WELCOME !

Thanks for dropping in for some hopefully great business info and on occasion some hopefully not too sarcastic comments on the state of Business Financing in Canada and what we are doing about it !

In 2004 I founded 7 PARK AVENUE FINANCIAL. At that time I had spent all my working life, at that time - Over 30 years in Commercial credit and lending and Canadian business financing. I believe the commercial lending landscape has drastically changed in Canada. I believe a void exists for business owners and finance managers for companies, large and small who want service, creativity, and alternatives.

Every day we strive to consistently deliver business financing that you feel meets the needs of your business. If you believe as we do that financing solutions and alternatives exist for your firm we want to talk to you. Our purpose is simple: we want to deliver the best business finance solutions for your company.



Showing posts with label working capital finance. Show all posts
Showing posts with label working capital finance. Show all posts

Wednesday, December 2, 2020

Business Cash Flow - Are You ‘ Pro’ ? The Case For Working Capital Finance Solutions And Management






 

 

 

 

 

Is Cash Flow The Oldest Word In The World ...Perhaps?!

 


Business Cash Flow in Canada.  It always seems to us like a bit of an understatement when you talk to clients about working capital finance solutions and their importance. Business owners and finance managers know the challenge of raising capital or monetizing existing assets... or both!

 

WHAT FINANCE NEEDS DOES YOUR FIRM NEED

 

Naturally, financing needs are diverse. It could be operational cash flow, replacing existing assets, etc. Any change in working capital cash flow impacts your firm either positively or negatively. Even managing your accounts payable effectively in daily operating activities provides movement in your cash flows. Addressing the inflows and outflows of capital is the key to long term business success as you manage liabilities due within 12 months.

 

A FINANCING DROUGHT IN THE SME ECONOMY?

 

Is there an SME drought of some type in Canadian business financing? The commercials and ads we see every day seem to say not, but in talking to small business owners and managers finance often seems just a step away from crisis mode as they search for an increase in working capital.

 

What is business cash flow? At the end of the day it's simply the flow of funds in and out of your business - most often measured by a 12-month timeframe. That cash flow comes from sales revenues/accounts receivable collections, inventory turns, and the management of your payables.

 

 

Cash flow represents all the money that is flowing into and out from your business during a specified time frame. Cash flow can consist of accounts receivable, accounts payable, and inventory. ... Working capital refers to all the current assets as well as current liabilities in your small business.

 

2 KEY ISSUES IN BUSINESS FINANCE

 

When it comes to business cash flows and working capital resources it comes down to two basic issues -

 

Managing your assets - asset turnover and the flow of money in your company

 

Accessing traditional or alternative finance to meet your needs - Understanding the cash flow statement

 

Top experts tell us that surveys of business indicate that well over 50% of all businesses in the small to the mid-market sector in Canada, in all industries are either worried or concerned about their ability to finance operations. Therefore how to calculate the change in working capital must be job 1 for the business owner and financial manager. Changes in working capital are basically the changes that arise out of changes in current assets and current liabilities on your balance sheet. That the ' textbook ' answer for the working capital formula.

 

While simple mismanagement of your business assets is one reason for that the other is simply your inability to collect promptly from late-paying clients. In some cases, your clients actually might be temporarily unable to pay!  Our traditional lending institutions such as Canadian chartered banks are risk-averse - that has made them very strong in global profiles, but has left Canadian business shall we say ' unfulfilled '!

 

SOURCES OF CANADIAN BUSINESS FINANCING

 

Rather than wait for the government to step in resourceful business owners/managers have simply gone out and accessed alternative financing to meet their cash flow fluctuation needs.

Those sources of Canadian Business Finance Solutions  bringing capital and cash flow  include:

 

A/R Financing


Inventory Loans


Access to Canadian bank credit


Non bank asset based lines of credit


SR&ED Tax credit financing


Equipment / fixed asset financing


Cash flow loans


Royalty finance solutions

 

Purchase Order Financing

 

Short Term Working Capital Loans/ Merchant Advance

 

Securitization

 

WHAT IS THE MOST POPULAR NON BANK  METHOD OF WORKING CAPITAL FINANCE

 

Invoice (A/R Finance) is probably the most popular method of addressing the working capital challenge. Accounts receivable and inventory are the 2 key current assets on the balance sheet that represent potential business liquidity.

 

THE COST OF FINANCING

 

While owners and managers are justifiably concerned about the cost of financing they sometimes forget that how you manage your assets can significantly decrease your overall financing cost. And while some ' alternative ' finance solutions are viewed as too expensive there are numerous ways to offset the costs of any financing you undertake.

 

Don't forget also there’s a huge difference between taking on new long-term debt versus monetizing assets for cash flow. Let's utilize a quick example:

 

 

A WORKING CAPITAL  EXAMPLE  OF FINANCE SUCCESS 

 

Consider a firm that borrows 100,000.00 as a term loan over 5 years, putting new debt on the balance sheet. Interest on that debt might easily be 15,000.00 over a 5-year term, even at excellent rates.   Consider the business owner who monetizes 100k of A/R for a 30 day period. Cost is approx 2000$, and new sales create profits over and over again as sales are generated and assets turned via operating capital for the sale of your products and services.

Your focus should be on the overall working capital cycle of your company - simply the time it takes to turn sales into cash. The longer that cycle is represents the need for more investment into working capital that is in effect ' tied up ' and might signal the need for external financing.

 

 

CONCLUSION

 

Our bottom line - don't underestimate the need for business cash flow and the power your firm has when it’s utilized properly. While ‘ cash flow ‘ may not be the oldest word or term in the world we can't underestimate its importance to business survival.

 

How much money do you need and will your firm always have enough cash? Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your business cash needs and working capital finance solutions.


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





7 Park Avenue Financial/Copyright/2020

Wednesday, May 8, 2013

Business Cash Flow . Are You ‘ Pro’ ? The Case For Working Capital Finance Solutions And Management



The Oldest Words In The World - Not Cash Flow .. But Perhaps ?

OVERVIEW – .Information on business cash flow and working capital finance management . It’s all about the new tools for cash flow financing and understanding cost and management of current assets




Business Cash Flow in Canada . It always seems to us like a bit of an understatement when you talk to clients about working capital finance solutions and their importance. Business owners and finance managers know the challenge of raising capital or monetizing existing assets... or both!

Naturally financing needs are diverse. It could be operational cash flow, replacing existing assets, etc.

Is there a SME drought of some type in Canadian business financing? The commercials , stories, and ads we see everyday seem to say not, but in talking to owners and managers finance often seems just a step away from crisis mode.

When it comes to cash flow and working capital resources it comes down to two basic issues - managing your assets and accessing traditional or alternative finance to meet your needs. Top experts tell us that surveys of business indicate that well over 50% of all businesses in the small to mid market sector in Canada, in all industries are either worried or concerned about their ability to finance operations.

While simple mismanagement of your business assets is one reason for that the other is simply your inability to collect promptly from late paying clients. In some cases your clients actually might be temporarily unable to pay! Our traditional lending institutions such as Canadian chartered banks are risk averse - that has made them very strong in global profiles, but has left Canadian business shall we say ' unfulfilled '!

Rather than wait for the government to step in resourceful business owners/mangers have simply gone out and accessed alternative financing to meet their cash flow fluctuation needs. Thos sources include:

A/R Finance
Asset Based Non Bank Lines Of Credit
PO / Supply Chain finance
Sale Leaseback strategies
Securitization or monetizing contracts
Inventory Finance


Invoice (A/R Finance) is probably the most popular method of addressing the working capital challenge.

While owners and managers are justifiably concerned about the cost of financing they sometimes forget that how you manage your assets can significantly decrease your overall financing cost. And while some ' alternative ' finance solutions are viewed as too expensive there are numerous ways to offset costs of any financing you undertake.

Don't forget also there’s a huge difference between taking on new long term debt versus monetizing assets for cash flow. Let's utilize a quick example:

Consider a firm who borrows 100,000.00 as a term loan over 5 years, putting new debt on the balance sheet. Interest on that debt might easily be 15,000.00 over a 5 year term, even at excellent rates. Consider the business owner who monetizes 100k of A/R for a 30 day period. Cost is approx 2000$, and new sales creates profits over and over again as sales are generated and assets turned.

Don't underestimate the need for business cash flow and the power your firm has when it’s utilized properly. While ‘ cash flow ‘ may not be the oldest word or term in the world we cant underestimate its importance to business survival .

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your business cash needs.




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 :


7 PARK AVENUE FINANCIAL = BUSINESS CASH FLOW AND WORKING CAPITAL FINANCE




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