Exploit Your Business Cash Flow Problem ! Financing Your Balance Sheet

Do You Know How To Mine Your Financials For Cash?


Information on solving a business cash flow problem and implementing financing for the Canadian balance sheet



Your business cash flow problem. A lot of times it can be avoided and or fixed by examining your balance sheet and implementing solutions either traditional or alternative that address that problem and challenge.

Canadian business owners and financial managers have a tendency to always look at their income statement, not the balance sheet. We suppose it’s the entrepreneur in them that drives that focus - the idea of generating more sales and lowering or maintaining their costs. That sales number in effect becomes their ' business scorecard, one that seems easily measured and one that facilitates compensation, and egos!

But when you business is all of a sudden facing a business cash flow problem all of a sudden those assets on the balance sheet will often be your only savior , if managed and financed properly . When you understand how to manage and scorecard those balance sheet assets you're going to win at the cash flow game.

Getting converted! That's what balance sheet finance is about - turning those assets in a manner that generates cash flow and managing and arranging your liabilities so that they don't consume that cash.

In reality those assets on the left hand side of the balance have already arranged themselves in the proper order. By that we mean they are listed in the same order always that reflects their ability to be liquidated for working capital. Of course that order is cash, inventory, receivables and equipment. That's the pecking order of cash we could say.

Cash is cash on your balance sheet - not exactly a prolific statement and most businesses in the Canadian small and mid sectors don't typically show a lot of cash on the balance sheet. It's therefore time to move on to the A/R - here where your credit extension to clients becomes critical in the entire process.

Inventory and equipment make up the balance of the balance sheet, with inventory varying in nature - it might be raw materials, work your firm has in process, or goods ready to ship.

If you are fortunate enough to have the balance sheet and income statement that meets a Canadian chartered bank approval your savior in a business cash flow problem is a bank line of credit. The bank secures your assets and you borrow against them, based on agreed upon borrowing margins.

But what if your firm doesnt not have the ability for financing balance sheet assets. That’s when the overall financial health of your company becomes critical - in effect: The patient is at risk!

When sales are growing and receivable and inventory is building cash flow challenges become readily apparent. And as your company gets older some of that A/R and inventory is, respectively, uncollectable or unsellable.

The business owner has a tool, or tools to measure cash flow and operating performance. We have always called them ' relationships' - the text book calls them ' ratios '. It’s the relationship between certain balance sheet items that allow you to keep score in business. Simple tools such as days sales outstanding, inventory turnover and debt to equity are great scorecards for your business.

In Canada you have a solid handful of solutions in financing your balance sheet and preventing those cash flow problems that can bring the patient to near death mode if not managed properly.

Those solutions include bank facilities, and when they can't be attained other solutions include receivable financing, inventory finance, asset based non-bank lines of credit, tax credit monetization, and supply chain finance, aka purchase order financing.

Don't focus solely on the income statement - properly exploit and manage that balance sheet! Speak to a trusted, credible and experienced Canadian business financing advisor on cash flow problem solutions.






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_cash_flow_problem_financing_balance_sheet.html

Dealing With An Equipment Lease Company Seem Like The Occult Of Capital To You? Financial Leasing Is Common Sense. Here’s Why.

Take The Mystery Out Of Canadian Equipment Finance


Information on financial leasing in Canada . Searching for the right equipment lease company for your capital needs isn’t as tough as you think !



Not fully up to speed on how, when and why to deal with an equipment lease company in Canada. Financial leasing doesnt for capital assets your business needs doesn't have to seem like the occult to your company. Let’s establish some common sense ground rules on equipment leasing in Canada. Enter clarity!

It tends to start at the ‘leasing versus buying ' decision. Whether you are a start up, in the SME sector, or a major corporation financial leasing of an asset will often work far better than an outlay of your firm’s cash in the form of a purchase.

An oft touted but oh so true advantage of an equipment lease is simply that it allows you to maintain up to date assets, thereby allowing your company to stay both productive and competitive . In many cases it’s quite costly as it can be costly to maintain obsolete assets that are deteriorating in value.

In the case of computing or telecom power for your firm the increased power, capacity, and all those bells and whistles of a new technology makes lease financing a perfectly logical financial decision.

In Canada businesses spend billions of dollars each year on new capital asses - Again, that can be rolling stock, plant equipment, telecom and computer assets, office equipment... basically anything! And in North America 80% of all firms utilize the concept of financial leasing to acquire that asset.

How much you pay in your lease contract is determine by two things, of course it’s the rate inherent in the lease, and secondly, the type of lease you enter into and its structure.

In Canada you pretty well have two choices - the capital lease and the operating lease. When you choose an operating lease one of the key benefits is simply that your monthly payment will be smaller. At the end of the lease term the asset isn’t quite fully paid for. Why is that? Simply because the lessor, or another third party who you need to know about, right about now! has made a residual investment in your transaction . In essence they made up the difference at the time your asset was paid for by the financial leasing company.

So now what then? You're at the end of the term of the lease and you don't own the equipment! Don't despair, because if you have a properly crafted operating lease you are the ' fork in the road '. Your options now are to purchase the asset for its current fair market value, return the asset, or thirdly enter into an extension or upgrade on your transaction.

Capital leases seem to a more straightforward kettle of fish. Your payments are traditionally more than an operating lease, if only because you are paying in full, with interest, for ownership at the end of the term.

When you are at the start of your transaction, our previously referred to lease vs. buy decision what must you consider to make one of the two choices above.

Those issues for consideration are monthly payments and cash flow, down payments, the obsolescence issue on your asset, your firm’s current cash flow situation, and your credit arrangements with existing lenders.

Canadian firms who want to grow their business and manage their assets properly should consider dealing with a solid equipment lease company or advisor as a partner for the future. Speak to a trusted, credible and experienced Canadian business financing advisor for help in making the right decisions in this critical aspect of your company's business.





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_lease_company_financial_leasing_capital.html

The 3 Commandments Of The FMV Fair Market Value Operating Lease - Myth VS. Reality In Canadian Finance Leases

Why We Love Canadian FMV lease finance options!


Information on the fmv fair market value operating lease in Canada . What are the benefits and issues around this type of financing versus standard finance leases.



The FMV fair market value operating lease. It's not a bad example of, in our case, the 3 commandments of what this type of leasing finance affords Canadian business owners and finance managers. More about those 3 three later.

Leasing is hardly the ' cutting edge ' in Canadian business financing. It's been around almost... well... since the Dead Sea was sick! Business has always benefitted from this type of finance; pretty well every industry in Canada utilizes it.


We have always maintained that lease finance removes something from your business. It removes what we long ago termed as the ' obstacle to innovation ' that your company might be facing. That obstacle is known to you by another term - COST!

Businesses in Canada choose to invest in new assets, whether they are on the shop floor or in the Computer room for a variety of reasons .Quite often the access to new technology does a number of things for your firm. It can reduce your labor costs, allow you to work more efficiently and faster, and generally stay more ahead the of the next guy... i.e. the competition.

We have rarely found a naysayer when it comes to equipment financing in Canada. That's not hard to understand, because in fact over 80% of businesses in Canada utilize either one of the two types of lease finance available in Canada. The simply reality is that the lease decision is most often driven by the cost of the asset and the amount of internal or external capital you must raise to acquire those assets.

Back to our three commandments. They revolve around the focus of one of those two types of equipment lease options accessible to yourself. That is what is known as the FMV operating lease. And those commandments are in fact better termed as ' choices’. The 3 commandments are : Thou shalt return ; Thou shalt purchase ; Thou shalt upgrade/extend .Let's explain.

Entering into an FMV fair market value lease gives you the option of returning, purchasing, or extending/upgrading the lease asset. Exercising any one of those three options puts you in the driver’s seat when it comes to maximum flexibility.

Naturally there are always some challenges - a good example being if your lessor is a great distance away. Our advice then? Ensure you know the cost of returning that asset, and... who bears that cost! You don't want to lock yourself into a provision that makes poor economic sense, diluting one of the key benefits that are a part of the lease.

Another key point for you to consider is simply the expected value of the asset at the end of the lease term. In the case of computers and telecom equipment it might be nominal; in the case of larger costly ' yellow iron' type of assets it might be significant. Utilize some business experience and product intelligence at the start of your transaction to determine what in fact those values might actually turn out to be.

Also, define with your lessor how FMV is determined. An unscrupulous lessor might in fact try and take advantage of the definition of FMV. Simple advice: Watch out for the actual language in the FMV verbiage in your lease. Some lessors might even be flexible enough to define that value of that asset based on their own or industry experience. In technology financing Gartner Group think tank type data estimates useful life of tech assets. And in other asset categories the internet has played a great role in determining auction and residual values of all types of assets.

Operating leases can significantly lower your overall cost, the proverbial ' monthly payment. Even more flexibility comes when you can bundle in other costs to acquire the asset - example: installation, etc.

Trading in or returning the equipment and entering into a new lease can often be a win / win for yourself and the lessor. Your get newer technology, the lessor gets the value of the returned asset, and the Canadian leasing firm retains you as a good, paying client!

The decision to enter into an operating lease should be part of your overall decision to finance assets. In technology it’s a huge driver of equipment and software sales. Your other options is of course to either purchase the asset for cash , or enter into a capital lease to own the equipment at end of term .

Always remember though to consider responsibly the 3 commandments of the FMV operating lease - purchase, return, or upgrade /extend. Maximum benefit for minimum cost.

Speak to a trusted credible and experienced Canadian business financing advisor who can assist you in Canadian lease financing.






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/fmv_fair_market_value_operating_lease_finance.html

Confessions Of An SBL Government Loans Super Fan . The Canada Small Business Loan

Looking For A Creative Way To Finance Your Start Up Or Small Business In Canada? Here’s How!


Information on small business government loans in Canada. Why the SBL loan is a preferred financing vehicle for thousands of businesses like yours.



SBL government loans. I guess you could call us a fan, even a super fan. The word fan comes from the root word ' fanatic ‘, denoting an ' enthusiastic devotee. So why is the Canada small business loan the recipient of our full support. Let's try and preach to some of the potential unconverted.

More and more businesses in Canada, new, and established, are seeking loans backed by the government. Talk about a great co-signer! And remember that we are talking about a loan, not a grant. We're always being asked about ' grant money’... free money in essence. We're sure it's out there somewhere, we just haven't found it, and we're equally believers in the ' there is no free lunch ' concept!

The SBL loan is a great choice for business when you're in a touch economy; it’s all about choosing the right lender under the program and ensuring you are aware of some basic rules and regulations that allow you to qualify for the program. We feel quite strongly that every Canadian business owner can actually do a great job of pre-qualifying themselves in advance.

Let's recap some of those basic qualifications. They include being a Canadian citizen or being eligible to legally borrow in Canada. That's just common sense. Although you only have to only guarantee 25% of the loan personally that comes with the understanding that you have a reasonable personal credit history. In Canada the credit bureaus work on a ‘scoring ' basis, and for purposes of SBL government loans you should at least have a score of 650.

The questions of rates and structures always comes up in connection with questions from clients. Interest rates are ultra competitive given that you business is either completely new, or has under 5 Million dollars in revenue (That’s the revenue cap under the program). Rates on the SBL small business loans are in the 3% over prime range and a small government fee can usually actually be added into the financing of the loan.

Any business financing application has strong elements of one thing - and that’s common sense questions. You should therefore be prepared to address some very basics, including a resume or bio on yourself, a description of your business, a cash flow repayment plan (that’s critical). Additionally some supporting documents are required, all of which in our opinion are again. very ' common sense ' oriented. They include a copy of your tax return, your incorporation data, a premises lease, etc.

It's a great idea to also have a clear idea of the financing you are requesting. The three categories of assets that can be financed under the program are equipment, leaseholds, and real estate. Unfortunately it’s not a cash loan per se, so there are no working capital or cash flow borrowings under the program. And by the way that’s a popular misconception.

We should also add that you need to inject a minimum of permanent equity, in effect your ' down payment ' of 10% of your total borrowing.

It’s strongly recommended that you investigate the power of the Canada small business SBL loan. You just might find you will become a super fan also! Speak to a trusted, credible and experienced Canadian business financing advisor for help with this great program.






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/government_loans_sbl_canada_small_business.html

Who Else Wants A Franchise Financing Loan ? Franchisee Info On Canadian Franchising Loans

Secrets of Success In Canadian Franchising Finance


Information on securing a franchise financing loan in Canada . Franchisee Success is about franchising loans that suit your project.




A franchise financing loan. It’s one of two things you need to successfully gain your entry intro entrepreneurship - the other is of course selecting the right franchise and being approved for it!

Franchising finance in Canada requires a focused commitment by yourself as a franchisee. It is a combination of positioning yourself as ' finance worthy ' and at the same time ensuring you create the perception that you can successfully run and grow a business in the Canadian franchising environment.

Getting that franchise loan can be a challenge and a journey if you don't have some proper preparation done in advance. And don't despair, it doesnt have to be a solo journey. You can easily amass a core team of solid help - they might include your franchise lawyer, a banker or accountant, or a Canadian business financing advisor. Their advice and experience alone can take you over the top, which in your case is.. you guessed it.. Approval.

There still exists the odd would be entrepreneur out there that thinks that 100% OPM might actually work in Canadian franchisee finance. OPM is of course ' Other People Money ' and we can categorically say that 99.999999 % (have we made out point?!) of franchise loans in Canada require an equity contribution from you, the owner.

Don't even ask your next question; we know it already: ' How much do I as an owner have to put into the business to make the financing work?". For a starter that’s partly a wrong question or assumption already because you should be thinking in terms of financing the franchise so that is has a proper combination of debt and equity... and also the ability to grow via having some working capital for operations.

The majority of franchises in Canada probably don't necessarily have an accounts receivable component... but you certainly need cash flow for inventory, operations, payroll, your salary, etc!

In Canada some very popular and established financing programs can accomplish financing your new business with only a 10% equity component - however to both qualify and be successful at the same time additional equity is often needed to make certain financial rations work.

In certain cases your franchisor might be able to steer you towards some financing success - either through a referral or relationships they have established sources. The mistake here is that franchisees sometimes assume this either guarantees approval, or that the franchisor in some manner will support or guarantee the financing. A word of advice from experience - this is not the case!

Actually though the best co-signer in Canada has stated they are willing to guarantee the majority of your financing. What? We can see the expression on our clients faces as we make that statement. However in reality it's true, because the government of Canada in fact guarantees the financing they make under the Canadian BIL / CSBF program. And the majority of franchises in Canada are in fact financed in this manner. Talk about some great help!

We view getting a successful franchise financing loan as the ' hard aspect' of getting your franchising dream in place. Their is a ' soft' component to all this of course ; for example presenting yourself professionally, demonstrating your experience, and ensuring you have a crisp and complete proposal in place.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with franchisee financing in this exciting industry component of the Canadian economy.





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/franchise_financing_loan_franchising_franchisee.html

Is ABL Everything You Need And More In Canadian Business Financing ? The Asset Based Line Of Credit Facility Works Hard!

Business Financing Come Apart? Investigate ABL Today.

Information on the ABL asset based line of credit facility . This business financing mechanism is the solution to full business lines of credit via a/r, inventory and equipment margining.


Could an ABL asset based line of credit in fact be all the business financing your Canadian company needs? It's rare that one form of business finance in Canada meets everything you are looking for in a finance solution - quite often there needs to be a combination of solutions that make the final package work for yourself.

We can make the case the ABL facility in fact just might be the perfect solution for you - everything you are looking for in a revolving credit facility.

The revolving business line of credit... revolves... it’s as simple as that. The facility is an all encompassing umbrella around your key business assets - 99% of the time that includes the current and fixed asset triad - receivables, inventory, and equipment. Truth is told real estate can often be factored into the same facility.

The security that your firm provides for those assets becomes what the lender calls the ' borrowing base ' for you facility. A true asset based facility will have no form of notification to your clients, suppliers, etc. That's an important differentiator when it comes to benchmarking other types of financing.


Up to now we can forgive the majority of first time clients exploring an ABL for asking ' so what in fact is the difference between this type of finance and a Canadian chartered bank line of credit?

One key difference exists and emerges very quickly for the Canadian business owner or financial manager. It's simply that ' more ' in our case is better, and ' more ' in this case means more liquidity and cash flow. Another not so subtle difference is that the majority of firms utilizing an ABL asset based line of credit in fact qualify for financing when in fact they would never be a candidate for traditional bank financing.

That’s why a broad spectrum of Canadian business utilizes business financing of this manner. Does your company find itself in one of these industries: wholesale distribution, retail, and manufacturing? The bottom line is that pretty well every industry in Canada is serviced by ABL finance.

So why would your firm in fact consider a major all encompassing change in its working capital requirements. The unfortunate reason is that we would venture to say that the majority (but not all) of Canadian ABL users either doesn’t qualify for bank financing or they in fact qualify but simply can't get the amount of liquidity they need. They are in fact ' capped '.

With reference to our ' not all' comment above, it may come as a surprise to many but some of the largest and most successful corporations in Canada, firms with revenues in the billions have forsaken traditional bank lines and focused on an ABL facility . In the ABL environment your firm can be public, private, small, large... it's one size fits all.

Facility sizes for an entry level ABL tend to be in the 250k range, but it's important to note that there is no upper limit from there - facilities in the tens of millions of dollars can be arranged.

Your new business line of credit works because the ongoing monitoring and margining of collateral (via your reporting) maximizes liquidity. Typical advances are 90% of A/R, 30-70% on inventory, and market values of equipment and real estate.

It doesnt take long for the busines owner to realize that with those margins that in some cases there overall cash flow access can be improved anywhere from 50-100% , and we've seen that time and time again.

So is ABL a one size fits all? You can certainly make that case when you consider the facts above. Speak to a trusted credible and experienced Canadian business financing advisor who can assist you with your asset based line of credit 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_asset_based_line_credit_business_financing.html

Cash Flow Financing For Canadian Working Capital Solutions.It’s Like A Knife Fight In A Phone Booth Out There!

Avoiding the ‘ Closed For Business’ Sign!

Information on cash flow financing and working capital solutions for Canadian businesses . Viable traditional and alternative financing exists for your firm .



Cash flow financing challenges and working capital solutions for Canadian business. Keeping your firm solvent / liquid can almost seem like a crisis sometime. We were talking to two of our favorite business marketing guru's the other day and one of them made the comment ' it's like a knife fight in a phone booth ..!’. Wow, we thought, could there be any more a propos comment than that when it comes to business competition and business survival

Naturally it's important to be in a position to ensure you understand the nature of those challenges, why they occur, how to measure or track them, and finally ... put financing in place that ensures business liquidity.

There is a lot of statistics out there that say that a majority of business in the SME sector fail in their first 5 years in business. They simply didn’t have the access to capital they needed to survive. Ever since the 2008 recession/financial debacle cash flow and working capital have become ' job 1' for Canadian business owners and financial managers.

Having observed Canadian business for over 40 years now the one thing that never surprises us is the fact that when a business is enjoying strong success there often exists a general sense of complacency exists within the company. Cash flow seems kind of ok... and if it isn't we've got the bank to support us, right ?The bottom line on that one - fast growth and sales can hide a lot of problems .. for awhile .

The need for working capital for your company arises out of some basic needs - pay suppliers, finance, growth, ensure banks and other creditors are happy .

One term used in business is ' technically solvent ' - the basics on that one are that you have more assets than debts. That's the key to our message today - simply that that is just a calculation, and calculations don't pay bills.

Your ability to finance and monetize those assets is what liquidity is all about. Oh and by the way, if your balance sheet shows more liabilities than assets you're technically bankrupt!

As we have said, you need financing solutions to properly fund those assets, and that growth over time. It also helps that you are focusing on asset turnover - collecting receivables on time, turning inventory within your industry norms, and not mismatching short term cash outflows with long term obligations.

Canadian businesses tend to, on balance, not have a lot of cash on the balance sheet. That's ok if they have the credit facilities to draw on.

How can the business owner or finance manager monitor just how good, or bad the overall situation is? Some very simple calculations such as your days sales outstanding, inventory turns, and debt to equity calculations can provide tremendous insights. Monitoring these over time can provide very relevant information on an approaching crisis.

When your bank no longer seems to support you in a manner that you require we would offer up that they have also been benchmarking those same calculations on your financials. By then it is often too late to mend and repair that bank relationship.

Managing your assets, measuring that performance, and using debt in manner that suits for firm is key for cash flow financing survival.

In Canada the re are a number of working capital solutions for that ' knife fight in the phone booth ' that proverbial battle for cash flow survival.

Those tools include bank facilities for those that qualify. Other solutions include receivable financing, inventory financing, leasing assets or sale leaseback scenarios, or a true asset based line of credit that margins A/R, inventory and equipment all under on revolving facility. Two other relatively unheard of solutions are monetizing your tax credits and supply chain financing.
Why should you consider these working capital solutions?
Several reasons, including finally have a handle on accurate and timely information. Also, you prefer to manage growth, not fail from it. Managing day to day cash flow crisis is not … fun!

Speak to a trusted, credible and experienced Canadian business financing advisor on how your firm can successfully win the cash flow challenges you face everyday.





YOUR COMPANY IS LOOKING FOR CASH FLOW FINANCING !

You've arrived at the right address ! Welcome to 7 Park Avenue Financial

Financing & Cash flow are the biggest issues facing business today

ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?

CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs
EMAIL - INFO@7parkavenuefinancial.com






Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :

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