Purchase Order Finance In Canada : Made To Measure Cash Flow Financing For Orders / Contracts

Purchase Order Financing Is One Way To Navigate the Minefield Of Cash Flow Financing Growth

OVERVIEW – Information on purchase order finance solutions in Canada. Financing sales via the right cash flow solution increases revenue potential and profits

Stan Prokop


Purchase order finance solutions in Canada address continuous comments from new clients. Their issue? 'Getting working capital financing for my orders and contracts actually is harder than getting the order itself? '. Let's dig in.

How do Canadian business owners/financial mgrs address their ability to get large new orders and contracts, fulfill the job, and did we forget to mention - get paid ?! It is the working capital and cash flow that come out of those contracts and orders that will of course help you grow sales and profits.
So how does purchase order financing and P.O. Factoring work in Canada? And is it actually available?! Here are your answers:
Purchase order financing or factoring provides you with capital for the key elements of your business, i.e. Product purchases, payroll, and working capital to carry receivables. Most clients we meet in the purchase order finance area have what can only be describe as the best and worst of problems - that is to say they have the order , they just don't have access to the capital to complete the order or project .

The downside of being able to fulfill those orders without proper financing is place is that you don't want to strain your relationship with key suppliers, while at the same time you strive to deliver your product or service on an 'on time 'basis.

Naturally your ability to accept larger orders enhances your overall competitiveness within your industry, and larger orders usually translate (hopefully!) into larger profits. That's how smaller companies get bigger.

Canadian business owners and financial managers consider purchase order financing and the factoring of their purchase orders, but at the same time they don't want to take on additional debt, or give up ownership of their business to an investor / partner.
Looking for the basic ' mechanics ' of P O Finance. It starts with having a P.O. and contract from a legitimate credit worthy company - More often than not some of these clients can actually be outside of Canada - we see that all the time.

The purchase order finance firm - typically a commercial finance company - not a bank , provides you with the minimum amount of capital you need to complete the orders. In certain cases this might involve making payments to your supplies on your behalf.
In some cases the PO finance or P O Factoring firm could be asked to issue a letter or credit to a supplier on your behalf - that is also a common P.O. financing and factoring strategy that achieves similar objectives.

Therefore the benefits of this type of Canadian business financing are very clear:

Being competitive on large orders/contracts!

Other alternatives to order/contract financing? You could enter into long term working capital or cash flow loans, but these typically involve payments that are fixed over 3-5 years. P O Financing strategies bring no debt to the balance sheet - you're monetizing /cash flowing and order/contract! Although purchase order financing is generally quite a bit more expensive than bank financing it allows you to do short term financing without taking on additional debt on your balance sheet.



Speak to a trusted, credible and experienced business financing advisor who can provide you with information on how PO financing and factoring works based on your unique company/industry needs.


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

Stop Me If You've Heard This But Isn't Business Credit Challenging and What's Asset Based Finance?

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Information on how Canadian owners and business managers can utilize asset based finance for business credit that meets their ongoing needs. A new tool for financing your business in Canada

It is always surprising to us that asset based lending is still probably less than 5% of Canadian business credit while in the U.S. it accounts for hundreds of billions of dollars of ongoing business financing.

However the trend is reversing and new transaction are being completed everyday in this asset financing category. Canadian businesses who need financing in excess of 250k (the upper limit is almost unlimited) can benefit from this relatively new Canadian business financing strategy.

Clients always have questions as to what the financing actually is and, more importantly, how it works and does their firm qualify.

ABL is simply A business loan secured by collateral (assets). The line of credit, is secured by inventory, accounts receivable and/or other balance-sheet assets, and is non bank in nature.

Let's address the qualification issue first - the reality is that if your firm has business assets in receivables, inventory, equipment, and even real estate those assets can be monetized into a business line of credit that focuses on the asset, not the overall quality or condition of your balance sheet.

We are of course referring to Canadian chartered bank lines of credit that provide a similar and more often than not less expensive form of financing via revolving lines of credit. However most business owners know those facilities focus on balance sheet and income statement strength, ratios that must be met, and heavy emphasis on personal covenants and outside collateral. That is not asset based lending relative to what we are talking about!

Your asset based lending financing facility is secured by business assets. These facilities are typically available through private finance firms that are non-bank in nature. One of two of Canada's banks offer this type of financing outside their normal business banking, but qualifications and deal size are still somewhat challenging to meet in our opinion.

When you negotiate an A B L facility (that's the acronym the industry uses) you and the lender agree up front on the market value of your ongoing receivables, inventory, and unencumbered equipment. That collateral becomes the essence of your financing and drawdown capability.

So why is this all different from a bank? The answer is simply - banks have regulated formulaic methods of financing business - in fact many would agree that bank business credit got increasingly difficult to get since the 2008 worldwide debacle.

Finance firms offering asset based lending are not regulated in the same manner, do business in almost every industry in Canada, even those that are deemed ' out of favor 'and the management of these firms typically have years of experience in lending against receivables, inventory (yes, inventory!), with the additional enhancement of allowing you to monetize your credit facility by including some borrowing against your equipment for ongoing working capital and cash flow.

Speak to a trusted, credible and experienced business financing advisor in this specialized area and find out how a new financing facility can put you head and shoulders above your competition in overall financing strategy.


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/5125150

Business Credit Solutions In Canada : Exploring Asset Based Finance & Loans

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Time For Self Help In Asset Based Finance Business Credit : Right Loans For The Right Time

OVERVIEW – Information on asset based finance solutions in Canada . Business owners & financial mgrs should focus on business credit alternatives and loans and cash flow monetization strategies that make sense for their company

Asset based finance solutions for your business are a solid ' self help ' strategy that delivers on loans & business credit alternatives made to run and grow your company . ‘Self help ' seems to be more popular than ever ... so let's dig in.

Companies face a lot of challenges these days, and financing is certainly one of them. Let's not forget thought that those challenges might have a positive spin to them - sales growth opportunities, competitor acquisition, yet can also be daunting when it comes to threats against your very existence in today’s competitive environment.
How then can asset based finance aid your firm in allowing you to generate the working capital and cash flow you need to prosper and grow, let alone survive?

Asset based financed helps your firm in both good time and challenging times. It comes in a variety of forms - it is commonly in the industry itself referred to as ' ABL ' financing, and typically your firm would negotiate what is simply or commonly known as an asset based line of credit . The facility provides you with a revolving line of credit very similar to a chartered bank facility.


Non bank operating credit lines might also include a significant inventory financing component, and usually address what we could best call special needs or special situations re: turnarounds, growth, distress, etc.

The finance costs are higher, but asset finance solutions deliver! Pricing in Canada on asset based lines of credit is all over the map - We tell clients they can expect to pay anywhere near a point or two over prime up to an including 1.5-2% per month . What defines that huge difference in pricing? The answer is that that there are different what we will call ' tiers ' in ABL lending in Canada, and the overall size and deal quality of your firm will ultimately drive you to an asset based finance partner that more closely matches your needs and your overall ' risk profile '.


A perfect match? The best candidate for an asset based finance line of credit is a firm that is experiencing strong growth but can't attract the traditional capital that is used to finance receivables, inventory, plant and equipment, and even in some cases real estate.


Creativity is the benchmark for asset based financing. Essentially your balance sheet can be financed ' to the max ‘based upon your different asset components. In some cases even intellectual property or patents might be included in the overall financing, although that clearly is not the norm.


The reality is that asset based finance has somewhat changed the overall face of business financing in Canada and more and more firms , both large and small are gravitating to this form of finance . Deal sizes in Canada vary greatly - we do not encourage clients who have an under 250k/mo need to explore asset based finance because at a certain point the reporting, costs, etc done make sense for neither your firm or the ABL lender .

Other general asset based financing solutions include:

A/R financing

Inventory Loans

SR&ED Tax Credit Loans

Sale leasebacks on owned equipment/real estate



Is there any downside in asset based lending and an ABL working capital facility ask our clients? With relative certainty we can say any downside is significantly offset by upside. The facility gives you almost unlimited working capital, and margins assets that might otherwise not be finance able. And don’t forget, this type of facility does not add debt to your balance sheet, you are simply monetizing your hard and in some cases soft assets.
Speak to a trusted, credible and experienced advisor in asset based lending.


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 Loans In Canada : Real World Working Capital Financing Sources

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Business Loans In Canada – No Alternative Facts Here !

Just Clear Info On Financing Sources & Solutions

OVERVIEW – Information on working capital & business loan financing sources in Canada . Identifying the right funding sources enhances chances of business and profit growth

Business loans in real world scenarios don't rely on 'alternative facts ' when it comes to achieving the right solution in working capital finance sources, as well as other types of funding your company might need . Looking for some solid 'real' facts on Canadian business financing? Let's dig in.
The one guarantee we provide clients is telling them that business financing is never a question of why, it's usually ' when ‘!
Working capital and cash flow are of course the heart of every business.

The challenges of obtaining that financing become a question of time. Cash flow is required for your regular ongoing business, as well as your growth strategy. In most cases your company is part of a regular cycle - you buy inventory, your produce things, you sell, bill and collect. In a perfect world your suppliers give you unlimited time to pay, and unlimited credit limits. And of course your customers pay you in exactly 30 days. Guess what? It's not a perfect world!

If you are a traditionally financed firm you have access to bank capital for revolving credit lines based on your business needs. But for a growing number of Canadian firms that access to traditional bank capital is not available. Many firms simply can't meet the numerous basic requirements that our banks demand for those low cost traditional bank financing scenarios.

You therefore probably need help in identifying sources of business financing that work for you. The solutions actually are quite numerous - its becomes a question of:

What funding solution best suits your need

What are the costs involved

Does your business model suit a particular financing solution

Working capital financing comes in several forms - it can include:

Non bank asset based lines of business credit

Inventory loans

A/R Financing

Sale Leasebacks

SR&E tax credit financing

P O Finance

Working Capital Term Loans

Merchant loans

One of the most important things you can do for working capital business financing is to ensure that the type of financing you source matches your needs. What we mean by that is that you should match short term needs with short term financing. Factoring, aka ' A/R Financing ‘might be a good example. If your receivables aren't financed, and you need cash to meet inventory and supplier commitments that type of financing is immediate and addresses your needs. Why would you enter into a five year term loan at fixed payments for a short term capital need or requirement?

Understanding your current asset mix and turnover are key to successful business growth & cash flow turnover. Those assets can quickly be monetized into a working capital facility that comes in a variety of methods. The reality is that your inventory and accounts receivable grow lock step to your sales and your ability to finance them on an ongoing basis will give you access to , in essence, unlimited working capital .


There are some solid technical rules of them around how you can generate positive pricing for working capital facilities. By calculating and analyzing some basic financial ratios (we call them relationships) in your financial statements you can get a strong sense of what’s available in working capital business financing and what pricing might be involved. Those ratios are your current ratio, your inventory turns, your receivables turns or days sales outstanding, a, and your overall debt to worth ratio. Depending on where those final ratio calculations come in will ultimately allow your working capital financier to put your firm in a low risk, medium risk, or high risk band of pricing?

The bottom line - Pricing and solutions vary, and your ability to convey the positive aspects of your business to the working capital lender will ultimately lead to a final pricing and solution.

If you're looking for ' facts ' on business financing speak to a credible, experienced and trusted working capital business financing advisor to determine what solutions are the best for your firm.


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

Asset Based Lending In Canada : Your Counter Strike On Business Loan & Cash Flow Challenges

Can Asset Based Lending Save Your Company ? You Decide!

OVERVIEW – Information on asset based lending in Canada . This business loan /cash flow solution solves various financing & growth challenges

Asset Based Lending in Canada seems to be catching the ears of more & more business owners/financial mgrs in Canada. Is it possible this business loan / cash flow financing solution can actually save your company - or at a minimum grow it? We'll let you decide! Let's dig in.

Let's try and make some common sense around this somewhat unknown financing solution - beginning with: What is an asset based line of credit and could it actually ‘save’ your firm and if your firm doesn’t need ‘saving’ could this method of business loan still make sense.


In order to determine if asset based finance can ‘save ‘your firm it might do us well to understand what it is. Don't get confused around the ' jargon ‘which tends to sometimes complicate what you are looking for, which is adequate business financing that meets cash flow and working capital needs.


The basics? Simply that asset based lines of credit are revolving working capital facilities that totally focus on your asset base. When you are comparing this type of financing to a banking facility you will of course quickly realize that the Canadian chartered banking facility that provides a similar (but not exact) type of financing places a lot of focus on issues external to your assets. As we know banks focus on and require very solid balance sheet rations, outside collateral and guarantees, etc.


That’s banking 101. That is not the requirements that are over focused on when it comes to a business credit line. Asset financing lines of credit / loans are business financing working capital facilities that are revolving lines of credit secured specifically by receivables, inventory, and in many cases equipment and real estate if those two latter items are applicable .



You basically borrow, on a daily basis, as you need to, on the sole strength of those assets. Many of our clients are in fact able to also on occasion arrange temporary bulges which can even take them higher than their asset based borrowing capability!



An example of this might be bring a purchase order financing scenario into play which would allow your firm to temporarily borrow against purchase orders and contracts you have received from your customers . This type of additional supplemental financing is best suited for manufacturers, distributors, and firms who export goods or who are wholesalers.


Asset based financing solutions tend to be lumped under the umbrella of ' Alternative Finance ' solutions - fast becoming more popular. While firms with some level of financial distress or challenge use asset financing a lot, the new reality is that this type of financing is being utilized by every type of corporation of all sizes and all industries in Canada, from startups to Canada’s mega corporations. Something must be working!
The reality is though that in many cases firms who have business financing challenges indeed are the perfect candidates for asset based lines of credit if only for the reason that they provided you with capital and cash flow when traditional source can’t.


So if your business needs to be ‘saved ‘ because of issues such as inability to achieve traditional bank financing, or you have traditional financing but it is not enough, than an ABL facility is what you should consider . ABL, by the way, is the acronym for asset based line of credit. Sorry for the jargon!


Other issues you might be facing might include firms that are in a turnaround or workout situation. We have worked with a number of clients who in fact are in ‘special loans ‘scenarios at their bank and they require exit financing from that relationship. Fortunately or unfortunately for traditional business financing in Canada it’s all about the ratios and covenants.

Alternatively your firm might be in a turnaround from either a difficult year or a difficult ‘one of ‘situation that took place. Perhaps your firm is losing money but is on the road to rebuilding sales and profits again? Asset financing loves sales growth by the way!

Asset based lines of credit eliminate those ratios you can’t meet because of being over leveraged (too much debt), or having dramatic seasonal cash flow changes based on your business model and your industry.
The bottom line is simply that your firm now has the ability to be ‘saved’, using our jargon, because you have maximum flexibility in borrowing on your assets, with those assets being the sole focal point of your borrowing base.


As a general rule ABL financing is more expensive than bank borrowing, which is currently at some of its lowest levels in Canadian history. But even paying a premium or significant premium on your ability to borrow in an unlimited fashion against your asset base can still 99% of the time make total sense, that’s simply because your ability to turn capital into profits takes care of a lot of the financing charges.


Speak to a trusted, credible and experienced business financing advisor and discover if the asset based funding makes sense for your firm.


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

Working Capital Financing In Canada : Business Funding 101

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Working Capital Financing : Looking For The Real Thing In Business Funding?

OVERVIEW – Information on working capital financing & Business funding solutions in Canada. What if your company had all the cash flow you need to run and grow your business?

Working capital financing challenges require the ' real thing' in business funding. Is it even possible to imagine your company having enough cash flow all the time? That would certainly alleviate the daily challenges that seeming consume a large amount of the time when it comes to owners/mgmt. Let's dig in.

Part of your success in attaining the right amount of working capital understands what it is and what it is not. The most applicable way we encourage clients to understand the term is simply the funding needed to manage your daily business operations.

So in general it is 'short term 'in nature, although business owners can readily be excused for wondering why it is 'short term' if they are thinking about it all the time!

Understanding and recognizing the problem is half the challenge. That allows you to focus in on real world solutions, which by the way are available! Classic cash flow often simply revolves around understanding how you can finance inventories and A/R.


The concept of a 'cycle 'is very important in understanding the cash flow conundrum and the solutions around that conundrum. The bottom line is that the working capital ties up in your current assets changes - daily!

Cash becomes inventory which becomes a receivable which becomes cash again... what a concept! You will be in a better position to understand the working capital needs, and how to address them if you understand the length of your working capital cycle - simply put: How long does inventory remain on the floor and then converted into saleable inventory, and how long does it take for a receivable to be collected.

Delaying payables is the opposite way to work your way to fairly perfect working capital. Naturally that is not practical or recommended, but our point is simply that your working capital financing investment in your current assets is offset by the timing of your payables, which assists in your cash flow cycle.

So we've focused on the problem, what about solutions? It comes down to 3 basics:

Permanent working capital

Outside commercial financing/ or bank financing if available

Internal cash flow mgmt - i.e. payables mgmt & asset turnover focus

Which one or ones are best for your firm? Focus on understanding the turnover of your receivables and inventory - very quick rudimentary calculations can determine that. Also, develop a realistic cash flow forecast, because you now know what the needs are based on the knowledge we have obtained around understanding our turnover and requirements.

One useful tool? Clients we meet are often searching for a 'quick fix 'number - One calculation you can use in a general matter is that your firm requires working capital in the amount of 25% of your sales. That is of course a very general guideline.

To finalize working capital financing and business funding for your company your options are a long term fixed working capital cash loan, in some cases this is called mezzanine or sub debt financing. At the same time you may be in a position to secure bank financing of receivables and inventory, which has become more of a challenge than ever in the current economic and business environment.

Your firm is probably a candidate for a working capital factoring facility, which monetizes your receivables the same day you issue them - this is one form of generating all the working capital financing you need for business funding. These are provided by commercial non bank financing companies.

Bottom line: Understand what working capital financing is, calculate how much you need and when and why, and then implement the right solution that matches your business overall needs and credit quality. Seek out and speak to a trusted, credible, and experienced business financing advisor in this area of Canadian business 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