PROFESSIONAL BUSINESS PLAN WRITING SERVICES AT A REASONABLE COST AND PROMPT CUSTOMER SERVICE

Non bank asset based lines of credit

Short Term Working Capital Loans/ Merchant Advance

WHAT THOSE TEMPORARY CASH FLOW CRUNCHES!

If our businesses were a straight line with totally repeating ongoing transactions a lot of cash flow shortage shock would go away. Unfortunately, that is rarely the case, so seasonal and bulge situations often occur, often along the lines of the ' cash flow shock' we talk about.

The owner /manager's ability to forecast seasonality and bulges in business will always alleviate working capital shock .

WHAT TYPE OF BORROWING FACILITY DO YOU NEED?

At the end of the day, the most common solution to the business cash flow problem is the ability to ensure you have a borrowing facility in place that allows your company to address future cash flow uncertainty.

If your firm has profits, historical cash flow and acceptable financials chartered banks and business credit unions are the solutions for the long term.

FINANCING THE BALANCE SHEET

As long as you have business assets (receivables, inventories, equipment, orders/contracts) numerous non-bank solutions exist to allow you to feel that you have cash flow availability. Funding current assets is a key part of addressing a cash flow crunch.

CONCLUSION

If you're looking to avoid small business cash flow problems shock and ensure you have access to financing solutions that address the right stage your company is in ( start-up, mature, high growth, turnaround, etc ) to grow products and services, so seek out and speak to a trusted, credible and experienced Canadian Business Financing Advisor who can assist you with your financing needs. It's all about the amount of cash you need to satisfy enough cash for funding 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

business financing consultant

Sunday, January 10, 2021

Canadian Business Loans: On Your To Do List For Accessing Financing Options

Feeling Lost Out On Loan And Finance Options In Canada?

Canadian business loans and financing options are often very near the top of the business owner/financial manager’s ' to do ' list when it comes to running and growing the business. It can be also said that it’s often common for the owner/manager in the SME sector to feel ' lost ' when it comes to achieving those financial goals and accessing the right business loan. Has to be the case? Not really... let's dig in.

WHAT IS THE SME BUSINESS SECTOR?

By now pretty well everyone seems to recognize that the SME (small to medium enterprise) sector in Canada is one of the constant powerhouses of the economy. Everyone seems to have a different definition of what this sector is; some maintain its, for example, companies with under several hundred employees and sales of 20 Million as an example. That's not that SME to us! but less focus on the solutions available to finance those firms.

SMALLER BUSINESSES HAVE A LARGER FINANCING CHALLENGE

The one thing everyone does seem to agree on though is that 'size counts' in business financing and the small to medium guy has a lot more of a challenge in accessing. More often than not it feels like an obstacle course, as the owner /manager finds it very difficult to obtain long term financing options that will help secure business growth.

THE CHALLENGES OF BANKS TO FINANCE SMALL BUSINESS

On occasion, it might help to put yourself in the shoes of the bank or the many commercial lenders that offer financing solutions for working capital business needs to Canadian companies. Lenders focus on key items such as tangible equity, assets, and in many instances outside collateral.

CANADIAN BANK SOLUTIONS FOR THE SME

Canadian chartered banks in Canada are often the 'point person' when business financing discussions come up around the needs of small businesses. While often criticized for providing the financing business needs they do participate positively in a number of ways, including the best interest rate.

Banks typically provide:

Govt Guaranteed Business Loans - The Canada Small Business Financing Program

Term loans

Small overdrafts

Mortgages

They are successful because they are on every corner, have very clear rules and borrowing applications, and can be a source of constant contact with the owner/manager.

ALTERNATIVE FINANCE TO THE RESCUE?

While bank solutions are low cost and accessible it's in fact commercial finance firms that provide a lot of the other financing options that will get small businesses to the goal line. Commercial finance firms generally aren't regulated, take more risk, and are profit-motivated. Additionally, they provide small business loan options simply not available from the banks. It is often important to have a good business plan and cash flow projections - 7 Park Avenue Financial prepares business plans that meet and exceed bank and commercial lender requirements.

LIST OF ALTERNATIVE FINANCING OPTIONS IN CANADA

Those options:

Non bank asset based lines of credit

Short Term Working Capital Loans/ Merchant Cash Advance/Business Credit Cards - Good personal credit score required - these facilities have higher interest rates but are very easily accessible

CONCLUSION

Whether it's bank financing or non-bank commercial finance options the SME business owner doesn't have to feel lost when it comes to financing options for a small business loan that suits their needs at acceptable interest rates. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your operational and growth goals when it comes to loans in Canada that suit your funding and growth needs.

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

Direct Line = 416 319 5769

business financing consultant

Saturday, January 2, 2021

Your Business Growth Financing And Funding Strategies Search Just Might Be Over

Looking For The Phoenix Effect When It Comes To Growing Your Business?

Proven Information On Business Growth Strategies Financing Funding In Canada

Business growth financing strategies financing and business funding in Canada, no secret here, present cash flow and capital funding challenges. The Canadian small business owner and financial manager dreams of his or her firm being able to achieve the Phoenix effect. That’s the Egyptian fable that has the Phoenix Bird rising from the ashes and signifying resurrection and hope.

SALES AND CASH FLOW - THEY ARE DIFFERENT!!

Let’s dig in. We're never surprised these days, in talking to our clients, that many owners/managers sometimes don't associate growth with a cash flow drain. Their logic is: ' Sales are great, we've just got those new contracts and PO's, and we’re introducing a new product ‘...etc...Etc. In their minds, and rightfully so, those expanded revenues will generate more profits. It's a perfect world, right?

Not so fast! The owner/manager has forgotten in those growth scenarios we noted that cash goes out quicker than it goes in. It's a fundamental cornerstone of business finance- Growth eats cash!

WHEN SALES GROW YOUR CURRENT ASSETS BUILD UP!

The reason is of course is that you must invest more in inventories, receivables, equipment, as well as ' beefing up ' other areas of fixed costs - i.e. people, etc.

RECOGNIZING A FINANCIAL CRISIS

So even if the business owner/manager recognizes the problem what then is the solution to avoiding a financial crisis of some sort? Frankly, we see things go awry quickly because when you firm is in cash crisis mode that is not viewed by commercial lenders and banks as a lending opportunity to your firm!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! You don't want to be caught in your lenders board room explaining that you didn’t see it coming.

BUSINESS LINES OF CREDIT CAN PROVIDE THE SOLUTION

The most common solution for these sort of growth stories is the business line of credit. That type of financing can be achieved via a Chartered bank credit facility, or a newer solution these days, the Asset Based Line Of Credit, offered by non-bank commercial lenders. These facilities of course monetize your 'current assets ' and allow you to borrow on a revolving basis.

WHY IS ASSET TURNOVER KEY TO GOOD CASH FLOW

A word to the wise, don’t let accessing either of these two facilities lull you into a false sense of security. Your focus should still be on strong asset turnover to the best of your ability, so inventory turns and collecting A/R in high growth situations should be a top priority.

HOW TO PLAN FOR CASH FLOW NEEDS

Many business owners still don’t realize that they can plan effectively for cash flow needs. A simple spreadsheet tracking your sales, collections will identify the amount of your cash needs. That allows you to be proactive in planning for business growth financing. By the way, that sort of simple analysis will always be viewed positively by your cash flow lender.

WHAT STAGE OF GROWTH IS YOUR FIRM IN?

Naturally, there are different stages of ' GROWTH' when it comes to business funding solutions that can be all the way from start-up to explosive growth scenarios. All stages of business growth come with different financing solutions - some short term, others long term.

Small businesses aren't exactly the candidate for those Bay street venture capital folks. We've referred to bank credit lines, as well as non-bank ABL lines of credit. Other cash flow growth solutions include:

Non-bank asset-based lines of credit

Short Term Working Capital Loans/ Merchant Advance

CONCLUSION

Which type of financing will make your growth successful? Let your firm experience the PHOENIX EFFECT... seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with growth funding.

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

Direct Line = 416 319 5769

business financing consultant

Wednesday, December 30, 2020

A Business Finance Strategy Doesn’t Have To Be A Long List - Growth Strategies For The SME Sector In Canada

HOW TO DESIGN GROWTH STRATEGIES

Business Finance Strategy Growth Strategies For Canadian Business

A business finance strategy doesn't necessarily have to be a long list of technicalities when it comes to financing the SME (small to medium enterprise) in Canada. Designing growth strategies can be a simple plan or process around getting the financing you need. Let's dig in.

While a business plan and formal cash flow forecast of needs aren't critical to your planning finance for your business they will go along way to understanding your needs, particularly the cash flow estimates which will dictate how much financing is required, and when.

HOW DOES A BUSINESS MANAGE GROWTH

We have seen that it is key for owners and managers to ensure they can exert control of business growth challenges. Understanding the company's objectives area and ensuring that financing is in place to sustain that growth is key to business success. The ability to have a business plan and understand the turnover of assets in key categories such as accounts receivable and inventory is key. Ensure your company has the right mix of debt and equity.

WHAT ARE SOURCES OF CANADIAN FINANCING

Remember also that Canadian business financing comes from various sources - that includes Canada's chartered banks, commercial credit unions, insurance companies, and independent commercial finance companies - Canadian and subsidiaries of U.S. firms.

DON'T FORGET THESE OTHER SOURCES OF FINANCING THAT ARE OFTEN OVERLOOKED

Remember also to consider some sources of financing that never make it to the top of the obvious list when the business owner or a financial manager is planning financing. They include suppliers, and even the government, primarily through the BIL/CSBF program, commonly known as the SBL loan.

SR&ED CLAIMS ARE FINANCEABLE

Don't forget also that if your firm has a research component you can file SR&ED claims, and, more importantly, finance that sred claim as soon as you have filed, recovering valuable cash flow for ongoing growth and development of your products or services.

WHY IS ASSET TURNOVER IMPORTANT

Also, we are in a never-ending discussion with clients on asset turnover and sales when it comes to short term corporate finance. Why? Simply because better asset utilization will increase profits and cash flow, and those profits, kept in the business, are... you guessed it... a source of financing!

THE BUSINESS CAPITAL STRUCTURE

When thinking about your finance needs it's important to ' bucket' those needs into the category of either debt or equity - two very different kettles o fish! How you arrange you’re financing via debt or equity dramatically affects the returns and risk to owners and other stakeholders, i.e. your lenders.

Top experts in finance always tell us that the proper use of debt in your overall capital structure is a great way to fund your operations and provide better returns to owners. At the far end of the spectrum though is the fact that too much debt brings risk and potential bankruptcy when cash flow cannot repay those arrangements.

MONETIZING KEY ASSETS

We're huge fans of asset monetization as an alternative to debt. A growing business will always have receivables, inventories, contracts, etc. Those can be financed via the bank or a non-bank lender, providing you with ongoing cash flow but without taking on long-term debt with fixed repayments.

SOURCES OF BUSINESS FINANCING

Remember also that the stage your business is in actually will in many ways dictate to you what type of financing is achievable and through whom. That financing is going to come from:

Non bank asset based lines of credit

Short Term Working Capital Loans/ Merchant Advance