Is Your Business Cash Flow Feeling Like A Game Of Snakes & Ladders ?
OVERVIEW – Information on financing business cash flow in Canada. Here’s your tools to measure and finance your working capital needs
Financing business cash flow in Canada often has business owners , particularly in SME Commercial industries feeling like they are playing a constant game of ' Snakes & Ladders " - that iconic game that has one being helped , and hindered at the same time. We're talking about getting more money... from your business money. Let's dig in.
The winning part of the cash flow ' snakes & ladders’ cash flow ' game' is to be in a position to spot working capital needs long before any bad news. Business owners and financial managers are often far too focused on just growing revenues and paper profits, often spending in areas with classic entrepreneurial optimism.
Knowing your limitations in areas such as taking on debt, financing current assets (A/R & inventories), and determining what owner / shareholder dividends can be paid is all part of winning the business cash flow conundrum.
It shouldn't be a surprise (but it often is) that there are some simple yet intelligent ways to manage and finance your working capital needs. One of the most useful and practical also is simply keeping an ongoing tab on the ' relationship ' of receivables and inventories. The ultimate danger is when A/R is higher than it needs to be and inventories are bloated / slow turning.
Commercial lenders that you are considering borrowing from for business credit line needs focus on those relationships and turnover in sales, A/R and inventory. Reasons for slow moving receivables tend to relate to stagnant sales, poor collections, and extended payment terms granted to your clients.
Your goal in a constant monitoring of sales, A/R, and inventory is simply to ensure you are not moving potential cash from one unproductive asset category to another! Simply speaking no owner/manager cannot ignore a strong focus in this area of managing your business.
Looking for a simple way to monitor these key relationships? Simply set up a basic simple spreadsheet that monitors the values of sales, A/R and inventories at month end. Examine these on a monthly basis at least.
Example - Your month end sales have increased 15% but receivable totals are up 35% and inventories are up 10%. Clearly A/R should be your focus, and is signifying a potential cash flow shortage based on the higher investment you're carrying in receivables.
Financing business cash flow can be achieved by solid mgmt techniques we're demonstrated and in numerous direct finance solutions - These include:
A/R financing
Inventory finance
Bank revolving credit lines
Non bank asset based business lines of credit
Refundable tax credit financing
Working capital term loans
Sale leasebacks
PO Financing
Royalty finance
If you're looking to extract ' real money ' from your business money and want to avoid that up and down ' snakes and ladders' feeling seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with finance needs .
7 Park Avenue Financial :
http://www.7parkavenuefinancial.com
7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS CASH FLOW FINANCING EXPERTISE
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 '
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
