YOUR COMPANY IS LOOKING FOR BUSINESS CASH FLOW FINANCING SOLUTIONS!
FINANCING OPERATIONS IN CANADA / FINANCING THE BALANCE SHEET
You've arrived at the right address! Welcome to 7 Park Avenue Financial
Financing & Cash flow are the biggest issues facing business today
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs
EMAIL - sprokop@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8
Business Cash Flow Financing. Confusing sometimes? It shouldn’t be. The term ' cash flow ' is widely used …. And somewhat widely misinterpreted! Where’s our safety patrol when we really need one ?! It's a specialized term in business and has often confusing definitions - especially in times of a 'cash flow crunch'
The purest form is the cash flow statement for any firm. At its simplest, it's a ' cash in' and ' cash out' analysis. Key to this analysis though is the timing of the receipt of funds. Any good business cash flow statement or projection will show projected inflows and outflows over a period of time - usually annually.
THE TERM CASH FLOW IS OFTEN CONFUSING AND MISINTERPRETED IN CANADIAN BUSINESS
We mentioned wide misinterpretation of cash flow issues. That is because it is often confused with other accounting terms such as 'profits ', ' income ', and 'revenue'. Naturally, real cash is the lifeblood of a business. We don't pay our bills with ' revenue'! It's the amount of cash on hand that pays those bills and makes loan payments, lease payments, etc.
TURNING REVENUES INTO CASH .. FINALLY!
So, yes, our firm makes things, we sell them, and eventually, we receive payment. During that time we are paying out cash to employees, suppliers, and also waiting to get paid ourselves. We are only able to pay our bills as a business with real cash!
PREPARING YOUR CASH FLOW PROJECTIONS
When businesses prepare a cash flow statement they list their monthly expenses, both fixed and estimated, and then focus on anticipating when customers will pay invoices, thereby generating cash. That will also help identify the type of financing and cash flow loans that will make sense for your business. That type of loan will be identified on your financials as ' cash flow from financing '. That is the critical cash flow statement that's typically called ' cash flow from financing activities'.
WHAT ASSUMPTIONS ARE YOU USING IN YOUR CASH FLOWS- IT'S WRONG TO ' ASSUME'!
Naturally, there has to be some solid work around any assumptions in that whole process - for example:
Are the projected sales going to be realized?
Will the payments from those sales be made on time
How much can be drawn out of the business in the meantime
As most small business owners who have borrowed already know this type of document is probably the most important one that the bank or finance company wants to see. It will also help you identify long term funding needs in your company's cash flow and take advantage of proper financing options at interest rates commensurate with your overall credit quality.
DO YOU UNDERSTAND YOUR CASH FLOW CYCLE - EVERY INDUSTRY HAS A DIFFERENT ONE
Business owners, therefore, need to properly understand the total ' cash flow cycle ' That cycle consists of purchasing inventory, booking receivables around the sales that are made, and then collecting those receivables. Simply right? Not really, the true challenge is in the following: ' TIMING'! ..allowing the business owner and financial manager to focus on positive cash flow and the requirements in a line of credit.
BUSINESS HISTORY IS LITTERED WITH CASH FLOW DISASTERS
Many textbooks in finance have been written around the mistiming of the cash flow cycle - where large and once-great companies went bankrupt by misunderstanding the subject of our article. At 7 Park Avenue FInancial we've observed Small businesses don't focus as much on their financial statements as they need to!
SPOILER ALERT - CASH FLOWS DO NOT EQUAL PROFITS
Most laypeople find it very difficult to comprehend that a company that is profitable can go bankrupt. As we have discovered that can absolutely happen as financial managers confuse net income from a sale from the actual receipt of cash from a sale. If the cash pipe is ' blocked ' problems will occur! That cash generated by your businesses almost never equals profits in the same timeframe!
Those are short term problems that need to be fixed via internal management of your assets or external financing solutions/cash flow lending with repayment terms tailored to your specific needs via a cash flow loan that meets your needs.
CONCLUSION
In summary, any small business owner or financial manager understanding of the business cycle and proper cash flow will add value to the success of the business from a financial perspective.
How Do You Finance Cash Flow? Some key financing solutions for cash flow problems?
A/R Financing/Invoice financing
Inventory Loans
Access to Canadian bank credit / Term loan
Non bank asset based lines of credit - Collateral based solutions
SR&ED Tax credit financing
Equipment / fixed asset financing
Cash flow loans
Royalty finance solutions
Purchase Order Financing
Short Term Working Capital Loans/ Business Credit Card / Merchant Advances Good owner credit score required! These are temporary cash flow loans typically with a 12-month term.
Securitization
To seek financing options for the business cash flow challenges seek a trusted, credible and experienced Canadian business financing advisor who can assist you with your working capital needs and understanding business cashflow loans and their requirements.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
7 Park Avenue Financial/Copyright/2020/Rights Reserved
