Recognize These Business Finance Problems and Financing Challenges?

Examining Cash Flow And Finance Challenges in Canadian Business


Information on financing challenges faced by Canadian business owners and managers. Spotting and Solving business finance problems




Business finance problems. Got the ability to spot financing challenges when it comes to the immediate and longer term issues that face your firm in the Canadian business environment? We have always felt that some positive proactive techniques and information can go a long way to your health... and that’s better business health we're talking about by the way!

It's easy for an outsider to revert to the textbooks on this one, and larger corporations have access to all sorts of advisory advice. The business owners and managers of small and medium sized corporations in Canada have the tools; they just need to know how to use them. Technically speaking, (and we promise to try and not do a lot of that,) its just understanding your financial and operating leverage.

In reality by using basic and time tested tools you're in effect creating an early warning system around business finance problems and financing challenges you are facing now or down the road. And the goal is pretty clear, don't you think - it’s about ensuring you can fulfill your financing and contract obligations while at the same time growing and profiting.

A lot of finance problems revolve around your favorite entity, your customer. It's therefore prudent at all times to understand the financial health of your customer. This can be accomplished in a number of ways - if you don’t think major corporations ask for their clients financial statements... well you're simply wrong. The small and medium sized corporation can utilize various tools to monitor customer financial health; even monitoring payment habits over time is a great tool, allowing you to spot deterioration.

It goes without saying you have to be open to realizing what some of your current financing challenges are - Thats often tough for the business owner to admit because most entrepreneurs we meet are optimistic, sometimes excessively so, which is of course a double edged sword.

Can you balance sheet actually predict failure? A lot of history tells us it can... and there's some pretty basic stuff here. Things like knowing the real value of your assets, not the book values when it comes to negotiating with Tier 1 or Tier 2 lenders. While cash and receivables are the two most liquid parts of your balance sheet even those receivables might misrepresent a true value in your firm if they are uncollectible, or uncollectible in a timely fashion.

While it may seem unappealing to spent to much time analyzing your financial health just some very basic ratios ( we’ve always called them relationships ) in 4 areas - liquidity, leverage, activity, and profit will give you a great total view of your firms current or upcoming challenges .

In Canada your firm has access to traditional financing via Canada's chartered banks, but those financing challenges that seem ' unfixable' can be address by a broad number of business finance solutions from non bank lenders - they include asset based lines of credit , government business loans, monetization of receivables and inventory separately or combined, supply chain finance, and tax credit monetization.

Bottom line ... invest some time in some analysis and basic tracking tools, and consider speaking to a trusted, credible and experienced Canadian business financing advisor on solutions to business finance problems.






Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :

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

Don’t Make These Mistakes In Financing Franchise Opportunities In Canada . A Franchising Loan Must Make Sense – Here’s Why.

Canadian franchise finance – the upside and downside issues!


Information on financing franchise opportunities IN Canada . What the franchisee needs to know about a franchising loan


Financing franchise opportunities in Canada. That brings to mind one of our favorite old expressions - ' tuition is very high in the school of experience'! That's why when we talk to clients about franchisee loan financing in Canada we're often cautioning against what can go wrong as much as what can go right . Makes good business sense, right?

There is no arguing of course that franchise finance in Canada is still booming, the general malaise in the economy notwithstanding. From our perspective we are even optimistic about the finance landscape out there when it comes to financing your franchise.

One thing we can say is that your options on financing your Canadian purchase of a new or resale franchise are hardly unlimited. In reality there are actually down to self financing, getting some sort of assistance from your franchisor ( doubtful in most cases ) and either utilizing the government CSBF program or the services of a specialty franchise finance firm . In some cases what we term as complimentary financing is available, that might come from an equipment and leasehold financier, or a true working capital loan from a regulated financial institution.

In many cases either some initial or ongoing financing for franchises is done via personal and corporate credit cards for your new busines. This clearly is a double edged sword, in that while it provides some capital for either assets or working capital needs but comes with the higher rates that we associate with credit card debt.

Additionally we always recommend that the franchisee make a strong effort to separate his business life from his or her personal life when it comes to finances. Almost everyone agrees that one of the prime drivers for incorporating your business is the reduction of personal liability - as all business is a risk. (Naturally some are more riskier than others as we have seen over the years!) On balance it would certainly be better to acquire a corporate card for your business as opposed to a personal card - just common sense, right?

Many new franchisee ' newbie’s' don’t often consider the concept of ROI when they enter into their franchise agreement. The reality is that whether its a franchise or any other business you can't afford not to wrestle down this concept, Its all about carefully analyzing how much you need to put it, what amount of sales and revenue you need to at a minimum break even, and finally, and certainly as important, what level of profit, including your salary of course will be a satisfactory return on your business.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in covering off the risk and reward of a franchise loan when you're assessing those Canadian franchise opportunities in Canada.





Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :

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

Here’s One Method To Increase Liquidity . A Canadian ABL Asset Based Finance Co Solution

A ‘ NEW ‘ Canadian Business Financing Solution ?


Information on how Canadian firms can achieve greater business liquidity via an asset based finance co ABL facility . Asset based lending … works!



Business liquidity. We were watching a U.S. bank TV commercial the other day and they were talking about ' accelerating cash flow '. Many but not all Canadian business owners and managers are aware that the Canadian banking system is dramatically different from the U.S. one. Hundreds of U.S. banks focus very directly on commercial lending to the point that it's actually the largest part of their portfolios - that’s hardly the case in Canada of course where there is a major focus by banks on savings, mortgages, investments, securities work, etc.

So the asset based finance co (company) in the U...S is a very large part of the commercial landscape. That's not the case in Canada; however that is slowly changing as thousands of firms investigate ' ABL ' facilities as their new alternative to accessing business liquidity and capital.

Let's take a look at how and why the asset based lending facility is a cash flow accelerator. For a starter, what are the reasons a firm would want to consider what we term a ' non bank' facility in Canada. The reasons are diverse - they include acquiring a firm, recapitalizing a firm, or simply monetizing their current and fixed asset base to accelerate cash. A true ABL financing doesnt necessarily bring any debt to your balance sheet - it a simple ‘monetizer ' of assets.

So when your firm considers such a solution it’s simply a case of understanding and of course sharing your current financial position, and focusing on how the specific use of funds will enhance cash flow.

What are some of the reasons a firm fails to recognize the need for a better business line of credit? They can be diverse, but they include not understanding some of the external pressures facing their company , operating on a belief that the old ways in business finance will always work, or even having undertaken a project or strategy that failed, thereby severely impacting your working capital and cash flow,

In order to understand the benefits, as well as implement a solution via an asset based finance co partner you need some basics under your business belt. They include knowing your days outstanding for both your A/R and payables. If you company has an inventory component, which is certainly the case in many manufacturing and wholesale firms in Canada the amount you are carrying , its turnover, and the amount requiring financing is key .

Why then does ‘more ' business liquidity come from ABL solutions. That’s the easy part to explain to a client, because it simply involves combining the total amounts of receivables, inventory, fixed assets, and real estate into one basic ' pot of assets ' that is monetized into a business line of credit.

Don't be surprised if your new ABL facility doubles your current borrowing power! That’s because it margins receivables at 90%, inventory anywhere from 30-70%, and then throws in additional borrowing power via a constant drawdown and revolving of funds based on equipment and real estate if n fact the latter is applicable.

Speed... and acceleration; that’s what the TV commercial for U.S. business banking was talking about .. and it’s available in Canada via an asset based finance ABL solution .Now you know!

Speak to a trusted, credible and experienced Canadian business financing advisor on this great method of increasing financing for your firm.






Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :

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

The Black Hole Of Canadian Financing – Is Financing Cash Flow And Working Capital Your Corporate Finance Challenge?

Canadian business cash flow alternatives


Information on financing cash flow and working capital in Canada. The corporate finance challenge may not be what you think.




Is financing cash flow and working capital really the ' black hole ' of corporate finance and business financing in Canada? It sure seems that way. That ' black hole ‘... it’s a term used to denote a place of ' confinement ‘from which ' nothing can escape '. That clearly seems to be the feeling many clients we talk to have when they are faced with the challenges of business financing.

When those sorts of challenges exist in a business it becomes difficult to both survive, let along grow the business. Canadian business owners and financial managers realize that it's about time they understood some of those options.

A good start before exploring those solutions is to ensure you have your business financials in order and up to date, that’s critical. We're never surprised anymore at the number of businesses we see and meet that can't product proper and up to date balance sheets and income statements. This issue then becomes one of credibility, in essence current lenders, and future lenders can be forgiven for wondering ' what’s really wrong here?’ And all along the way you're missing opportunities to grow sales and increase profits.

We don’t want to overestimate the need for getting your business financials under control but that simple task allows you to hole employees and managers accountable, you can grow, while all the time removing the stress of not knowing where your firm is at from a viewpoint of financial strength.

Every business owner / manager would love to relieve the stress of daily cash flow financing firefighting - you're rather growing the business!

Let's move on to some of those working capital solutions, the corporate finance tools that allow you get back on track.

Part of that challenge revolves around assessing your where you are in the business continuum. You're either a start up, in the SME sector, or a mid sized Canadian business. (We’re pretty sure the largest corporations in Canada don't read out stuff!)

In the start up phase your cash flow often comes from personal assets, and suppliers can also supply much needed credit at this point in your business cycle. Many start up firms utilize receivable financing in Canada - it’s a pre-step to qualifying for a traditional bank line of credit and provides working capital as you generate sales. It appears to be more costly, but in reality the cost of this finance is grossly misunderstood by many.

If you are in the SME sector financing cash flow comes from working capital term loans, equipment finance, and finally the ability to qualify for a bank line of credit. The government business loan is a great way to acquire capital assets and minimize cash outflow.

Mid sized firms in Canada have access to various forms of commercial capital - those funds come from business credit unions, banks, insurance companies and unregulated non bank commercial lending concerns such as asset based lenders.

More esoteric, but very realizable methods of financing cash flow are supply chain financing and the monetization of tax credits, as well as securitization of current and future sales receivables.

We hope we've made our point - get those financials up to date and explore Canadian corporate cash flow alternatives, whether you are a start up or intent on taking your company to the next level.

Speak to a trusted, credible and experienced Canadian business financing advisor on financing cash flow alternatives for your firm.








Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :

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

Sales Generation At No Cost? Use Customer Financing Via Vendor Finance Leasing Programs For Revenue & Cash Flow Success

Yes Virginia – there is a great sales tool to increase sales and cash flow in Canada !


Information on how to offer customer financing , aka ‘ vendor finance ‘ leasing programs at no cost for great revenue gains!




Would a Customer Financing Program for your clients increase your sales at virtually no cost to your own firm? You might me surprised that many of your competitors are beating you at the sales game only because they have mastered utilizing the tool of vendor finance via leasing programs.

Let's examine how your firm can generate additional sales, and accelerate cash flow by using a time worn tool used by thousands of Canadian firms already.

The concept of a vendor finance program for many firms conjures up images of your firm all of a sudden losing its core competency and becoming something of a finance firm or specialist. That’s the farthest thing from the truth, if, and it’s a big if, you do it right.

The reality is that there are different; let us call them ' models ' in a customer finance program. Yes of course you could turn your firm into a mini bank and finance clients - only problem there is that you need huge amounts of capital which only large corporations have access to.

And additionally, when you finance a customer directly you create large revenue recognition challenges that you don’t need. Bottom line of course is that you are looking to generate revenue, not defer it!

If you create our recommended customer financing program at no cost your sales force becomes armed with an additional tool to their tool kit. One of those tools is price - in that for a small reduction in the cost of your product and service that amount can then be used to subsidize the financing cost to your client.

Clients are as much concerned about acquisition cost as they are about the quality and service of your firm. In effect cost and financing often becomes what we have termed over the years as an ' obstacle to innovation '.

If we haven’t made it clear by now our recommended strategy for a vendor financing customer financing program is simply to align yourselves with a partner that can facilitate your program, at, as we said, virtually no cost to you.

Under your direction a program can be implemented, under your firm’s name, and financed totally by the partner. Oh and by the way, that takes away all the credit and bad risk also, which is a huge gain.

Using a vendor program to the maximum allows you to get creative in a number of ways, you can offer deferred payment programs. Remarketing profits suddenly have the potential to appear, and you can even take ownership of the asset at the end of the customer’s lease or rental term, allowing you to generate an additional sale as well as control the aftermarket in your product.

Intrigued? You should be, as we said, as your competitor is probably doing this already in some form. Speak to a trusted, credible and experienced Canadian business financing advisor on setting up a customer financing program that meets your needs.






Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :

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

Warning ! Not Using AR Finance Could Be Hazardous To Business Health . Receivable Financing Via Factor Funding in Canada

A Canadian A/R Finance Strategy



Information on ar (A/R) finance in Canada. How does receivable finance via factor funding work, what does it cost, and why it doesn’t cost what you think.


AR (A/R) Finance is one method that Canadian business owners use to ensure they have the optimum level of accounts receivable and cash flow.

It doesn't take long for Canadian business to realize that their receivables are in effect their funds that are sitting in someone else’s bank. And trust us that the large corporations figured that out a long time ago - they invest thousands and millions of dollars in credit and collection departments. We know, we've sat there!

So how in fact does a firm extend credit in Canada, while at the same time minimizing the effect on working capital on a daily basis?

One of the things you have to do in advance is to calculate your firms ' collection period. If you monitor this over time you will find that you have a strong sense

Once you truly understand this calculation you will be in a position to understand the effects of increasing sales, taking on larger clients or projects, and knowing at the same time what it will cost you in financing costs and yes, even bad debt, as not all clients pay as we have found!

Most busines owners, particularly those in the SME sector don't often feel they have the tools or knowledge or expertise to calculate these types of ' what if ' scenarios. If that’s the case a business advisor, accountant, etc can help you for minimal or no cost. It's all about putting the variables on the table and looking at them - they include things such as your projected increase in sales, your costs to deliver that product or service, the cost of financing expenses from your bank or financing company, and the cash flow that will come out of those increased sales .


How then cans Canadian business utilize receivable financing, also called ' factor funding' to ensure they are masters in their kingdom - you know the kingdom we're referring to, it's the one where cash is king!

AR Finance simply accelerates the flow of money in and out of Canadian business. In a perfect world you are accelerating ' cash in ' and slowing down ' cash out ‘, i.e. payables, etc.

The cost of factor funding, aka receivable finance is a very misunderstood topic in Canada. A good start might be for you to calculate how much it costs you now to carry receivables. Its actually only three data points in your business - you annual sales, your a/r , and the amount you are paying your bank or financing company to carry that bank line or commercial receivables line of credit.

Let’s use a larger firm as an example - say it has 20 Million in sales, and they collect their money in 65 days. Let's say they are borrowing at the bank at 5%. Their total financing costs are 20M X 5% divided by 365 days in the year Times 65 days which is their collection period. Their cost to carry A/R is then 178,000.00.

The cost to finance this a/r via factoring would be about 10k more a month , but the firm now has unlimited access to cash flow and working capital, is growing sales, and have maintained their ' cash is king ' status with strong cash on hand .

Is that good or bad, and how does it compare with factor costs. The key point here is that your DSO in effect becomes zero when it comes to receivable finance, as you generate cash immediately as you invoice. You then utilize that cash to generate more sales, turnover working capital faster, etc.

In Canada, as a general rule receivables are financed at a discount of 2% on a monthly basis. So you as a business owner have to take the time to re-do our calcs and determine your new cost of financing. You may be well surprised!

Speak to a trusted, credible and experienced Canadian business financing advisor on how factor funding and receivable financing works, what type of facility works best (its confidential A/R finance) and how your firm can qualify immediately.






Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :

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

Stuck In Business Financing Traffic? Raising Sources of Funding For Loans In Canada

Business Finance Options For Canadian Business



Information on sources of business financing for Canadian companies . Raising capital for loans and funding monetization of assets requires solid homework by the business owners.



Sources of business financing in Canada. It's no wonder thousands of Canadian firms, pretty well every day; feel they are in an eternal traffic jam with no green light in sight. Let's examine some of the main funding options in Canadian finding for raising capital via loans and other instruments, predominantly monetization of assets.

Running out of funds is no picnic. It's of course the major reason that a company either declines or even disappears. They become another ' tombstone ' in Canadian business. Not generating profits, or cash flow over a period of time ultimately leads to business demise - again... no secret there!

So who are the saviors... in effect those sources of business financing in Canada ?They come from a wide spectrum , including by the way your suppliers, who can play a key role in your success as they extend credit to your firm on terms .

Other key sources are Canadian chartered banks, asset based lenders, (they are kind of the new kid on the block), factoring firms (aka ' receivable finance ') and equipment leasing companies.

Often many sports analogies lend themselves to business - we don't know why, they just do. So keeping those sources of business finances ' on side’ often becomes the goal of every owner and business manager. If your firm’s financial position weakens then you in effect are abandoned by the assistance you need most, often leading to a financial crisis of some sorts.

How businesses get into short term trouble is again seemingly quite obvious. Suppliers react to potential problems by holding shipments or shortening payment terms, even the ultimate short payment term - C.O.D.! Other creditors tend to pile on when word spreads, or credit reports indicate you firm is trending downward. In some cases it’s absolutely not the fault of management - the industry could be in a temporary decline.

Replacing financing is difficult in the best of times; it’s really difficult for a firm that has financial challenges

Many sources of business financing are not afraid to step up to the table if your firm is temporarily challenged - they include factoring firms, asset based lenders, or financiers of tax credits. Equipment lessors and commercial asset loan firms are equally up for generating new cash flow by engineering a sale leaseback of assets, of simply approving your firm for much needed new equipment.

Canadian business should never be afraid source new asset financing in troubled times - however they should expect that transactions will be structured, perhaps at higher rates, shorter terms, or the need for some additional external collateral.

Nirvana in Canadian business, when it comes to funding loans or raising working capital is often Canadian chartered bank financing. That's certainly the perception by many clients, as these types of facilities are quite inexpensive (even more so in today’s low rate environment) are somewhat flexible. The reality though is that most challenged, start up, or struggling businesses cannot expect to achieve that bank credit Nirvana in Canada that they dream about.

Whether your firm is new, struggling, pre-revenue, or facing a temporary financing challenge never forget that sources of capital do exist. As we have mentioned they included asset based lines of credit, tax credit financing, receivable finance, supply chain financing, and equipment leases and leaseback.

Get out of that traffic jam by speaking to a trusted, credible and experienced Canadian business financing advisor on raising funding for your firm today.







Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com


Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :


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