Stop Dreading Working Capital Financing – Cash Flow Lending and Loans That Make Sense

Managing and getting working capital are two different things, and worrying about cash flow financing and what type of lending and loans are out there is of course another, and probably the issue that concerns your firm most.

Let's looks at some key issues around sourcing working capital for your Canadian business, although we are quite sure our information applies universally. How you have managed or are managing your internal financing is directly related to what solutions you have available.

Let's also be clear on what we are talking about, which is essentially your current assets and current liabilities. The accounts consist of receivables, inventory, your access to credit lines, and on the other side of the balance sheet your accounts payable. You want to have sufficient funds to satisfy your short term creditors, i.e. your suppliers, make any long term loan payments you have, and, most critically access cash for day to day working capital and growth.

We have mentioned how you manage your cash flow. Most business owners we meet do it intuitively, i.e. your business has a flow or rhythm around paying suppliers, billing your product and services, and finally creating receivables and getting paid. We also find working capital an interesting term, because in reality the accounts we mentioned, i.e. a/r and inventory are in effect tied up . They are unable to be monetized or cash flowed, and that’s why you need working capital solutions.

Most business owners don't know the technical term for monitoring their cash flow and working capital. A great tool is called the cash conversion cycle; another is called the DuPont Cycle. Each of those two tools provide you with some very rudimentary calculations you can make to monitor how fast a dollar travels through your company, and what effect on your profits and returns faster turnover has . Check those two out!

So, we've done a fairly good job of identifying our issue and problem... you were probably looking for solutions, right? The good news is there are several. The optimal solution in any business is to have your suppliers finance your firm - your cash flow increases when you don’t pay suppliers and are billing and collecting your own receivables. However, slow down payables to an extreme is not a recommended solution, certainly in terms of your supplier’s way of thinking!

The solutions to cash flow financing in Canada are as follows: asset based lending, receivable financing, purchase order financing, and working capital term loans. All these solutions are either very suited to your firm or not applicable.

Our favor rite and probably most recommended client solutions asset based lending; it’s simply a revolving line of credit on which you borrow daily against A/R and inventory. Yes, we said inventory. And these facilities are not loans per se; they are simply credit lines you access for your assets. Smaller firms should consider C I D invoice discounting, it’s our recommended solution, allowing you to bill and collect your own receivables but monetize them when you want. That’s true cash flow financing.

Whatever your challenge speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in accessing working capital and cash flow financing that most makes sense for your business growth and profits .


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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 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/working_capital_cash_flow_financing_lending_loans.html

Work With Equipment Leasing Finance Companies For Industrial Equipment and Computer Financing Needs

The decisions need to be made - namely should you lease or buy your new industrial, business equpment or computing technology. And are equipment leasing finance companies your best solution for your business financing needs.

Sooner or later all companies in Canada need to choose between leasing equipment, understand the benefits of that finance decision, and most importantly know who to turn to or partner with for their leasing acquisition financing needs.

Let’s make sure you understand why you should carefully consider the key benefits of lease financing and ensuring you have made the best equipment acquisition decision. While it's a U.S. statistic, we're pretty sure that it’s the same here in Canada - namely that sooner or later over 80% of all business chooses lease financing as a business option for acquisition needs.

That eight out of ten ratio is a powerful one, so why in fact did those firms choose this method of business financing. The answer is actually quire easy, Benefits! Let's examine he key benefits you should focus on, and, as importantly, ensure you understand the costs, any risk, and the processes involved in making a solid leasing decision. It's all about doing your homework, being prepared, and working with the right parties.

So let’s first recap those benefits. The bottom line is flexibility, and with this type of financing what else could be more suitable. Simply because whether you are a start up, or Canada's largest corporation, whether you are leasing a photocopier, shop floor equipment, or computing technology... you guessed it, equipment leasing finance companies do that... for your firm !

Worried about your equipment or assets becoming obsolete - (think computers!). Don’t worry; simply match your lease to the term of the expected useful life of your computers, telecom equipment, software, etc. Worried about being burdened with asset disposition at the end of the lease term. Don't be. Simply enter into an operating lease that allows you full control in returning, keeping, or even upgrading that asset.

It of course always comes back to cash flow, and we can assure you that it’s easier to make a 3k monthly payment than to write a cheque out of your operating line of credit for 100k. Whether it's computers, industrial business equipment, or your corporate jet it’s always about cash flow and working capital conservation in business. Having just come through the 2008-2009 recession cash flow and its conservation still remains king.

There are many slick tools to determine whether you should lease or buy assets - they are available everywhere. We always encourage clients to make an informed lease versus buy decision for their asset financing needs. And, getting back to those benefits, numerous accounting and tax implications also play favorably to the leasing decision.

Are there any disadvantages to lease financing? We don’t really call them disadvantages, but there is no perfect holy grail for business financing, and when you lease you should understand of course the agreement is non cancelable, might have miscellaneous admin fees attached to the transaction, and on occasion a down payment or first and last months payment might be required for credit reasons .

So, whats next then? If you want to meet your equipment leasing finance needs seek companies that are your best partner for asset size, your firm’s credit quality, and suited to your geographical needs. Don't have a lot of time to investigate the process? Simply speak to a trusted, credible and experience Canadian business financing advisor who will work through the process with you, successfully.




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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 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/equipment_leasing_finance_companies_computer.html

How To Obtain The Best Receivable Financing In Canada and Why Factoring Receivables Works Best When Its CID!

Your mission, should you choose to accept it? It's finding a financing receivable strategy that works, is cost efficient, and allows you to mind your own business when it comes to this popular method of Canadian business financing!

Factoring receivables gains daily momentum in Canada - If you feel either confused, mis informed, or just generally out of sync with how this type of financing works and what it costs lets get you up to speed.

It's actually not as complicated as you thing - on a daily, week, or monthly basis, (it’s your call) you provide your invoices and proof of delivery and shipment . And then here's the good news, you receive cash, the same day, for those funds. Actually, to clarify, the amount of the advance on your invoices is actually 90% - you receive the rest of the funds, i.e. the ten per cent, when your customer pays - less the financing charge.

And we know from experience that clients want to always know and talk about that financing charge, so let’s clarify that point right away. First of all did you know that some of the largest corporations in Canada utilize this method of financing receivable portfolios? Their cost is often either the same as traditional bank financing, and in some cases less.

However the majority of business in Canada that seek out factoring receivables actually pay anywhere from 1 - 2.5% per month for the cost of factoring. But let’s be clear here, receiving those funds when you invoice allows you to maintain a totally positive cash flow, and at the same time continue to grow sales and profits. We also point out to clients that they are now in the enviable position of taking 2% discounts on all their qualified purchases with their suppliers, and, if they are really smart, can negotiate better terms and pricing from their suppliers on product.

We referenced the term C I D when it came to our favorite, and recommended financing receivable solution. So what exactly is C I D? It's a unique form of factoring, that by the way, costs the same as other types of factoring receivables financing. However, unlike traditional A/R financing it allows you to bill and collect your own receivables on a confidential basis. Your suppliers, clients, etc are simply not aware of how you are financing your company, and we think that’s important. C I D is the acronym we provide for Confidential Invoice Discounting. So again, to clarify, you are financing your business on a confidential basis - your competitors who use this type of financing are not. That’s your key advantage, and we think it’s significant.

Selecting a receivables financing partner can be a challenge - simply because there’s hundreds of small and larger firms out there with difference criteria. You have to be able to distinguish between recourse and non recourse factoring, and if the firm even offers (or has heard about!) C I D financing. Other factors (pardon the pun) to consider are the size of your portfolio, misc fees that add up quite frankly, and must be understood or negotiated. And pricing is reflected to a certain degree by the size of your monthly receivable financing. A/R portfolios of 250k per month generally receive better pricing and structures.

Interested? Confused? Hopefully not the latter, but if you are seek out a trusted, credible and experienced Canadian business financing advisor who will steer you through the financing receivable maze - we're sure you'll come out the other side well informed and with a factor facility that works best.
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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 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/factoring_receivables_financing_receivable.html

Striking Gold With Film Tax Credits – Finance Ontario and BC Film Production Incentives

Prospecting for gold is probably tough, but we're quite sure prospecting for financing for your film, TV or digital animation projects is tougher. So why not get that ' striking gold ' feeling via Ontario and BC film production incentives and film tax credits.

The film industry in Hollywood North ( aka Canada ) is alive and very well thank you , and the generosity and relative straightforwardness of Canadas film tax credit system has sure helped in that regard .

There continues to be almost not a day when we don’t hear or read about various film tax credit debacles in the U.S. - ( The last title we say the other day read as follows " Officials prepare for a battle over whether to scarp 40M a year tax breaks for movie and tv ...' ) . That story originated out of Connecticut , and we're not pointing fingers at any particular state, its just that Canadian film tax credits for Ontario and BC Film production incentives seems to be a lot more easier and straightforward .. I guess we're biased a bit!

Canadian film tax credits and the financing of those tax credits have been in place for many years now. Each province has a film tax credit (there are 10 provinces in Canada) and the credit is in conjunction with CRA, which is the Canadian equivalent of the IRS in the United States.

As we have noted before Canada maintains that the money, jobs, and resultant tax revenue from the industry more than offset funds granted via tax credit certificates for the three parts of the industry - film, TV, and digital animation. (Actually there are some other credits for music and publishing).

Producers and project owners in both U.S. and Canada that choose to domicile there projects in Canada ( i.e. film them here, post produce them here, etc ) are in the enviable position of receiving funding for their projects from anywhere, in general .. from 30- 45% of their total budget . Yes, its still up to you as producer to arrange the other 55-70% but don’t say you haven’t a good start when you receive non repayable funds in the amounts that we have highlighted.

So you've 'struck gold ' with your tax credit certification? Is that all there is? Definitely not, as most producers and project owners choose to finance those credits for valuable cash flow and working capital.

By working with a trusted, credible and experienced Canadian business financing advisor you can get solid assistance in qualifying your claim, determining eligibility, getting your credits certified, and , finally, last but not lease , financing these valuable credits for cash flow and working capital for your current or next project . If that isn’t ' striking gold... we don't know what is!

--

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 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/finance_film_tax_credits_ontario_bc_production.html

Have Ontario CRA Sred R & D Tax Credits ? Finance Yours Today For Advantages Of Cash Flow !

Maximize or minimize ? What's best in Canadian business. In the case of taxes it’s minimize! In the case of cra sred R&D tax credits it’s maximize for advantages of cash flow!

Whether you are in Ontario or quite frankly in any of the rest of Canada how could you not afford to file a sr&Ed claim for the R & D your firm does on its innovative products and services? We are of course talking about the Canadian Scientific Research and Experimental Development tax credit program which provides refundable funds for a very significant portion of the funds your Canadian business spends every year in this key area the economy - i.e. the competitive edge area!

And, getting back to our maximize or minimize issue, recent figure suggest that almost 4 Billion (yes that’s billion with a b!) of cheques are going out every year to Canadian businesses such as yours. As we have said in the past, we are pretty sure you want those cheques to be cashed by your firm and not your competitor, since the funds don’t have to be paid back.

So, lets assume you are aware of the program, (many aren't) and lets further assume you are using the program either on a first time basis, or, if you're very lucky, you're a repeat offender! You therefore should be aware that your claims can be financed so you can take advantage of cash flow and working capital that would be beneficial to your firm today.

Many sred consultants (they are the specialized firms that prepare these claims) tell us that a proper preparation of your claim can exceed your initial estimates of what you can received by sometimes 11-200%. So you ability to create CRA SRED R & D tax credits that are of solid quality , file the claim, and then finance it for working capital simply accelerates all the benefits of the program .

Do you have to finance your claim? ask clients often? Naturally the answer is definitely not, but we certainly think you should consider it. Think of your claim as simply an account receivable, which of course it is. It's just that it's a very high quality receivable because it is a non repayable cheque that’s due your firm from the federal and provincial government. So in considering financing the claim you can of course simply wait for your cheque , or you can monetize, or 'factor' , or ' discount ' the claim . (All those terms are interchangeable and mean the same thing.)

Are CRA SRED R&D tax credits difficult to finance if you want the advantages of cash flow. Well, consider we a bit biased but we don’t think so, it’s a simple business financing application, with the additional back up being your sred claim and the required ability for your firm to be able to offer the tax credit up as collateral.

Speak to an experienced, trusted, and credible Canadian business financing advisor today to get more info on either the program itself of the financing of those R &D tax credits.

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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 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/sred_cra_ontario_r_d_tax_credits.html

Can A Franchise Finance Business Loan Be Creative ? Here’s How Canadian Franchise Finance Works!

Is it actually possible to get ' creative ' when considering a franchise finance business loan for you new Canadian role as an entrepreneur in franchise financing? There are some tried and trusted rules we use in the franchise lending area, but a little creativity has never hurt anyone we believe!

If you haven’t considered how to finance your new business in the franchise industry then we feel it’s probably a little too late in some ways, as your ability to finance your business properly we think has a lot to do with the ultimate growth and success of your business. There are very focused lending sources for the franchise area of financing in Canada - the trick of course is to know what they are and more importantly how you can navigate the ' maze ' successfully.

The reality is that if you have some industry experience in your new business and a proper finance plan you have a much better chance of financing your business properly.

So, who can you turn to in terms of creativity and resources for franchise financing? Clients are amazed when we tell them the most creative partner in franchise financing in Canada is none other than the Canadian government !How could that possibly be? Simply because a program guaranteed by the government and administered by the banks could not be any more creative than this.

The program is the ' BIL ' loan program, and it provides you with financing up to 350k for your new business. Are the terms onerous? Hardly! The essence of the program is a 5-7 year term loan, with great rates, limited personal guarantees, and some other elements of flexibility. If that isn’t creative then we don’t know what is!

Naturally all the creativity in a business loan of that type for your franchise finance scenario should not be reliant on just one lender - the other lender is someone you know very well. Yourself. That's simply because when you look at the total financing of a franchise in Canada the two components are simply debt (the funds you have borrowed) and the equity, or money you have put in yourself. These equity funds, i.e. your commitment to the business, typical come from savings, the proverbial ' friends and family ' support, and investments or collateral that you have available.

Getting back to our key subject of creativity, our above noted BIL loan program only covers certain aspects of a franchise finance scenario. You can augment that loan with flexible equipment financing that has low down payments and extended amortization terms, as well as, in some cases, a working capital term loan.

We never forget to remind clients that the franchise financing plan is a two stage process, acquiring the business, and making sure they have some capital and funding to operate and grow their new business.

In summary, you can be creative when you are looking for info on how Canadian franchise finance works. You need knowledge on what funding sources are available that are specialized to the franchise industry, and assistance in executing a proper financial plan. Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in maximizing that creativity!

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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 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/franchise_finance_business_loan_financing.html

Why You Should Utilize Asset Based Lenders for a Revolver line of credit facility

Some Canadian business owners and financial managers aren't familiar with the term ' revolver line of credit ‘. So for clarity purposes it’s simply terminology for a business operating line of credit. It revolves, or goes up and down everyday, as your firm collects receivables, pays bills, buys inventory, makes loan payments, etc.

Naturally clients can be forgiven for asking '' What is the difference then for asking why asset based lenders offer a unique , and we think better revolving line of credit than perhaps their Canadian chartered bank can offer .

We're going to cover off the basics of a revolver line of credit via an asset based lending solution with a focus on ' why ' you should this type of business line of credit.

The reality is that asset based lenders are playing a more important role everyday in Canadian business - that’s simply because most business owners and financial managers agree that it is more challenging than every to meet their day to day financing needs with bank facilities . That is because banks place more focus on external collateral, operating results that meet their guidelines, and a lack of desire to finance items such as inventories, purchase orders, etc.

The key main reason why you should consider an asset based line of credit is simply that the firms that provide this type of financing specialize in exactly what you need - maximum financing for receivables, inventory, and equipment .

Very typical margining of these current assets in an asset based line of credit with a non bank is 90% of receivables, 50%or more for inventory, and full appraised value of equipment and other fixed assets. We have seen real examples where a revolver line of credit has tripled a firms borrowing power, even at better rates on occasion.

So clients start seeing very quickly why they should be utilizing this type of financing, they just don’t know with ' who ‘. There’s where it does get a little tricky, as firms offering this facility are less known than the banks, and are often independent finance firms of subsidiaries of U.S. banks that operate here in Canada. There is when its best to seek the services of a trusted, credible and experienced business financing advisor to match your needs with the right asset based financing solution.

Let’s summarize some key points that focus on the real issue we are talking about - why you should consider asset based lenders for your day to day operating needs.

First of all, size doesn’t matter in the asset based finance world. Facilities from 100k to many millions of dollars are available. We'll quickly add that some of Canada's largest corporations are financed by this method, we just don’t hear about it!

Other reasons why you should consider this type of Canadian business financing are as follows: you are in a turnaround situation, you can’t get equipment and inventory financing that you need to generate sales and profit. Other reasons include your growth - in some bank environments you are punished for growing too quickly, but asset based lenders raise your facility as you grow, with their only concern being the assets you have to cover the facility.

Make sense? We think it does, so speak to an expert business financing advisor on what the merits of a revolver line of credit are, and find out why asset based lenders may be your business finance savior in the current business financing environment.
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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 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/revolver_line_of_credit_asset_based_lenders.html