The New Shape of Business Financing and Commercial Lending Options in Canada

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Current Commercial Lending Options

Business financing and commercial lending needs often can come in a time of industry or economic turmoil. In the language of the people this simply means ' tougher times! If there is any good news it is that a number of new and alternative financing solutions are offered through alternative lenders.

Turmoil in economic times presents all sorts of challenges for Canadian business owners and financial managers. As challenging as business financing has become so called ' tougher times' a new group of financing services and players in Canadian business financing offer new and different types of financing for business needs.

These options are available for every business, from retailer to industrial and of course technology. Additionally your firm can be established, start up, or pre-revenue.

One way to consider the types of financing available on the landscape is to think of either ' traditional ' finance or the new kid on the block - ' Alternative '.


The alternative financing players in the marketplace are often unregulated, simply meaning they are not bound to government restrictions as to types of lending, risk levels, etc.

A good way to thing of business financing in Canada is simply by thinking of the offering as either from a regulated player, or a non-regulated player. Banks are a good example of regulated players, while firms such as equipment finance companies or asset based lenders tend to be unregulated.

Years ago may types of financing easily available today -

Examples :

Purchase Order Financing


Tax Credit Financing


Royalty Financing

... that might have been unimaginable in older times are now viewed as new and extraordinarily relevant to Canadian business financing needs.

The bottom line is that commercial lending and financing is no longer of course just offered by Canadian chartered banks. In Canada for example it is some major insurance companies and pension funds are the ones funding the Canadian equipment financing industry.

Alternative financing for firms is all about niches - the good news for commercial borrowers in Canada is that competition has become fierce and it’s quite often a challenge for the companies seeking Canadian business financing to differentiate from who is offering what. By the way that is where an experienced Canadian business financing advisor with a track record of business finance success can be an invaluable part of your financing search.

Alternative Financing vs. Business Banking Via Chartered Banks

We're the first ones to forgive new clients who think that the only ' go to ' for appropriate business financing solutions are Canadian charter banks. Numerous other lenders have taken up the slack, and are often complementary to client banking scenarios.

Captive finance companies also provide a significant amount of financing in Canada. They play a significant role in many transactions that otherwise might not be able to meet more stringent bank criteria.

Alternative finance solutions can include "

Inventory Financing

Purchase Order/ Supply Chain Finance

Asset Based Business Credit Lines

Equipment Leasing/ Sale Leasebacks


When Canadian business owners and their financial mgrs have a strong knowledge of both the finance offering and the competition for that offering that leads to :

Best rates

Flexible Terms and Structures

By the way, for all the competition that Canadian banks have, and given they are viewed as the strongest and best run in pretty well the whole world , they haven’t necessarily stood around watching their business financing and commercial lending decline . They have expanded into the U.S., purchased independent commercial lease financing and auto financing firms, and rebranded these firms into their own offering.

Many smaller companies in Canada, those ranging under 5 Million dollars in revenue utilize independent commercial receivable financing firms, known as ' factors' to finance their working capital needs. The need for this and other types of creative financing is huge because of the general strict credit criteria of the Canadian chartered banking system.

At 7 Park Avenue Financial our recommended ' Receivable Finance ' solution is Confidential Receivable Financing , allowing your firm to automate your sales into constant cash flow, with your firm doing your own billing and collecting .

Non bank financing firms have different levels of pricing, and those rates are commensurate with the risk level , transaction size, and type of financing provided. Alternative finance companies have proved themselves to be very successful and strong competitors of the Canadian banks.

Canadian non bank finance firms have a number of finance offerings that allow premium pricing, and servicing the SME (small to medium enterprise) sector provides strong growth opportunities .

So how does the ever changing Canadian business financing landscape affect you, the potential borrower? The bottom line is that a variety of finance offerings allow you to maintain an open door to get the maximum amount of financing your firm needs. Smaller firms have the ability to use lease asset financing, receivable financing, tax credit financing, purchase order financing from a variety of competitors.

Take hands-on approach to your finance needs, by speaking to a business finance specialist who can help you manage the relationships you need to have in place to access business financing options that make sense for your firm.



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 Do Factoring Companies Work In Canada

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The Best Factoring Company Will Offer Confidential Receivable Financing - Here's Why

An effective accounts receivable finance solution has the ability to ' supersize' your overall working capital and cash flow. This can be even more enhanced with a business accounts receivable finance strategy known as C I D - Confidential Invoice Discounting; that is a type of ' factoring ' that has worked very well for our clients at 7 Park Avenue Financial.

How can this business finance solution be ' supersized' then? Simply that it is highly possible that on the utilization of this type of financing you will often double, and in some cases triple your access to immediate cash flow and working capital. Business owners and their financial mgrs will be surprised to know that in most cases even traditional bank financing won't provide the same cash flow access as this little known solution.


And safe to say that in some cases where you would have been self financing or had non-financing in place whatsoever, well, your firm has it now!

How Much Does A Factoring Company Charge ?

So what in fact is the cost of this unique and innovative AR Finance solution, how does it work, and what can your company compare it to when assessing your specific cash flow needs.

C I D is our terminology for Confidential Invoice Discounting. ' Factoring ' solutions are used by firms of all sizes (even major corporations, by the way) but in reality seems to be more common in the S M E (small and medium enterprise sector). It even accommodates start ups if you can believe it, as any type of financing for a start up is often a major challenge for the business owner. By the way, the big boys have a more fancier name for their AR financing solutions - Securitization .

Companies that sell on credit in Canada will always have an investment in their accounts receivable, often representing, along with inventories, a huge part of their overall business assets.

So how is that asset financed ? That becomes an even more challenging question when traditional bank financing is not available. In a large majority of client we talk to they don't qualify for some, or all, of the business capital they need via a bank.


That's exactly where business accounts receivable invoicing and discounting comes in. Your ability to ' sell ' those invoices as you generate them, using the A/R as collateral allows your company to turn into an instant cash flow machine. It's all done by a fairly seamless process when you are working with the right type of facility and the best firm/financing partner.


So that’s the essence of factoring, or invoice discounting, but where does our key benefit of confidentiality come in? Right about here!

The key difference of Confidential Receivable Finance facilities and business factoring is that you are in control of your sales ledger and customer base, not the factor finance firm. That gives you superiority over other firms who use this type of financing but are forced by their factoring agreement to make their customers aware of how they are financing their firm. In talking to clients here at 7 Park Avenue Financial that benefit is huge in their minds when it comes to how their competitors and suppliers might view them.

How Does AR Finance Work?

On a daily basis a/r financing works in the same manner as what we will call ' traditional ‘ accounts receivable finance and invoice discounting. It’s a simple process. You generate invoices for the products and services that your firm provides and you receive immediate same-day funds for 90% of the invoice value. ( That remaining 10% is held back until you client pays, you then receive the 10% less a finance fee of anywhere from 1-2% per month.

The way our clients look at it is that the 1-2% per month reduction in gross margin is more than offset by all the cash flow their sales generate - allowing them to run and grow the company on an ongoing basis.

Advantages Of Confidential Invoice Discounting

Clearly the advantages of this type of business financing couldn’t be more pronounced

- Financing is approved quickly

- Easy to administer

- Your company bills and collects it's own a/r !

- Cash flow generated is used to run and grow the business


So, does a solid AR Finance strategy seem like the proper cash flow solution for your firm? Ultimately you will decide that - we're simply letting you in on the secret and letting you be the decision maker around supersizing that cash flow.

Speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success . Get your company ahead of the pack and competitors.






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 Receivables Finance Work ?

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Best Method For Trade Receivables Finance ? It's ' Confidential ' !

Accounts receivable AR Finance isn't as much a ' secret strategy ' as opposed to a method to turn your company sales into a virtual cash flow machine ; in effect past obstacles of cash flow have now become a working capital/cash solution.

You only have to look at some ' search engine ' stats to find that thousands of Canadian businesses search everyday for what they hope is valuable real world assistance around their business financing needs. From early stage companies to mature medium size and even larger corporations .. it's always about unlocking cash flow in their sales and receivables.

When clients of 7 Park Avenue Financial talk to us about their financing challenges we've found it is easy , and clients can be forgiven, for getting bogged down in such issues as the cost of this financing, how it works, and even more importantly , dispelling what they may have heard about ' factoring ' and ' invoice discounting '.

Business owners and their financial mgrs are of course all for a ' good thing ' ; and they want to know how receivable financing works, as well as wanting to avoid the pitfalls and negative perceptions that come with this method of cash flow finance.

We're focusing in our discussion here on smaller and medium sized firms ; safe to say that larger corporations have access to a lot more financing possibilities in the realm of traditional bank financing . Some firms who are public companies can utilize working capital strategies and business funding that SME ( small to medium size ) companies just can't access.

These smaller firms , who of course make up a huge part of the Canadian business landscape have to rely on their own internal cash flow mgmt as well as utilizing any external finance they can access to fund ongoing operations, growth, and working capital.

The worst irony in business finance may well be the fact that many companies have to give up growth prospects simply because they can't access external business capital . That might mean new clients, new markets, foreign expansion, new product lines, etc.

What is Confidential Cash Flow Factoring / How Does It Work

Cash flow factoring of accounts receivable is the ongoing sale, in whole or in part of your sales invoices as you generate them and deliver products and services to your customer. The invoices are purchased at 1-2% % discount from company , and you receive cash, 99% of the time the same day, for those sales. So, in effect all your sales now fuel that cash flow machine we spoke about previously .


So far, so good, right? Where complications arise, especially in Canada, is the fact that this type of financing requires your client to be notified of the process, directly, or indirectly, and payments are required to be forwarded to your factoring finance firm. Canadian business, in our eyes, has a reluctance to involve their customers in their internal financing policies, and challenges. As a result, many firms are skeptical of entering into accounts receivable finance of this manner.

The Best Solution In Financing Sales

Is there a solution? We told you there was - it’s a breakthrough called Confidential Invoice Discounting!

This type of financing comes at the same cost as ' old school ' factoring, and allows you to bill and collect your own receivables!

Your company gains all the benefits of that cash flow factoring machine we've turned your company into. This type of facility can easily be a part of a non bank business line of credit known as an 'ABL ' - that's an asset based line of credit that allows your company to have a credit line that functions like bank credit lines.

Let those competitors, customers , and vendors to remain exactly where you want them to be, outside your financing strategies and challenges ! Let your competitors try and figure our how you're doing so well in both growth and profits.

Speak to a trusted, credible, and experienced Canadian business financing advisor with a track record of business finance success , putting your firm into a proper Receivable finance facility, allowing you to reap the benefits of cash flow invoice financing.


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 Sources Of Business Finance In Canada

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Sources Of Finance For Business Growth / Survival/ Expansion

Sources of business finance is all about options and having business owners identify the need and importance of solutions to funding their company in challenging times . Certain times are more challenging than others .

Although it's not necessarily ' easy ' for larger corporations, or public companies to raise capital , SME COMMERCIAL FINANCE solutions  are probably even more challenging.

What Are Cash Flow / Debt / Working Capital Options For Your Company ?

Canadian business financing options come with a combination of benefits an risks.
Part of the challenge is your being able to determine whether your company needs operating capital or long term capital in the context of asset financing or permanent working capital.

When it comes to ' operating capital ' a company might still be in somewhat of a ' start up ' mode, so there are the typical expenses for starting a company - these might include product development, marketing, legal and accounting, leasehold improvements, etc.

Two critical areas in that early stage that we have mentioned have some unique financing solutions available. The Canadian Govt' SRED program ' funds a significant portion of r&d capital . As well these claims can be financed, accelerating the cash flow, via a short term SR&ED FINANCING LOAN that has no payments during the term of the loan.

Your SR&ED claim is most successful when it is prepared by a qualified SRED consultant who can maximize the benefits of the program. We cringe when business owners or financial managers tell us that the program is ' just too much paperwork ' because they are clearly forsaking a true capital injection into their business. Many of those consultants will actually prepare your claim at their own time and expense risk, offering you a contingency agreement on those funds. The bottom line: check out this program.

Leasehold improvements are always difficult to finance and Industry Canada helps finance thousands of businesses under the Canadian Govt Small Business Financing Loan program. The features and the benefits of the program , which include a gov't guarantee to your bank are numerous, and the overall rates, terms and structures it provides have even larger companies envious of the Canadian Small Business Financing Loan . By the way, we call them ' SBL'S ' !

Many clients of 7 PARK AVENUE FINANCIAL advise us they have turned to what is known as ' love money ' or ' friends and family ' loans and investments .

We're not big fans of utilizing so called ' love money ‘, and are even less enamored by clients who are actually prepared to collapse personal registered savings or mortgage their homes to start a business. While its important to have some ' skin in the game' as the expression goes its our recommendation that you incorporate your business and strongly seek out traditional and alternative financing to fund your business .

Your business has 2 types of financing available that not all business owners and their financials mgrs recognize. These two types of financing include supplier financing via extended terms, as well as offering cash discounts to client for prompt payment .

Sources Of Canadian Financing For Small & Medium Sized Companies

Receivable Financing is one of the most popular ' alternative finance ' solutions used in Canada. Also called ' factoring ' or ' invoice discounting ' it turns your sales revenues into an automatic cash flow machine . At 7 Park Avenue Financial we recommend our clients utilize ' Confidential Receivable Financing ', allowing your firm to bill, collect, and automatic cash flow your sales/receivables.

Other forms of both traditional and alternative financing include short term working capital loans, more commonly known in the past as MCA'S or merchant cash advances . These loans provide short term ( typically 12 month ) loans geared to your sales levels, and will often be in the range of 10-20 per cent of your annual sales .

Businesses requiring equipment should always consider utilizing lease financing for their new and used equipment needs. We tell clients at 7 Park Avenue Financial that over 80% of North American business utilizes lease finance.

A relatively newer form of financing known as ' royalty finance ' is a hybrid of debt and equity finance.

In Canada venture capital and private equity is generally very difficult to obtain for most start up ventures - we caution clients to not dwell too long on these options unless you're committed to a long haul in effort!

The overall combination of your company size and credit quality will tend to drive the top picks applicable to your firm re numerous sources of financing available, either traditional or alternative.

Speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success for the sources of business financing and options available to 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 ' Factoring Accounts Receivable ' ?

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Why Factoring Accounts Receivable Works

Is Factoring Receivables A Good Idea ?

Our goal is to explain the art and science of business to business factoring so that Canadian business owners can understand the benefits and costs of commercial accounts receivable financing. ' Commercial ' receivables of course refer to any non consumer-related a/r.


Companies that consider the financing of A/R are in different phases of their life cycle. In some cases they are growing to quickly or have unique customer situations, thereby eliminating the chance of accessing traditional bank financing solutions - aka the ' business line of credit '. Factoring is a form of a line of credit , but has some major technical differences as to how it it utilized on a daily basis. One of a number of possible answers to overcome cash flow obstacles is the financing of your a/r. There are of course other solutions - working capital loans, both short term and long term in nature, P O Financing, sale-leasebacks, etc, etc. We're focused on factoring today .

It is important to know that financing your AR can come in the form of a one time scenario, a periodic solution, ( when you need it ), or, most commonly, on an ongoing basis. The bottom line is that your firm has the option to choose.

WHY IS FACTORING ACCOUNTS RECEIVABLE USED ?

It might seem a little to obvious, but the financing of your accounts if generally for the day to day running of your business, retiring obligations with suppliers, employees, lease and loan repayments, etc.

In well run companies working capital needs should generally fluctuate - otherwise your firm might feel sometimes that it is in constant crisis mode. Clients of 7 Park Avenue Financial are often the first to admit the reason they are seeking the advice of a business advisor is that when cash flow is constantly tightening they look for new innovative solutions in Canadian business financing.



Simply speaking business to business factoring is the sale of your receivables for cash. It sounds so simple, that’s why we are hoping to convey the ' stripped down' explanation of this type of financing, while at the same time warning clients where some of the complexity and risk lies if you don't have proper business finance advice.

Receivables , normally , have to be paid in 30 days - however most owners know that 60 and 90 days are common occurrences. Your ability to smooth out the cash flow ultimately will reflect in your overall business financing success.


Let's focus in on our core asset, your A/R. Go to any balance sheet and receivables will make up a very large portion of your ' most near liquid ' asset. Your ability to monetize that asset on an ongoing basis creates working capital.


Business owners need to consider that their ability to monetize cash through receivables factoring in essence can become a competitive tool, allowing you to penetrate markets, and generate more sales and profits at the expense of your competitors.


Business to business factoring has been around for 100 years . Why is it more popular today? The simple ' stripped down ‘reason it is easier to obtain than bank credit, and can often be fully functional in your company within a couple weeks.

Why Factoring Accounts Receivable Is Utilized By Canadian Business

Why do business owners like and utilize A/R financing? - simply because it has limited focus on personal covenants of the owners, other asset collateral is not required, and under the right circumstances your customers and suppliers aren’t even aware of how your firm has suddenly become flush with cash .

How Much Does Accounts Receivable Financing Cost ?

So that’s all the upside, is there any downside? Only if you don't know what you are doing !You need to focus on what types of business to business factoring is out there, what are the costs ( they vary from 1-2%/month) and if your receivables partner has the flexibility and straight forward processes to accommodate your day to day activity .

What Is The Best Type Of Factoring

At 7 Park Avenue Financial we recommend Confidential Receivable Financing via factoring receivable companies . It allows the business owner/financial mgr to bill and collect their own a/r with no interference by 3rd parties. For more info on Confidential A/R Finance
CLICK HERE FOR MORE INFO ON CONFIDENTIAL RECEIVABLE FINANCING

Speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business financing success to ensure our ' stripped down ‘version of business factoring meets your business and cash flow goals.







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 A Business Turnaround Plan For Cash Flow

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What Does A Business Turnaround Specialist Do?

What is a business turnaround plan when it comes to financing ? It's all about a strategy and that covers a lot of issues, but our main focus today is ' cash flow '

All business owners and their financial mgrs. recognize the importance of cash flow and working capital at critical times in their business. For most companies that cash is generated from accounts receivable and inventory sales that come from sales revenues . Of course the ultimate failure for lack of cash flow is business failure.

So understanding what the turnaround requirement is when it comes to funding your business often simply comes down to the solutions that are available to put in ' the fix '.

It's not always ' intuitive ' to realize cash flow deficiencies , especially when sales revenues are growing ; fast growing sales can mask a lot of financial problems ! The good news is that there are some basic technical fundamentals to help you assess the problem . Think of that type of analysis as being a business cash flow doctor.


When looking for outside help in someone that understands your financials and business look for someone that has a solid track record and experience, and can facilitate cash flow turnarounds by offering up solid and sometimes creative working capital solutions.


One way of taking a look at the seriousness of your cash flow challenge is a technique known as 'DOOMSDAY RATIO '. So What is that ratio and what is its significance? It's simply a ratio ( we at 7 Park Avenue Financial have always called it a 'relationship ') of your cash on hand divided by current liabilities.


The final result is really one of the most powerful and effective solvency ratios ( or relationships ) that a business owner can utilize. Business people might be aware of two other similar ratios, the current ratio and the quick ratio. The current ratio included the firm's current assets, including accounts receivable and inventory.



The Quick ratio did the same but excluded inventory. While not all 'non-financial' folks might not like taking this detailed a look at their financial statements this hard look at your numbers will often reveal key insights into business financing turnaround needs.

The business owner can quickly see that the doomsday ratio focuses solely on Cash! We can call it a very 'demanding' ratio because it focuses solely on the liquid gold within the company, cash!

Although your firms accounts receivable and inventories are somewhat close to being cash, and no matter how well they are managed those two current assets aren't cash yet, and everyone knows the day to day business challenges of converting receivables and goods into a final cash customer payment.

Really the best way to look at the Doomsday ratio is to view it as an ongoing measure of the firm’s cash 'buffer'. The bottom line is that it will show the business owner what 'cushion' of cash the firm has. Business owners could even choose to monitor the ratio daily, as it could very well warn against impending shortages of working capital.

Many business owners know that it is also not productive to carry cash on hand, particularly in today's low interest rate environment. So it makes common sense that the doomsday ratio may in fact be less than the number '1' , but at least we have a number that, on an ongoing basis, we can monitor.

Each business over time has a philosophy and business practice around how much cash is kept on hand. Naturally it's also obvious, and important to know that if you reduce your operating line of credit with you cash you still have the full liquidity of your operating line, but you aren't paying any interest to borrow. That's a good strategy also.

How Can Your Business Accelerate Cash Flow

One method is to consider a receivable financing strategy - one that factors or sells your accounts receivable as your firm sells it's product and services. Our recommended solutions for clients of 7 Park Avenue Financial is a ' CONFIDENTIAL RECEIVABLE FINANCING ' solution, allowing you to bill and collect your own receivables while generating cash as you sell ! That strategy allows you to generate cash , and maintain that positive ' DOOMSDAY RATIO'!

In summary , take a look at any relevant financial analysis technique to monitor cash flow/working capital for your business.

What Is Your Business Turnaround Financing Plan ?

And don't forget to see that CASH FLOW doctor who can implement solutions such as:

A/R Financing

Working Capital Loans

Bridge Loans

Sale leasebacks

Non bank asset based revolving credit facilities

Tax credit monetization

Purchase Order Financing / Supply Chain Financing

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who has a track record of business finance success and turnaround expertise for refinancing your company properly.






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 Can Cash Flow Problems Be Solved ?

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Fixing The Cash Flow Problem

How To Correct Cash Flow Problems - Here at 7 Park Avenue Financial we aren't so sure there's a case for the regular blues, but if the challenges that come with working capital deficiencies and cash flow are ' top of mind' with your business it might be refreshing to know we have some solid solutions , tips and techniques to solve those key issues . We suppose you can call them a ' cure for the cash flow blues '.


When a company can properly address the issue of working capital, cash management and ensure accounts receivable and inventories are being managed properly that helps ensure daily and long term survival, while at the same time improving owners overall return on investment, aka ' R O I '. Proper management of the current assets on your balance sheet, relative to your sales growth simply brings a double whammy of benefits to your business.

So what about those ' current asset ' accounts on the company balance sheet that we have been talking about . Having a poor handle on receivables and inventory can severely impact your overall company performance. We're speaking of two things, how you manage those assets, and how to finance working capital. It's a dynamic situation, because those two asset categories - a/r and inventory literally change every hour - sales get generated, invoices are issues, receivables get paid and inventory gets shipped as more goods are purchased. Talk about ' dynamic '.


Canadian business owners and financial managers often have a poor handle on their current asset accounts - primarily of course receivables and inventory. We can forgive them for that, because those balances changes pretty well every couple hours. Talk about a moving target! .... Invoices get issues, receivables get paid, inventory gets shipped... and more goods are purchased.

How Do Cash Flow Problems Occur?

Simply speaking it revolves around the fact that if you are mismanaging these accounts, or not financing them properly you lose the ability to deploy funds more productively - i.e. growing your business. That’s when the total ' mix ' of your assets becomes important.


Clients of 7 Park Avenue Financial might sometimes tire of our focusing on the importance of isolating which type of financing is going to fix the company working capital problem. Solutions vary and they include:

Short Term Working Capital Loans

Long Term Loans

More Owner Equity

Asset Monetization ( We confess that's our favourite )


There is a very simple way of matching the financing you need to your assets. The solution - use financing of similar maturity to your assets. A quick example ?

Utilize leasing /equipment financing for long term more permanent assets. Another example? Utilize a receivable financing program for your Accounts Receivable

Why Do Cash Flow Problems Occur ?

Another solid rule of thumb is to always not forget that the longer it takes for a dollar to flow through your firm (your cash conversion cycle) the more working capital financing you will need). That is critical to identifying the long term solution for your business, which often is industry specific as industries vary as as to being asset intensive, service oriented, etc.


Business owners and their financial mgrs should focus on proper management and financing your accounts receivable in a manner suited to your business.

Here's a shocker - there’s a cost to carrying receivables and inventory . Receivable financing, aka ' factoring ' is a solid tool when you can get a good handle on net savings using this type of short term financing . Never forget (everyone else seems to!) that stronger sales, asset turnover, and more profits can easily justify the use of a receivable finance facility.

There needs to be a solid balance to the overall problem your firm might be facing. The ' text book answer ' is that if your are able to manage your working capital accounts properly you can better assess any financing risk and cost for the overall cure to cash flow shortages. That perfect balance is what your firm should constantly try for .


As we noted cash flow accounts change daily and require a lot of vigilance. Solutions to your business financing needs include:

A/R Financing

Inventory Finance

Purchase Order / Supply Chain Finance

Asset Based Non Bank Credit Lines

Unsecured Short Term Working Capital Loans

Tax Credit Financing

Sale Leasebacks


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