Cash Flow Finance Working Capital Problem Solutions Revealed !

YOUR COMPANY IS LOOKING FOR THE SECRET TO UNLOCKING

CASH FLOW AND WORKING CAPITAL!

WORKING CAPITAL MANAGEMENT / FINANCING 101!

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
Suite 301
Oakville, Ontario
L6J 7J8

cash flow vs. working capital 7 park avenue financial

Cash flow finance in Canada. Can it solve your working capital problem? We say yes, with one caveat... namely done properly. That's the key, it's almost as if we're ' declassifying ' some secret documents not previously know to others - at least that's how it feels when we speak to business owners grappling with their business financing challenges. It's all about fixing negative working capital.

PROPER UTILIZATION OF DEBT

Debt or monetization of your assets to generate cash flows isn't always a good thing, but actually, top experts in finance have suggested over the years that many companies can add to the overall value of their company by 10-20% if they are using debt properly, deducting interest and finance charges, etc. - The bottom line? Proper working capital techniques and asset turnover to cover obligations due within one year as opposed to long term debt. Receivables converted into cash, as an example greatly enhances your overall cash flow position.

IS DEBT SUITABLE FOR YOUR COMPANY

But with that financing comes the restrictions that are imposed by lenders, or simply the suitability of certain financings for your firm. A lot of business finance solutions look good on paper but ultimately might not work for your company when it comes to accessing enough cash for your business funding needs via assets and liabilities finance and management.

WORKING CAPITAL FINANCING NEEDS TO BE FLEXIBLE

Should you have any specific goal when searching for optimal financing methods? One of them is pretty important; it’s ensuring that you give yourself some flexibility along the way for the amount of working capital you need. We meet so many clients that have locked themselves into some form of debt or asset monetization strategy that has done one thing: Making it impossible to raise more capital! Simple techniques such as more effective managing of your accounts payable also increases cash flow.

That might be because of the security you have offered up, or been asked for. When that occurs one other ' bad thing ‘that happens is that you are now operating and running your sales strategies in a different manner because you are locked into a financing arrangement that does not allow flexibility.

One other point of caution - entering into the wrong type of working capital/debt financing forces you to then consider making changes in your expenses and budget and making you less aggressive in exploring or taking on new sales opportunities and contracts. There is one benefit in that though... unfortunately it’s the benefit of your competitors, who sense weakness and attack from the rear!

WATCH OUT FOR LOAN COVENANTS AND RATIO RESTRICTIONS

Remember also that when you enter into a working capital problem resolution financing that you are now in the world of loan covenants, offering up personal collateral in some cases, and if you are highly leveraged that’s going to become a regular issue with you all the time - forcing many business owners and managers to refocus on what they do best - run their company and grow sales and profits - improving their net working capital position. Your cash flow statements as a part of your firm's financing statements ( see : 'cash flow from operations' in your financial stats ) will reflect your sources and uses of cash. Understanding where cash inflows can improve is key to business financial success.

SOME POPULAR AND ACCESSIBLE CANDIAN BUSINESS FINANCING SOLUTIONS

There are many types of debt or asset monetization solutions that, if done properly allow you to achieve the right amount of cash flow you need.

Some of those for your working capital and cash needs include:

A/R Financing - Accounts Receivable / Accounts Finance Factoring

Inventory Loans

Access to Canadian bank credit

Non bank asset based lines of credit - Financing the balance sheet

SR&ED Tax credit financing

Equipment / fixed asset financing

Cash flow loans

Royalty finance solutions

Government Of Canada Small Business Loan Program - The Guaranteed federal business loan

Short Term Working Capital Loans / Merchant Advances - typically repayable over a 12 month term

Those financing mechanisms, if done properly allow you to take on the right amount of debt, achieve stronger sales revenues, and consider new opportunities for products, acquisitions, etc.

CONCLUSION

So, have we ' declassified' some of the info the business owner/manager needs to solve the eternal working capital problem? We hope so, and it should be the goal of business to pay attention to current and anticipated funds flows to balance their overall financial policy - and the ability to achieve free cash flow. Business capital and cash flow are at the heart of your business and your overall capital structure and will translate into better numbers in your income statement. At 7 Park Avenue Financial we try and stay away from a lot of those ' textbook' decisions around current assets/current liabilities and ' current ratio' jargon - the ' working capital formula ' but sometimes you just can't avoid it in the short term!

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with financial performance solutions and sources of capital that work... for your company.