YOUR COMPANY IS LOOKING FOR BUSINESS FINANCE SOLUTIONS!
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Financing & Cash flow are the biggest issues facing business today
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
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EMAIL - sprokop@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8
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:
A/R Financing
Inventory Loans
Access to Canadian bank credit
Non bank asset based lines of credit
SR&ED Tax credit financing
Equipment / fixed asset financing
Cash flow loans
Royalty finance solutions
Purchase Order Financing
Short Term Working Capital Loans/ Merchant Advance
Securitization
CONCLUSION
The name of the game always in growth financing is to determine the amount of cash/capital you need before the crunch arrives. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with a business finance strategy and provide alternatives that make sense.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
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