Wizard In Working Capital Solutions And Finance Cash Flow Tools? You Are Now!

Tweet





Is Your Working Capital Situation Scarier Than A Zombie Movie?


Information on working capital management solutions in Canada . What tools are available to finance cash flow and manage business finances properly ?

The constant battle for working capital for the Canadian business owner - it's a continuous journey. And sometimes it’s a scary one, maybe not as scare as some of those popular Zombie movies... but pretty close sometimes!

Are there some finance cash flow tools and knowledge we can share? You guessed it... there are. So we’re of course talking about the funds that are in fact, hopefully ... ' working ' in your short term operations. It's critical to understand a couple of key concepts before we can take you to that toolkit of solid cash flow solutions. So the concept of ' net working capital which is really the difference between your short term assets and liabilities is critical. And at the end of the day the final success you have in financing your business comes down to two key areas -

How you manage those assets
How you finance those assets

Simple as that.


When you think of it, you’re basically on a constant journey with this whole issue. We read an analogy the other day where you might be considered either a warrior or a wizard when it comes to certain aspects of business success. We suppose that we are saying that you have to be a bit of both.

The ' warrior ' aspect of today’s issue is your constant effort to turnover assets, but at the end of the day you have to be a bit of a wizard, especially if you are growing, because that investment in receivables and inventory is in effect your permanent investment. So both your lenders and yourself have a vested interest in how you are doing on that issue - especially if bankers, other lenders, lessors, etc have loans outstanding.

When you think about it the real challenge of finance cash flow tools is really the issue of using the financial solution that comes with an appropriate rate and risk level.

So what are some of the working capital solutions that your firm can employ? They might be one or several of the following:

Bank credit facilities

Receivable financing

Asset based lending

Supply chain/Purchase Order Finance

Sale leaseback of fixed assets (we’re a bit outside out current asset scenario here but sale leasebacks do work)

Tax Credit monetization

Securitization of receivables/contracts

While we would all probably agree that it would be great to have a precise formula around which solution worked best that’s not the real world of course! It simply becomes a case of ensuring that the increases in sales you are enjoying are financed properly. And you want to be able to do that proactively... we can't count the number of clients who we meet who are in emergency cash flow crunches. Why? Because they didn't plan or use some basis analytical tools to measure the performance of their receivables, inventory, and payables.

Seek out and speak to a trusted, credible and experienced Canadian business financing manager who can assist you with your finance needs. It doesn't have to be scarier than a Zombie movie!

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

Click here for 7 PARK AVENUE FINANCIAL

http://www.7parkavenuefinancial.com


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .

' 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

Here’s Your Fighting Chance For Cash Flow Solutions! How To Pinpoint A Canadian Business Finance Solution

Looking For Working Capital Survival Techniques?


Information on cash flow solutions for Canadian business owners . Understand the problem and find a business finance solution

Canadian business owners and financial managers are looking for ' fight back' type cash flow solutions
for their survival and growth challenges. Let's examine that from two angles understanding and pinpointing the problem, and then implementing a satisfactory business finance solution for your firm, one that makes sense in the here and now!

While clients we talk to are often very focused on fixing the problem we’ve felt it's just as important to understand how and why they got there. Makes sense right?

If you step back and take a closer look at what's going on in your business you will see that the constant pattern of payments and receipts to your firm dictate the need for Canadian business financing at certain times. The cycle typically constantly repeats itself, your company buys good, generates a payable, incurs costs in creating your products and services and finally invoice generation to your clients. And then you wait!

That's when we arrive exactly at the crux of the matter as typically at this time your cash shortfall is at its greatest point. All the while your firm of course has payable and creditor obligations, and let’s not forget the tax man!

Now we are getting to the core issue, creating cash flow solutions to finance these needs. We now arrive at a point where many companies ' blow it ' for lack of a better word. That's because the obvious solution is ' the bank '. We can't count the number of times clients told us they have approached their bank on what we can politely term a ' short notice'.

Guess what though. Banks don't like to lend on a short notice. Quite frankly they are managing their own cash flow issues! Clients simply often don't realize that at this point in a company's need for a business finance solution that insolvency risk is at its greatest.

The other irony of our situation as described above is that in many cases business has never been greater for your firm. New contracts, new orders abound! Yet history tells us many companies, small and large have gone under when profits and sales were great, but cash has run out.

Solid and savvy Canadian business owners and financial managers will step up to the challenge this time and learn to plan better for short term borrowings. You don’t want to over borrow but at the same time you don't want to commit yourself to having excess cash and liquidity. (Although that’s a problem clients never seem to have!)


One of the best ways you can monitor your cash flow needs is to monitor on an ongoing basis changes in your assets and debt. Business owners often don’t realize that the transfer of funds between those two identify the movement of your cash.

If assets go down cash has been generated from the asset, if assets go up you have in fact invested in this asset, and, guess what, your cash has gone down.

In Canada you have a number of available cash flow solutions for working capital needs. They include properly managed bank debt via a solid relationship and track record. Companies that can't qualify have access to asset based lines of credit, working capital facilities, receivable and inventory financing on their own or together and even monetization of tax credits and purchase orders.

Looking to better understand what business finance solutions makes sense for your firm, and why? Speak to a trusted, credible and experienced Canadian business financing advisor to determine your firm’s best course of action.

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

Direct Line = 416 319 5769


Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .

' 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

6 Ways To Compare And Analyze Asset Based Lending Revolving Credit Facilities : ABL Financing Works

Are You In a Position To Properly Compare Business Lines Of Credit ? You are now!



Information on why financing via asset based lending is increasing as an option in Canadian business

Clients who listen to us tout the positive aspects of business revolving credit via abl asset based lending and financing sometimes have a great question for us ; namely ' How can we compare this type of Canadian business financing to other forms of lending, i.e. the traditional chartered bank line of credit ?'

Good question! Right? So a good way to do that is to set up 6 common benchmarks that allow you as a Canadian business owner or financial manager to do a proper analysis or comparison. Let's cover off the basics of those 6 comparison points.

First of all, we can start with borrowing capability. In general terms we can make the following statement - under a bank facility you have a pre -set credit limit that typically is reviewed annually. However with an ABL facility your borrowing is always tied to the asset base of your firm, which typically is a total sum or receivables, inventory, unencumbered equipment, and even real estate. While bank A/R facilities are more often than note capped at 75% of A/R the asset based revolver will typically come in at 90%. On top of that you will also receive more generous inventory margining 99% of the time, in our opinion.

Let’s move on to overall structure, our 2nd comparable. Larger more high quality asset based facilities typically have a multi year length, while your bank facility is renewed (hopefully!) annually based on historical financial performance.

Point # 3, which we will call follow up or monitoring via your lender. Here is where a dramatic difference occurs. Your bank will assess and provide and renew the credit facility based on operating ratios, loan covenants, external collateral perhaps, and quality of owner guarantees.

Asset based lending takes a different approach; it counts your assets, both at the start of the facility, and periodically during the facility. So in the same manner that you provide what bankers call ' borrowing certificates ‘the ABL lender actually only focuses on those same assets within those certificates. Are we making ourselves clear, it’s always about the assets!

Point # 4. Bank lines of credit are available from... you guessed it... Canadian chartered banks. The ABL revolving credit universe in Canada, while not huge, is non bank in nature.

It is made up of ' unregulated " (banks are regulated) independent finance firms, small and large that offer revolving credit financing to Canadian business. Faculties are available from 250k to hundreds of millions of dollars in size. As such all types of firms that might not qualify for traditional bank financing are immediately eligible for ABL finance, even if they have financial challenges, up to and including considering a bankruptcy filing!

Let’s move on to point # 5 - pricing. While bank pricing is generally perceived as the best financial cost on Canadian business borrowing clients of the same credit quality can achieve the same or better pricing via an asset based line of credit. Firms who can't obtain bank lines of credit still qualify, but of course pay more for these facilities.

Last, but not least, covenants. While banks focus on cash flow coverage (typically 1.25:1) balance sheet ratios, and leverage ABL lending draws on appraisals of assets, reporting, and operational type audits.

What's better for your firm a traditional bank business line of credit or an ABL financing. You're now in a position to better decide. Speak to a trusted, credible and experienced Canadian business financing advisor today on moving forth with the selection of your choice.

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


Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .




' 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

Do You Know How To Raise Cash For Financing A Business Purchase Acquisition?

Tweet

Hitting a Bull’s Eye In Canadian business acquisition financing!


Information on raising cash and debt financing for your business purchase acquisition in Canada

When financing a business purchase acquisition it kind of comes, fortunately or otherwise, to the fact that ' size counts '! . So the cash you need will directly relate to the size of the business you are financing, as well as the asset quality.

Naturally how the company you are purchasing and raising cash for is doing play a key element, as often less cash is required and the focus is on financing remaining assets. So a solid rule of thumb to keep in mind is simply that the amount of cash and ' finance power ' you need is very directly related to your targets situation on profitability. In other words a lot less real cash is required if a company is not profitable or barely breaking even. That certainly makes the job easier, right?

In talking to clients about financing a business purchase we often feel they are focusing solely on the purchase, and not on the on going capital and cash flow needs of your newly acquired business.

We also have to consider the fact that raising cash for a business might often be more feasible if you have a strategic partner or other equity investor. That unfortunately will dilute your equity position but might be realistically the best course of action. And it does certainly allow you to purchase and fund a business with less ' monetary' contribution to the deal.

In the case of larger transactions Canadian business people might well look to a private equity partner in the deal. Their assistance in helping you complete an equity investment, as well as their experience in any specific industry is of course a valuable consideration. And to sum up the whole issue of getting either a strategic or operating partner or private equity group we can simply say that often times this might well add credibility and realism to your offer in the eyes of the seller.


Bank financing in Canada is available to finance business acquisitions. You or your Canadian business financing partner needs to address the following issues at this point:

A concise overview of how you will run the business - i.e. management depth, experience, etc

You need to ensure the industry your business is in is ' in favor ' when it comes to a bank appetite

Your business plan and projections have to be realistic relative to cash and working capital resources re operations and growth

In a perfect world - and we know it's not! You want to be in a position to demonstrate sales growth, profits, and a balance sheet that hopefully won’t have a debt/ equity ratio of 3:1 as an example. And your assets such as inventory and receivables should demonstrate borrowing power quality.

Other ways to finance your business purchase include asset based lending, bridge loans, use of sale leasebacks, and even the government SBL loan if the business has under 5 Million in revenue.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor when it comes to a capital raise for a business purchase acquisition in Canada.

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


Click here for 7 PARK AVENUE FINANCIAL
http://www.7parkavenuefinancial.com


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .



' 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

The Only SR&ED Funding Guide You Need For Your SRED Loan on Your R&D Tax Credit

Tweet

Although Canada's Sr&Ed program seems to be going thru some changes in terms of application and adjudication of your claim the good news is that the ability to finance your SRED (SR&ED) claim is as straightforward as ever. Let's explore some key basics around what you need to know to finance your claim and get a head start advantage on your ability to reclaim SRED funds.


Put very simply, if you have filed a SRED claim there are a number of reasons to consider financing that claim for immediate cash. It's a simple case of staying ahead of the game and monetizing your R&D tax credit now to accelerate working capital.
There is no industry that is unable to finance a SRED claim - the program of course covers a wide variety of industries in Canada - many claims we see from clients are in the software and technology area, but virtually every industry has the ability to capture a SRED government grant that is of course, non - repayable.

We should state however that SRED claims that are prepared by proper technical advisors tend to be easier and quicker to finance - that is simply because with that experience and credibility comes the assurance to your lender that your claim has a high probability of being approved in entirety or for the most part.

That brings us to a critical point around the financing of the SRED claim, which is often our client's most typical starting question - 'Our Company has a SRED claim - how much can we get for it today?" SRED loans typically start out at 70% ltv. Ltv is an acronym of course in finance for loan to value, so we are simply stating that you can immediately borrow and receive in the range of 70% for your SRED claim. Naturally that 30% gap still remains with your firm to its credit, it's simply that you don't receive SRED loans for that remaining 30% which acts as a solid buffer to cover the probability that your claim might be adjusted by Canada Revenue Agency - it also covers off the financing costs.


A popular misconception around SRED financing is that it is a loan - that is not the case in the technical manner that we as business owners view loans. A term loan, or short term loan for that matter adds debt to your balance sheet, and you make payments on a loan of course. SR&ED financing of your R&D tax credit is simply the monetizing of your SRED claim, with the claim as collateral - so your firm is incurring no additional debt. Also, the beauty of a properly constructed SRED financing is that no payments are made for the duration of the financing - The financing costs are netted out against your final cheque that you receive from Ottawa and your province. (SRED funds usually have two components, the federal and the provincial portion.)

Sr&Ed financing is efficient and can happen very quickly - as a business owner you should view the entire process in the same manner as you would any other application for financing - example - leasing some equipment, etc.

The key aspects of a SRED application are a copy of your SRED claim, a copy of your tax filing that you of course made at the same time as you filed you R&D tax credit, and typical information on your company, i.e. your financial statements. If for some reason you have made the decision to finance that claim after you have had your technical audit you are eligible for even a greater advance that our aforementioned 70%- however typically clients come to us when they have just filed a claim, or in some cases, are in the process of filing.

Financing of your SRED loan takes a couple of weeks from start to finish, in our experience. So your strategy to finance your claim and receive cash for it can often be enhanced by planning early, which is always a good thing in any aspect of business finance.

Speak to a trusted, credible, and experienced financial advisor in SR&ED TAX credit finance to determine how easy it is to monetize that claim and turn that non repayable government grant into cash flow that will accelerate your growth and profits.

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

http://www.7parkavenuefinancial.com


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .



' 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/4989373



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

Alternative Finance Solutions? Why Non Traditional Financing Alternatives Just Might Work For Your Canadian Business

Tweet






Seeking But Not Finding Alternative Financing In Canada
Hint - It's Not What You Think !

Information on alternative finance solutions for Canadian business. Non traditional financing provides significant financing opportunities

Not every one these days is totally clear on the term of alternative finance , so lets recap some non traditional financing alternatives that just might make sense for your business financing needs. And to quote ourselves you just might find that alternative, in some cases, is the ' new traditional '!

First thought that comes into a clients mind when they think of the need for business capital? Of course it’s the Canadian chartered banking system. But thousands of business owners and financial managers quickly find that while somebody seems to be qualifying for those loans and other bank facilities it isn’t them!

We don’t want to weigh in too heavily on why the banking solution isn’t always totally available for your business - it’s just a fact that the Canadian banks manage risk very well! But when you qualify boy are those rates attractive!

We will add one more point about the banking system in Canada, which is simply that while you might in fact qualify your needs, ironically may be deemed too small or too large. How ironic.

So that allows us to move on to a discussion on alternative financing vehicles that might just work for your firm. One of those is in fact a bank alternative that is non bank nature. It's the government guaranteed SBL loan program. Although it’s facilitated by a bank the majority of the loan is guaranteed under the INDUSTRY CANADA loan program, allowing you to tap into rates, terms and structures that are attractive.

To access the SBL program you need to seek a bank employee who is aware and comfortable with the program. And the other qualification is simply a loan package that covers off the basics, which isn’t hard as you might think. Your financials, a business plan, and some back up documentation and you are off to the races.

Another solid form of alternative financing is Asset based lending. These are non bank commercial credit facilities that secure, into a business line of credit your A/R, inventory, equipment, and real estate if applicable.

Almost any firm (with assets!) qualifies for ABL lines of credit - including manufacturing firms, service companies, technology companies, etc. Most facilities start at the 250k range and there is pretty well no limit on the upper end of an asset based deal. Oh, and by the way, some of the largest corporations in Canada use this ' alternative ' finance vehicle to run their business. Apparently (to quote us!) alternative is the new traditional for them.

Other forms of alternative finance? You just might be surprised. They include"

Receivable finance/factoring

Supply chain PO finance

Tax Credit Financing

Securitization of A/R


Seek out and speak to a trusted credible and experienced Canadian business financing advisor on how alternative finance can work for your firm... and you just might find that alternative is the new traditional!

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

http://www.7parkavenuefinancial.com


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .



' 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 Decide If Financing Receivables Is a Solution for Your Working Capital Funding

Tweet

We call it the R R factor. And we are not talking about rest and recuperation! The R R factor will give you a sense it its time to consider whether a newer, more popular method of financing receivables is your working capital funding solution.

We're going to provide you with a quick but easy and powerful tool to determine if your cash flow challenges need to be addressed in a more positive fashion. It's the receivables to revenue ration - hence the term R R. First, take you year end balance of A/R, which is of course your uncollected sales revenue at that point in time. Then determine how many weeks of sales that represents. Calculate this ratio historically and you have a method of determining whether your cash flow and working capital requirements are changing.

So how does business address the challenge of working capital funding when it's as challenging as ever to borrow. Many companies are assessing factoring, or financing receivables. It's a simple process that is only made complex and difficult when you don't understand the pricing, how it works on a daily basis, or the important need to align yourself with a partner that offers and matches your business financing needs.
The process is actually quite simple --- On a daily, weekly, or monthly basis - it's your choice, you sell your receivables. So what happens next? Simply that the day you generate that sale you have the same day cash for those receivables. Therefore the Canadian business owner and financial manager have created a true ATM machine out of the investment the company has in accounts receivable. Readers will also begin to immediately appreciate that they have just stumbled upon the ultimate cash flow solution, because every time they sale they have instant cash. So what's the catch?

We believe there are 2 catches, and when the business owner understands and addresses them the receivable financing solution becomes much more clear and common sense.
The first ' catch ' is the cost. The typical Canadian cost of financing a receivable is 1.5- 2% / month. The firms offering the service do not call that an interest rate, they call it a discount fee. You sold something, for cash, i.e. you're receivable, and it was discounted by 1 or 2% for that privilege. Is that expensive. Absolutely... maybe! That is because most business owners don't pick up on the fact that they are in effect carrying those receivables already, which is a cost that is often not intuitively calculated by the business owner. Secondly, the term ' opportunity cost ' comes in to play, because the reality is that if your firm can generate a good return on investment you can use the cash flow from your receivable financing to generate higher profits.

So why isn't factoring or receivable financing the choice of every Canadian business for working capital funding? The reality is, and this is a surprise to many, that the largest firms in Canada utilize this financing. They simply have a stronger ability, due to their financial strength, to determine how the facility works on a daily basis, the best type of facility we recommend to customers is one in which your firm is able to bill and collect its own receivables, which is not offered by 99% of firms in the Canadian marketplace. Search out that 1% solution is what we tell our clients - at that point you will have a competitive financing vehicle for working capital and virtually unlimited cash flow growth.

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

http://www.7parkavenuefinancial.com


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .

' 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












http://www.7parkavenuefinancial.com/financing_receivables_working_capital_funding.html



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


Article Source: http://EzineArticles.com/5263367