Want To Avoid A Cash Flow Crisis? Here’s How!
OVERVIEW – 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's understanding 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!
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-problems-crisis-financing-solutions.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
