Tweet
How Your Competitors Do Money : Fixing Your Business Financing Solutions!
OVERVIEW – Information on business loans and solutions and alternatives to cash flow and working capital financing sources in Canada
Business loans in Canada, along with working capital financing and other cash flow solutions aren't that different than shoes ... they come in different sizes and styles! So how can you ensure you're achieving finance success similar to your competitors? Let's examine what business owners/financial mgrs are looking for these days when it comes to company finance solutions. Let's dig in.
Part of the challenge we tell clients is simply the terminology. Working capital means different things to different business owners, as do debt solutions and asset monetization.
Working capital can be achieved successfully, and in a fairly timely fashion in the following three manners:
1. A cash working capital term loan that injects permanent working capital into your firm and is paid back over a specific period at a fixed rate. Govt Small Business Guaranteed Loans also provide long term financing for equipment and leasehold improvements
2. Monetizing your current asset accounts - i.e. advance high levels of margin against your receivables and inventory. Here solutions include: bank lines of credit, as well as alternative asset based non bank lines of credit
3. Various subsets of Asset Based Lending, including
SR&ED Tax Credit Financing
Sale Leasebacks
Equipment Financing
Royalty Finance
Is it possible to increase cash flow / working capital at no cost? We're glad you asked! We will call it our internal strategy - You can increase your working capital tomorrow at no cost - we repeat, no cost by doing the following:
1. Collecting your receivables more quickly
2. Turning your Inventory over faster
3. Slowing down your accounts payable
All of those require management skills and a greater level of customer intrusion - which is to say you do so at the risk of potentially offending suppliers and valued customers. But it is the perfect way to achieve working capital nirvana... trust us on that.
The current business environment makes it very challenging for you as a business owner to achieve any level of working capital via a loan or monetization of your current assets.
Canadian chartered banks are among the most respected in the world, but business owners know that it is extremely difficult to achieve working capital via traditional bank financing. As a business owner you need two things - reliable financing, and financing to grow your business. If you have bank financing and are unable to replace it the situations becomes of course even more challenging, because you become 'self financing 'at a good point.
One of the best pieces of advice we feel we give business owners is to not focus on one solution only as the ' holy grail ' to their working capital challenges . The reality, in our experience is that the solution to cash flow challenges will come from a variety of different sources, certainly two at a minimum that will allow you to achieve working capital and cash flow piece of mind.
Is cost of financing important? Yes it is, but don't forget to ask yourself the questions around access to capital and what you can do with those funds, vs. just focusing on cost of capital.
Most alternative financing structures come with high rates than traditional banking. We address this issue with clients by saying that in some cases these solutions will actually save your firm from extinction, but on a more positive note, they can, despite their costs, help you grow sales and profits, thereby offsetting much of the perceived higher costs.
Don't be afraid to consider traditional as well as alternative working capital and debt sources. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can ensure you're getting the same access to financing as your competitors.
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 10 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
'
ABOUT THE AUTHOR
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
