Top Working Capital Funding and Facility Solutions

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Information for Canadian business owners on working capital funding and the type of working capital facility for a small or medium sized company  that will meet your firm's needs. How to measure and recognize the need for a cash flow solution that meets your firms requirements.

What Is A Working Capital Loan

Every Canadian business owner and financial manager wants to know that their firm has financial health in the short term. Your company's ability to access cash  means only one simple thing - you have the ability to pay off your short term liabilities such as accounts payable, taxes, source deductions, etc.

Those larger companies have access to a lot of other means of capital, venture capital, private equity, etc. Our focus is on SME Canada , those small and medium sized enterprises that are the backbone of the economy, in good times, and those less than good times !

So do you, in fact, need a better type or working capital facility today, and, if so, what are your options. We can't cure the patient unless we can confirm he is sick... so how in fact do you determine if that working capital need exists. It could not be simpler. Go to your balance sheet, add up cash, receivables, and inventory, and if they in total don't cover your accounts payable, guess what... the patient has a problem.

Two points worth mentioning, we fully realize the most successful business managers and owners know intuitively that they have a challenge in the area of cash flow. It's simply recognizing that on a day to day basis more and more time is devoted to working capital management - i.e. collections, invoicing, juggling payables, etc.

What Is A Working Capital Loan? Who Are The Working Capital Lenders

There are very specific cash flow solutions for your working capital funding requirements. But believe it or not many of them can actually be fixed internally. Your ability to negotiate better terms with your suppliers is a critical cash flow factor. More importantly, many business owners don't focus on the turnover and quality of your current assets such as receivables and inventory.

By effectively measuring and monitoring your turnover in receivables and inventory can significantly improve cash flow.

Technically we're talking about reducing day's sales outstanding and calculating inventory turnover. Your goal is to reduce the amount of time it takes for a dollar to flow through your company. It is all about managing those  ' working capital ratios '.

So we have identified the problem, and the measurement issues around that problem, let's focus on solutions and the financing of working capital.

In a perfect world, and we know it's not, your Canadian chartered bank would be financing all your receivables and inventory on an ongoing basis, and when you need it to offer up a bulge type facility to take you through a working capital rough patch. That type of working capital facility is generally referred to as a business operating line of credit.

As we said, it's not a perfect world apparently!... And thousands of firms, perhaps yours, don't have access to this type of facility. So the Canadian marketplace offers up a number of solutions, for medium-sized and larger firms the alternative is an asset based line of credit that comes without the restrictions of a bank facility ( ratios, covenants, outside collateral, etc) but in fact provide you with more working capital than a bank could.

 For smaller firms, a working capital facility term loan is available via the government related bank in Canada. For smaller and medium sized firm's receivable financing facilities, known as factoring, can turn your receivables into a constant ATM machine, albeit at a higher cost.

So what's our bottom line. Simply the right business loans via a working capital facility will put life back into the patient, your company! Knowing what facility works best, what your options are, etc is really the only challenge, Speak to a trusted, credible and experienced Canadian business financing advisor to guide you through to the right cash flow solution.


Stan Prokop - founder of 7 Park Avenue Financial –
Originating business financing for Canadian companies, specializing in working capital, cash flow, asset based financing . In business 13 years - Completed in excess of 100 Million $$ of financing for Canadian corporations. Core competencies include receivables financing, asset based lending, working capital, equipment finance, franchise finance, and tax credit financing. Info & Contact Details :

http://www.7parkavenuefinancial.com


7 Park Avenue Financial

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653


Email = sprokop@7parkavenuefinancial.com

' Canadian Business Financing with the intelligent use of experience '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment, and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing, and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.


Stan Prokop

















Article Source: http://EzineArticles.com/expert/Stan_Prokop/432698

Article Source: http://EzineArticles.com/5364669

Accounts Receivable Finance Solutions: Investigating Cash Flow Factoring Solutions

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Beyond Reasonable Doubt This Cash Flow Financing Solution Works – Here’s Why & How

OVERVIEW – Information on cash flow financing solutions in Canada. Factoring is the fastest growing accounts receivable finance solution in Canada - Here's why

Cash flow needs for Canadian business owners usually have them in one of two camps - either they have unlimited cash resources (doubtful!) or they are constantly hampered by day to day challenges in growing and managing their business - (probable!). Accounts receivable finance solutions such as factoring could well be the solution to all your problems. Let's dig in.


Canadian business owners and financial managers face, on a daily basis real world cash flow challenges. Let’s look at an example at why accounts receivable finance can be your holy grail of working capital financing. Cash flow financing goes by a number of different names in Canada that is part of the confusion we are always trying to wade through on our client’s behalf.

Various terms apply to this type of business financing. They include: factoring, invoice discounting, A/R financing, and our favorite and most recommended solution - Confidential receivable financing. Depending on how your transaction is structured and who you are dealing with is really the key issue - It's not about what the financing is called!

Clients always want to know if they are a candidate for this type of business financing. There are some perfect candidates, so let’s look at a profile or two in order that you can determine if you fit. Generally you will have accounts receivable that pay fairly regularly but are on occasion slow.

Your overall bad debt experience has probably been in the satisfactory/respectable column. Your invoice and stated terms for your customers is 30 days, but guess what? Some or many clients in 60 and 90 days. Bottom line - you're in the category of needed an A/R finance solution.

Does size count? Depends what you're talking about of course! In cash flow financing it really doesn’t. Speaking in general terms if you have at least $ 50,000 of invoices a month you are a candidate for accounts receivable finance. The reality is that corporations with millions of dollars in receivables actually utilize this form of financing also.

Where size might count a bit is that it has a potential effect on your overall financing cost. In our experience you can potentially reduce the cost of your accounts receivable finance facility by close to 1% per month if you have a large facility. However, we spend many hours and many meetings educating Canadian business on factoring pricing, which is grossly misunderstood by most clients who look into this type of business financing.

So the bottom line is that you should not let your company size, or any other challenges you might be facing (temporary financial losses, restructuring, etc) affect you ability to successfully achieve an accounts receivable finance strategy.

Many times the decision to consider factoring of your receivables comes from directly related issues to collections. In some cases the slow pay nature of your client may be affecting your ability to purchase inventory or meet payroll - It that type of classic situation that drives clients to seek outside financing assistance.

When you finance (in effect you are selling) your receivables under this type of facility you immediately receive a 90% advance on your invoicing - that allows you to meet obligations and expand your business.

Traditional sources of business financing in Canada, i.e. chartered banks have made it challenging for firms to finance receivables in a manner that makes sense for the business owner. In some cases, as we noted, your business has or had challenges that prohibit you from temporarily sourcing cash flow financing from banks.

Speak to a trusted, credible and experienced business advisor, and focus on getting into a facility that meets your needs re day to day workings and cost.


Stan Prokop - founder of 7 Park Avenue Financial –

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 13 years - Completed in excess of 100 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 & Contact Details :
http://www.7parkavenuefinancial.com

7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

' Canadian Business Financing with the intelligent use of experience '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.


Stan Prokop

Sr&ed Tax Credit Financing : Your Cash Flow & Sred Loan How To Primer

What If … Your Firm Could Get Funding Today for Your Future SR&ED Tax Credit Financing ?

OVERVIEW – Information on sr&ed tax credit financing in Canada. A Sred loan unlocks the cash flow in your refundable tax credit claim

Sr&ed tax credit financing allows owners/financial mgrs to fully explore the cash flow potential of Canada's Sr ed program. Let's dig in .

Whether your business is a first time, or multiyear claimant everyone is in the same boat - waiting for the refund cheque. Occasional audits of either your technical claim or the financial aspect of the claim can further prolong your receipt of funds.


In talking to many clients we can safely say that most firms who have a commitment to R&D capital probably could put those funds to alternative uses.

Clients we meet use sr&ed refunds for working capital, buying new equipment, reducing payables, and of course also furthering their R&D enhancements. In essence you're enhancing and continuing to expand your business.

Therefore as powerful a tool as a sred claim is the reality is that it itself can create short term cash flow problems. Those challenges are on top of the ones Canadian business owners and financial managers face every day, slow receivables, demanding payables , opportunities to purchase more inventory , or in some cases invest in equipment and long term fixed assets .

How then does monetizing your SR&ED claim address your overall working capital and cash flow position. Simply that you can monetize your claim as soon as you file it, or even while you're preparing the claim .That's called a SR&ED accrual or Sr ed credit line facility .

SRED, aka SR&ED tax credits are financeable! So you ability to finance your claim simply allows you to receive approximately 70% of your claim today in the form of a SRED bridge loan. And remember, that's not additional debt on your balance sheet, since the sred loan is in fact offset or collateralized by the full value of your actual sred refund.

Talk about kick starting cash flow - you're receiving cash for non repayable refundable tax credits under the program.

So how difficult to finance your sred claim? It involves a very typical business financing application, as well as full backup for your sred claim, including who prepared it, details of any previous year's submissions and approvals, etc.

Even if your firm is experiencing financial challenges you are still very much in the position of being able to discount, or in effect factor your sred claim, because that is the asset that supports the financing . Many firms that look to SRED Loans for cash flow are also start ups in many cases, or at a minimum early stage firms - in all industries.

A Sred cash flow loan can be completed in a week or two assuming your full ability to provide back up on the claim, info on your firm, etc. It's a very basic process.

Speak to a trusted, credible and experienced sred finance expert who will no doubt help them accelerate the sred financing.


Stan Prokop - founder of 7 Park Avenue Financial –

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 13 years - Completed in excess of 100 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 & Contact Details :
http://www.7parkavenuefinancial.com

7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

' Canadian Business Financing with the intelligent use of experience '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.


Stan Prokop

Business Line Of Credit Needs : ABL Ends Your Search For A Cash Flow Solution Alternative

Business Line Of Credit Needs – We’ve Got A Solution & That’s No Fake News!

OVERVIEW – Information on business line of credit needs in Canada. ‘ABL’ aka ‘Asset Based Lending’ is a true cash flow solution – Here’s why

Business line of credit needs are often challenging when owners/financial mgrs are trying to run... and oh yes ' grow ' their company. That’s why ABL , the acronym for asset based lending operating facilities can deliver on a solution for almost every business - with only 1 pre requisite - assets such as receivables, inventories, equipment, or even real estate . Let's dig in.

So why is ABL becoming one of the fastest ways to get your business financing going? The answer - This business line of credit is a working capital facility, similar to a bank facility that provides working capital on a regular basis against inventory, receivables, and in many cases equipment and real estate if that is applicable.

One can argue the case forever on whether Canadian banks are providing the right amount of financing and support for small , medium, and yes even large businesses in Canada - we don’t think we’ll get full closure on that discussion although most top experts and studies say that that SME COMMERCIAL FINANCE needs are certainly not fully delivered by traditional banking institutions as it relates to new firms, high growth firms, or businesses with any kind of financial challenge on their balance sheets and income statements.

So assume you either can’t qualify for a chartered bank business line of credit or that you perhaps do, but the facility doesn’t meet your needs. That’s where an ABL, or asset based line of credit comes in.

How does ABL work then? It’s a simple, no nonsense form of financing provided by non bank type firms - typically commercial finance companies. Many call it 'alternative financing', but we can assure you this form of ‘business financing ‘is becoming more mainstream and popular every day.

Because the chartered banks focus on traditional metrics such as your overall financial performance, outside collateral, personal guarantees, etc you will find the overall ABL process much simpler and common sense. It’s simply a case of borrowing against your real assets, with little or no reliance on the issues we outlined above relative to a bank type facility.


The specialty of an asset based line of credit provider is simply their strong knowledge of your industry and assets, so because of that your ability to generate almost unlimited working capital becomes very obvious very early on in the picture.

What do we mean by that? Simply that if you have receivables, assets and equipment you can always borrow against them on an ongoing basis so typically you can draw down on 90% of receivables, 40-70% of your inventory values, and pre agreed upon amounts on the appraised value of unencumbered equipment .

Typically companies that are the best prospects for this type of financing are firms with fast growth and in some case a limited track record i.e. a start up, etc.

In some cases this type of business line of credit could possibly be complimentary to your existing bank facility, but more often than not if replaces it totally.

How are ' ABL'S priced? While there are a number of key advantages to an asset based line of credit they do normally cost more than bank facilities. Depending on the size of the facility and the overall nature of your firm, its industry, and other challenges you might be facing the final pricing will reflect a realization of those issues.

So yes, it will cost more, but those costs can be significantly offset by increased cash flows via inventory turns, ability to purchase smarter with that cash, and to convert receivables immediately into cash for additional sales efforts.

Don't forget though that you have in effect just negotiated unlimited working capital, and have the ability to turn assets more quickly and generate increased cash flow, revenues and profits. That’s a true business financing triple threat! If you're looking for more good news understand also that asset based operating credit lines are suitable for pretty well every industry in Canada - Again, it's always about the assets.

Speak to a trusted, credible and experienced advisor in this area to ensure that you determine if you can benefit from such a business financing arrangement.


Stan Prokop - founder of 7 Park Avenue Financial –
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 13 years - Completed in excess of 100 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 & Contact Details :
http://www.7parkavenuefinancial.com


7 Park Avenue Financial

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653


Email

= sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '


ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.


Stan Prokop

How To Qualify For Franchise Financing In Canada – A Franchising Finance Business Loan That Makes Sense!

The GOOGLE fellow tells us that 2,687 people have read the following post we did in 2011


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Entry Pageviews

How To Qualify For Franchise Financing In Canada –...

May 6, 2011,

2687


Here's The Post :

 http://businessfinancingcanada.blogspot.ca/2011/05/how-to-qualify-for-franchise-financing.html

Why You Should Utilize Asset Based Lenders for a Revolver Line of Credit Facility

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Information on why a line of credit known as a ' revolver' might be a solid business financing solution via non bank asset based lenders in Canada. How these facilities work and what they cost

Some Canadian business owners and financial managers aren't familiar with the term ' revolver line of credit '. So for clarity purposes it's simply terminology for a business operating line of credit. It revolves, or goes up and down everyday, as your firm collects receivables, pays bills, buys inventory, makes loan payments, etc.

Naturally clients can be forgiven for asking '' What is the difference then for asking why asset based lenders offer a unique, and we think better revolving line of credit than perhaps their Canadian chartered bank can offer.

We're going to cover off the basics of a revolver line of credit via an asset based lending solution with a focus on ' why ' you should this type of business line of credit.

The reality is that asset based lenders are playing a more important role everyday in Canadian business - that's simply because most business owners and financial managers agree that it is more challenging than every to meet their day to day financing needs with bank facilities. That is because banks place more focus on external collateral, operating results that meet their guidelines, and a lack of desire to finance items such as inventories, purchase orders, etc.

The key main reason why you should consider an asset based line of credit is simply that the firms that provide this type of financing specialize in exactly what you need - maximum financing for receivables, inventory, and equipment.

Very typical margining of these current assets in an asset based line of credit with a non bank is 90% of receivables, 50%or more for inventory, and full appraised value of equipment and other fixed assets. We have seen real examples where a revolver line of credit has tripled a firms borrowing power, even at better rates on occasion.

So clients start seeing very quickly why they should be utilizing this type of financing, they just don't know with ' who '. There's where it does get a little tricky, as firms offering this facility are less known than the banks, and are often independent finance firms of subsidiaries of U.S. banks that operate here in Canada. There is when its best to seek the services of a trusted, credible and experienced business financing advisor to match your needs with the right asset based financing solution.

Let's summarize some key points that focus on the real issue we are talking about - why you should consider asset based lenders for your day to day operating needs.

First of all, size doesn't matter in the asset based finance world. Facilities from 100k to many millions of dollars are available. We'll quickly add that some of Canada's largest corporations are financed by this method, we just don't hear about it!

Other reasons why you should consider this type of Canadian business financing are as follows: you are in a turnaround situation, you can't get equipment and inventory financing that you need to generate sales and profit. Other reasons include your growth - in some bank environments you are punished for growing too quickly, but asset based lenders raise your facility as you grow, with their only concern being the assets you have to cover the facility.

Make sense? We think it does, so speak to an expert business financing advisor on what the merits of a revolver line of credit are, and find out why asset based lenders may be your business finance savior in the current business financing environment.

Stan Prokop - founder of 7 Park Avenue Financial –
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 13 years - Completed in excess of 100 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 & Contact Details :
http://www.7parkavenuefinancial.com

7 Park Avenue Financial

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653


Email = sprokop@7parkavenuefinancial.com


'

Canadian Business Financing with the intelligent use of experience '


ABOUT THE AUTHOR

Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.


Stan Prokop












Article Source: http://EzineArticles.com/expert/Stan_Prokop/432698

Article Source: http://EzineArticles.com/5849612

Financing A Business In Canada : Solving Working Capital & Funding Needs

Time For Some Self Driving Financing ? Here’s How To Finance Your Funding Needs

OVERVIEW – Information on financing a business in Canada. Knowing your working capital & funding solutions & costs enhance business probability for success

Financing a business always seems to come back to that tried and true (cliché?) term of cash flow being the lifeblood of a business. No matter how overused the term might be most business owners and financial mgrs would not dispute the need for the right amount, and type of business funding. Let's dig in.


The downside of not having, or being able to arrange cash flow and working capital financing is simply that you have a lesser ability to grow sales, maximize profits and take advantage of new opportunities .

So what in fact are the working capital and financing issues that are raised on an ongoing basis for your business?

Key is understanding how your receivables, inventory, and other assets come together to drive working capital and cash flow. And, to our point, how do you finance those assets and those needs?

What are the real drivers in funding need - typically it's growing revenues, expanding, and in some cases buying or merging with another business.

Although most business owners/financial mgrs can't imagine having too much capital for their business that over abundance would actually mean you are not using capital properly! The bottom line, as experienced by most business folks, is that financing a business is actually a balance act.


One of the main things you should focus on is your ability to pay your current debt - On the balance sheet your accountant shows that as ' current portion of long term debt ' - You always want to be in a position to meet these obligations as failure to do that means you are bordering on insolvency . All of that snowballs into major issues with your bank, your suppliers, and other creditors such as leasing or finance firms.


So as we have said, you need to be able to calculate, or measure working capital, and then address how you will satisfy the need that comes out of those numbers. There are some easy calculations you can perform in measuring your overall cash flow - it's really simply understanding your inventory and A/R turns, as well as having a handle on your accounts payable days outstanding.

If it was a perfect world you could raise all the working capital you need internally. How would that work?! Well, using an extreme example if you collected your receivables in 45 days, and turned your inventory in 45 days, and were able to pay your payables every 90 days you would be very self financing. Sounds great, except you can hear your suppliers and creditors now I bet... Also, the profits that you generate out of your business obviously become a new additional part of the working capital component and would even further benefit your overall position.


But let's get back to the real world, which states that if you have more current assets than current liabilities you 99% of the time need external working capital.

Canadian business owners achieve that additional working capital in a number of ways - the most beneficial is bank lines of credit, or in some cases, if your firm meets the criteria, a cash flow working capital loan. If you are unable to meet bank criteria, and are still in a challenged or growing position then we advise clients to consider a non bank working capital or asset based lending facility.

If receivables tend to be your main current asset than a factoring or invoice discounting facility makes the most sense. Most Canadian business owners don't fully understand how factoring in Canada works, and are often confused by the costs and process.

So what’s our bottom line recap - it’s simple -

Understand how much financing you need - that means ' measuring' your needs, as well as what type of funding suits that need.


Stan Prokop - founder of 7 Park Avenue Financial –
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 13 years - Completed in excess of 100 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 & Contact Details :
http://www.7parkavenuefinancial.com

7 Park Avenue Financial

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.


Stan Prokop