YOUR COMPANY IS LOOKING FOR BUSINESS CASH FLOW FINANCING!
CASH FLOW AND WORKING CAPITAL FINANCING OPTIONS
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
Business cash flow financing. Is your firm getting enough? It's probably just us but we have never met a client who, unlike larger corporations, has just too much 'cash on hand'! Small businesses as well as large corporations will agree with that!
CASH FLOW IS ABOUT DAILY OPERATING NEEDS
The whole idea of having enough cash flow and working capital is to allow you to have enough liquidity for your daily operating needs while at the same time allowing you to grow your firm.
2 KEY CASH CHALLENGES
The challenge, therefore, becomes how much cash do you need, and where do you get it. (There are only 2 places to get this cash).
If the Canadian business owner and financial manager have a good handle on his or her cash flow needs you're in a position to pay back any secured debt and run your firm.
So what factors in fact determine if you're 'getting enough' when it comes to cash flow loan needs? Well, first of all, it’s about the level of risk you want to take in running your firm on a daily basis with either just enough cash, OR ACCESS TO CASH, or with a buffer that you're comfortable with.
CASH FLOWS FLUCTUATE
While your debt payments might be fixed... in fact they probably are, the reality is that there are circumstances that occur to all firms that make your cash inflows fluctuate.
BANK FINANCING IS ONLY ONE SOURCE OF CASH FLOW FINANCE
So how can you ensure you have access to capital for short term operating needs? That's the $50,000.00 question. You can of course access a business loan via bank financing, short term and long term if you qualify for a Canadian chartered bank business credit line, but that might come with commitment fees for unused balances, compensating balance requirements, and the challenge of dealing with the bank when sales and financial performance declines. Good balance sheets and the ability to demonstrate profitability is key. Interest rates are very attractive to small business owners when it comes to accessing bank finance. Small or early-stage firms will require principals that have good management experience and a business track record and a solid credit score.
2 SOURCES OF BUSINESS FUNDING
We referenced only two sources of business cash flow financing previously. In essence they are first of all internal profits and operations, and secondly external working capital financing. It's as simple as that.
So can the business owner/manager actually accelerate cash, ensuring you’re ' getting enough' from an internal perspective. You sure can!
That can be done by accelerating collections, understanding your 'float times‘ re cheque processing, lockbox operations, etc.
INVOICE REGULARLY
We actually think there are firms out there they invoice once a month. Nothing could be worse... so invoice your clients as soon as you have earned the right to do that by shipping your products or completing your service delivery.
In some cases, you should revisit customer terms and perhaps require deposits for work to be done.
MANAGE PAYABLES PROPERLY
Delaying payments requires a fine line of management thought. You should of course pay creditors to terms, but not before then - stretch them as long as possible without altering vendor relationships which can be valued highly. If you have a sales force compensation plan you could adjust commissions relative to receivables collected, not sales made. We fully realize we've just made an enemy of the sales force by the way, but it’s a cruel world!
EXTERNAL SOURCES OF BUSINESS FUNDING FOR CANADIAN BUSINESS
Business cash flow financing externally consists of bank lines of credit, working capital facilities that are non-bank in nature which secure receivables and inventories, and don forget the new kid on the block, asset-based business credit facilities. In some cases, the business owner can consider sale-leaseback or tax credit financing where appropriate.
QUICK SUMMARY OF CASH FLOW FINANCING SOLUTIONS
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 / Term Loan
Royalty finance solutions
Government Of Canada Small Business Loan Program - Guaranteed federal business loan
Sale-Leaseback Financing
Merchant Cash
CONCLUSION
So, is your small business getting enough? If you aren't then speak to a trusted, credible and experienced Canadian business financing advisor for assistance on working capital needs for business cash flow financing.
