What is Financing Working Capital? And Why Should You Care?

Financing Working Capital for Better and Faster More Cash Flow

Financing working capital needs for Canadian business owners requires some ' real world ' info on the capital you need to finance day to day operations . Your competitors might well be using some strategies you might not even be aware of .

Business owners and financial managers constantly try to avoid the ' liquidity crisis' that can cripple a business . As challenging as it might be for non financial folks to understand different ratios and the structure of their balance sheet those type of issues must be understood and dealt with. That allows you to have ' predictable cash flow '

How does the financial mgr of a business address cash flow, and what is a reasonable working capital loan interest rate ? Answers are easier than you think - things like speeding up collection of your receivables, managing payables and supplier relations carefully, and ensuring you don't have excessive long term debt .

Finally you have understand how you can ' monetize ' your balance sheet to deliver on financing working capital needs. There are a number of ways finance folks have of explaining ' cash flow ' ; a common one is current ratio, simply the relationship between your short term liquidity and your short term obligations;

The reality though? Receivables can be slow to collect and inventories can sometimes turn slowly . If your sales are going up and you are on top of collections and payables your have real operating cash flow.

How then do you monetize the balance sheet - that's what our clients wan to know! They aren't looking for classroom lectures on ratios !

So those solutions ? They are more thank most business owners and financial managers might think. They include:

Traditional bank financing

A/R finance

Asset based lines of credit

Tax Credit Financing ( Typically SR&ED credits )

Sale leasebacks

Inventory financing

Short term working capital loans

So our bottom line? Simply that staying focused on turning over your current assets and financing them properly will accelerate your cash flow and provide the solution for your working capital needs.

It's critical to monetize your balance sheet in the right way, understanding the costs of these solutions, as well as how they work on a day to day basis.

Speak to a trusted, credible and experienced Canadian business financing advisor and has a track record of success.

Don't underestimate the need to address these business financing
issues today.







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

Click Here For 7 PARK AVENUE FINANCIAL website !





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

Five Working Capital Loan Hacks You Need to Know Now

5 Tips to Help You Find the Best Working Capital Loan Company

A business working capital loan comes in more shapes and sizes that you might think !  We're the first to admit there are no guarantees in business, let alone life, but there are some real world proven methods of achieving  cash flow solutions that work. So are you ready to apply for a working capital loan - we've got some solid solutions.

Most of clients are quick to ask about the working capital loan interest rate situation. The reality is that loan rates vary , depending on key factors such as the size of the loan and  the overall credit quality and risk parameters.

Strategy 1 - While not optimal you might consider the sale of fixed assets that your company might no longer be using in day to day operations . These would be assets not critical to your business , but in fact might be unproductive in the scheme of things.

Naturally you need to make sure you have bank permission to dispose of assets in case there are security agreements or liens in place. In some cases you might want to consider replacing assets with ones that are cheaper and more productive and less costly to maintain.

Strategy 2 - The Sale Leaseback . This is of course the opposite of buying new assets, You own the asset in question, its free and clear - you just refinance it , typically through a lease financing company  . In some cases you might want , or need to get an appraisal  to ensure you get proper value for the asset.

Strategy 3 - Inventory financing . That is often a challenge for business owners and financial managers given their bank arrangements often do not cover inventory finance. It's a specialized asset financing and is often part  of a non bank asset based lending facility . Asset based lenders like to finance inventory!

Strategy 4 - Other assets . Many businesses often have hidden assets such as tax credits , patents,  etc - They can often be monetized for cash flow

Strategy 5 - Monetize your receivables and sales if you don't have bank credit in place . Quite frankly that's our most recommended and utilized finance strategy. You don't take on debt, your cash flow grows with your sales. Using our recommended CONFIDENTIAL RECEIVABLE FINANCE solution you bill and collect your own receivables and gain cash immediately on making the sale. Quite likely your competitors might already be using this type of financing!

Summary : Those are 5 recommended business working capital loan solutions . Are they guaranteed ? Not always. Will one or some of them work for your firm. Most likely yes!

Speak to a trusted, credible and experienced Canadian business financing advisor with a track record of success who can assist you in evaluating options.

Best Business Acquisition Financing to Buying A Business ?

How to Use Business Acquisition Financing to Buying A Business

When business owners and entrepreneurs make the decision to buy an existing business they need some solid info around how to finance the transaction . So what are in fact the best ways to execute your strategy on business purchase financing?

In many situations clients tell us they often have the ' inside track' on a business or company that would accept a good offer based on the current situation of the seller. There are of course various reasons for sellers wishing to divest of their business - these days succession and management buyouts are popular reasons.

Obviously there exists key reasons why buying an established company is a solid way to execute on your business plans . Most of those reasons are obvious:

Existing revenue and profits

Experienced management and personnel already in place

Elimination of start up risk

Etc. !


In many cases some seller financing may in fact prove to be critical in financing your deal. Previous owners remain in a subordinate position via whats known as a vendor take back, and often the skills an expertise of the seller are valuable in early stages of the takeover.

A debate sometimes exists, but most experts believe it is easier to arrange funding for an established business. When cash flow and sales are positive they play a key role in establishing the ability to repay business acquisition loans of various types. In many cases franchises are part of todays acquiring of businesses - they have brand and reputation already place.

The concept of valuation is key in purchasing a company . Higher valuations might in fact mean you have to finance goodwill when most lenders prefer asset financing solutions

We should point out that many businesses that are purchases are in some form of ' distress' . Here valuations are often attractive but the buyer must demonstrate confidence around ' the turnaround'. Valuations can be made through the buyers own expertise, or you can use the services of qualified business valuators.

What are the key issues in valuation and financing ? They include:

Quality of financials

Revenue trends

Cash flow and working capital positions ( Throwing off cash is better than using cash !)

When we work with clients we spend a lot of time ' normalizing' those financials to ensure the right assumptions and costs are in place.

Business acquisition finance can be facilitate through term loans from traditional and alternative sources, government loans, asset based loans, and cash flow loans.

Seek out and speak to a
trusted, credible and experienced Canadian business financing advisor with a track record of success in how to finance business acquisitions.





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

Click Here For 7 PARK AVENUE FINANCIAL website !





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

Make The Best Business Line Of Credit Work For Your Company

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A Business Tool For More Cash Flow

Asset based lending might just be the best business line of credit that your firm needs .

If you're looking for a financing mechanism that fills the gap in your cash flow needs we have a solution that's working for thousands of firms in Canada already !

And the surprise? Simply that many business owners and financial managers aren't aware of this solution!

After the 2008 financial recession many firms found it even more difficult to achieve proper financing for their business. In otherwords .. credit had dried up. Banks tightened up, some finance firms disappeared ( a good example : GE CAPITAL !) and many businesses and even whole industries found themselves ' out of favor '.

Asset based lending takes a deeper look - if your firm has assets it's financeable! This type of credit line

focuses solely on asset collateral - typically receivables, inventory, equipment, and yes, even real estate.

How does this unsecured credit line work ? Simply by having those above mentioned assets margined to a much greater per centage than you would typically get from a bank . In effect they are your ' borrowing base ' on an ongoing basis.

Asset based lenders often have great expertise in certain asset categories, namely inventory as an example. Asset based line of credit providers monitor your assets on a monthly basis based on your monthly financials . That typically will get you 90% margins on accounts receivable and anywhere from 30-70% on inventory. Often an updated appraisal on equipment and real estate will allow even more borrowing power on those two asset categories.

Once the ' ABL ' revolver credit line is up and running your borrowing power is virtually unlimited as your sales and business assets grow. A combination of regular reporting and good quality assets such as your a/r, etc will allow you to face even minor downturns such as a negative income time period . Many businesses lose money at certain times in their history .

So if you firm has a solid management team and good controls on your business you can expect to receive maximum financing from the asset based lending solution .

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a track record of success who can assist you with your overall cash flow needs.





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


CLICK HERE FOR MORE INFO ON BUSINESS FINANCING AND CREDIT LINES ?





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

Quick Way To Solve Lack of Bank Financing ? Receivable Financing Companies

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Factoring Facilities - The Way Towards Unlocking To More Cash Flow

Receivable financing companies just might be the ' new and improved ' solution to your business cash flow challenge. Factoring companies are providing solutions that in many cases Canadian chartered banks are unable to provide based on their more severe credit requirements for borrowers.

Why then should a business owner of financial manager be looking at a receivable financing facility ? That's a typical question posed by business owners who sit down with our firm to discuss their finance challenges.

The simple reason is pretty basic -

accelerated business cash flow

. From the day you generate an invoice and make a sale your company is eligible for immediate cash. And the good news is that you can finance all your sales and invoices, or only partially draw on a basis that suits your needs. Most companies have their own cash flow cycle, including the seasonality of the industry they are in.

We have mentioned that in spite of accounts receivable financing rates ( they are higher than bank financing ) this type of corporate finance solution has become the de facto alternative to traditional business credit lines. More so for the small and medium sized business in Canada, also know as the ' SME ' sector. But don't be surprised when we tell you than many larger firms use a flavor of this method of finance also.

Why is being ' cash flow positive ' so important in today's biz world? Simply because competition is tougher than ever and your ability to enhance your reputation with suppliers and customers is critical. It gives your firm 'professional visibility '.

There are in fact

other forms of short term cash flow financing including sale leasebacks, financing sr&ed tax credits, short term working capital loans

based on solely your sales volume, etc . A/R factor financing collateralizes your receivables, but not other assets.

Business clients will always ask if there is an ' upper limit ' to the amount that factoring companies will provide against their sales. The answer is there is no upper funding limit! Your sales revenue becomes almost an automatic ATM machine!

If there is one solution that we recommend against all others for a receivable financing facility it's a ' Confidential ' facility . It allows you to bill and collect your own receivables and achieve all the benefits of this type of solution .

If you're focusing on almost daily ' cash flow survival ' it might be time to recognize the finance solution is right in front of you - A/R finance !

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a track record of success in business finance.







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

Click Here For 7 PARK AVENUE FINANCIAL website !

Steps To Commercial Business Financing Options

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Ending The ' No Bank Financing ' Conundrum

Business financing options are provided by a number of non bank specialized finance companies in Canada. They provide an array of corporate solutions , all of them different but still allowing you to achieve cash flow and working capital goals . They are in fact , the answer to .. you guessed it ' no bank financing' conundrums.

The challenge for business owners and financial managers is to identify and execute on who those sources are and what they can do for your company . Many companies, and industries in fact have specialize needs .

When you think of the right type of business financing for your company it's important to think of senior and junior ! What do we mean by that comment ? Simply that a senior lender will want all the security on your business, typically handled by a document called the G S A - General Security Agreement . It then becomes a challenge to source other types of cash flow and debt solutions which can't be monetized.

A good example of a senior lender is Canadian chartered banks. But when that source of capital isn't available many firms these days choose asset based lenders , allowing them to drawn on various assets of their business but with more flexibility.

In some cases your business might need a ' bridge loan' - they solve temporary capital shortages .. they are a ' bridge' to future refinancing of your business.

Leasing companies are one of those specialized asset lenders that financing both new and used equipment, even software. While many firms think they are eligible for VC or private equity financing in fact they are poor candidates for that type of financing .

Is there a bottom line? We think so , Simply that if you are looking for a commercial finance company for debt and medium or
short term financing options alternative non bank lenders are a great choice.


Seek and speak to a trusted, credible and experienced Canadian business financing advisor with a track record of success when looking for a non bank commercial finance company 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

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com

Click Here For 7 PARK AVENUE FINANCIAL website !





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

Receivable Financing Problems : Here's What Really Matters

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Creative Ways to Solve Working Capital Challenge : Steps to a Successful Receivable Financing Problems

Receivable financing problems grow out of the need for a businesses inability to grow cash flow as you run and grow your business. One strategy we recommend to clients is to grow cash flow and ' lose money'. That's not a trick statement of course, and when business owners understand several forms of receivable finance
via invoice factoring can solve their challenge they want to know more. Let's dig in!

A/R financing is a source of working capital - it's not debt or a loan per se. In technical terms it's the sale, or ongoing sale of your A/R generated out of your sales. That transaction is accomplished via a ' discount' basis, typically in the 1 to 2 per cent per month basis if you're on top of your collections. That's where ' the loss' comes in - it's a financing cost but at the same time has delivered all the cash flow you need. Suffice to say your business should be able to handle that 1 or 2 per cent drop in gross margins with the result being - Cash Flow!

Invoice factoring allows you to run and grow your business, sell more by taking on being orders and contracts, and also has the unique ability to allow you to negotiate solid supplier prices . Why ? Because you have the cash!!

This form of receivable finance is used by almost every industry in Canada . Even those Bay Street boys use it also - they apply a fancier name - Securitization.

What then are two major benefits of this method of Canadian business finance. It's simply the ability to get a cash advance on your sales and of course the quick turnaround- typically 24 hours! Bottom line - pretty well same day funding

Yes factoring is more expensive than Canadian chartered bank financing = that's the perception. But that must be balance against the hard reality that thousands of businesses do not qualify for all, or even some of the cash flow financing they need. And when you're carrying a/r 60=90 days even that bank credit line doesn't help.

The best form of account receivable cash flow financing? We call it Confidential A/R Finance - You bill and collect your own receivables, reaping the benefits and eliminating disclosure.



We're open enough to say that the majority of firms who in fact entertain receivable factoring can't get financing elsewhere, particularly at their bank. But don't forget also that many instances involve firms such as yours who are growing too quickly or who have landed that ' big contract' or order.

It's at this time that business owners appreciate the fact that their net worth, profitability, debt coverage, or operating losses aren't under the microscope anymore. And your firm is free to explore other methods of debt financing outside your A/R assets.



Speak to a trusted, credible and experienced Canadian business financing advisor with a track record of success in this key area of Canadian corporate finance.





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

Click Here For 7 PARK AVENUE FINANCIAL website !