When You Can’t Afford Mistakes In Canadian Working Capital Cash Flow Financing - Finance Options and Tools That Work

Need Some Help In Cash Flow Financing & Mgmt?


Information on working capital cash flow financing solutions and management techniques for Canadian business . Finance alternatives that work.



Managing it... and getting it. That’s two different ways of addressing work capital cash flow in the financing of your company. The importance of cash can’t be underestimated in any business, and how to finance and both manage and address the requirements you have is challenging for many Canadian business owners and financial managers.

It certainly doesn’t help that in the current 2011 somewhat volatile economy that the struggle for that cash ' lifeblood' seems as hard as ever. Many clients we meet in the small to medium size sector of Canadian business have the owner or owners of the business spending a little too much time on chasing cash. And borrowing for the liquidity has always remained a challenge.

Business owners realize all to quickly that sales growth demands a lock step in working capital requirements... the bottom line is that your a/r increases, inventory levels rise, and many of those ' variable costs ' increase also .

That’s where it’s all important for Canadian business to spend some time taking a hard look at their particular cash cycles - that’s the time gap for a dollar to flow back into their company from the time you make a sale. That must be balanced of course against your ability to meet your short term obligations.

So how do you protect and sustain that working capital cash flow? There are two types of solutions, internal and external. Internal solutions will drive a lot of more stress out of your business than you think - it’s simply about focusing on managing receivables and your overall credit and collection policy in a better fashion. Naturally you can slow cash outflow by slowing down your payables, but that’s a fine line to walk when you're talking supplier and vendor relationships that are key to your company.

So we guess that takes us over to external. Focus one typically for many business managers and owners is to seek a bank facility that meets all their needs. That is of course pretty well the least costly solution when it comes to external financing in Canada - if... ands its a big IF... your firm can meet Canadian chartered bank borrowing criteria .

When true traditional financing cant be achieved then you should consider alternative strategies that are becoming more mainstream everyday. Take a look at the right left side of your balance sheet. Would you prefer to see 500k of receivables there or 500k of cash?

We think we know your answer... and that is achieved by simply financing your receivables as you generate them. The cost of doing that , between 1-3% of a sale ( assuming your customer is a reasonable payer ) can easily be offset by now putting you in a position to take supplier 2% net 10 day type discounts . Additionally you can now purchase goods and services ' smarter and harder ' with your new found liquidity.


Other external working capital solutions, non bank in nature, include asset bases lines of credit, monetizing your tax credits due your firm, and generating cash via a sale leaseback on some assets.

In summary... it’s a two style challenge, internal and external. If you want some assistance in this regards speak to a trusted, experienced Canadian business financing advisor who can help you on both challenges. Cash flow, not an area that allows you to make mistakes!



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/working_capital_cash_flow_financing_finance.html

5 Things You Need To Know About Equipment Financing In Canada – Why The Old Rules Don’t Apply Anymore In Heavy Machinery Loans

Forget What You Thought You Knew About Lease Financing After Reading This Information on equipment financing in Canada .

Focus on these 5 issues for lease finance success in heavy machinery loans and leases.



Are the ' old ways' in business always the best ways? We're not always sure about that - let’s examine 5 key areas you need to focus on when arranging equipment financing for heavy machinery loans and leases in Canada in our current economic environment.

When we speak to clients whats the one thing they are always looking for in lease finance for the financing of heavy machinery and other types of assets from business equipment, computers, and plant assets. You guessed it. Approval! Let's drill down on 5 needs to know areas of lease financing in Canada.

In equpment financing its all about approval, our # 1 topic today. Although lease financing is on a tremendous roll in the 2011 Canadian economic environment its safe to say getting approved for the asset financing you need, within rates and terms and structures you feel you deserve is .. Well... let’s say, still a challenge! If you have solid financials and a strong history of cash flow and repayment to a lessor you naturally will have not a large problem.

But what if all of the ' credit boxes ' the lessor puts you in don’t quite match up. The good news is that lease and equpment financing in Canada for heavy machinery loans is often a ' story credit' situation. That might mean you can expect a higher rate inherent in the lease, and the good news is that heavy machinery type assets have significant asset and residual value which will help with a structured approval. That approval might include outside collateral, a shorter term, etc. Bottom line, there is a ' credit box ' for every type of asset and business credit quality in Canada.

Point # 2 today - you've go choices. It's not always about price. Focus instead on the many other parts of the equipment financing decision such as where you will get the fastest approval. The hundreds of lessors in Canada that will provide you with financing are most focused on firms with whom they can build a longer term relationship.

Point # 3 today - Do you consider yourself the best lease equipment financing specialist in Canada. Someone who knows all the players understands current rates and structures, and who knows the in’s and outs of lease finance lingo? It's rare that any Canadian business owner or financial manager can feel 100% comfortable in knowing he or she has made the best financing decision for the asset they are acquiring.

The solution - Consider help and assistance from an experienced Canadian business leasing and financing advisor. That help should be free and the cost of your financing might go down significantly when you have expert assistance in negotiating terms, rates, and types of equipment financing leases and loans that make sense for your firm.

Point # 4 today - Simply put - the devils in the details! In small and medium sized transactions in Canada there isn’t a lot you need to know about standard documentation. However in larger ticket heavy machinery loans pay particular attention to types of leases you enter into, final pricing, and documents that make sense around your obligations, and rights in your transaction.

Item # 5 - In Canada your primary two choices for lease equpment financing are full payout lease to own transactions, known as capital leases, and the more complex operating lease transaction. Operating leases can have a significantly lower cost, but you need to understand end of term issues around extending, buying, upgrading, or returning the asset you have financed. Again, here is where some expert assistance comes in very, very handily.

In Canada there is solid competition for your lease finance business when you're acquiring heavy machinery loans and leases. Take time to understand the players, maximize the benefits, and above all seek the help of an Canadian business financing advisor who is expert in Canadian lease finance to assist you to arrange the best leases for your firm.



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/equipment_financing_heavy_machinery_loans.html

AR ( a/r) Financing Is Your Logical Plan B – How Factor Finance Becomes Your Solid Canadian Non- Bank Funding Source

Are Accounts Receivable Financing Companies A Logical Solution to Canadian business financing ?


Information on ar financing in Canada and how factor finance firms are a solid and logical solution to funding your firm in a non-bank setting .



How do firms that can't qualify for bank financing (or all the bank financing they need) solve the working capital dilemma? A solid ' Plan B' solution is (A/R) ar financing of your accounts receivables. Factor or discounting finance has become a significant contributor to funding of Canadian businesses - of all sizes.

Your ability to turn current assets such as receivables (and of course inventory) makes you quite simply a better credit risk for your lenders and suppliers. Most Canadian business owners and financial managers realize very quickly that profits do not automatically generate cash flow for your business. In the long run of course they do equal cash flow... however you will notice your suppliers and other lenders rarely want to wait for the ' long run’!

Naturally if you don’t need to borrow and can generate cash by waiting and collecting your receivables your cash flow stays ' internal ' To stay in business for the long haul you of course need 3 key underpinnings to your business - profit , cash, and solvency . As we have said profits don’t equal solvency in the short term and that’s where ar financing comes into play.

So why do thousands of Canadian firms (yes thousands) turn to factor finance. Simply speaking it’s an alternative way to funding growth, turnaround and restructuring. If utilized properly you are now in a position to take and negotiate vendor discounts with your key suppliers, enhancing your relationship over the long term.

So, the logical question we get from clients is of coruse ' why not the bank?’ Although bank financing of receivables is by far a cheaper method of financing your working capital that solid pricing comes with stringent credit requirements. The bottom line is that ar financing and funding has quite often much more flexibility when it comes to your firms particular current financial situation.

Factor financing is often viewed as ' the gap ‘... it’s the bridge between your current situation and traditional funding. There are a number of different ar financing solutions in Canada - many Canadian business owners and financial managers are confused by a lot of the terminology... recourse...notification... discount rate. Reserve holdback. Etc.

Our recommended solution to clients is what we term a ' confidential factoring ' facility. This facility allows you to bill and collect all your own invoices... unlike the majority of this type of financing in Canada no contact or notification is made to your clients. You simply must be in a position to maintain proper monthly financials and reporting around your A/R.

A key benefit of factor funding in Canada is that facilities grow pretty well automatically as your firm grows - there is not constant re-applying. Many clients miss the key fact that this type of financing is not debt - it’s a monetization of your assets. Over the long term you will increase profits and sales turnover.

Speak to a trusted, credible and experienced Canadian business financing advisor on how the funding and finance of your receivables can help you grow sales and profit.




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/ar_financing_funding_factor_finance.html

The Why and How of a Canadian Customer Financing Program – Why You Need To Offer a Vendor Leasing Offering

Beat The Competition with A Cost Free Financing Program For Your Clients

Information on the benefits of a customer financing program for your clients . Why a vendor leasing offering allows you to beat your competition with the ultimate innovation – a value add finance program at no cost to you.



When isn't the competition intense in Canadian business? So if you had a tool that allowed you to grow sales, increase profits wouldn’t it make sense to at lease investigate any possibility that allowed you to do that?

What we are talking about is a formal (it can be informal also ... it's your call!) arrangement to provide a customer financing program - i.e. a leasing offering for your clients.

Sound complicated? time consuming ?Depending on the type of offering you put together we can assure you the cost to your firm starts at Zero Dollars ! And the beauty of a customer lease offering such as the type we're talking about can pretty well include any product and service your firm sells.

We remember fondly working on very formal customer financing programs in the 1980’s.... we continually spoke of using financing as a means to ' control ' our client base . Boy did the lawyers hate that term ' control ' ... so I guess in the end we opted for ' influence ' as the buzzword for the benefits of a vendor program offering leasing to our client base .

So just how did that influencing work...? Well... are you often
worried about the competitions pricing of similar products and services to yours? Consider this - when you offer customer finance you have a new powerful tool in your sales ' toolkit ' because clients tend to focus on actual monthly payments - they will spend less time talking to you or your sales team about actual price and discounts.

In fact, you can even become the General Motors of your industry ... what do we mean by that? ... simply that you could even utilize a bit of your discounting and pricing that you typically use to subsidize the finance rate - that is perceived by clients quite often as an economical purchase decision - of your products and services!

The old adage ' time is money ' is suited quite perfect to vendor program financing. Why... because by offering a financial solution to your clients you... and by the way congratulations! .. have just saved your customer the time and frustration in going out to arrange their own financing. We hate to sound like a broken record by we're champions of the term ' Obstacles to Customer Innovation '. The innovation is of course your first great products and services... the obstacle are your price. The solution... a one stop financing solution when you market your firm’s product and service offering.

Let's circle back to that word ' control ' that the lawyers seemed to hate so much when we started marketing customer financing way back in the 80's. The reality is that if your customers are financing your product you now have a certain element of control... oops! ‘Influence’ on the end of term behavior of your customer. If your client is on a 3 year typical lease as an example you are in a position to know exactly when they are up for renewal, upgrade, etc.

We can’t begin to count the many other significant benefits of a customer financing vendor program. And, as we said, by aligning yourself with the proper ' back office ' partner the cost to your firm is zero... and the benefits are increased sales, cash flow, and profits. That a triple whammy! Speak to a trusted, experienced and credible Canadian business financing advisor who can assist you to set up a vendor leasing offering that puts you ahead of your competition.




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

7 Myths Of The Canada Government Small Business Loan – Mom Never Told You This!

Putting An End To Confusion Around the federal small business loan

Information on misunderstandings and incorrect perceptions on the Canada government small business loan . Let good information on SBL loans be your key to financing success.



Misinformation. It's all over the place these days it seems. Let's clear up some ' myths' and misunderstanding around the Canada Government Small Business Loan.

The small business loan program in Canada is sometimes more commonly known as the ' SBL ' loan. It is a tremendous program to assist Canadian new and existing business owners with the financing of their business.

At a time when Canadian business financing seems more challenging than ever it seems logical that the entrepreneur and business owner wants to explore all possible financing alternatives. In our opinion the program in question is bar none of the best financial alternatives for Canadian business.

So why does so much misinformation and misconception seem to exist whenever we discuss the program with clients. We don’t know, but we do know we can help clear up the misinformation - so let’s go!


Myth # 1- ' Our business is doing ok and doesn’t need a government small business loan ' Well that might be the case but if you are looking in the future for equipment , real estate or leasehold financing ( yes you can finance leasehold improvements!) then the rates , terms and structure of the program cant be beat .

Myth # 2- ' The SBL loan is for business owners with bad credit ' - Wrong, very wrong, in fact the business owner, although he or she only guarantees 25% of the loan under the program must have reasonable personal credit . The program is best described as being financing for businesses, including start ups that can't access all the traditional credit they need.

Myth # 3 - ' The government lends the funds directly to you or your company ' - Wrong again, as the program is guaranteed by the government, and administered from a policy perspective -- however primarily banks are the ' facilitators ' of the program.

Myth # 4 -' the program is a grant - and no payment is required ' Very wrong! This is not a grant; it’s a 5-7 year term loan with regular monthly payments. Many people we speak to are inquiring about ' grants' and other federal incentives... that is NOT the SBL program.

Myth # 5 - ' Anyone can get a Canada government
Small business loan ' - You guessed it, wrong again. Although the rates, terms, structures, flexibility, and limited guarantee are the key aspects of the SBL loan there are certain criteria that must be in place to qualify. Additionally the program only covers businesses with actual or projected revenues under 5 Million dollars.

Myth # 6- ' Government small business loans are hard to get, and involve a lot of ' red tape' '. Well, some may think that, we certainly don’t think that’s the case. Approvals with the proper package in place can take only a day or two! It's all about ensuring you have a package in place that covers all requirements in a clear fashion.

Myth # 7- ' A company or individual can get a Canada government small business loan anywhere ' - Well not really, you need to ensure your institution works with the program and has experience in submitting requests that are clear and make sense and satisfy program criteria .

Well, there you have it. If you want to maximize the benefits of this great program speak to a trusted, credible and experienced Canadian business financing advisor who can help you fast track business financing success, with a program that is much tailored to your financing 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 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/canada_government_small_business_loan_sbl.html

Canadian Business Financing For A Franchise? Just A Thought – Do It Right The 1st Time With Franchising Lenders

Need Some Help With Franchise Finance In Canada?

Information on business financing for a franchise in Canada . The lenders and the offering .



We guess they call it ' crunch time '. As far as you are concerned your chances of success are excellent... now it's time to find the business financing you need for your franchise... from lenders that provide the funds you need.

Let's ensure you've got the basics covered, starting with the amount of funding you need, and solutions for each part of that capital. I guess we're saying also that in many cases you need to potentially cobble together a solution from a number of financing sources. It's somewhat rare that one franchise lending solution is going to cover all your financing needs, simply because we're talking about different classes of assets.

So what makes up a franchise structure? Typically there are several components - the franchise fee itself, potentially inventory, and equipment and leaseholds. Any business, whether its a franchise or not requires working capital for ongoing operations ; and remember also that a key component of that working capital are the royalty fees that you pay back every month to the franchisor . Typically royalty fee arrangements that we see all the time are in the 8% range, but that varies per size and type of franchise of course.

In order to determine your strategy and chances of success you have to spend some time checking one specific person out ...that’s YOU! So that should be easy to do, right? Your ability to position your personal finances and your background and experience plays a huge part in franchise approval. One of the documents you'll need is a PNW statement - a statement of personal net worth. A simpler definition - what you have; what you owe!

Your PNW form is assessed as a key part of the credit approval decision, in conjunction with your personal credit history. Remember that as successful or well known as your franchisor might be... from a lenders perspective you are still essentially a ' start up ‘. If you're buying an existing franchise, we guess you could call it a re-start!

In Canada, similar to the U.S. your personal ' score' at the credit bureau has to be over a certain threshold. The entire system is run on a scoring system with 800 being perfection at the credit bureau. So what’s a satisfactory score - we'll share with you that in Canada the majority of lenders, of all types of business and personal financing rely on a score in the 650 range. And trust us... higher is better. This whole exercise also allows you to determine what amount of capital you can put into the business, as it's not possible to get 100% financing for all your franchise financing needs - typically 10- 40% should come from yourself.

In assessing your overall financing situation take into consideration that the lender will quite often being factoring in a ' worst case' scenario , one that assumes that perhaps your sales and profit and cash flow ( out of which you repay your franchise loan ) might not be as optimistic or real as you have positioned

Our theme today is of course ' doing it right the first time ‘. That’s where your business plan or executive summary comes in play. It should be clear, understandable, at the same time positioning you and the industry in a positive light. We advise clients that a key goal here is simply realistic financial projections, and don’t forget to include repayment of franchise debt! We're often dismayed by how much none financially oriented clients spend for a business plan - a slick proper one should not cost you more than 1k in our opinion.

Doing some careful preparation in the areas we have discussed will help you ensure both final financing approval, as well as a shorter timeline than we see many clients suffer ring through. And help is only a call away via a Canadian business financing advisor who has credibility, experience, and can be trusted - ensuring you final business financing approval from your franchise.




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/business_financing_franchise_lenders.html

Heard About The Revolution? How ABL Lending Revolutionized Canadian Business Line Of Credit Financing

Canada’s Revolving Line Of Credit Evolution



Information on how ABL lending via an asset based line of credit has revolutionized business line of credit financing for Canadian businesses of all size.


We checked... a revolution is a ' complete or marked change in something'. So why do we maintain that ABL lending, i.e. asset based non bank lines of credit are, of all thing revolutionary? Here's why.

When Canadian business owners or financial managers are exploring new business lines of credit they are in one of small number of situations - those include ; financial distress, acquisition finance, growth, start up, etc.

Any one of the above situations has is a challenge - lets look at one that can be realistically position as a ' larger challenge ‘... aka THE TURNAROUND.

Is there anyone more challenging for a business to change the financial course and direction? We personally doubt it (although makings sales is sometimes as tough!). Many business owners and financial controllers associated credit risk with the pricing of their financing. That’s a reasonable assumption. So logically banks, who only offer great pricing, are... you guessed it... some risk averse to financing a turnaround. Even we agree with that... and by the way... did we mention we love Canadian banks.

But if that’s the case... how can a legitimate turnaround be financed? Good question? We've got an answer - an asset based line of credit, via ABL lending in Canada.

The reason an asset based business line of credit works when a traditional alternative doesn’t is two fold - you have business collateral and assets and the fact that a true asset based lender prices risk, quite somewhat unlike our chartered banks.

Typical situations in a turnaround are quite logical - financial losses, being put into ‘Special Loans’ or your firm is perhaps ' off covenant '. Off covenant is of course when certain ' number relationships' in your financials don’t make sense. In many cases we see clients are also in debt to CRA, those good folks at ' the government '.

The asset based lender is often the solution that both you, and your bank! are looking for. This financing attempts to fix the problem that you and the bank cannot. The good news is that often your firms reputation and expertise are of course worth saving.

Typically your ability to prove that you can still generate sales growth is a key element to an ABL lending turnaround situation. When that can be validated a finance offer typically includes high margining of receivables and inventory, with those funds often being used to restructure some debt, clear CRA arrears, all the while leaving some working capital for growth .

Often times an appraisal of any fixed assets is required... however this ultimately benefits the customer by adding in an additional borrowing base that now becomes a part of the overall credit facility.

And besides growing those sales and operating efficiently again, what are your responsibilities under this type of business line of credit financing. It all comes down to proper and timely reporting of sales, receivable collections, and inventory and fixed asset lists.

So, is a business financing turnaround achievable in Canada? It absolutely is, and one of the ways that can happen is via ABL lending, a revolutionary concept in Canadian Biz finance. Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in formulating a financing turnaround, with a business line of credit that makes sense to your current 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 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/abl_lending_business_line_of_credit_financing.html