Are You Mismanaging Cash Flow? Fixing Working Capital Problems With Solid Financing Solutions

Getting The Bank Or Business Lender ' On Side  '

 

 Become A Good Manager Of Cash Flow Assets

 

As the Canadian business owner and financial manager well know it takes more than that to get lenders,  ( bank and non-bank) to get a good feeling about financing your firm and approving business credit for cash flow working capital finance solutions your firm might require. At the end of the day, it’s about  ' protecting ' their financing and collateral interests in your company.

 

Unfortunately, there are ways to be totally  ' not great ' at proving that you're a good cash flow business owner/manager.

 

  

ASSET TURNOVER HELPS DETERMINING WORKING CAPITAL HEALTH   

 

In financing, more often than not it’s about ' the assets '.   So while we can easily get caught up in fancy formulas are EBITDA and other calculations the reality is that it’s your assets and their turnover that determine your real working capital health. Mismanaging those assets makes you a great ' mismanager ' of cash flow and working capital.

 

One Of America’s great cash flow and investment managers ( Warren Buffett ) once said:

 

‘Does management think the tooth fairy pays for (future) capital expenditures'

 

Not all companies do the proper amount of planning  so when the inenvitable cash flow crunch happens a business is usually caught of guard for lack of that planning . Understanding your asset turnover will allow the business owner and financial manger to address needs  and identify proper business finance solutions.

Professional accountants and advisors call theis whole process the operating cycle, also called cash conversion . No secret to any business owner that  it takes a fair amount of time for a dollar to flow through the company coffers from the time that you created products or generated services all the way through to payment of your final invoice/contract.

At 7 Park Avenue FInancial we look at the whole picture and determine the critical relationships and timing betwee generating sales from inventory or providing services, to turnover in payable and receivables. Knowing the exact numbers in those relationships helps us dertmine financing solutions for our clients.

While our client might often view these calculations as complex, it simply know some basic formulas around how much days inventory is outstand, how long it takes to collect your receivables, ( thats ' days sales outstnading ' ) and finally days payable . Not all our clients understand that simply slowing your payables creates a positive cash flow - the actual formula for this is average payables multiplied by amount of time you are looking at , and then divided by your cost of goods.

If there is one very important number to keep in mind relative to some of the calulations we have shown it simply that there should be a commensute rise in certain accounts and relationships =

Example - if sales are stable or going down , and receivables you are carrying are up - that is a bad thing ! There should be a strong correlation to growht in sales and grwoth in receivables and inventories, as an example.

 

Naturally, term debt lenders focus on your long term viability to generate payment for their loans. At its very simplest it’s about your cash flow from the management of your working capital accounts (A/R and inventory) that pays bills, not the fancy EBITDA formulas that reflect how much your assets have actually depreciated.

 

So when profits and EBITDA calculations are positive we meet clients that still are having a challenge paying suppliers and meeting payroll obligations.

 

So what we are saying is that it’s important to understand that sales revenue and profits and the ' value ' of your company, if you're focusing on just those, have made you a great Mismanager of cash flow and working capital.

 

It's all about know how your firm can access cash from assets, as well as being able to plan for future needs.  That's where a bit of planning comes in - putting together a sales and receipts forecast, discussing these needs with a bank or non-bank lenders. The biggest mistake we see in this area from clients is they are not properly analyzing the cash timing of collections from accounts receivable.

 HERE ARE SOLUTIONS TO NEGATIVE CASH FLOW

 

If your cash flows are negative through this planning process the solutions are pretty clear, and limited:

 

 5 WAYS TO ACCELERATE CASH

1.Take on term debt

2.Have shareholders put in more money

3.Delay payments to suppliers

4.Really increase sales!

 

5. And finally - convert assets into cash via asset turnover focus

 

Converting assets into cash via :

A/R Financing

Inventory Loans

Access to Canadian bank line of credit

Non bank asset based lines of credit

SR&ED Tax credit financing

Equipment / fixed asset financing

Cash flow loans

Royalty finance solutions

Government Of Canada Small Business Loan Program  - The Guaranteed federal business loan

 

CONCLUSION

Use our solutions and tips to avoid being a " MISMANAGER " of working capital solutions for your firm.

 

If you're looking for cash flow working capital finance solutions for short term or long term needs speak to a trusted, credible and experienced Canadian business financing advisor  at 7 Park Avenue Financial on how to achieve the right solutions for financing your firm for health, growth and success.

 

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

Click Here For 7 PARK AVENUE FINANCIAL website !



7 Park Avenue Financial provides value-added financing consultation for small and medium-sized businesses in the areas of cash flow, working capital, and debt financing.



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. He is an experienced

business financing consultant

.

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 financing 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.


Click here for the business finance track record of 7 Park Avenue Financial







Stan Prokop
7 Park Avenue Financial/Copyright/2020

Here’s Some Keys To Unlock Business Operating Cash Flow With Solutions That Work

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INFORMATION ON BUSINESS FINANCING SOLUTIONS IN CANADA

Here's to not losing your keys. We're talking about the keys to unlocking business operating cash flow and the solutions that come with that Canadian business financing challenge.

We're big fans of confusion, because hopefully it enhances our reputation of providing clarity around issues such as business cash flow! That term is often confusing to many business owners, and financial managers.

The reality is that you will ultimately be judged by others, i.e. suppliers, bankers, lenders, lawyers, and other professionals as to how well you manage and understand that business concept.

That cash flow plan is really one of the most important documents in your business. Where confusion reigns is that it is often inter mingled with profits, income and revenue, which really are all pure accounting terms.

As we have pointed out in the past, cash does not, we repeat, does NOT equal profits, The short example is that your firm probably has a payroll this week, but in fact has not collected monies owing to you for sales you have made previously, perhaps a month or so ago. And, as we have pointed out, although you have recognized that revenue you in fact have not been paid. The short comment... it's pretty simple - You dont pay bills with revenue, just cash!

When the busines owner demonstrates he has true control over his business he enhances his or her reputation with a lender, whether that is a banker, a commercial finance company, a lessor, etc.

So what keys can you use to dig deep and unlock the cash flow power within your firm? One way is to maximize management of accounts payable. Properly and effectively managing that time lag between your receipt of goods and services to payment enhances operating cash flow, increasing it. Naturally you don't want to abuse supplier credit.

Managing fixed assets properly is another key to unlocking cash flow. Watch your fixed assets to sales ratio, and you might even consider a sale leaseback on unencumbered assets.

A huge cash trap for which you need a great key is inventory. Monitor inventory performance and the amount of product you carry.

Lastly, and perhaps most importantly, the key to unlocking cash flow power is in your receivables. Have a solid credit policy and ensure your A/R is financed properly, either through a bank or commercial receivable finance company. That latter strategy can turn your company into a real cash flow machine if managed properly.

Keep in mind that you're the one in control of those keys to unlocking business operating cash flow.

Financing solutions are also available to enhance those ' keys ' - speak to a trusted, credible and experienced Canadian business financing advisor about those solutions that might work 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

Financing Solutions For Franchise Financing In Canada : Solving The Franchising Loans Challenge !

Your Crash Course In Franchise Financing Loans In Canada

OVERVIEW – Information on business finance and franchise financing in Canada. Financing solutions via franchising loans have some key requirements

Franchise Financing in Canada
is a key part of the total solution that the entrepreneur needs to put in place when considering the purchase of a new franchise or an existing unit. How do you get approved for that financing and who offers these loans? Let’s dig in.

Proper franchise financing, coupled with a solid franchise opportunity helps the entrepreneur assure financial and personal goals will be attained.

When we meet with business owners to discuss their Canadian franchise financing needs they often reveal they have contemplated purchasing their own business for quite some time but that financing was an obstacle. We firmly believe that financing should not be an obstacle to success.

The hard reality of franchise financing is actually very simple - that is that if you have a reasonable personal investment into the business ( we'll discuss' reasonable' later ) , and a decent work and credit history that are some great options for franchise financing in Canada .

Many new entrepreneurs are industry or work focused, and they don’t consider themselves ' financial types '! That simply emphasizes the point that you should be working with a trusted, credible, and experienced franchise financing advisor who can both guide you through the best solution, and in fact get you the capital that you need . It should not be any mystery that a combination of a strong proposal and application geared towards the type of financing you need almost guarantees total success.

If you don’t have a business plan or financial projection for your business you must realize you absolutely need that document. 9 out of 10 of our customers don’t have that plan, or recognize the importance of it. In that case we work with the customer, and prepare the plan based on input from you on your projected revenues, profits, expenses, etc. In our experience a winning plan is geared towards financing and not marketing and advertising.

We do get a little concerned when many new budding entrepreneurs come to us with no industry experience in the business they wish to purchase or enter into. That generally speaking is viewed as a negative, it does not mean you wont are financed, it simply means it’s a negative point that has to be taken into consideration.

Our experience in franchise financing with Canadian entrepreneurs is that a careful well thought our business plan, cash flow forecast, business summary give you a 95% chance of financing success.

In Canada our firm uses a three pronged strategy to finance franchises - we utilize the CSBF program , working capital term loans, lease financing, and oh yes, the 4th piece of the puzzle - your own investment .

We had referenced previously that your personal investment must be reasonable, there is no absolute number that can be tabled here - simply that an owner equity investment of 10 to 30, perhaps more per cent investment usually carries the approval. We can’t over emphasize that each franchise financing differs with client needs re amount, structure, types of assets being financed, etc.

So, our final bottom line - Be prepared, consider seeking out and speaking to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success . Have credible info and demonstrate you know your business. Soon you will be on the way to franchising success!


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 - 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


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

When Cash Flow Problems Become A Crisis . The Power Of Proper Financing Solutions

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

Business Finance Problems ? Here’s Some Canadian Capital Financing Solutions !

Uncovering Secrets in Business Finance Success


OVERVIEW – Information on techniques to recognize business financing problems and information on financing solutions for Canadian business.



If there is one benefit of meeting and speaking to numerous companies with business finance problems its that one quickly gets a sense of what financing solutions are needed... and when!

In fact a lot of what we could call early warning signs in business challenges emerge pretty clearly - even though those same signs are often ignored or misinterpreted by the Canadian business owner and financial manager. Let's look at some of these business warning signals and how you can nip them... in the bud as they say!

Experienced business owners know that access to capital tends to come and go... its those good times, bad times and boom and bust that makes the journey somewhat... exciting.

Most owners / managers are simply happy to ensure they have access to the right financial solutions for their company. Even more important is ensuring those solutions come with terms, rates and structure that suit those present situations.

Your ability to have access to up to date information at any time is critical to both managing your business and having access to solutions. So when we meet a client that can't produce regular monthly balance sheets and income statements that has always been a warning sign of bad things to come.

Mismanagement of current assets is the real killer in working capital and cash flow problems. If there is any good news in that it’s that there are some great finance vehicles to help you both manage those current assets and address the cash flow challenges that come with any business that's both surviving, and growing.

Let's take a look at some of those current asset warning signals. Key in that category is the double whammy of growth and slowdown in accounts receivable. Not knowing your day’s sales outstanding and the ongoing relationship of sales and receivables is a business killer. Financing receivables in Canada can come in a number of different ways - they include”

Receivable financing / factoring
Comprehensive asset based credit lines that margin A/R at 90%
Bank credit facilities

All of the above solutions come with different rates and structures - some will work for your firms overall credit quality, some might not. What these solutions do provide though is an immediate increase to your ' cash on hand ‘... and that’s a good thing.

Inventory deterioration, or even inventory build up are also key warning signals to a business finance problem. It's important to know your inventory turns, and, similar to receivables monitor those inventories so they aren't continually representing more and more a percentage of your total assets.

We've been talking ' current assets' but at the same time fixed asset concentrations can be a killer also. Here is where proper use of term debt and lease financing are critical.

In summary, knowing what financing you need, and when it critical to the fix for some of those early warning signals we've talked about.

Speak to a trusted, credible and experienced Canadian business financing advisor on ' realistic ' financing vehicles for your firms operations, challenges, and growth.

7 PARK AVENUE FINANCIAL
CANADIAN BUSINESS FINANCING EXPERTISE





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 7 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.webpage66.com/business_finance_problems_financing_solutions.html

How ‘ Not ‘ To Be Great At Mismanaging Cash Flow . Fixing Working Capital With Solid Financing Solutions

Become A Good Manager Of Cash Flow Assets



Information on cash flow and working capital financing solutions for the Canadian business owner / manager who is challenged by the right way to manage business growth and finances .



Cash flow and working capital solutions in Canada. If there is one myth about success with growth and financing solutions it’s that sales and revenue growth will get you there. It won't.

As the Canadian business owner and financial manager well knows it takes more than that to get lenders, ( bank and non bank ) to get a good feeling about financing your firm . At the end of the days it’s about ' protecting ' their financing and collateral interests in your company.

Unfortunately there are ways to be totally ' not great ' at proving that you're a good cash flow business owner/manager.

In financing, more often than not it’s about ' the assets '. So while we can easily get caught up in fancy formulas are EBITDA and other calcs the reality is that it’s your assets and their turnover that determine your real working capital health. Mismanaging those assets makes you a great ' mismanger ' of cash flow and working capital.

America’s great cash flow and investment manager, WARREN BUFFETT once said ‘Does management think the tooth fairy pays for (future) capital expenditures?).

Naturally term debt lenders focus on your long term viability to generate payment for their loans. At its very simplest it’s about your cash flow from the management of your working capital accounts (A/R and inventory) that pays bills, not the fancy EBITDA formulas that reflect how much your assets have actually depreciated.

So when profits and ebitda calcs are positive we meet clients that still are having a challenge paying suppliers and meeting payroll obligations.

So what we are saying is that it’s important to understand that sales revenue and profits and the ' value ' of your company, if you're focusing on just those, have made you a great Mismanager of cash flow and working capital.

It's all about know how your firm can access cash from assets , as well as being able to plan for future needs . That's where a bit of planning comes in - putting together a sales and receipts forecast, discussing these needs with bank or non bank lenders. The biggest mistake we see in this area from clients is they are not properly analyzing cash timing of collections from accounts receivable.

If your cash flows are negative through this plan process the solutions are pretty clear, and limited:

Take on term debt

Have shareholders put in more money

Delay payments to suppliers

Really increase sales!

And finally - convert assets into cash

Converting assets into cash via receivable financing, sale leaseback, or comprehensive asset based lending lines of credit is our personal favorite, mainly because they monetize assets without really creating new debt.
Use these solutions and tips to avoid being a MISMANAGER of working capital solutions for your firm . Speak to a trusted, credible and experienced Canadian business financing advisor on how to achieve the right solutions for financing your firm for health, growth and success.

7 PARK AVENUE FINANCIAL

CANADIAN BUSINESS AND CASH FLOW FINANCE EXPERTISE



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 7 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_working_capital_finance_solutions.html