Why You Should Care About Business Solvency! Business Cash Flow And Working Capital Solutions In Canada

Understanding And Solving Canadian Business Solvency


OVERVIEW – Information on tools , techniques and solutions around business solvency in Canada . Cash flow and working capital tracking is easier than you think !



Business Health - We're pretty sure dedicated business owners and financials managers care about their business health, and solvency, as much as they care about their personal issues.

And the results of not caring about overall financial health and liquidity in your business are of course disastrous, up to and including business failure. It also goes without saying (but we’ll say it!) that you're in a position to survive and grow when you have business working capital and access to solutions that provide those funds.

The symptoms of poor cash flow should be obvious to every business owner; they include:

Vendor / supplier concerns
Slow receivables
Faulty financial reporting

and on it goes!

When you are on top of things and you have the ability to attract financial solutions. That's a much better position to be in than being ' hat in hand ' in front of a bank or a commercial finance company when your firm is probably closer to ' dire straits ' than poised for growth .

What then are some of the solutions for business working capital and solvency? They in fact are more numerous than you think, and they often can be used in combinations. They are:

Receivable finance
Sale Leaseback Financing
Asset based bridge loans
Comprehensive non bank asset based lines of credit
Purchase order / Supply Chain Financing
Chartered bank business credit lines/term loans

The challenge of course is to ensure which solutions suit your company and when. Here's where you need to take the ' big picture ' outlook as to the business working capital solutions that more perfectly suit your firm’s situation.

To ensure which solutions work you of course need a solid handle on meaningful information from your financials. Unbelievably not every business owner/manager knows how to either pull together the data, or interpret it.

Simple relationships in your financial statements make your banker or non bank lender somewhat of an ‘oracle '

when it comes to predicting business failure. We recommend to clients that they become their own oracle!

Business relationships of the numbers in your financials are both long term and short term. The common word for these relationships is ' ratios’, we prefer our own terminology of a ' relationship '.

When you look at some of the shorter term ' relationships ' in your financials you are really looking at two things; and they are so obvious most owners/managers can't see the forest for the trees.

What are those two things? They are ' changes' and ' movement '. Just keeping track of simple changes in operating expenses, day’s sales outstanding, inventory turns, etc will make you the oracle of your business future. And whether it’s a balance sheet or income statement relationship we assure clients there's meaningful data in them there numbers!!

When you both have a handle on, and care about your cash flow solvency the solutions to growth and operations challenges will become a lot more clearly.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with Canadian working capital solutions.

7 PARK AVENUE FINANCIAL
CANADIAN CASH FLOW FINANCING AND BUSINESS SOLVENCY 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_solvency_cash_flow_working_capital.html

Looking For Best Equipment Lease Rates In Canada . It’ About ‘How ‘to Get Them, Not ‘ Where’ When It Comes to Leasing Companies

Expecting The Best Lease Finance Rates In Canada . Here’s How!


OVERVIEW – Information on how the Canadian business owner/manager can achieve best lease rates from leasing companies in Canada when arranging equipment and asset acquisitions.



Here's where you are going wrong. When Canadian business owners and financial managers focus on getting the best lease rates from equipment leasing companies, they are focusing on ' where ‘... not ' how'!

The reality is that the current Canadian landscape is very competitive when it comes to delivering solid asset financing solutions to your firm and industry. So ‘creditworthy’ firms (hopefully yours?!) can expect and demand solid interest rates based on their own particular credit quality. So the thing you are probably working hardest to find is already there.

What is critical though, and often missed by the business owner/ manager is in fact how that rate is delivered in terms of structure, documentation, hidden fees, and the quality of the firm you are dealing with . When you master those you have achieved leasing Nirvana in Canada!

We continually remind clients that in fact your lessor has actually borrowed the money also, so they are focused, and it’s reasonable to assume- all the time, on maximizing the mark up in your transaction. Because that mark up is your profit.

Many lessees (that’s you!)don't know they can easily calculate the lessors profit on your transaction. How? Because the elements of any equipment lease in Canada are term, interest rate, monthly payment, value of the deal, and end of term obligation. Typically you are given all of those, except the rate! So by simply using a financial calculator you're in a position to determine the actual rate you are charged.

Often the most important part of your equipment lease is in fact the final payment. Why? Because it is at that time that it is determine what you signed up for in the documentation of the lease. And if you have entered into the wrong type of transaction (yes ' IT' happens) the actual residual value of the asset becomes the largest part of the profit component of your lease.

The above scenario is particularly true when it comes to your choice of type of lease, capital or operation. If you have chosen a fair market value, aka ' operating lease ' you is in fact obligated to return the asset to the lessor. And they then sell it to further increase their profit on a transaction.

Many business owners are to say least, surprised, you may say dumbfounded when it comes to being told they either have a very low or even 'negative' interest rate in their operating lease overall rate. Why? As we said the lessor is banking on making their profit a few years from now when you are obligated to return the asset.

By the way, don’t get us wrong, in many environments the operating lease is one of the best solutions in town when it comes to financing technology assets such as computers, telecom assets, etc. That’s because those assets are traditionally worth a lot less, sometimes even close to zero, when it comes to economic life/value. So if the lessor wants to take that risk off your back... let them!

One final point on operating leases - if you know what you are doing you'll construct your obligation so that the choice at the end of the term allows you to make the decision to buy, return, or extend the lease. All of those options are available to you, you just didn’t know it. Even worse, you weren’t told. Must have been a slip up, right?!

Our point today, simply that your credit quality and actual interest rate are pretty well predetermined in today’s competitive equipment leasing marketplace. Dealing with the right firm, and understanding the documentation you enter into is key to asset financing success. Focus on ' how' not ' where '!

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor on equipment finance solutions that work... in your favor!

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/leasing_companies_best_lease_rates_equipment.html

Can Financing Receivables Ignite Your Business Funding . Cost and Benefits Of Factoring Funding In Canada

Know How To Fire Up Business Cash Flow?



OVERVIEW – Information on financing receivables in Canada. Assessing invoice finance as a finance option , and understanding the cost of factoring a/r in the Canadian business financing marketplace.



We'd all agree there’s a major difference in igniting, and on the other hand, freezing your business credit. We maintain to clients that financing receivables is a key ' igniter '

of cash flow funding in Canada when the Canadian business owner and financial manager is experiencing the business credit freeze !

Trends now show that thousands of businesses in Canada find themselves unable to get the financing they need. Whether they are ' cut off ' or simply ' restricted' in getting capital into their firm the repercussions can be anywhere from being mild to severe, severe of course meaning closing your business.

So why is receivable finance funding different, and how does the business owner/manager asses the cost of factoring A/R into a sensible arrangement?

The essence of invoice discounting, aka ' factoring, aka ' invoice discounting ' is simply the ability to monetize sales directly into cash as you generate revenue. That in itself is a powerful statement. Where things go wrong is when your business locks itself into a facility that either costs too much, is unwieldy to operate, and simply doesnt mesh with your day to day operations. By the way, that absolutely doesnt have to be the case!

So if banks also margin receivables for cash flow for your business wouldn't Canada's chartered banks be the optimal solutions for cash flow finance. Well they would be that perfect solution if your business qualifies, and if you do qualify do you in fact have access to all the credit you need to grow the business when it comes to seasonality, large orders, cash flow bulges, slow paying clients, etc. The answer is that while our banks in Canada provide the best and most ' low cost ' solution the reality is that not everyone qualifies.

The short answer to bank versus non bank funding in Canada, when it comes to A/R finance is that the bank bases its decision on your sales, profits, and balance sheet; Factoring on the other hand bases its finance formula only on your sales and the invoices generated from that revenue. Oh and by the way, funding is in fact ' same day '. And it's only as complex as you want it to be , and the industry itself , unfortunately does not always do a good job of explaining facilities ; sometimes employing smoke and mirrors

to hide costs and day to day facilitation of the financing . That's when you need clarity!

The key to a successful A/R finance program in Canada is your management of the program. The type of facility you enter into, as well as your ability to control what you finance and when is critical. And , as a kicker, our recommendation to clients are ' confidential ' facilities that allow you to bill and collect your own receivables in a manner that allows the competition to do only one thing - figure out where you are getting all that cash .

Whether you're a start up, medium sized firm, or a large corporation, financing receivables can be a huge part of your business success. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor today who can assist you with the facility that makes the most sense for your unique needs.

7 PARK AVENUE FINANCIAL
CANADIAN RECEIVABLE FINANCE 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/financing_receivables_cost_of_factoring_funding.html

New Business Start Up Financing In Canada

Traditional and Alternative Start Up Loans In Canada


OVERVIEW – Information on solutions for Canadian entrepreneurs seeking new business start up financing in Canada



New business start up financing in Canada; the Canadian business owner and entrepreneur wants, and needs some solid advice and information that firms financed by larger VC firms already have. Many say the system isn’t working when it comes to financing a new venture. Do we agree? Yes... and No! Solutions do exist.

In the case of the start up its all about the traction you need to get to a cash flow positive and profit situation. The challenge is of course getting there, when it comes to the often larger capital investment you need to make to ' bootstrap ' the business.

Let's look at the basic challenge, which is simply the inability of the entrepreneur to obtain business credit. We're often amazed at clients speaking about financing they have received at the inception of their business; who believe they have been awarded some real ' business credit '.

The reality? The bank or other institution, perhaps a leasing company or other commercial finance firm is placed a 100% emphasis on your own net worth and collateral and personal assets. You have of course provided the proverbial ' PG ' - personal guarantee on your ' business financing ‘. Trust us on that one, no business credit has been granted!

Vendors and suppliers are a large part of the challenge. They can be forgiven for wanting to ensure they can get paid. In some cases one of the solutions to the ' supplier credit ' scenario is a purchase order financing arrangement. This allows your supplier to be paid and ship the product you need, with the collateral being the inventory, receivables and sales that are generated out of that arrangement. That type of financing is expensive, but if you have solid gross margins that can withstand that cost supply chain/PO financing is a great solution for the business start up.

Business credit cards certainly are frequently used in the start up phase, and we’re not talking about the ' miscellaneous' purchases, as we have run into many clients that are financing a large part of their start up on the credit card concept. The problem with this? First of all their personal credit might be at risk, given they are more often than note making maximum usage of their card facilities. Secondly, as an overall strategy it's recommended by experts that you separate your business and personal life when it comes to financing. Need help on that one... ask your spouse for an opinion!

Important in new business start up financing is your ability to fundamentally understand the cash flow cycle and how you can address each component of it. The cash flow cycle is pretty simple - its understanding how a dollar flows through your company from the timing around operations, production, shipment, and collection of your sales into your business bank account. The shortfalls you experience along the way need to be addressed with working capital solutions.

Some of those solutions:

The BIL/CSBF loan program – government guaranteed up to 350k

Sale leaseback financing / bridge loans on assets already purchased

Receivable Financing

Comprehensive Asset Based Lending - non bank credit lines on inventory, A/R and equipment

Tax Credit Monetization of SRED Tax credits

Securitization of receivable contracts

So, is the challenge of financing a start up in Canada there? Absolutely, but at the same time solid solutions are available also. You are in a position, with the right assistance, to leap frog those barriers. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist your start up to mature into a great business story.



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/new_business_start_up_financing.html

What Business Start Up Financing And Loans Are Available To The Canadian Entrepreneur

Tapping Your Way Into Start Up Capital In Canada

OVERVIEW – Information on the business start up in Canada. How does the entrepreneur get the capital he needs via financing and loans .




We actually vividly remember when start up financing was easy to get for the Canadian entrepreneur. The time frame? Pretty well... Never!

Financing for a new business venture

in Canada has always been a challenge - and today with globalization, banking crises, and credit bubbles we're pretty much permanently challenged!

Is there any good news? There is, and the reality is that for the informed entrepreneur there are in fact numerous finance and loans options, some of them even ' traditional '.

Start up finance can come in many forms and it's important to know exactly where those sources of funds are. In fact we're fairly positive that a combination of several different sources of capital can in fact get your business ' started up '.

The downside of not getting either all the financing you need, or the wrong financing means just one thing - you're potentially closer to failure on your project.

At the heart of your business idea is the business concept of equity and debt. You need a healthy dose of both to pull off business success. The concepts are very simply, equity denoting ownership or your contribution to the financing, as well as the debt... the borrowed funds. There are some grey areas of course - for instance you could secure a loan from friends and family, but if properly documented it’s really a debt obligation.

The key to obtaining the right financing at the start of your venture is the plan... and that’s the business plan. While clients show us plans that are very heavy on marketing and sales and product potential we tend to gravitate to the financial portion of the plan, trying to ensure that cash flow and cost and revenue estimates are accurate. A simple case in point is that many client plans show revenues of 100k in month one... the problem they have forgotten... That revenue isn’t collected until month 2 or 3!

What are some of the actual finance solutions then that are available to the start up entrepreneur. You'd be surprised. They include:

GGovernment guaranteed SBL loans (easier to get than you think)

Purchase Order Financing

Receivable and Inventory Financing

Financing a SR&ED tax credit for instant cash

Royalty financing

Business Credit Cards ( Not our favorite )

Asset Based Loans



Any one of these options can generate hundreds of thousands of dollars in financing for the start up entrepreneurs of Canada. The Government Small Business loan in fact gets you up to 350k of financing for needs such as equipment, leasehold improvements, computers, even software, etc.


If you're looking for straightforward and real, accessible solutions for a new business venture in Canada seek out and speak to a trusted, credible and experienced Canadian business financing advisor. Getting funded might not be the challenge you think.

7 PARK AVENUE FINANCIAL
CANADIAN START UP 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_start_up_financing_loans.html

SBL Government Loans Might Be The Business Loan Solution Your Start Up Needs!

Another Option to the brother- in- law loan ?




OVERVIEW – Information on start up financing in Canada. SBL government loans just might be the business loan that successfully starts your business



Experts agree that start up financing in Canada is a challenge for any entrepreneur. Did it every used to be easy? We're not sure but we do know that capital for the ' start up ' is in fact one of the most challenging issues that you will face. By the way, that goes for debt and equity... although today we're focusing on the debt component of your business. The world of angel investors and private equity and VC's are a subject for another day!


Government SBL loans are an alternative to the entrepreneur having to take a home equity loan, borrow from friends and family (it’s never good to borrow money from your brother in law!)

Or seek alternative financing capital that is available, but comes with higher rates and more restrictive structures.

So, can we say there is less capital around and that it's harder to achieve - The pundits out there will debate all day on that one. Instead we'll focus on getting clients the financing they need, at solid ' big business ' rates, terms and structures, via SBL government loans.

Most Canadian business owners/manager is somewhat skeptical when it comes to the phrase ' government' and small business success. We won't weigh in on the hundreds of reasons they might be thinking that way - all we can say is that the Government small business loan, via Industry Canada has helped thousands and thousands of start up businesses every year. So the proof is in the pudding we maintain!

A key element to understanding the program is simply grasping that you are not dealing directly with Ottawa on these loans, they are offered by your bank when you are able to (finally) find a banker that is familiar and has success with the program. What the government does do is to ' guarantee ' that loan to the bank for the majority of the loan. If you're a good banker that’s a strong incentive to make more loans!

Why would the government get involved in start up financing? The bottom line - we don't care, and we know our clients don't care; they just think it’s a great thing to be able to access financing, to a maximum of 350k, at rates just several points over prime. (By the way, prime couldn't be any lower these days, right?)

We do suspect though that Industry Canada, the sponsor of the program likes to feel that they are stimulating the economy and helping out one of the largest sectors of the economy, the SME sector.

So, start ups. A challenge to finance? Always, but one sure fire solution is SBL start up financing that gets your business out of the gate. Speak to a trusted, credible an experienced Canadian business financing advisor who can assist you with your needs.

7 PARK AVENUE FINANCIAL
START UP 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/start_up_sbl_loans_government_business_loan.html

How’s Your Business Financing ‘’Lease or Buy ‘Expertise? Assessing Your Lease Financing Options

Analyzing Business Asset Acquisition Alternatives


OVERVIEW – Information on the lease or buy decision that owners face when they employ a lease finance option in their overall business financing strategy



Did you realize that when it comes to Canadian business financing the 'lease or buy ' decision is actually an ' investment ' decision? Let's look at some key aspects of leasing finance that will help you analyze the alternative you might not know you have!

While various business assets can be leased, i.e. land, office, etc our focus today is on equipment and assets. The key advantage of leasing these assets is that it allows you to free up scarce capital that you would otherwise spend in other aspects of your company... i.e. daily operations!

The challenge though, for the Canadian business owner and financial manager is knowing how long you will hold the asset, and if it will have any value at the end of your usage and lease term. And because it's a lease, and not a purchase you can’t make unilateral decisions to sell the asset or make a dramatic change to it. Your lessor of course has a buy in into that decision, and the reality is they borrowed the money also and have locked in a certain yield they hope to achieve on all your payments.

We love talking to clients about the ' lease vs. buy' decision as some are keenly aware of the key drivers in that decision, and others... are not!

So what are some of those key drivers? They include the actual cost of the asset, taxes, accounting treatments re book value, as well as making an intelligent decision around what the leasing company calls the ' useful economic life ' of the asset.

Cash flow is critical in the business owner’s final decision around the asset acquisition, but at the same time you want to ensure that you also consider the profit generating aspect of the asset.

Many business owners don't fully understand their ' cost of capital ' , and other factors to consider are areas such as debt vs. equity , given that debt is pretty well always cheaper than reducing ownership control via equity dilution . And if your company has a reasonable amount of equity and a clean balance sheet you can achieve very attractive lease costs in today’s business financing environment.

Not all the lease / buy decisions you are faced with have to do with ‘the numbers ‘. A good example – purchasing or leasing new technologies for your employees give your company both a solid reputation and are somewhat of a morale booster. In certain cases because of government legislation you may even be forced to lease or purchase assets you might not necessarily have wanted to... or needed. That’s our governments for you... here to help ..!?!
Clearly good it’s always good to focus more so on revenue producing assets, and in particular ones that produce sales and profits. On occasion though the business owner finds himself or herself faced with the proverbial ‘guesstimate ‘when it comes to business asset acquisition.

So can we summarize some of the critical factors in the ‘leasing or purchase ‘decision? They might include:

Revenue and cost issues

Tax/accounting/depreciation/useful life issues

Budget constraints

Intangible issues re customer and employee perceptions

If you’re not totally comfortable with acquiring assets under a lease / loan or purchase strategy seek out and speak to a trusted, credible and experienced Canadian business financing advisor today.

7 PARK AVENUE FINANCIAL
CANADIAN LEASE FINANCE 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_financing_lease_or_buy_leasing_finance.html