Fixing 3 ( More ) Parasites Of Business Cash Flow . Solutions For Management Financing Challenges In Canada

Power Up Business Cash With These Solutions and Tools!


Information on business cash flow . Fixing management financing challenges so your firm never runs out of cash and working capital .



Parasites of Business cash flow in Canada. We wrote recently on 2 specific parasites concerning management financing challenges for your business. They were, specifically, mismanagement of your cash flow cycle, and... Secondly, poor use of operating leverage.

That word parasite conjures up an image of a ' leech ‘...or ' sponge ‘. It seems somewhat appropriate then to perhaps address 3 more of those parasites of your business cash and working capital challenge.

We'll start with # 1, which is the concept of ' Financial Leverage '. A good way to think of that is that it’s the idea of how different types of financing affect you use affects your net profit. To finance your firm it always comes down to the fork in the crossroads - ie debt or equity. If your firm can pull off acquiring and managing as much debt as possible in a solid manner you naturally restrict outside ability to dilute your equity position.

Essentially that’s a good thing. The only problem is that your lenders want to get paid, either periodically or on a revolving basis. Ultimately its one of the most important ' big picture ' decisions you have to make in running and financing your business.

Potential parasite #2 in our analysis today is the concept of maturing debt. Along with that comes another business decision (boy, there seems to be a lot of important decisions to be addressed today!) which is the idea of taking on debt on either a short term or operating basis. You also don't want to be caught in the additional common situation of having to guess where interest rates must go

Potential parasite # 3 is the idea of current asset management. Here's where things can really go wrong, and generally speaking, fairly quickly.

Did you know that as a business owner and financial manager you have minute by minute access to one of the most powerful tools in business analysis... we think, in the world. Simply speaking, it’s the understanding and analysis of your ongoing receivables and inventory. Your ability to track sales and inventory should have bells going on in your head when things feel like they are going awry. Simply monitor over time your sales to receivables ratio, and in the case of inventory ensure your inventory isn't trending up when your sales are not!

The real ' quality ' of your profits / income is ultimately related to your management of these 3 potential parasites.

In Canada you can fix, eliminate, or control these parasites in a variety of ways. They include a term cash flow loan, receivable and inventory financing, true asset based lending facilities, or the monetization of tax credits such as the SR&ED credit.

Speak to a trusted, credible and experienced Canadian business financing advisor on how you can find and deliver on solutions to management financing challenges.



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_management_financing_challenges.html

Don’t Make These Blunders When Financing A Canadian Franchise . Franchising In Canada … Done Right!

Are You Doing The Right Things When It Comes To Franchise Financing In Canada?


Information on franchising in Canada. Financing a Canadian franchise requires not making certain costly mistakes



A blunder. We're told it's about ' acting blindly ‘... ‘without guidance'. Can you actually afford to make a blunder when it comes to financing a Canadian Franchise? Talk about a costly mistake.

Let’s examine some ways in which you can avoid making those serious mistakes when looking at franchising in Canada and the financing needed to complete that purchase. And by the way that includes buying a resale franchise, or of course a new ' turnkey ' operation.

It goes without saying that you need to do your homework in order to ensure that Murphy's Law doesnt kick in... ‘What can go wrong ... will '. We're also often asked if there is a difference in working with a Canadian franchisor as opposed to a U.S. founded organization. We certainly don't think so... and the reality is you may well be dealing with a Canadian master franchisee anyway. That's of course a Canadian or Canadian organization who has secured the U.S. rights for Canada.

Identifying the right amount of capital required for your business franchise is critical. That of course involves the initial franchise fee, as well as the amount then required to facilitate the entire purchase. That might include equipment, leaseholds, inventory, etc.

It's at this time that many potential Canadian franchisees make their first ' blunder ‘. They forget to consider longer term working capital. That’s the funds required to run their business on a daily basis, re operating costs. Remember that your business can't grow without a proper base of working capital.

And coming back to our debt and equity scenario, spend some time understanding how the right mix of personal investment and debt plays out relative to leverage, risk, depletion of personal resources, etc.

There is a danger in making a sizable non refundable deposit if in fact you are ultimately unable to complete financing for your Canadian franchise. And talk about a sinking feeling if you complete a transaction and ultimately find you are not suited to the nature of the business with respect to the personal satisfaction that comes from creating and growing your own business.

There is probably no better ' homework ' when it comes to a Canadian franchise opportunity than talking to other franchisees within the system you are considering - they might also provide valuable insights into how they financed their franchise and what obstacles you might need to overcome .

We're not so sure you can call it a blunder, but it's certainly an over expectation if you think your franchisor will provide or significantly help you with the financing of your purchase. In fact you might be surprised that it’s the federal government, via the CSBF program that in fact finances thousands of franchises in Canada. Avoiding blunders in making that program successful for yourself is a whole other subject.

Avoid those blunders we're talking about when assessing your options in franchising in Canada when it comes to selection and finance of your business.

Consider also speaking to a good franchise lawyer, accountant or Canadian business financing advisor who can assist you in eliminating costly mistakes and enhancing chances for success.








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/franchising_in_canada_financing_canadian_franchise.html

2 Signs Your Business Is Going Broke And Your Solutions For Fixing Business Cash Flow Problems

Solving Business Cash Flow Problems .. Today Or Before They Happen

Business Cash flow problems can be solved with the right info an Help . Solutions for business liquidity before you hit the wall!


Can you spot (or have you spotted already) business cash flow problems inside your firm? A better question might be - have you got some solutions to those problems! We've got some insights into both today.

Business failure, temporarily, (or otherwise!) often comes back to cash flow and working capital. In some cases it's an ongoing situation that saps management strength - at other times it's a time bomb inside your firm, seeming ready to explode at any time as you hit the proverbial cash flow shortage wall!

Your ability to perceive this challenge and correct it is of course critical.

Let's get to the meat of the matter... jumping right into the matter. Here are 2 key areas or reasons why you might be ' going broke ‘, and maybe not know why. The term ‘ going broke ‘ is a bit unsophisticated .. but anyway …here goes!
Your ongoing challenges might involve one of these, or both . We'll let you make the call.

Sign # 1- your cash flow cycle. Simply speaking it’s the relationship around the ' in’s and outs' of your business. It's the time cycle between collections and payables. We met with a CEO yesterday of a larger firm who commented that in his cash flow cycle they typically get paid by clients before suppliers are paid. They are in the food industry - and that would be typical. When that issue is reversed, i.e. suppliers needing to be paid before clients pay you face a cash flow cycle problem.

And by the way, you need the right mix of those ' current assets ' when it comes to turnover. When your a/r or inventories become ' bloated ' that's a sign of ' going broke '.

Sign # 2- Leverage. It's a common term that the business financial folks use. It's essentially the fixed costs in comparison to the profits you can earn from selling more. As you look to buying more assets, or even buying a competitor that leverage issue becomes critical. Buying more assets and taking on more fixed costs just puts more pressure on you to breakeven, let alone make a profit.

Too much leverage ultimately will lead to business failure.

Remember also that one of the biggest misconceptions in business is that profits aren't cash. Lenders in Canada generally aren't impressed by romantic, slick company names, high ambitions and future profits. They focus on cash flow and the quality of earnings - when you track income and cash flow over time they should gradually come together.

Our final advice - seek out the ' bad news ' in your cash flow problems - and understand where they are coming from.

Solutions in Canada are abundant - depending on where you are in the business maturity cycle - i.e. start up, growth, mature, etc. Those solutions include solid banking support, receivable and contract finance, inventory and P.O. finance solutions, and asset based lending and equipment finance.

Speak to a trusted, credible and experienced Canadian business financing advisor on how you can utilize these to... dare we say it... not go broke!



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_problems_solutions.html

How To Finance A Company In Canada .Mistakes You Don’t Want To Make In Cash Flow Financing

Looking For Traditional and Alternative Debt Financing Solutions In Canada

Information on how to finance a company in Canada . What cash flow financing alternatives are available to the Canadian business owner and financial manager ?




How To Finance A Company...that's the challenge for owners of new and existing businesses in Canada when it comes to equity, debt, and cash flow financing.

Let's examine some basic aspects surrounding that issue with a focus on how Canadian business owners and financial managers can both identify and then source capital. Our focus will be primarily outside of the equity arena as private and public entity is... well... a whole different kettle of fish.

Timing is of course... everything .. and it sure helps when you're financing a firm in an economy that is a bit healthier. Financing, both from a debt or cash flow point of view is of course the lifeblood of any firm. Great companies, both small and large go out of business due of course to inability to get the proper mix of financing in place.

As most business people know it’s not only a challenge to generate the interest of a financial partner - then it becomes the challenge of an approval securing those funds! And as your firm grows you will need additional cash flow financing - you don't want to be in a position of growing so much that you business fails - that has happened to many in Canada.

In Canada banks and other commercial financing firms provide the debt and cash flow financing capital you need Let's explore and recap some of those debt and cash flow financing options available

When most business owners think in terms of external financing they consider Canadian chartered banks as the key option. That is no doubt certainly the most publicly available finance - and when you have the corporate and personal assets and collateral the rates, terms and structure of the bank agreement is without a doubt appealing.

But in many cases the Canadian banking system can't support the thousands of firms who have additional or specialized needs. In the case of securing bank credit you need positive profits, assets and collateral, a track record and probably forms of what the banks call ' secondary repayment - Our clients know it as the ever concerning Personal Guarantee!

So, when you are looking s to how to finance a company what are some of those other options? They include asset based lenders; in the true sense of an ' ABL ' solution these firms provide non-bank lines of credit secured by your A/R, inventory, and fixed assets on the balance sheet. And a lot of the emphasis that banks place on approval do not come into play with an ABL lender.

Equipment financing, aka leasing your key assets is also a very effective method of financing your firm. It also relieves the larger cash outlays your business needs when it acquires assets.

Start up and small businesses have access to the Government SBL loan program, which has great rates, terms and structures when it comes to acquire assets and even financing leaseholds and real estate. And the majority of the loan is guaranteed to the bank by the Federal government.

Cash flow financing, or the ' monetizing of assets ' can be accomplished by utilizing receivable financing, inventory finance, and even selling your tax credits such as those under the SR&ED program . Why wait a half year to get your cheque from your non repayable tax credit?!

One of the best methods of cash flow financing comes your a partner you know only too well - yourself and your firm. By managing your assets such as inventory and A/R you can generate internal cash flow through your business operations.

Speak to a trusted, credible and experienced Canadian business financing advisor on those equity and debt options when it comes to how to finance a company in Canada.






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/how_to_finance_a_company_cash_flow_financing.html

Do Your Competitors Use A Customer Finance Vendor Program To Beat You At The Sales Game?

Use A Client Financing Program To Win The Sales Battle !


Information on why a customer finance vendor program is used by thousands of Canadian firms to accelerate sales and cash flow . Factors you need to consider in a client lease program.




Thinking about a customer finance vendor program? We know for sure that many Canadian business owners and financial managers recognize that their competition sometimes wins the sales battle, without even beating you at actual pricing / cost.

How do they do that? If you had the ability to get to the bottom of the matter you just might find that your lost client was offered a financing solution by your competitor for a sale you should have made!

Thousands of firms in Canada increase sales and are able to motivate their clients to purchase by the effective use of a vendor finance program.

Can we think of two reasons why you wouldn’t want to do that directly? We sure can - first of all you probably don’t have access to unlimited cash, and secondly, there are some serious revenue recognition programs when financing is offered by the seller.

So if that’s the case, what’s the solution? There's a great one, and it’s simply to set up an effective customer finance program that allows you to control the sale and program in partnership with a firm that will provide you with the capital and tools to offer such a benefit to clients.


It's important though to understand the benefits, and in some cases the limitations of the program. Simply speaking, you need to know how and why to offer a financial solution for your client. To coin a phrase we came across over 30 years ago from a trusted mentor, you want to be in a position to ' Remove the Obstacle to Innovation ' when a client considers your product and service combo.

In many cases you want to be in a position to close the sale more quickly - in effect shortening your sales cycle. The financial solution offered to your customer keeps interest in your offering high, and at the same time allows you to get one step up on a competitor who isn’t in fact able to offer the financing.

When you partner with the right firm or individual to offer such a program its essentially at no cost to yourself, other than your time commitment in promoting and putting together the program.

And by the way, you or your sales for don't have to be ' financial pros’ - your partner firm or individual is fully prepared to step in an consult with your customer on the basic elements of such an offering; they of course are things such as term of lease required, monthly payment, possible ownership at end of term, credit approval, etc.

By investing some time in such a program you can have different... let us call them ' flavors' within your offering. They might include shorter term rentals, the proverbial ' don't pay a cent event ', below market interest rates that could be subsidized by your firm in order to increase sales, or allowing customers to pick and choose their own monthly payments by providing them with a rate chart - with of course your firms name at the top . In effect your customer finance vendor program has allowed you to be a total solution vendor.

Speak to a trusted, credible and experienced Canadian business financing advisor to find out how you can beat your competitors through the use of a financial option.






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/customer_finance_vendor_program.html

Warning! Are Traditional Factoring Program Companies In Canada Right For Your AR Finance Challenge?

What Type Of A/R Financing Best Suits Your Firm ?


Information on factoring companies in Canada . What type of AR Finance program best suits your firm when it comes to receivable finance?


There's nothing like a ' Danger Ahead' sign up the road to catch a Canadian business owners attention. That's why we're pointing out a number of things today with respect to factoring companies in Canada, how they work, and why ar (accounts receivable) finance may be the best thing that ever happened to you... or the worst. Talk about a balanced perspective.

More often than not when Canadian firms look to AR Finance as an alternative it’s out of an immediate need, often almost survival. They might be finding themselves in a number of positions, including having to restructure their firm or the debt, downsizing, or addressing the worst and best problem of all - Hyper growth with strong revenue increases.

From our vantage point factoring companies in Canada are often addressing ' the short term fix' stage. The 3 most common situations that caused these challenges often are poor management (that might be you unfortunately) being undercapitalized, and finally, over leveraged.

So how does a traditional factoring program work - and what’s the good and bad in all that?

Simply speaking it’s an immediate solution that makes cash available for your firm - at a time when pretty well no one else will give you the amount you need, if they'll give you any at all

When you implement the solution you're in a positional albeit at a cost, to grow your business again, pay and hire people, and take supplier discounts and price advantages. And all of this is done without debt, and diluting the ownership in your firm.

So, lets recap how things work with an emphasis on pointing out the good and somewhat ' unfavorably viewed ' aspects of this method of Canadian business financing.

Here's how it works: You typically receive approx 90% of all invoices you submit, and you can submit pretty well as often as you like, even daily. Bottom line, as you sell you get cash. Same day.

So what could possibly be the downside of this ' traditional' factoring? The daily mechanics are not always viewed positively by the business owner; in some cases credit limits are set on your accounts, and in the majority of cases collection services are provided by the factoring firm. Generally the cost of the financing is in the 2% range, meaning that if you finance a $ 10,000.00 invoice for 30 days you have a financing charge of $ 200.00. Is that a lot? We’ll let you decide once you benchmark it against the advantages of your AR Program.

Is there a better way to enter into the right program with factoring companies in Canada? One method is the confidential invoice financing facility. Here you get all the benefits of AR Finance, but at the same time you are billing and collecting your own receivables.

How do you know when you're ready to consider such a program? A few basic ongoing calculations of your sales to receivables, collections and inventory turnover analysis should allow you to determine whether you have a financing need that might not be served by the traditional chartered bank solution.

And remember this type of financing can often be bundled together in an asset based line of credit that margins both receivables and inventory.

Speak to a trusted, credible and experienced Canadian business financing advisor - get the straight goods on those warning signs.







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/factoring_companies_in_canada_program_ar_finance.html

Considered A Canadian Business Advisor For Specialized Access To Financing Funds And Lenders In Canada?

Best Way To Explore Traditional & Alternative Canadian Business Finance ?


Information on benefits of utilizing a Canadian Business Financing advisor to access traditional and alternative lenders for financing and funds for your business .

Yes, of course it’s ultimately up to you but have you considered a Canadian business financing advisor for your specialized access to funds, financing and traditional and alternative lenders in Canada?

As we said it’s you the Canadian business owner or financial manager that has to both recognize the need for and make the call when it comes to your company financial needs. Whether your firm is in some type of financial distress, or if you have the double edged sword challenge of growing sales (how do you finance them).

The fundamental concept of business finance ( and unfortunately many don’t know or recognize this ) is that as you grow your sales you must invest more in business assets such as inventory, receivables, and even equipment under your fixed assets category on your balance sheet.

In a perfect world (guess what, it's not) you want to be able to be in a position to generate and have access to financing almost ' spontaneously ', as you grow. And we forgot to mention that that higher investment in A/R, inventory, etc also leads to higher obligations when it comes to payables from suppliers, wages, and government super priority payments such as HST, employee source deductions, etc.

Yes, actual profits (when collected, by the way!) provide additional financing for your firm, but ultimately you will need access to lenders and financing sources to compliment your business finance needs.

When you consider assistance outside of your firm, such as a business advisor it might even be at a time when serious challenges have set in. Those challenges may be diverse, such as suppliers freezing credit, or your institutional lender such as a Canadian chartered bank being in a position to tighten, suspend or freeze your credit access.

Canadian business financing advisor can assist you in getting back the confidence of suppliers and lenders at a time when you need it most. That comes by providing solutions, both traditional and alternative, to the current problem.

We all know the expression ' you can't see the forest from the trees ' and most business owners / managers would admit they are sometimes to close to the problem, or, alternatively don’t have the expertise and access to outside financing sources. In essence you have just received access to corrective financing actions, at a time when you need it most!

So how in fact does a trusted, credible and experienced Canadian business financing advisor ' fix ' things? One way is to focus on the balance sheet and increase cash flow monetization when it comes to sales to inventory and sales to A/R ratios. This can be accomplished through working capital facilities that are non bank in nature, asset based lines of credit, monetizing your tax credit, securitizing receivables, and in some cases bringing a new chartered bank on board that is comfortable with your management and long term success.

So, need that specialized access to traditional and alternative funding sources. Who you gonna call ?!





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/canadian_business_advisor_lenders_funds_financing.html