YOUR COMPANY IS LOOKING FOR BUSINESS CASH FLOW FINANCING!
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?
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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
"Revenue is vanity, profit is sanity, but cash is king." - Unknown.
7 Park Avenue Financial originates business financing solutions for Canadian Businesses – We offer Business cash flow funding and working capital solutions – Save time, and focus on profits and business opportunities
7 Park Avenue Financial: “Canadian Business Financing with the intelligent use of experience”
Business Cash Flow : Financing Your Needs
Like other aspects of working capital management in business, financing cash flow needs often need a ‘ fresh look ‘ when addressing the operating and growth needs and your changes in working capital. Let’s dig in.
Cash flow finance is crucial for businesses as it helps manage the inflow and outflow of funds, ensuring smooth operations and growth.
Breaking Free From the Cash Crunch
Canadian businesses frequently face gaps between accounts receivable and immediate operational expenses. These gaps create stress, limit growth opportunities and damage supplier relationships.
Let the 7 Park Avenue Financial team show you how Business cash flow funding provides immediate working capital without adding a long-term debt burden.
3 Uncommon Takes on financing cash flow :
- Cash flow funding can improve supplier relationships by enabling early payment discounts
- Using cash flow funding seasonally can be more profitable than maintaining larger cash reserves
- Cash flow funding can serve as a competitive advantage in winning larger contracts
Did You Know?
- 82% of business failures are due to poor cash flow management
- Canadian businesses wait an average of 57 days for invoice payment
- 61% of small businesses face cash flow issues regularly
- 27% increase in alternative funding usage since 2020
- 93% of companies using cash flow funding report growth
What Is Business Cash Flow?
Cash flow refers to the movement of money into and out of a business, encompassing the inflows and outflows of cash and cash equivalents.
It is a critical aspect of a company’s financial health, as it determines its ability to meet financial obligations, invest in new opportunities, and sustain operations.
Positive cash flow indicates that a business has more money coming in than going out, which is essential for operating expenses and growth and stability. Conversely, negative cash flow means more money is leaving the business than entering it, leading to financial strain and potential operational challenges.
Importance of Cash Flow for Small Businesses
Cash flow is essential for small businesses, as it determines their ability to meet financial obligations, invest in new opportunities, and sustain operations.
A positive cash flow indicates that a business has the necessary funds to cover its expenses, invest in growth, and respond to unexpected challenges.
This financial flexibility is crucial for small businesses, which often operate with tighter margins and less access to capital than larger enterprises.
Conversely, negative cash flow can lead to financial strain, reduced growth, and even business failure. Managing cash flow effectively ensures small businesses can thrive and adapt in a competitive market.
THE WORKING CAPITAL CHALLENGE IN CANADA
While a cash surplus might always be the bottom line goal for most businesses in the SME (small to medium enterprise) sector, a working capital shortage is often the challenge.
A true measure of a company’s success is the focus on cash management.
Cash flow lending can help businesses manage working capital and cover costs like payroll and inventory, particularly when cash inflows are delayed. Thus, it enables businesses to bridge gaps until expected revenues are received.
ARE YOU WINNING OR LOSING IN BUSINESS FUNDING NEEDS / ASSESSING THE NET WORKING CAPITAL FORMULA
How the business owner or financial manager deals with that can often be the deciding factor in winning or losing in Canadian business.
Your cash flow statement, a key part of your financial statements, will help address the focus on net working capital and business funding needs.
The relationship between current assets and current liabilities ( the current ratio ) is key to understanding the need for sources of capital. Liquid assets that can be converted into cash denote business success.
The working capital you need will be directly related to your business operating activities.
Those changes in working capital are related directly to successful asset turnover in accounts receivable and inventory.
Most business owners also recognize that management of accounts payable is directly related to cash management and short-term obligations, such as your margins and profits in the cost of goods sold line item on the income statement.
What businessperson doesn't relish the thought of putting capital to work to grow more sales and profits? In some cases, the constant need for capital expenditures places stresses on capital needs, depending on your business type and whether it's ' capital intensive.'
Of course, the worst-case scenario for not managing your working capital or being unable to access alternative or traditional financing is total business failure.
While we're the first to espouse ' alternative ' business financing solutions, we're also the first to point out that even alternative financing solutions can be extended if your firm is perceived to be in a death spiral.
WHAT ARE THE USES OF WORKING CAPITAL?
What are some of the positive uses of managing working capital and having access to more cash?
They include:
Expanding your business into new product or service areas
Being able to take out more funds for shareholders with the expense of a hit to your financials
Improving relations with suppliers and key vendors
Reducing debt and lowering financing costs. A business loan can help achieve these goals by providing financial solutions to manage cash flow effectively.
WHAT SOLUTIONS ARE AVAILABLE TO BUSINESS OWNERS FOR CASH FLOW MANAGEMENT NEEDS?
How do owners/ financial managers address cash flow issues? While the most common method is a Canadian-chartered bank overdraft facility, numerous other ways exist to access cash flow and finance assets.
They include:
Short-term working capital loans - These work by offering businesses loans that are repaid through future cash flows. This financing option is especially beneficial for companies lacking physical assets but with solid cash flow projections. They provide greater flexibility compared to traditional loans and cater to businesses facing seasonal sales variations or seeking growth beyond their existing cash reserves.
A/R financing
Asset-based lines of credit (they monetize receivables, inventory and fixed assets all into one facility
Inventory finance
Tax credit monetization
Purchase Order Financing
Securitization
Sale-leaseback
Government Loans
IS BANK FINANCING YOUR ' GO TO' BUSINESS LOAN - WHAT TO DO WHEN THE BANK SAYS ' NO'
While bank financing / traditional business loans are the ‘go-to ‘ solution for almost everyone, ‘go-to’ is often impossible if small business owners can’t meet bank criteria for lending.
A merchant cash advance can be a flexible alternative. It provides funding based on a percentage of future sales or credit card sales, making it accessible for businesses that process credit and debit card transactions.
MONETIZING ASSETS IS THE KEY
Remember that except for working capital term loans all the solutions we have referenced monetize assets and allow you to cash flow assets, with no additional debt on the balance sheet.
Cash flow financing helps businesses secure funding based on their anticipated cash flows, offering flexibility for companies without significant physical assets and aiding in managing cash flow issues.
ACCOUNTS RECEIVABLE - YOUR SECOND MOST LIQUID ASSET
A/R financing/invoice financing is often the most common and logical solution to working capital finance.
That’s because receivables are the closest asset to cash to the actual cash on hand in the bank! Businesses can leverage future cash flows from receivables to obtain loans, providing flexibility and addressing financial strains from delayed payments and cash flow gaps.
WHAT IS THE BEST TYPE OF ACCOUNTS RECEIVABLE CASH FLOW FINANCING
Looking to increase working capital in the short term without bringing long-term debt to the balance sheet?
Our recommended solution to clients in this area is the CONFIDENTIAL RECEIVABLE FINANCING solutions.
It allows you to bill and collect your own accounts and receive advances of 90% of all sales you generate into your business ledgers.
By the way, it’s your call as owner or manager to access how much you need and when; a cash flow loan can help manage short-term cash shortages by providing the necessary funds quickly. Similar to a bank facility, you, of course, only pay for what you are using, so it makes more sense than ever to manage your receivables efficiently.
CASE STUDY:
An Ontario manufacturer faced a growth-limiting cash flow gap with 45-day payment terms from major customers.
After implementing business cash flow funding:
- Revenue increased 47% in 6 months
- Supplier relationships improved through early payments
- Won 3 major contracts previously out of reach based on an additional use of purchase order financing
- Eliminated seasonal stress
- Achieved sustainable growth model
KEY TAKEAWAYS
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Understanding receivables conversion cycles drives optimal funding timing
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Leveraging existing invoices unlocks immediate working capital access
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Strategic timing of funding requests maximizes cost-effectiveness
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Maintaining clean financial records ensures quick approvals
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Matching funding terms to business cycles optimizes returns
Understanding Cash Flow Loans
Cash flow loans are short to medium-term financing options designed to help businesses manage their cash flow.
These loans are typically secured from online or alternative lenders based on the strength of a business’s sales and credit history.
Cash flow loans can be used for various purposes, such as covering day-to-day expenses, paying rent, making payroll, and addressing other immediate financial needs. Unlike traditional loans, cash flow loans often have more flexible terms and faster approval processes, making them an attractive option for businesses needing quick access to funds.
CONCLUSION
Are you looking for a ‘ new way ‘ to address the problem of accessing cash to run your business and increasing working capital?
Call 7 Park Avenue Financial, a trusted, credible, and experienced Canadian business financing advisor.
We deliver real-world finance solutions to ensure funding is available to grow your revenues in products and services.
FAQ
How does business cash flow funding improve operational efficiency?
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Eliminates payment gaps in operations
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Enables bulk purchase discounts
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Supports timely payroll management
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Reduces financial stress
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Maintains vendor relationships
What makes cash flow funding better than traditional loans?
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No fixed monthly payments
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Funding based on receivables
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Faster approval process
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More flexible terms
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No collateral requirements
How quickly can my business access funding?
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Same-day approval possible
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24-hour funding available
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Simple application process
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Minimal documentation needed
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Immediate access to capital
What types of businesses benefit most from cash flow funding?
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B2B service providers
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Manufacturing companies
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Wholesale distributors
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Construction firms
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Professional services
What are the long-term advantages of cash flow funding?
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Sustained growth potential for net income growth
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Improved supplier relationships
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Enhanced credit profile
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Greater operational flexibility
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Increased competitive advantage
What happens if my customers pay late?
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Funding adjusts automatically
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No impact on terms
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Communication support available
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Payment tracking provided
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Flexible solution options
How do I qualify for cash flow funding?
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Revenue requirements vary
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Time in business matters
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Industry type consideration
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Credit flexibility available
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Documentation needs minimal
Can I use multiple funding sources simultaneously?
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Strategic stacking possible
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Complementary solutions available
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Expert guidance provided
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Optimization strategies offered
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Risk management included
What differentiates cash flow funding from traditional financing?
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Revenue-based decisions
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Flexible repayment terms
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Quick approval process
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No fixed payments
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Asset-light structure
What are the types of cash flow?
There are three primary types of cash flow that businesses need to monitor:
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Operating Cash Flow: This type of cash flow is generated from a business’s core operations. It includes cash received from sales, services, and other consistent forms of income, as well as expenses related to core operations, such as inventory, staffing, marketing, and overhead. Operating cash flow is a key indicator of a company’s ability to generate sufficient revenue to maintain and grow its operations.
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Investing Cash Flow: This type of cash flow is related to the acquisition and sale of long-term assets, such as property, equipment, and investments. Investing cash flow demonstrates a business’s investment in future growth and its ability to generate returns from these investments. Positive investing cash flow indicates successful asset sales or returns on investments, while negative investing cash flow often signifies ongoing investment in the business’s future.
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Financing Cash Flow: This type of cash flow is related to transactions with owners or creditors, including loans, owner-equity infusions, dividends, and debt repayment. Financing cash flow shows how a business is funded and how it’s managing its capital structure. Positive financing cash flow can indicate new capital being raised, while negative financing cash flow might reflect debt repayments or dividend distributions.
What is Good Cash Flow Management?
Cash flow management is managing a company’s cash inflows and outflows to ensure it has enough money to cover its expenses and stay afloat. Effective cash flow management involves several key steps:
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Creating a Cash Flow Forecast: A projection of a company’s future cash inflows and outflows. This forecast helps businesses anticipate periods of surplus or shortage and plan accordingly.
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Identifying Areas for Improvement: Analyzing the cash flow forecast to identify areas where cash flow can be improved. This might include reducing unnecessary expenses, optimizing inventory levels, or accelerating receivables.
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Implementing Cash Flow Management Strategies: Implementing strategies to improve cash flow, such as negotiating better payment terms with suppliers, increasing sales efforts, and managing inventory more efficiently.
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Monitoring and Adjusting: Continuously monitor cash flow and adjust strategies as needed. Regular review of the cash flow statement ensures that businesses can respond quickly to changes in their financial situation.
By understanding cash flow, managing cash flow effectively, and utilizing cash flow loans when necessary, businesses can ensure they have the funds required to meet their financial obligations, invest in growth, and achieve long-term success.
