Small Business Financing In Canada

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Working Capital and Financing Options

Small business financing in Canada ' should ' mean that your company has access to all the working capital you need to both run, and grow, your business .

At 7 Park Avenue Financial we believe that is not impossible, but the business owner and his or her financial manager must have a solid understanding of the options and your company's ability to qualify for and execute on the option or options that make the both sense . Note that in some cases it might make sense to cobble together more than one option to achieve that ' cash flow nirvana' you are looking for .

The business reality is that cash flow doesn't discriminate - both companies in looking for SME COMMERCIAL FINANCE solutions, all the way up to the largest corporations need access to cash flow options. The challenge for smaller firms is that business finance loans are often more limited to the smaller company. So it's therefore important to know what those options are!


Accessing the cash flow challenge might be easier than you think . More often than not smaller firms though have the challenge of locating the expertise and resources they need to evaluate the business finance conundrum.


Two key elements of your first step to what we call 'working capital assessment 'are your gross margins and your turnover. That’s the big problem we have with text book / academic solutions to working capital - they point you to the text book calculation - give you a formula which essentially has you subtracting current liabilities form current assets, and voila ! the inference is you have working capital . However, our clients have never paid a supplier or completed a company payroll with a ratio!

Many firms have an ' inventory component ' to their business - These companies are typically non service type firms , which often are less capital intensive.

To properly assess your working capital needs focus on understanding your turnover - how much inventory do you carry, what are the days outstanding in inventory, and as importantly, or more importantly, are your receivables turning over .

Business experts tell us that for many firms 80% or so of the total of all the business assets you have are tied up in A/R, inventory, and, on the other size of the balance sheet let’s not forget accounts payable .

It is possible to have financial business financing success based on your new found knowledge and analysis of your cash flow and asset turnover.


Canadian business financing solutions to small business finance loans really revolve around a couple viable solutions. Typically, in our experience Canadian chartered banks cant satisfy your business working capital needs - if only for the reason that they rarely finance inventory and require significant merit in your overall financials, profitability, external collateral, personal credit worthiness, etc .

Solutions To Business Finance In Canada

 

There are very viable options that have the potential for a 100% turn around in cash flow :

A total working capital solution can be achieved by a they working capital finance solutions such as a non bank asset based line of credit. This solutions monetizes your accounts receivable and inventory into one borrowing facility .

This is commonly called an asset based line of credit that provides high leverage margining on all you business assets.


Other solutions, still as viable , yet somewhat misunderstood are securitization, and purchase order financing of new contracts and orders. (Your suppliers are paid directly for the orders you have in hand - what could be better than that?)

One of the most active types of ' instant small business financing ' Finally, coming up the road at lightening speed is factoring and invoice discounting. We mention them lastly but they are probably the most popular method, gaining traction everyday. Our favorite is confidential invoice financing, allowing you to control your financing .

Recommended A/R Small Business Financing : 

 Confidential Receivable financing, allowing your company to bill and collect your invoices in a normal fashion , turning current and future sales into instant cash flow.

We have identified several ways to determine the need for proper business financing ; we have outlined a number of solutions that will take the guess work out of working capital.

These loan and financing options are available with a bit of research and/or help from a trusted , credible and experienced Canadian business financing advisor who can provide you with timely and valuable assistance in your 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


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 Does Non Bank Receivable Financing Work ?

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Confidential A/R Finance Is The Best Kept Secret In Business Credit Finance

Accounts Receivable financing isn't always in the headlines - we're the first to admit that . But it should surprise business owners and their financial managers that thousands of Canadian firms are moving toward a working capital financing facility known as receivable factoring.

There are numerous reasons why businesses choose, or must choose to finance their sales outside traditional bank norms . One reason might be they aren't able to access all the business credit they need ; in other instances they might not qualify for any traditional bank credit solution while at the same time their business is growing !

Confidential Invoice Financing

Here is a question . What if you could get invoice finance that would allow you to bill and collect your own receivables under this facility? Possible? Absolutely.

Canadian business financing solutions such as Confidential A/R Finance provide your business with unlimited cash flow, and, unlike your competitors, you , not a third party, are in control of your facility.

HOW RECEIVABLE FINANCING WORKS

Most Canadian business owners and financial managers know a bit about how factoring, aka receivable financing works.

The Confidential AR Financing Difference :

Factoring , we call it ' old school ' factoring, is a process whereby you sell your receivables and receive immediate, same day cash for those invoices. 99.9% of all the financing done in Canada under this business model has the third party lender firm collecting your invoices and notifying the customer. They also follow up for collection and interact with your customer, because, as we said, you have sold them your receivable, or receivables in whole.

Why Trade Receivable Financing :

Clients of 7 Park Avenue Financial like the end result:

Instant Cash Flow

Constant Working Capital replenishing

What they don't necessarily like is the 3rd party firm taking over the client relationship as it relates to accounts receivable.

Enter Confidential Receivable Financing - Under this scenario your receivables are billed and collected by your firm , and there is no third party interference with the relationship you have with clients when it comes to billing and collecting.

Business owners like this latter model - The bottom line is that your financing relationship is not disclosed to your customers, and that’s a good thing. Your firm achieves all of the benefits of accounts receivable financing, but under the confidential invoice finance model your receivable factoring is in your control.

Under traditional U.S. And U.K. type receivable factoring your customers receives a letter from either yourself or the factor firm, notifying your clients about the issue of your firm having sold its receivables. If you don’t care about that, no problem...! But if you do care about what the perception of that letter might be then you should consider confidential invoice finance.

Using a solid non bank a/r finance model gives you a competitive advantage - It differs from bank financing, and is the alternative to the traditional factoring of invoices that we have talked about here. The bottom line is there is a world of difference in the facilities offered.

Cost Of Factoring / Confidential A/R Finance

The cost of confidential invoice discounting is the same as traditional factor financing - so that’s a good thing! This method of financing is costlier than bank interest rates, but does not require the significant emphasis that banks place on personal guarantees, outside collateral, ratios, covenants, credit limits , etc. In fact business owners may be surprised to know that credit limits are virtually unlimited if you business has the sales levels to justify increases in the facility, and that the facility is operating properly .

Speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success , one who will assist you in closing this valuable type of working capital financing solution.







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

Equipment Leasing Companies In Canada

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Equipment Financing Rates & Strategies

Excellent equipment leasing options and solid asset finance solutions do exist in Canada , and suffice to say that equipment finance continues to be a popular and success method of acquiring both new and used assets for your business . Yes Virginia , used assets can be financed also. Financing assets is a proven formula to run and grow your business while at the same time conserving cash and not having to disturb existing credit lines.

Why Is Equipment Lease Finance So Popular with Canadian Business?

There are several key factors that drive the reality success of equipment financing in Canada :

Tax and Accounting Benefits

Conservation of capital and cash flow

An alternative to owning assets that depreciate in value and require replacement

Leasing assets is the ownership alternative - your firm reaps all the benefits of using the asset but is not obligated to the significant capital outlay for those assets. An old adage in the equipment asset finance industry is that businesses benefit through the use of assets , not the ownership . While there is nothing wrong in that other saying - ' pride of ownership ' the reality is that to stay competitive in current times business owners and their financial mgrs must always consider optimal use of capital.

Naturally the additional cash flow saved from lease finance strategies allows your company to invest in other resources and assets to make your business more profitable and competitive.

One of the major concerns for any business, particularly those that are in industries that are deemed ' asset intensive ' is the issue of obsolescence.

Assets that run your business include those shop floor assets as well as the computers and software that drive your business forward. Also some assets have limited long term use - a good example might be the constant upgrades needed for computers and software. ( Yes , application software can be leased !)The constant upgrading of technology needs can be a major cash drain on your business if this component of your business is not addressed properly from a cash flow perspective.

Purchasing assets that have limited long term use is not a solid working capital strategy for any business- your accountant can confirm that one ! Not too many business folks can imagine using todays computers for 3 to 5 years out - doubtful to say the least.

Equipment finance provides your business with ' buying power ' ; that is to say that you can buy more and better assets if your have a lease finance strategy in place.

Example Of Effective Leasing :


Lets say you need a new computer system for 250,000$ and the reality is that an alternate vendor has a better solution for 350,000$. If you were purchasing you have to wrestle down two key issues, laying out 250k , or alternatively coming up with an additional 100k of real cash to complete the second alternative purchase .

The monthly lease payment on a 250k 3 year lease would be approx 7700 dollars, and on a 350k deal it would be approx 10 600 dollars .

So as a business owner which solution do you want to wrestle with - paying either 250k or 350k out of working capital, or working an additional 3k into your operating budget?

Certain assets can also be financed under an operating lease strategy - that's a more technical aspect of equipment finance for another day but one that bears checking into .

The Leasing Bottom Line :

Business owners and financial mgrs must take advantage of some great rates, terms, and structures via one of the most comprehensive and flexible asset finance strategies available to business.

Seek out and speak to a trusted, credible and experienced equipment leasing advisor with a track record of business finance success, You will get the help you need maximize the benefits of this Canadian business financing proven strategy.



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

What Are The Best Business Financing Options ?

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Sources of Business Finance In Canada

Financing sources in Canada for Canadian business must seem sometimes as if it's a matter of truth or fiction for Canadian business owners and their financial mgrs. That certainly the feeling we get from clients talking to us at 7 Park Avenue Financial .

So if those sources of business finance exist ( THEY DO !) let's take a look at what is available for the commercial borrower, hopefully eliminating some of the ' turbulence' associated with the search for business funding.

Sources of Business Finance

We will focus primarily on sources of capital that essentially are available immediately for borrowers - they include:

Trade Credit From Suppliers

Bank Solutions

Equipment Lessors

Working Capital Providers - A/R Finance / Inventory Finance / Purchase Order Finance / Short and Intermediate Term Working Capital Loans


Businesses should never forget that supplier/vendor financing is one of the best and cheapest forms of capital and cash flow. Why ? Quite frankly it is much easier to obtain, is rarely, if ever ' secured' or ' collateralized ‘and typically carries no interest penalty


You should not forget that delaying payment to suppliers is a ' cash flow positive ' , but, and it's an important but, you never want to have that strategy deteriorate the relationship you have with a key vendor. Furthermore if your firm has the cash the cost of not taking a payment discount also must be measured .


So why is prompt payment to a supplier/vendor such a key cash flow / profit variable ? You can check with your accountant but let’s say you bought 10k of product from a supplier and were able to successfully negotiate a 2% NET 60 payment term. Calculating the discount foregone and the proceeds from the use of the money you might find that’s an 18% savings rate -so if you can borrow for less than that you clearly are ahead of the game. Bottom line - never underestimate the power of supplier financing from a payment and cash flow perspective.


While banks might be consider as a first choice ' go to ' when it comes to financing sources under consideration many firms looking for ' SME ' Commercial Finance solutions will often find they don't qualify for some of all of the funding they need to run and grow the company .

Business lines of credit from banks are low cost and flexible - but they require require appropriate bank collateral and the understanding from yourself that there might be some restrictions on your financials re additional borrowing from others, etc. If your company meets cash flow and ratio and covenant requirements from banks they are certainly the lowest cost and excellent source of intermediate capital for loans on equipment, fixed assets, and a revolving line of credit.

One of the most popular forms of finance , growing constantly in popularity, is A/R financing . Why? Simply because it provides significant capital without additional equity and allows you to avoid long term debt. Essentially you are monetizing your current assets, ie receivables .

Yes a/r finance has a higher cost, and we spend a lot of time in speaking to clients around the fact that the old stigma of A/R factoring disappears more and more every day. The old alternative is fast becoming the new traditional!


The benefit of A/R Finance also includes that fact that your sales in effect become an ATM machine, generating true cash as you sell products/services. This type of business finance also is an effective way to manage seasonal bulges in your business.


Inventory financing is typically done in combination with a bank line of credit, but is even more effective when in conjunction with a non bank asset based line of credit.Good inventory financing strategies are available if your firm has quality products; good inventory turns, and is not of a perishable type - i.e. food.


Equipment financing is a solid use of intermediate financing. It allows you to avoid large cash outlays, replenish assets and technology, is easier to obtain from a financing approval point of view, and allows you to simply pay for assets over their useful economic life. A huge portion of all businesses in North America lease both new and used equipment .

The bottom line in Canadian business financing options ? You can eliminate the turbulence that comes with business finance challenges by understanding what sources are available for what maturity. Simple as that.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success , assisting you with your needs for financing sources in Canada to run and grow your company.



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

What Is An Asset Based Lending Facility ?

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Commercial Asset Based Lending Works - Here's Why

Commercial asset based lending in Canada is basically a healthy alternative to traditional bank financing solutions that business owners and their financial mgrs are looking for to run and grow their companies . Most business people agree there is nothing better than healthy competition and asset based lending solutions, specifically business line of credit loans are a direct competitor to Canadian chartered bank facilities.


Dramatic changes in Canadian business financing have happened in the last ten years or so relative to the 2008-2009 worldwide recession . A number of ' new ' ways to finance your business make commercial borrowing facilities more accessible than every . Commercial lenders are offering viable solutions to working capital, debt, and cash flow needs sought by the Canadian business borrower.

These independent commercial finance companies, both 100% Canadian as well as some U.S. players doing business in Canada compete directly with traditional finance sources to offer a wide array of financing solutions for your SME COMMERCIAL FINANCE needs. Even internet solutions now empower the Canadian business borrower - those searching for ' abl asset based line of credit ' via an internet search find numerous offerings that can be specifically tailored to their needs.

Also on the rise are short term working capital loans - these loans arose out of the cash flow loans made to predominantly retailers and are now well suited to general business borrowing in pretty well every industry.

No secret that Canadian chartered banks often command the first train of thought when it comes to business finance for a revolving line of credit . Asset based business lending for lines of credit gains more traction everyday.


So let’s provide some clarity around ABL finance in Canada. If there is one differentiator of the product it’s simply that the total focus of the facility revolves around one word, ' assets '. Non bank asset based loans are more flexible than a traditional bank offering, and at a time when more is better they leverage your assets significantly greater than a bank facility. Remember that an ABL loan is typically from an unregulated lender; they have different sources of capital and don’t require key elements that are necessary in the Canadian chartered bank system.

Asset based business credit lines are not to be viewed as 'term loans ; They are simply a ' monetization ' of the assets you have in your business already - specifically receivables, inventory, equipment, and , if applicable, real estate.

While our banks focus on ratios, covenants, outside collateral, personal guarantees, etc the Asset Based Lender focuses predominantly on .. you guessed it .. Assets !


So why the sudden and growing popularity in asset based lending in Canada. We think the answer to that is the fact that it covers every type of industry, retail, manufacturing, service, etc. But more importantly it also addresses your company life cycle. Even more important is these credit facilities tend to grow almost automatically with your sales levels, allowing firms to capitalize on new markets, larger orders, new major customers, etc.


An asset based ABL finance facility can be achieved for a start up, an established growing firm, and yes, those firms that have suffered severe financial challenges. In the ' old days' (yes we remember them) it was not uncommon for forms of asst based lending to be viewed as a ' last resort' type of financing. Fast forward to today and some of the largest corporations in the world, in Canada included; utilize this financing as opposed to a traditional bank facility. So something must be working!

In order to assess your firms suitability for this type of line of credit businesses should be prepared to offer up to date financial statements , and proper agings of receivables, inventory and equipment lists if appropriate . Note - only unencumbered fixed assets may be considered as a part of your credit facility . Many firms of course have liens on some fixed assets they are leasing or are borrowing against .



Speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success to better understand how asset based loans can monetize your firm’s assets into an ABL business credit line facility that provides you with maximum working capital and asset leverage.




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

Common Methods Of Financing A Business

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Basic Ways To Finance A Business In Canada

How To Finance A Business In Canada - that's a common challenge for every type of firm, from start up to an established growing business . It's no secret at 7 Park Avenue Financial that business owners and their financial mgrs often feel shackled when it comes to working capital, cash flow , and debt financing options . That's even when it comes to larger established corporations, let alone new clients we meet in looking for SME COMMERCIAL FINANCE options . ( SME = small to medium enterprise ).

Even more of a challenge is how the entrepreneur has to properly evaluate and recognized those options.

A good start ? Simply that one must differentiate between short term cash needs (that’s working capital by the way ) and long term debt and financing solutions . That short term cash flow we're talking about is the cash flow you use on a day to day basis to finance a business - those routine everyday parts of a business - payroll, purchasing supplier inventory, covering your fixed costs, etc!

Naturally if your cash flow is decreasing your firm is unable to meet the obligations you have to suppliers and lenders, including your bank of course, assuming bank financing is in place.

It all boils down to 3 reasons as to why your firm needs working capital ; first you might be a start up, secondly it's those firms that are growing more rapidly than they planned , and finally simply the inability to cash finance day to day business . That latter situation typically involves around the challenge of managing and financing receivables and inventory .

When it comes to smaller businesses in Canada, those that we referred to in the SME category it is not uncommon for banks and commercial lenders to place a good amount of emphasis on the owner personal credit history . As your firm grows it is therefore of critical importance to start properly positioning your company as a business borrower , one with borrowing power based on your balance sheet, income statement, and cash flow statement . By the way, sales and cash flow projections don't hurt also!

Many firms are often unwilling to take on debt, but the good news is that working capital and cash flow financing is often just a monetization of your current assets ( a/r and inventory ), as well as your sales. You don't want to over borrow on sales and assets, as that can typically lead to a false sense of security .

Therefore the best business line of credit ? One that fluctuates!! It's generally a negative situation if your line of credit for your company is close to ' maxed out ' all the time. That typically leads to the financial challenges we alluded to earlier - the inability of your company to run smoothly on a daily basis.


Incurring debt is of course not all bad. It makes perfect sense to borrow and incur debt outside the working capital needs - a good example might be the need for more equipment. Paying for a long term asset out of current operating capital is not recommended. If the equipment generates profits and has a longer term useful life you have made the correct financing decision.

WORKING CAPITAL OPTIONS IN CANADA :

 

In Canada working capital options range from traditional to alternative. A bank working capital facility will margin 75% of receivables and potentially, but certainly not always, a portion of your receivables. Larger firms have access to non bank asset based lines of credit that provide a very healthy margin of cash flow by utilizing 90% of your receivables and anywhere from 30-70% of your inventory.

There are some very effective ' subsets' of alternative financing such as a/r financing, factoring, confidential receivable financing . If properly used they can turn your company in an ATM like machine for cash flow and growth financing . Again, its all about effective mgmt and financing of assets such as a/r, inventory, and sales.

Other Alternative Financing Methods

Not everyone knows that you can cash flow SR&ED credits as well as financing purchase orders and contracts. Those 2 alternative finance methods alone allow you to maximize your r&d capital investment and take on larger orders, respectively.

Businesses who can properly represent themselves via their true financial position and growth potential should never feel shackled when it comes to working capital financing. Never ' over borrow ' and ensure you have access to the traditional and alternative financing options that allow you to run and grow your company.



Seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success, one who can assist you in identifying immediate solutions... unleashing those shackles of the cash flow challenge .







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

Inventory Financing Companies In Canada

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Quick Guide To Inventory Finance & Working Capital

Inventory finance companies in Canada address the challenge experienced by many Canadian businesses - they carry inventories - but they need to finance them also. There are numerous misconceptions around who exactly finances inventory, how is it done, and what the challenges around the financing of this valuable and important asset on your balance sheet.

The overall way in which you manage inventories is a key part of your ability to the financing of the asset . It can never be overlooked that when inventory is a key part of your firms financing you need to be able to report and count your products, as simple as that might seem a statement . Typically businesses carry either a ' continuous' inventory , or in some cases ' periodic'.

As a general rule lenders prefer a ' continuous ' type of inventory accounting - that is simple being able to count and monitor your inventories at all times . Since inventories are ' margined ' in your agreement with your commercial lender or bank the ongoing valuation of the asset is key.

Naturally ' current assets ' such as receivables and inventory grow as your company's sales are growing . The proverbial ' working capital cycle ' that all business are familiar with is one in which cash turns into inventory which in turn creates accounts receivable - with process hopefully repeating itself and turning over as fast as is possible .

That total lag in the business can take anywhere from 60 to 120 days in most industries . We at 7 Park Avenue Financial therefore caution clients that the great thing about having growing sales revenues is that that also brings on the challenge of more current asset financing needs around inventory and a/r.

Why Do Businesses Look For Inventory Financing Solutions ?

Clients typically are looking for inventory financing because the level of investment that you have in product and receivables drains your cash flow. As sales volumes increase your cash flow decreases based on your overall collection period of A/R and of course those inventory turns.

Sales personnel want to know that their firm can deliver on orders that are higher value , including large new contracts or clients.

If you talk to business owners and financial managers in the ' SME ' ( small to medium enterprise ) sector of the Canadian economy many will say that just don't have access to the financing they need to grow or even run their business.

Do true inventory financing companies exist in Canada? We feel that the answer is generally ' no ‘, they do not. However if your firm would consider an asset based lending scenario that in effect takes the place of inventory finance companies in Canada . That is the asset based credit facility most firms we work with that is utilized to address the inventory finance challenge.

Under an asset based lending strategy your inventory is margined for what its worth, by experts who categorically know what its worth. You will enhance your ability to finance your product if you have the controls, reporting, and inventory accounting system in places that makes the inventory and asset based lender ' comfortable'. When properly margined asset based credit lines maximize the liquidity in your firm .

Key Benefits Of Asset Based Credit Lines For A/R & Inventory :

Provide financing in lieu of owners giving up valuable equity

Allows Firms to Consider Mergers & Acquisitions

Provide growth financing where balance sheets cannot be leveraged thru traditional bank financing

Speak to a trusted, credible, and experienced business financing advisor with a track record of business finance success. Get the financing you deserve around your inventory and general financing 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


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