Working Capital Financing In Canada : A Trip Inside Finance Options for Canadian Business

5 Working Capital Options for Canadian Business

OVERVIEW – Information on working capital financing in Canada. Various finance options exist that compliment your business cash flow needs without the need to take on additional debt

Working capital financing in Canada comes with a number of finance options for the business owner/financial manager. When, and which of these options makes sense for your business. Let's dig in.

There's not a lot of argument that that premier type of cash flow financing for your business is bank financing - but let's be frank and agree that bank credit is not always available in the amount and nature of what your business needs. Goes without saying that the other attractiveness around bank credit is the fact that it is always the lowest cost of financing vis a vis interest rates, etc.

When you firm is outside the scope of borrowing from Canadian chartered banks what then are the options? The reality is that a large number of commercial finance companies have filled the gap when it comes to alternate cash flow

and working capital solutions.

In many cases you can actually duplicate the style of bank offerings, with the only drawback typically being higher rates. Additionally these offerings tend to be ' asset ' based, focusing on one or a group of assets to provide you with the financing you need. Further comfort comes from the fact that these financings can almost always provide all the capital you need.

It's important to distinguish between working capital needs and debt, as the solutions we're talking about are cash flow focused - i.e. your business operating needs.

Here are the 5 Working Capital Options you may wish to consider for your business:

A/R Financing

Inventory Finance

Asset based business revolving credit facilities

Refundable Tax Credit Financing

PO Financing / Sales Royalty finance

Probably the most popular solution used by thousands of firms is Receivable financing. By immediately cash flowing your sales, at your option, your firm replaces receivables on your balance sheet with cash. As your business grows your facility can be adjusted at any time to increase the amount of borrowing. Advances under this method of financing in fact are even more generous than the bank - typically they are 90% of all receivables under 90 days.

By considering and exploring such options as CONFIDENTIAL RECEIVABLE FINANCING you're in effect mirroring exactly the same type of facility as a bank line of credit. Only the paperwork is different and you're able to bill and collect your own accounts without any notification to any other party. It's ' business as usual ' financing!

Asset based lending, also called ' ABL ' takes your business credit line one step further. It takes into account your A/R, inventory, and equipment and puts these all under one liquid borrowing facility. As we have noted inventory financing is now a part of the borrowing mix! The higher cost of this financing can easily be justified when it comes to covering your operating needs, maintaining relationships with key suppliers and vendors, and of course , job #1 - growing your company.

If you're focused on taking your company to the next level and are currently unable to negotiate traditional bank financing seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you on the exploration trip of working capital options for your business.


Stan Prokop - 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 90 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN WORKING CAPITAL FINANCING EXPERTISE





Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:

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



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop

Business Financing Health : Recognizing Finance Options

Secrets To Business Health And How They Relate To Financing Options

OVERVIEW – Information on finance options for Canadian companies. How does the overall ‘ health’ of your company affect type and amount of financing you need or are eligible for?


Business Financing Options in Canada often depend on the overall health of your company. A lot of questions can be answered by simply looking at some very basic and fundamental numbers and relationship in your financials. The doctor is in. Let's dig in!

Key to any business financing or survival for that matter is the whole issue of solvency . Here owners and managers want to assess the level of assets and debt. Lenders will always want to focus on owner equity, with a more refined focus of this number being ' tangible net worth.

Finance options will also depend on your ability and need to meet current financing commitments. Here we will point out that even a company that has had its loan called can still get very strong levels of alternative financing based solely on the asses of the business. This type of financing typically is called ' ASSET BASED LENDING ' and can come in many forms, both term debt and operating debt. They provide a path back to what many term ' traditional financing '.

The asset lending we've mentioned, when it comes to operating financing, will almost always revolve around receivables and inventory. The size, quality, and management of these two assets will dictate what type of financing you need... and... as importantly are eligible for.

You can properly measure, and help manage these two assets in some basic simple ways. In the case of A/R it simply calculating your ' day’s sales' in receivables turnover. Since the sale of inventory translates into a sale and then a receivable the management and tracking of A/R and inventory is a great way to track business health. P.S. The big companies do it all the time, all day, every day, and more often than not senior management is compensated on the management and performance of these two assets.

In the past, and we suppose we're doing it, we've suggested to clients that they track a simple chart that shows sales growth and then measures that same growth against the growth of A/R and inventories,

When looking at finance options it's important to assess whether you are looking for business financing to operate, start, or expand. In addition to traditional finance solutions offered by the Canadian chartered banks numerous other solutions work. They include:

A/R Financing

Working capital term loans

Inventory financing

Asset based lines of Credit

SR&ED Tax Credit Bridge Loans

Govt Small business loans (to maximum 350k)



Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can help you assess business health and finance options that suit your operating or growth requirements.





Stan Prokop - 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 90 Million $ of financing for Canadian corporations . Info /Contact :

7 Park Avenue Financial = Business Finance Options Expertise !



Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:

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



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '

Stan Prokop