Surprised ? Here’s The # 1 Enemy of Business Cash Flow and Working Capital . You Shouldn’t Be!

Here’s A Clear Picture Of Your Cash Flow Needs And Solutions

Information on business cash flow and working capital financing in Canada . A strategic overview of what hurts and helps Canadian business owners when it comes to financing their company .


A business cash flow killer. Enemy # 1 when it comes to working capital for Canadian business?

Are you ready? Hopefully it won't be a surprise, but the number one killer of cash flow and working capital for Canadian business owners and financial managers is: Sales!

While most ' experts' say that its poor management that creates business failure we are pretty sure we can make a case that it’s the poorly timed financing of cash flow that comes a very close second! That goes, by the way, for a start up as well as established medium to large corporations.

The reality is that you need to understand your sales cycle and how it impacts cash flow; at the same time you need some sort of ' road map ' to business financing success. So whether its equity or debt financing you have to realistically and creatively address your cash and working capital needs.

Let's examine some ' real world " (that’s the world most of us toil in everyday) solutions to measuring and generating capital for your business.

So let’s get back to that enemy, which you probably always thought of as your friend: Sales revenue! In reality that sales revenue is a huge consumer of cash, because there's a whole series of steps that go ahead of generating that sale and collecting your receivables.

So what is that whole sales or cash flow cycle? Its the time and dollars that are spent on marketing, ordering products and services, making and delivering those products and services, invoicing them, WAITING... yes WAITING .. And then, voila! payment from your client . In most companies in Canada that can take anywhere from 30 - 100 days, and we can assure you most firms fall closer to 100 days than 30.

As you are on that journey to deliver your product and service you are spending money, and waiting, all along the way.

So how does the Canadian business owner / manager help stifle the cash flow enemy? One immediate quick solution you won’t like is to reduce sales revenue and focus totally on collections. You'll be business cash flow perfect but stomped out of business by your competitors, who are growing sales and employing solid cash flow financing methods.

The better solution - develop good financing and controls throughout your sales cycle , understand your cash flow metrics, and get creative with alternative methods of sales financing .

You can actually generate cash throughout your sales cycle by employing solid Canadian business financing techniques. They include bank lines of credit, receivable finance, offering customer financing solutions via a qualified third party, employing supply chain finance strategies, and turning your company into an immediate cash flow machine with asset based business lines of credit.

So, sales and revenue growth. The enemy? Certainly not the case if you have some solid controls and solutions in place. Speak to a trusted, credible and experienced Canadian business financing advisor on working capital solutions for your business.

7 PARK AVENUE FINANCIAL
CANADIAN BUSINESS CASH FLOW FINANCING EXPERTISE




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_working_capital.html

Make Equipment Leasing Your Asset Financing Choice. Liquidity 101 With Lease Finance In Canada

Canadian Equipment Leasing Solutions . Right Time? Right Now!

Information on equipment leasing in Canada . Reasons why lease finance is the business owners asset financing strategy of choice.


Equipment leasing in Canada. As a business owner or manager you prefer to maintain or enhance liquidity, as opposed to cash outflow. Inflow is good, and that’s why asset financing via lease finance continues to be Canadian business's method of choice for financing assets.

More sophisticated and larger companies spend a lot of time on areas such as ' cost of capital ' and equity versus debt scenarios. The SME business owner in Canada, probably, on the other hand just wants to know that he or she is conserving cash when it comes to fixed asset financing. It's as basic as that.

While some analysis by either segment of business in Canada (smaller firms / larger companies) may show that a lease might have a higher financing rate as opposed to a loan or cash acquisition the focus preference of most is pretty simple - extra cash flow!

You certainly don't have to be a sophisticated financial analyst used by the larger corporations to grasp the fact that the extra cash flow and working capital you save by making a lease payment over time can be reinvested in your company to operate and grow your business. So, yes, if your bank line is at 6% and your lease rate is at 8%, as an example because your company can use funds not spent to maintain cash liquidity.

A typical lease payment in Canada has one or two payments in advance, sometimes called a ' down payment ‘, or ' security deposit ‘. A loan scenario might easily involve a 10 - 20% deposit, while at the same time having potential negative tax implications for your firm.

And while yes of course it’s all about ' cash ' being ' king’ other aspects such as a longer term and residual lease structures also make asset financing via lease finance preferable.

Private, non public companies need to always maintain a strong focus on their overall capital structure, but they don’t really have the same focus as public companies who are generally obsessed with debt to equity ratios because of their public persona and shareholder concerns.

We must also never forget that some companies simply can’t obtain proper asset financing because of their overall credit situation. That's where lease structuring comes in, and more often than not a transaction can be structured with some creative solution that ultimately leads to financing and credit approval.

It's no secret that over 80% of North American firms (we guess that includes Canada!) utilize equipment leasing for their business needs. Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your lease structure needs.





7 PARK AVENUE FINANCIAL

CANADIAN LEASE FINANCING EXPERTISE




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_leasing_asset_financing_lease_finance.html

Why Is AR Finance So Inexpensive In Canada . Factor Receivable Funding For Your Business - Not What You Thought!

The Devil Is In The Details Apparently When It Comes To Financing Your A/R In Canada


Information on AR Finance in Canada . How To Truly Understand Cost Of Factor Receivable Funding For Your Business.


Are you nuts? AR Finance... inexpensive? That was the reaction of one client when it came to discussing factor receivable funding in Canada for business.

The reality is that receivable financing in Canada is probably one of the most misunderstood areas of business financing when it comes to benefits, mechanics, and, as we said, cost.

We'll come to the issue of ' cost ' in a bit - let’s make sure we have got the benefits and mechanics under our belts first! AR Finance is Canada is, simply speaking, flexibility for short term working capital financing. It's mechanics, though relatively simple, provides Canadian business owners and financial managers with a large measure of cash flow and working capital when it comes to new orders and contracts, increased need for working capital as inventories and receivables grow, and , simply speaking, keeping your daily operations running smoothly.


It's of course your A/R that provides the backbone behind the capital that you need, allowing you the leisure of actually, as they say, working on your business, not in your business... and boy is that a difference as we all know.

One key benefit either overlooked or misunderstood is simply the fact that your factor receivable funding facility has the ability to grow as your business revenues grow.

And don’t forget , the key concept of AR finance in Canada is that your company isn’t taking on debt when you finance your receivables ; you're simply monetizing one the most key assets of any business, your receivables. A good analogy is that you are basically turning a Business To Business model into a cash business. As you sell, and invoice you receive cash the same day. Your facility of course fluctuates exactly similar to a business credit line, so factor receivable funding for your business goes up and down every day, just like a bank line of credit. You are of course paying for only what you use.

Many miscellaneous benefits accrue to your firm when you consider this method of receivable financing. They include:

- Ability to only draw down the amount of financing you need - It's a pay per use method for working capital

- Same day financing of your sales revenue

- Typical advances for A/R funding are 90% of your receivables

- A good facility will have per diem pricing

- Little or no emphasis on personal guarantees

- All North American receivables can be financed, and foreign A/R is financed via credit insurance which can be easily arranged


So, back to our client who said' ARE YOU NUTS ‘? As it pertains to AR costs of course!

Your business should be focused on profit and turnover. By having a constant supply of working capital and access to cash flow you have the ability to increase sales and profits. Many firms also have the ability to achieve overhead reduction as a competent AR partner firm performs these services for you.

Many clients we have spoken to have had to turn away sales volumes and large contracts because of financing inability .We see that all the time. With AR Finance you are now in a position to basically accept unlimited orders and contracts.

Do you believe you could enhance relationships with key suppliers by paying those cash or taking their offered discount? We sure think you could, and that’s a key benefit of factor receivable funding. That type of business activity also enhances your overall firm’s commercial credit rating, which should be important to you in the long run.

Got a lot of time on your hands as you run your business? We sure don’t, and you'll find that you'll be focusing a lot less on seeking external financing if you've got a solid A/R funding business solution in place.

So expensive? We let clients decide. But if you want to see how the true cost of AR finance fits into your business speak to a trusted, credible and experienced Canadian business financing advisor today.

7 PARK AVENUE FINANCIAL
CANADIAN A/R FINANCING EXPERTISE

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.webpage66.com/ar_finance_factor_receivable_funding_business.html

A SR&ED Bridge Loan . Never Thought Financing Your SRED Tax Credit Claim In Canada Possible? Here’s How .

See How Easily Your SRED ( SR&ED) Claim Can Be Financed

Information on SRED financing in Canada. A SR&ED bridge loan for your refundable tax credit claim can be monetized for immediate cash flow and working capital .

SRED. aka ' SR&ED'. The dust seems to have finally settled on the SRED Tax credit claim program in Canada. To put it mildly it was a ‘winter of discontent ‘by all parties.

That means a couple of things of course, one of which is that it's ( more or less ) back to business as usual for the thousands of Canadian firms who utilize the SR&ED refundable tax credit program ; it also means that if you haven’t previously then you can also finance that claim . If only for one reason - immediate cash flow!

Sred financing , and yes , even the SRED program itself seemed to quietly slow down last year as the federal government took a hard look at the program . That same program was a critical part of the financing of thousands of firms in Canada who strive for innovation in their products and services.

And that’s everything, by the way, from start to up major established corporations. In fact only 20% of the users of the program were larger corporations , so we can only imagine the rumblings in ' SR&ED land ' for the 80% of firms who find themselves in either start up or early revenue mode, or perhaps they have just been in business a few years and are starting to ' ramp up ' in revenues.

While confusion seemed to reign supreme in ' SRED ' the reality is that the program took a hard hit in popularity as everyone with a vested interest made a hard stand on where they stood on the program . That included the government, of course, the SR&ED consultants that actually prepare you claim (most firms don't prepare their own claims “and industry economists and pundits who questioned the payback on the governments billions of dollars spent on these non repayable tax credits.

And for the firms who in fact finance their claims for cash flow and working capital via a SRED financing bridge loan for their claim in Canada that cash looked like it might be going away.

Nothing likes a happy ending, and there seems to be a general status quo on the program, although some changes were made to areas such as the ' CAPEX ' portion of the program.

All's well that ends well, we guess, so it’s back to ensuring that if you wish to finance your claim and accelerate working capital benefits that choice is all yours .

Claims are generally financed at 70% loan to value, and a properly structured SRED financing typically takes the form of a bridge loan collateralized by your claim. No payments are made for the duration of the loan, and your firm receives the balance of your claim, less financing costs once the good folks in Ottawa and your respective province approve and fund your claim per their guidelines.

Speak to a trusted, credible and experienced Canadian business financing advisor on a bridge loan for your SR&ED tax credit today.

P.S. Claims can also be financed today for your next years spend. Don't forget to look into that benefit also.





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/sred_financing_bridge_loan_tax_credit_claim_canada.html

Got Your Cash Flow Financing Priorities Straight? Working Capital Business Solutions

Canadian business financing solutions for growth and operations


Information on cash flow financing management in Canada. Access to business working capital comes from outside.. and within!



Do you have your cash flow financing priorities straight? Pretty simple question, right? But when we talk to clients about what's important to them when it comes to business working capital they tell us they spend a lot of time on this issue, but are concerned that they don't have the resources or information the need to get the help they desire.

And when it comes to size, it unfortunately counts; because small and medium size firms in Canada just don't have the same access to ' financing talent ' for the liquidity to fund their operations. And it’s a two edged sword, gravitating between survival and growth.

What Canadian business owners and financial managers can do is to in fact spend their time a bit more wisely on what solutions make sense for their firm. And by the way, some of those solutions, as we'll discuss, are internal, not necessarily external! The obvious ones are spending properly, trying to self finance from within (yes you can by the way) and ensuring you have got some controls and tools in place to manage your cash flow financing needs and information.

After 2008 and 2009 world wide financial debacle many Canadian firms simply hunkered down and managed their availability of business working capital credit, but boy was it tough.

Growing your business requires working capital. We (hopefully) all agree on that. You need to have solutions in place to finance inventories and convert receivables into access to cash.

As we have always maintained you don't need to be a rocket scientist to manage working capital and improvements to it. One business pundit describes it as a ' block and tackle approach '! That approach is as basic as it comes - collecting money from your suppliers, generating better terms with your vendors and key suppliers, and turning those inventories.

That's what we were talking about before when we talked about the internal solutions, as opposed to the external ones. At that point you're simply focusing on your ' day’s working capital ' and your collection period days. That A/R and inventory that you carry should be at the top of your cash flow priorities list.

One problem clients constantly talk to us about is that as a small and medium size firm you have little negotiating power, perceived or otherwise, with larger customers and vendors. The big guys tend to want better terms if they are your customer, and they want prompt payment if they are your supplier. Talk about the proverbial ' rock and hard place!

That's when external cash flow financing solutions come into play in Canada , They include bank facilities, asset based lines of credit, receivable financing, inventory finance, supply chain financing, and monetization of tax credits and unencumbered assets .

Want help with some of those cash flow priorities. Speak to a trusted, credible and experienced Canadian business financing advisor today





7 PARK AVENUE FINANCIAL

CANADIAN BUSINESS CASH FLOW FINANCING EXPERTISE




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_business.html

Its 11 P.M. Do You Know Where Your Business and Debt Financing Is? Funding Canadian Business Via Proper Debt Finance Solutions

What Type Of Business Debt Financing & Funding Is Right For Your Company . Debt Finance 101 !

Information on business debt financing and funding in Canada. What is the right amount and type of debt finance for your company.





Business debt financing and funding for Canadian companies. When other forms of financing such as equity or more esoteric arrangements aren’t available the Canadian business owner and financial manager turns to debt funding via a number of different short or long term debt finance strategies.

There is sometimes a fair amount of pressure to take on new debt to satisfy production, sales and marketing growth. The question very simply becomes - how much debt can your firm handle, are you aware of the different debt options and which one or ones might be best for your firm?

There's a great little analogy about why those lenders you might be looking to borrow from are somewhat cautious on occasion .It's apparently rooted in the fact that when the first caveman made a loan of a spear someone it was never returned, and when it was it was broken . The reality in Canadian business financing, we feel is when both the lender and the borrower have created a solution satisfactory to both.

And sometime debt is not always the answer. We find clients gravitating to debt solutions when they start to experience serious fluctuations in cash flow. When that cash flow and working capital is properly managed, or assets are properly monetized you might find yourself thinking less of taking on debt.

It's a fundamental discussion point in business that leverage, i.e. taking on debt aggressively can either pay off or put your company out of business. Talk about two different sides to the story!

The reality also is of course, that when you take on more debt to grow or fix the company you might find in fact that opposite has occurred and you are feeling somewhat restricted in the flexibility you may have once had in growing your business.

When that debt is short term in nature any refinancing becomes a bit more of a challenge. So the challenge is very simple then - take on the right debt for the right reason. Bottom line, rethink your financial structure. Naturally with more debt you do in fact increase your Return on Equity, but at the same time your breakeven point increases because of those financing costs.

Debt that is of course structured properly, against solid assets can be a good thing. And if those assets are part of revenue generation even better.

Historically in Canada companies have relied on traditional sources of capital, i.e. ' The Bank '. What more and more business owners and managers are doing are exploring newer forms of financing that might include asset based lines of credit, tax credit monetization, receivable financing and securitization, sale leaseback scenarios, interim bridge loans, etc.

The bottom line today? Speak to a trusted, credible and experienced Canadian business financing advisor about sources of capital available to your company in good... and tough ... times!




7 PARK AVENUE FINANCIAL
Canadian Debt Financing Expertise



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_debt_financing_funding_debt_finance.html

ABL Financing . Recognize Early Warning Signs For The Need For A Canadian Asset Based Finance Business Credit Line?

Time for a Paradigm Shift In Business Credit Line Thinking?

Information on ABL financing in Canada. How business owners can spot trends in the need for an asset based finance business credit line



ABL Financing in Canada. How do you know when it just might be time to both discover and utilize one of Canada's best financing mechanisms for a business? There are in fact some strong signals and warning signs when it comes to switching to an asset based finance business credit line.

It kind of sneaked up on us, but asset based finance is growing and becoming more popular everyday in Canada as a business finance mechanism. While banks and other lending institutions focus on cash flow and ratios and covenants the asset based line of credit lender sits quietly in the corner and focuses just on one thing- ' Assets '!

We're going to discuss how you can recognize some key early warning mechanisms around when to consider this method of finance, but the simple rule of thumb is that you have to have assets such as accounts receivables, inventories, lien free fixed assets, and even real estate... well lets just stay... you qualify! That’s why wholesalers, retail organizations, and manufacturers and service companies of all types are gravitating to ABL finance.

We're always surprised when we hear clients say they haven’t even heard of ABL. More so when you consider some of the largest companies in Canada have abandoned bank facilities and moved to ABL. While for the larger company asset based finance business credit lines can in fact cost less and be more flexible, the reality is that for the small to mid size sector the cost of such a facility will in fact be more than bank credit. But, consider this, if you don’t qualify for the amount of bank financing you need that lower interest rate doesn't mean much when you're forced to restrict growth and focus almost all day on managing cash flow in an often crisis type mode. That's when reasonable financing costs should be the least of your problems.

Let's get back to some of those early warning signs that just might signify your need to check out a new paradigm in business lines of credit. Sales revenue has a direct relationship to working capital needs. Because those higher sales and growth opportunities bring higher levels of receivables and inventory and of course higher levels of payables.

Velocity, aka ' speed'. It not becomes a greater challenge to turnover assets to generate that working capital. It's up to the Canadian business owner and financial manager to, as you're growing establish what is acceptable in inventory levels, A/R collection days, as well as, oh yes, paying those suppliers.

Two ways for you to monitor your financial cash flow and working capital needs over time are to keep a simple track of working capital to sales and working capital turnover itself. The former is calculated simply by taking your current assets and dividing them by sales for, say, an annual period. Working capital turnover is measured by taking you sales and dividing them by your working capital for any period. You then track those!

Let's say you kept track of your working capital turnover and notice the ratio is trending lower. That means poor working capital performance, and you probably are feeling this via cash flow pressures.

When you utilize an ABL Financing facility you will find those assets can be monetized faster, with more liquidity in margining, resulting in higher borrowing power for working capital needs.

Speak to a trusted, credible and experienced Canadian business financing advisor when you feel your firm just might be exhibiting signs of a need for a better way in a Canadian business credit line via asset based finance.




7 PARK AVENUE FINANCIAL

ASSET BASED LINE OF CREDIT EXPERTISE







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_financing_asset_based_finance_business_credit.html