Short Term Working capital loans

Mezzanine Financing ( Unsecured cash flow term loans )


Financing a business in Canada, in ordinary, or extra-ordinary times takes some time, knowledge and access to funding solutions that are in your firms best interest . Stay educated and ensure you are working with someone who is on your side when it comes to maintaining finance solutions tailored to your business health. At 7 Park Avenue Financial we call that ' Financing With The Intelligent Use Of Experience '.

What's Alternative Financing In Canada ? Capital & Cash Flow Sources

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Alternative Financing Options For SME Commercial Finance Needs

Alternative financing options and sources is all about the right capital and cash flow from sources you can depend on to grow your company's sales and profits.These lending options tend to come with fast approvals although non bank lenders demand a higher rate of return based on the flexibility of their capital and the eligibility requirements .

Any current economic upheaval notwithstanding, it's safe to say that after the 2008-2009 recession businesses in the SME ( small to medium enterprise ) sector in Canada had greater difficulty in obtaining proper traditional bank financing . The ability do do business and raise business credit had many firms wondering what the commitment was to this key segment of Canada's economy.

Bank lending guidelines focus on key elements such as accountant prepared financial statements, personal guarantees, outside collateral, and performance ratios / covenants your company must abide by . That can be a challenge.

Alternative Financing Canada

 

The business line of credit is typically a major necessity for any company . when access to credit lines dry up your company is more often than not able to support ongoing sales and daily operations.

So what can small and medium sized businesses do ? Whether its start up funding, or growing a business the landscape of Canadian business financing has changed. Experts tell us that the reasons alternate capital sources are growing is a combination of regulations in commercial lending and technology. Many new lenders can provide access to financing previously only offered by Canadian chartered banks.

While in some cases banks are pulling back to certain types of lending new technologies and many new commercial finance companies are providing complementary financing to run and grow business.

At 7 Park Avenue Financial  we talk to new clients about the differences and benefits of traditional versus alternative finance solutions . Many firms have to utilize non-traditional business credit and business loans.

Though these sources of credit may not be perfect for every business, they are at least options to keep your company going through rougher economic times when you have been, as the saying goes ' de-banked'

Alternative Sources of Business Loans

 

Asset based loans - These facilities rely heavily on the hard collateral in your business, typically equipment, rolling stock, real estate, etc.

Non bank revolving credit lines - These business credit lines, often called ' ABL's " are used to manage the cash flow gaps that arise out of the need to carry inventory, collect receivables, pay employees and suppliers, etc. Similar to bank lines the carrying cost is calculated on the ongoing balance . The best way to operate these type of facilities is to make sure they ' revolve ' - hence the term ' revolving line '.

Another key benefit of the non bank asset based line of credit is that they can easily be increased as your sales and working capital needs grow.

Inventory Loans - Using inventory as collateral is often best facilitated in the context of the asset based credit line . The facility combines inventory and a/r financing to create an important source of ongoing cash flow.

Sale Leasebacks - Equipment your firm owns can be leased back to create valuable working capital,with your firm still maintaining full use of the equipment.

Equipment Financing - 80% of all North American businesses ( that includes Canada !! ) utilize lease financing to minimize capital outflows for new and used assets. Yes, used equipment can be financed !

SR&ED / Film Tax Credit Financing - Tax credits for the Government Scientific Research and Experimental Development program can easily be monetized to recoup valuable investments your company makes in R&D

Receivables Financing / Factoring - The ability to cash flow your receivables on an ongoing basis is one of the fastest growing parts of the alternative finance area . Our recommended solutions to clients of 7 Park Avenue Financial is Confidential Receivable Financing, allowing your firm to bill and collect your own a/r and be able at the same time to cash flow sales immediately as you generate revenues.

Royalty Finance - Royalty finance is quasi form of equity financing and allows your firm to raise funding based on sales

Purchase order financing - P O Finance is similar in many respects to a/r financing, but takes the whole process one step further , allowing the P O lender to pay your supplier for products related to legitimate purchase orders / contracts.

Working Capital Loans/Cash Flow Loans - Technology has allowed many firms to apply to short term working capital lenders who offer loans, typically 12 months in duration based on only your sales volumes. This type of financing is a key part of the whole wave of what the experts call ' FINTECH '. These loans fill a short term void and are typically based on loan amts equivalent to 10-15% of your annual sales volume. Other names for this type of loan is ' peer to peer / B2B ' financing.

These shorter term working capital loans/advances arose out of Merchant Advance industry in the U.S. , having spilled over into Canada . Those loans, called " MCA's " typically work best for retailers . In effect this area is a ' shake up ' of ' old school ' traditional financing. While these solutions are available to both public and private companies the majority of these types of financing revolve around private firms who want to both survive and grow their business.

We're not 100% sure that banks are abandoning small and medium sized lending - although many of our clients certainly feel so! But post the 2008 global recession it's safe to say business financing in Canada has changed. That's why the amount of capital available via private alternative finance firms should be often appealing to business owners and financial managers.

To explore the numerous capital and cash flow sources available via commercial alternate finance sources 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 business loans that makes sense for your company / industry.



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

What Are Real Working Capital Solutions For Canadian Companies

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Solutions To Working Capital & Cash Flow Challenges

Solutions to working capital problems for Canadian entrepreneurs work best when they come from the real world .. we can call it ' main street financing ' we suppose. Yes , you're right - this isn't the time for ' crowd funding ' !... what a concept that is .. having a million people send you 1$ . We wish we had thought that one up.

What then does the Canadian business owner and financial manager going to do regarding cash flow problems and working capital solutions when cash it at it's tightest. Even well operated companies require cash flow solutions for their profit and growth objectives ; client of 7 Park Avenue Financial tell us they just want to know how to get there.

Cash flow is of course ' fuel ' that will drive the combinations of growth and more profits, and allow you to run day to day operations with greater ease.

2 Ways To Achieve Optimal Working Capital Balance

Business owners can focus on two areas :

Sales .. and Asset Turnover !

Asset turnover is sometimes a bit of a surprise to business people that aren't necessarily grounded in finance, but the issue of turning over your assets in fact opens up a wide variety of potential solutions, most notably

Monetizing and Cash flowing Your Business Assets

By financing your assets and at the same time focusing on better turnover your overall profit/growth situation improves, almost immediately. It’s all about :


Turning Inventories

Collecting Receivables Faster

Financing Long Term Assets Profitably

Solutions To Working Capital & Cash Flow Needs

Working Capital Facilities

Short Term 12 Month Working Capital Loans Paid From Future Sales

Receivable Financing / Factoring / Confidential Receivable Finance

Asset Based Lending / Non Bank Asset Based Business Lines Of Credit

Chartered Bank Solutions

Leasing/Sale Leaseback

Tax Credit Monetization

P O Financing / Supply Chain Financing

All these key solutions can be structured from both traditional and alternative finance firms . Even better, certain solutions, structured properly can be cobbled together to increase your firm's total access to credit. It's all about monetizing the balance sheet , and your sales !


So how does the business owner/financial mgr actually figure out how much to borrow, and when? And don't forget the over riding question which is knowing how to balance the eternal questions of more debt or adding equity if in fact that is possible. Remember that many of the cash flow solutions here monetize assets and sales and don't require ANY dilution of equity ! That's a good thing from the business owners point of view.


For companies that have inventory its all starts at some sort of production cycle... but even service industries in technology or other areas have their own flavor of a working capital cycle .


A very simple rule to address working capital problems is that whenever your receivables and inventory grow you are going to have to address more working capital solutions.. it's as simple as that .


Speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success . Discover how you can address cash flow challenges... the right way. That’s of course if your crowd funding strategy doesn't work... and you can pretty well count on that one!






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

What Is A Business Turnaround Plan For Cash Flow

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What Does A Business Turnaround Specialist Do?

What is a business turnaround plan when it comes to financing ? It's all about a strategy and that covers a lot of issues, but our main focus today is ' cash flow '

All business owners and their financial mgrs. recognize the importance of cash flow and working capital at critical times in their business. For most companies that cash is generated from accounts receivable and inventory sales that come from sales revenues . Of course the ultimate failure for lack of cash flow is business failure.

So understanding what the turnaround requirement is when it comes to funding your business often simply comes down to the solutions that are available to put in ' the fix '.

It's not always ' intuitive ' to realize cash flow deficiencies , especially when sales revenues are growing ; fast growing sales can mask a lot of financial problems ! The good news is that there are some basic technical fundamentals to help you assess the problem . Think of that type of analysis as being a business cash flow doctor.


When looking for outside help in someone that understands your financials and business look for someone that has a solid track record and experience, and can facilitate cash flow turnarounds by offering up solid and sometimes creative working capital solutions.


One way of taking a look at the seriousness of your cash flow challenge is a technique known as 'DOOMSDAY RATIO '. So What is that ratio and what is its significance? It's simply a ratio ( we at 7 Park Avenue Financial have always called it a 'relationship ') of your cash on hand divided by current liabilities.


The final result is really one of the most powerful and effective solvency ratios ( or relationships ) that a business owner can utilize. Business people might be aware of two other similar ratios, the current ratio and the quick ratio. The current ratio included the firm's current assets, including accounts receivable and inventory.



The Quick ratio did the same but excluded inventory. While not all 'non-financial' folks might not like taking this detailed a look at their financial statements this hard look at your numbers will often reveal key insights into business financing turnaround needs.

The business owner can quickly see that the doomsday ratio focuses solely on Cash! We can call it a very 'demanding' ratio because it focuses solely on the liquid gold within the company, cash!

Although your firms accounts receivable and inventories are somewhat close to being cash, and no matter how well they are managed those two current assets aren't cash yet, and everyone knows the day to day business challenges of converting receivables and goods into a final cash customer payment.

Really the best way to look at the Doomsday ratio is to view it as an ongoing measure of the firm’s cash 'buffer'. The bottom line is that it will show the business owner what 'cushion' of cash the firm has. Business owners could even choose to monitor the ratio daily, as it could very well warn against impending shortages of working capital.

Many business owners know that it is also not productive to carry cash on hand, particularly in today's low interest rate environment. So it makes common sense that the doomsday ratio may in fact be less than the number '1' , but at least we have a number that, on an ongoing basis, we can monitor.

Each business over time has a philosophy and business practice around how much cash is kept on hand. Naturally it's also obvious, and important to know that if you reduce your operating line of credit with you cash you still have the full liquidity of your operating line, but you aren't paying any interest to borrow. That's a good strategy also.

How Can Your Business Accelerate Cash Flow

One method is to consider a receivable financing strategy - one that factors or sells your accounts receivable as your firm sells it's product and services. Our recommended solutions for clients of 7 Park Avenue Financial is a ' CONFIDENTIAL RECEIVABLE FINANCING ' solution, allowing you to bill and collect your own receivables while generating cash as you sell ! That strategy allows you to generate cash , and maintain that positive ' DOOMSDAY RATIO'!

In summary , take a look at any relevant financial analysis technique to monitor cash flow/working capital for your business.

What Is Your Business Turnaround Financing Plan ?

And don't forget to see that CASH FLOW doctor who can implement solutions such as:

A/R Financing

Working Capital Loans

Bridge Loans

Sale leasebacks

Non bank asset based revolving credit facilities

Tax credit monetization

Purchase Order Financing / Supply Chain Financing

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who has a track record of business finance success and turnaround expertise for refinancing your company properly.






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

Inventory Financing Companies In Canada

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Quick Guide To Inventory Finance & Working Capital

Inventory finance companies in Canada address the challenge experienced by many Canadian businesses - they carry inventories - but they need to finance them also. There are numerous misconceptions around who exactly finances inventory, how is it done, and what the challenges around the financing of this valuable and important asset on your balance sheet.

The overall way in which you manage inventories is a key part of your ability to the financing of the asset . It can never be overlooked that when inventory is a key part of your firms financing you need to be able to report and count your products, as simple as that might seem a statement . Typically businesses carry either a ' continuous' inventory , or in some cases ' periodic'.

As a general rule lenders prefer a ' continuous ' type of inventory accounting - that is simple being able to count and monitor your inventories at all times . Since inventories are ' margined ' in your agreement with your commercial lender or bank the ongoing valuation of the asset is key.

Naturally ' current assets ' such as receivables and inventory grow as your company's sales are growing . The proverbial ' working capital cycle ' that all business are familiar with is one in which cash turns into inventory which in turn creates accounts receivable - with process hopefully repeating itself and turning over as fast as is possible .

That total lag in the business can take anywhere from 60 to 120 days in most industries . We at 7 Park Avenue Financial therefore caution clients that the great thing about having growing sales revenues is that that also brings on the challenge of more current asset financing needs around inventory and a/r.

Why Do Businesses Look For Inventory Financing Solutions ?

Clients typically are looking for inventory financing because the level of investment that you have in product and receivables drains your cash flow. As sales volumes increase your cash flow decreases based on your overall collection period of A/R and of course those inventory turns.

Sales personnel want to know that their firm can deliver on orders that are higher value , including large new contracts or clients.

If you talk to business owners and financial managers in the ' SME ' ( small to medium enterprise ) sector of the Canadian economy many will say that just don't have access to the financing they need to grow or even run their business.

Do true inventory financing companies exist in Canada? We feel that the answer is generally ' no ‘, they do not. However if your firm would consider an asset based lending scenario that in effect takes the place of inventory finance companies in Canada . That is the asset based credit facility most firms we work with that is utilized to address the inventory finance challenge.

Under an asset based lending strategy your inventory is margined for what its worth, by experts who categorically know what its worth. You will enhance your ability to finance your product if you have the controls, reporting, and inventory accounting system in places that makes the inventory and asset based lender ' comfortable'. When properly margined asset based credit lines maximize the liquidity in your firm .

Key Benefits Of Asset Based Credit Lines For A/R & Inventory :

Provide financing in lieu of owners giving up valuable equity

Allows Firms to Consider Mergers & Acquisitions

Provide growth financing where balance sheets cannot be leveraged thru traditional bank financing

Speak to a trusted, credible, and experienced business financing advisor with a track record of business finance success. Get the financing you deserve around your inventory and general financing 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

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


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