YOUR COMPANY IS LOOKING FOR WORKING CAPITAL CREDIT SOLUTIONS!
Working Capital Loans / Working Capital Financing In Canada
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
Working capital credit challenges seem to give Canadian business owners a lot of headaches. Do cash flow lending and funding solutions need to do that? We don't think so and here's why... maybe even some cures!
MATCHING CASH NEEDS TO THE RIGHT FINANCIAL SOLUTION - WHICH ONE WILL WORK FOR YOUR BUSINESS
Whether your firm is a start-up, maintaining a status quo, or focused on growing like crazy it’s important that you utilize and match assets to the right amount of financing re: your working capital loan and cash flow needs. The principle of matching is very important in business financing; it’s a simple concept - finance your short-term assets, i.e. receivables and inventory with short-term financing strategies. Long term financing solutions typically involve more permanent business capital structure solutions.
Canadian Business Financing Solutions
They include in our case:
A/R Financing / Accounts Receivable Factoring
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
Government Of Canada Small Business Loan Program - The Guaranteed federal business loan
Purchase Order Financing
Short Term Working Capital Loan / Merchant Advance
Securitization
SUPPLIER / VENDOR FINANCING IS A SOURCE OF WORKING CAPITAL!
One thing business owners/managers should also remember is the importance of supplier trade financing. Let's use the example of a shoe store owner as an example - if he or she can get 60-day terms from a vendor and sell the shoes within thirty days the need for working capital and cash flow diminishes significantly.
However, when you are financing fixed assets and your company infrastructure (telecom, computers, machinery, etc.) that’s when a term loan or lease financing solution makes the most sense.
THE CHALLENGE OF A STARTUP
Startups have a larger challenge quite often when it comes to working capital credit needs. Financing operations become difficult, mostly because traditional lenders focus on track record, excess collateral, personal guarantees, etc. That's when alternative solutions most often make sense - they might include factoring, non-bank asset-based lines of credit, etc. Small businesses must weigh access to capital versus the cost of capital all the time. The credit score of the business owner is often a key issue in startup funding and achieving better interest rates over a period of time.
WHAT STAGE OF GROWTH IS YOUR BUSINESS IN?
As your business gravitates through the different stages of start-up, high growth, mature etc, it becomes more important than ever to learn how to analyze your financial position. When you are good at managing that whole process you minimize liquidity issues and maximize profit and returns on your company investment in assets. What is working capital? A good way to understand it is that current assets such as receivables and inventory are the majority of typical working capital sources, and a line of credit on these assets is key to long term success. Naturally accounts payable management, your ' days payable' is also a key cash flow driver.
ASSET TURNOVER AND THE OPERATING CYCLE
The challenge though is that working capital credit is a constant moving target. And if your assets are ' overbuilt ' that might also signify poor quality - i.e. poor inventory and collections resulting in a loss of sales and client /vendor relationships. The one thing that is constant though should be your realization that the longer time it takes for a dollar to ' travel' through your company will always signify the need for more focus on cash flow funding and lending solutions. When the business owner understands the working capital formula around current assets and current liabilities and what effect they have on funds flow helps guarantee financial success. That working capital ratio will constantly come up in discussions with business lenders.
ADDRESSING WORKING CAPITAL VIA INTERNAL MANAGEMENT STRATEGIES
There are though numerous ' internal ' methods of addressing working capital credit without external solutions and business loans. They include:
- Billing promptly as you sell
- Ask for client deposits if applicable in your industry
- Charge (and enforce!) interest on past due receivables
- Offer discounts for prompt payment
Creative business owners have long found ways to delay outflows also! They include stretching payments to vendors, not paying items before they are due, negotiating special terms, etc. All of those must be used with the right amount of ' PROCEED WITH CAUTION' of course!
CONCLUSION
Small business needs access to business capital. There shouldn't always be just ' excuses ' for your funding needs. Remove the headaches of cash flow challenges by seeking out and speaking to a trusted, credible and experienced Canadian business financing advisor - for working capital credit prescriptions that work for your operating capital needs.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
7 Park Avenue Financial/Copyright/2020/Rights Reserved
