Important Decision Making On Working Capital Loan And Receivable Financing Invoice Solutions

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Cross The Threshold On Invoice Finance Solutions

Receivable finance solutions that are offered in Canada ( there are several types ) are a valuable strategy for companies looking for alternative finance solutions when traditional financing is not available . Typically when we are talking about traditional financing we are talking about Canadian chartered banks of course !

So what does the business owner and financial manager need to know when it comes to invoice financing and complementary cash flow strategies ? For a starter A/R financing is not a loan per se, your firm is of course simply monetizing one of the main current assets on your balance sheet.

Years ago we venture to say that many business owners were not aware of alternative finance strategies . That of course also means that many of the benefits derived from factoring or Confidential Receivable Finance finance solutions. At 7 Park Avenue Financial we always strive to ensure our clients understand the various options available to meet their unique individual needs.

Our Cdn banks of course do not tout the benefits of a/r financing / factoring if only for the reason they do not offer this type of financing . That has sometimes tended to create an image that firms utilizing factoring finance are financially challenged . That's very wrong - in fact business folks might be surprised to know that some of the largest companies in Canada utilize this for of cash flow financing - in some cases they call it by a fancier name - Securitization .

Alternative finance solutions almost always cost more . Important to understand though that actual factoring of invoices tends to not be priced at an interest rate , as opposed to a selling cost of margin reduction - typically 1-2% for companies who have good paying clients.

Example - On a $ 10,000 invoice you would have a cost of $200.00 to finance the invoice . The benefit? Cash is available immediately after you invoice and ship /provide your service.

So our take away here of course is that a/r finance pricing is in fact a huge stumbling block to many clients, but only when they don't understand it.

A/R Financing only works when you have sales, so firms that are in severe distress or have seriously declining sales rarely are encouraged to utilize this method of cash flow finance.

Receivable financing solutions typically only work for business to business firms , aka ' B2B'. Firms that sell on credit or cash to consumers are best suited to working capital cash flow loans that monetize future sales based on your historical sales levels . As an example companies in the retail sector can typically achieve a working capital loan of 10-20% of their annual sales.

What else is important in the invoice financing area ? Simply that choosing a partner firm to access your financing needs.

If you are looking for the straight goods on which method of invoice receivable finance works best (We favor confidential A/R finance), how pricing is determined, and how the facility works on a day to day basis.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in crafting the facility that meets your working capital financing needs.




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 area 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.
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

Modern Rules of Working Capital Loan Solutions

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How To Ge A t Working Capital Loan - Alternative Business Funding

Does a working capital loan requirement loom on your company's horizon? Business funding is all about timing - the right financing solutions for your business needs which change over time . That additional cash flow from the loan covers up the gap when those proverbial ' cash flow crunches' arise.

Working capital loans are typically debt financing - removing the need for business owners and entrepreneurs to have equity dilution in their ownership.

Confusion sometimes arise out of the different types of working capital loans in the current Canadian business financing environment Traditional loans of these type are typically provided by the banks, and they are longer term in nature - typically 2- 5 years . They place a very strong emphasis on historical cash flow of your firm, as well as typically a need to see some solid cash flow forecasts.

In recent times, ( hence our ' modern rules ' ) a number of very viable alternatives have arisen in the Canadian market . These alternative financing solutions are more often than not easier to obtain and provide capital to fix the shorter term challenges that business face.

Although they are no pure ' working capital loans ' per se many companies will lean towards a/r financing and short term cash advances ( typically 12 mo duration ).

The short term cash loans are typically repaid via a fixed amount on a weekly or monthly basis. Surprisingly in some cases your bank is debited daily for a fixed amount in certain situations - examples might be retailers or restaurants - The industry has termed these ' Merchant Cash Advances '. Probably the most important requirement to achieve this type of loan is simply your bank statements which show the inflows and outflows of cash . It allows for a formula to be created, determining the loan amount . Here's a secret . It's typically 10-20 per cent of your annual sales .

Receivables financing solutions pertain predominantly to firms who sell on a B2B basis . They invoice their sales , and the cash flow for the business comes down to the timing of those payments by your firms clients. No surprise that over the years the days sales outstanding has in fact increased for many firms - placing the reliance on borrowing and working capital loans .

Larger firms can also explore non bank business lines of credit - called ' asset based lines of credit ' These facilities will margin your a/r and inventory and even place a borrowing value on equipment and real estate, if in fact you own the business premises.

If you are interested in a working capital loan that provides business funding for your short or long term needs seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a track record of success in alternative and traditional business finance.





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 area 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.
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

Looking For The Best Secured Business Loan ?

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Asset Based Lending & Working Capital Loan Solutions Can Propel Your Company Forward

A secured business loan strategy will often reward Canadian business owners and financial mgrs. with an excellent rate - but one is best to remember other financing options . Rates , terms, repayment etc are critical but numerous other solutions can provide the business capital you need ;

At 7 Park Avenue Financial we're constantly preaching options !

Secured loans bring the word ' collateral ' to mind of course. So it's all about assets.

So what do lenders look at when are taking your firm's entire picture into focus, as well as of course the collateral . They look at your overall industry, the business financial credit history , and of course the general picture on cash flow .

While the current craze of ' online lenders ' seems extremely popular these lenders look mostly at the cash flow coming in and out of your business. They will often do this simply by reviewing bank statement history . These lenders are essentially unsecured - they have a promise to pay from the company and it's owners, but almost never any collateral.

Asset based lending solutions make it possible for SME COMMERCIAL FINANCE borrowers to look at new equipment, expansion, or simply the financing of inventory and receivables as the business grows . Most business folks are not aware that non bank asset based lines of credit will often come at a cost, but will in fact provide unlimited amounts of capital that is in lock steps with your sales and growth plans .

The plethora of working capital loans available ( short term, long term, retailer merchant advance, etc ) provide the amount of business finance optimism that business owners and their financial mgrs, are looking for .


In fact the Asset Based Finance solution can best be described as a one stop solution - given that it combines the ability to finance inventory, receivables, equipment, and , if applicable, real estate.

More firms than every look to these type of solutions even when they are challenged in financial performance and can't access traditional Canadian chartered bank financing. Companies look to these ' ABL ' ( asset based lending ) solutions as an alternative from having owners raise additional equity . Often times the business might have enough debt already and asset financing solutions monetize assets.


So how does the facility work - it is a non bank solution with an independent firm, and provides you with 90% receivable financing, and inventory borrowing that’s based on the actual value of your inventory, not some predetermined cap or limit that many banks impose. (That’s because banks generally don’t have the ability to understand your inventory values - ABL lenders do!).

Speak to a credible, experienced and trusted Canadian business financing expert with a track record of financing success. Secured small business loans and other finance options are just around the corner !




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 area 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.
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

24 Hours to Bridge Loan Funding

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Advantages to Best Bridge Loan Funding From Commercial Bridge Loan Lenders

Commercial bridge loan lenders are kind of the ' new kid on the block ' when it comes to getting a working capital loan for bridging needs. Business owners and financial managers need to know about this potential solution for working capital and cash flow challenges.

So how does this financing work and how do you eliminate some of the market confusion of this relatively new term - ie the short term working capital loan . To be in a position to evaluate this type of financing, that arose out of the merchant advance industry you need to know how the financing works and what it costs.

The right use of this financing solution allows your business to survive.. and grow.- both equally important.

Why does this financing work? Simply because it's based on your sales and future cash flows coming into your business . Sounds good so far, right?

A Few Quick Tips to Help You Find the Best Bridge Loan Funding Company

Most business have fairly predictable cash flows which commercial bridge loan lenders can easily document via your bank statements and sales history . That info is actually one of the key sources of info you must provide to get approved for the loan .

As a general rule most businesses can easily qualify for a loan that is 10-20% of their annual sales. That info is the key driver in bridging loan approval.

More and more companies are using the strategy everyday as the benefit is clear = more and immediate working capital that allows you to fund your business, buy inventory, meet payroll , etc. All of the challenges that your business faces everyday.

Here's a Quick Way to Solve Lack Of Working Capital

It's critical to work with a reputable firm when you contemplate this type of financing . Cost is also an issue to explore carefully as financing rates can be in the high single digits and higher . Remember also that this type of financing is ' unsecured' and should appeal to those companies that have good margins and are growing.

Paying back your working capital loan comes with a lot of flexibility. Payments are made on a regular basis and are typically adjusted to your cash inflows - payments are typically on a weekly or monthly basis.

So is this type of financing right for your business. It is if you can immediately benefit from cash flow and working capital usage of funds to stabilize and grow your business. It's true ' cash flow power '.

Bottom line ? Investigate bridge loan funding from commercial bridge loan lenders, understanding your costs and benefits. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a track record of success on how this type of financing can make sense for your Canadian business.





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 !





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

Are Working Capital Loans What Your Company Really Needs? What Type Of Finance Company Can Help?

Cash Flow Solutions You didn’t know about !

Information on working capital and cash flow solutions . Loans might not be your only alternative when looking for a finance company to increase your access to liquidity for growth and survival

The shock has probably worn off by now. We're referring of course to the business owner and financial managers realization that sales don’t equal cash flow and that your management of working capital might just be your key to short and long term survival.

So what type of finance company or institution can help you in the access to liquidity? The reality is that every industry needs a different level of working capital. That relationship of your assets to your turnover to your cash on hand is what is going to make the final call on what type of loans you might need for your cash flow management solution.

And we will add that you might find that ' loans' or bringing on additional debt to your balance sheet is not only the wrong solution, but you have alternative non loan solutions!

The reason you are looking at your working capital situation hinges probably on two areas, your firm is growing too quickly, or you have asset management challenges or problems with inventory and receivables. So hopefully you can now see that what working capital management is all about comes down to matching the financing you need to the assets and equity you have on your balance sheet. As your business and profits grow the owner equity component grows also

So are loans the solutions to your cash flow challenge (or crisis?!). Sometimes, but definitely not all the time. The long term solution to a cash flow management solution might in fact be a working capital term loan, in effect injecting long term capital into your business. If you can qualify for this loan, which is more often than not unsecured, it certainly is an option. Larger loans of this nature are called subordinated debt, but cash flow term loans are available for almost all firms - generally the minimum being 50k , but as we noted, going to several million dollars depending on the size of your firm .

But why would you borrow externally and bring debt onto your balance sheet when the solution is inside your business, not outside? Clients are often surprised when they find out that two other solutions, and not loans, are possible.

We're talking about asset based lines of credit, which are generally non bank in nature, meaning they are offered by private finance firms. Rates on such facilities can be competitive to bank rates, but more often than not come at a premium. However your ability to, in many cases, double your working capital liquidity can significantly increase profits and sales. Just think about it, if you can double sales, keep your overhead costs relatively fixed, the additional profits you generate can easily cover your new increased financing costs.

The other solution we will mention is the sales of receivables. This type of financing brings zero new debt on to your balance sheet, improves your cash position, and provides immediate cash flow for growth. Perceived as expensive and non traditional it is gaining traction with Canadian business every day. In effect it is the trade off you have between growth and survival and additional financing cost, of a non loans nature.

In summary, working capital loans can come from external finance company sources. Alternatively you can become your own finance company by managing and monetizing your assets in a variety of ways. Speak to a trusted, credible and experienced Canadian business advisor to determine which solutions work best 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

Office = 905 829 2653

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

Working Capital Financing

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Does My Firm need a Working Capital Loan ?


Information on working capital loan solutions in Canada. The ability to monetize and finance ongoing growth for your business operations is key to long term success. Knowing what type of business financing you need ( and how to get it ) is key to Canadina business financing success

Clients we meet with often want to need if they require additional working capital financing for their overall business growth and survival. They also, as prudent business owners, want to know what alternatives are available for financing consideration.






Lets answer question # 1 first – we can some facetiously say that the answer will be similar to your lawyers answer to most questions – you may need a working capital facility or loan, or you may not ..!


What do we mean by that? The key issues in working capital financing is understanding what it is, why it is needed, and what alternatives you have as a Canadian business owner of financial manager to access that additional capital .
Let’s get back to our key point, which is simply that we need to first understand what working capital is. We can go by the textbook definition, which is simply go to your balance sheet, take current assets, subtract current liabilities – and voila ! You have your working capital amount. Let’s bore down a bit and truly understand this number and what it really means to your firm on a day to day basis.


Your current assets are of course your inventory and receivables; your current liabilities are your payables and what you have upcoming in loan and lease payments everyday. As a business owner you know that these numbers change everyday, and that as your business grows you require a larger investment in accounts receivable, inventory, and a buffer of cash on hand for miscellaneous issues, emergencies, etc.


Now let’s examine a very key point that will help you understand the thrust of our message. Higher working capital is preferable, but if your inventories and receivables aren’t turning then higher works against you, because you have built up assets that aren’t turning, and it cost you money to build up those receivables and inventory.


So the reality is that you have three options in assessing your working capital financing needs.

They are as follows:


1. Focus on higher turnover of receivables and inventory – and stretch your payables as long as you can so as not to lose your valued supplier relationship


2. Monetize your working capital in a more efficient manner – i.e. negotiate an operating line of credit with your bank based on receivable and inventory margining – Alternatively supercharge your current assets by what is known as an asset based lending facility

3. Consider a permanent working capital term loan – this is a long term, generally 3-5 years cash loan that is repaid in specific installments. Essentially you are committing long term working capital into the business which will help alleviate growth needs.


So in summary, what is our bottom line? Its simply that you need to understand what working capital is – you need to determine if you can generate working capital internally or externally, as per our options # 2 AND # 3 above. Speak to a trusted, credible and experienced advisor in Canadian working capital solutions and you will be on the way to increased sales and profits via a proper business financing strategy.


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

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

Isn't Working Capital Bad For Your (Business) Health?

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Understanding and measuring business capital Needs. Information on business capital and why working capital might not be what you think it is! Cash flow solutions explained. Cash flow measurement tools.

We can hear our clients now! How possibly could working capital (isn't that cash flow?) be bad for my firms financial health. Let's talk about that.

The technical financial folks define this as a very basic calculation that even the non financial business owner can do - simply deduct your current liabilities from your current assets (from your balance sheet statement) and, voila! Congratulations, you have working capital. Hopefully that number is a positive number, because when it's negative you're technically insolvent and that's a subject and solution for another day!

Anyway, our number is positive - that's good, right. Not necessarily, and that's the premise of our info we share here, because if you have positive working capital your funds are tied up in receivables, inventories and pre paid items.

It is therefore very important to understand what makes up working capital, how you can monetize or cash flow it, and most importantly, but often totally overlooked, how you can measure business capital.

The essence of measuring your working capital revolves around turnover, days sales outstanding, inventory turns, and payables days outstanding.

The good news is that you can very easily calculate and track these measurements, and we can virtually guarantee they will better assist you to understand why your investment in working capital is very much a teeter totter of good news/bad news.

Do you like to travel? Money does also, and considers how long it takes for a dollar to travel through your company. From the day you place an order, purchase product, pay for product, bill a receivable, and yes, collect that receivable that total cycle can be easily 200 days, if note more. That's a lot of travel, so you hopefully can see our premise here that your investment in your working capital accounts is not necessarily a great thing.

Your business is composed primarily of inventory, receivables, and payables, (also fixed assets). We therefore strongly suggest to clients that they understand the turnover and overall return they are getting from these key asset accounts.

You would understand your situation somewhat better if it were not for those pesky issues that you can't control - business owners and financial managers recognize them well and run into them every day. They are sales growth and decline, your fixed costs that you have to pay and manage no matter what, and any financial distress you may be experiencing from past external factors - i.e. a bad year, etc,

The holy grail of business capital and working capital financing is when you have strong controls on internal asset turnover and at the same time you have access to external working capital via bank lines, asset based lending facility, loans, grants, etc.

We constantly remind clients that if they are turning over their working capital accounts more efficiently all the time its in effect a measure of the true success of your company - think of it, you're buying things, paying supplies on time, and customers are paying you on time and ordering more goods and services. A quick tool for measuring your progress in this area is simply to take your receivables days and inventory days, subtract your payables days outstanding, and if that number is improving, or going down you are winning the 'working capital is bad for your health' premise we have presented.

As a Canadian business owner you are both granting credit and requesting credit (customers and suppliers respectfully). Understanding business capital in this manner will allow you to finance better internally and borrow via banks, finance firms, asset based lenders, etc.

Speak to a trusted, credible and experienced business financing advisor about our ' health' problem and what your tools and solutions might be for better business success.

Stan Prokop - founder of 7 Park Avenue Financial –
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 13 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














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