YOUR COMPANY IS LOOKING FOR BUSINESS CASH FLOW LOAN FINANCE SOLUTIONS!
FINANCING YOUR CASH FLOW NEEDS
You've arrived at the correct address! Welcome to 7 Park Avenue Financial
Financing & Cash flow are the most significant issues facing businesses today
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8
Direct Line = 416 319 5769
Email = sprokop@7parkavenuefinancial.com
"Transform tomorrow's revenue into today's growth capital - without the wait."
7 Park Avenue Financial originates business financing solutions for Canadian Businesses – We offer Cash Flow Loans 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”
Understanding Cash Flow Loan and Asset-Based Lending in Canada
Business financing in Canada shouldn’t rely on any sort of ‘ magic ‘to get the correct type of cash flow loan or unsecured loan to run your business.
When things work well, you’re more likely to rely on some natural ‘ chemistry’ for the correct type of financing solutions on your balance sheet.
That chemistry, or interaction of various parts of your balance sheet, will deliver on that ‘ magic’ that business owners/financial managers are looking for from other lenders - Let’s dig in.
The Cash Crunch: Your Business Doesn't Have to Wait
Running a thriving business but struggling with timing mismatches between receivables and payables?
Managing daily operations while waiting for customer payments can paralyze growth and strain vendor relationships.
Let the 7 Park Avenue Financial team show you how Cash flow loans offer a strategic solution, providing immediate working capital based on your future revenue projections and helping you maintain momentum without sacrificing opportunities.
2 Uncommon Takes On Cash Flow Financing :
- Cash flow loans can improve vendor relationships by enabling early payment discounts.
- Using cash flow loans strategically during peak seasons can increase annual profitability more than traditional term loans.
DID YOU KNOW?
- 82% of business failures are due to poor cash flow management
- The average approval time for cash flow loans is 48 hours
- 67% of Canadian businesses prefer alternative lending solutions
- Typical loan amounts range from $10,000 to $500,000
- 91% renewal rate among qualified borrowers
In many cases, the financial solutions you are looking for don’t even require significant sales increases or expense reductions.
The right loan and asset monetization strategy simply accelerates the cash you need to run your business. It’s a primary business goal—more cash / less time!
Business owners and financial managers are constantly challenged on some finance basics.
They include managing the assets you already own, ensuring they are adequately financed, knowing what borrowing options are available, and recognizing the benefits of either equity or debt financing, both of which have merits.
Today, we’re focusing solely on debt financing and monetizing your assets and sales - including asset-based loans.
Those businesses that manage their cash flow and working capital better than others can show higher levels of cash and, hopefully, profits! This directly impacts the business's financial health, making it easier to secure funding.
Short-term working capital needs revolve around how much money you require to finance your current assets for operating cash flow -
Strategies here include:
Bank lines of revolving credit/term loan solutions - Financial institutions such as credit unions and insurance companies can provide traditional funding solutions -
A key part of traditional finance is the personal guarantee, good credit rating of owners, and past performance of the business. This holds owners personally responsible for bank debt. The application process for bank financing can typically take longer for many companies than for non-bank financing.
Non-bank asset-based credit lines - asset-based loans for a non-bank business line of credit- This credit line funds a company’s cash flow needs based on assets of the business - Personal assets are NOT a part of the ABL financing solution -
Commercial real estate can be part of your facility if it is company-owned. Physical asset assessment is a key part of the underwriting process. Loan terms are tailored to your needs around seasonality, the mix of assets, etc. Higher interest rates are typically associated with ABL solutions but are a major source of accessing business capital.
A/R Financing / factoring - the ability to turn future sales into instant cash as you generate revenues versus facilities from traditional banks - Younger businesses can easily take advantage of factoring solutions without taking on additional debt - The advance amount is typically in the 90% range
Inventory Loans - a financing tool that can be combined with asset-based credit lines and/or purchase order financing
Tax Credit Loans (SR&ED) - a good fit for companies investing in r&d projects
Until business owners/mgrs understand how much they need to finance daily operations, they will never be successful in cash flow mgmt—and managing those assets, such as accounts receivable and inventory in a better fashion will consistently lower financing costs. Government loans such as the CSBF program and BDC solutions are also available.
Given that most businesses buy on commercial credit terms, even managing payables more efficiently leads to better cash flow.
So, how much financing does the small business owner need for his or her company? If your business is getting ‘ larger and growing ‘ faster, you should focus on financial solutions that fill the gap.
Longer-term financing needs can be addressed via other solutions.
They include:
Equipment Financing - typically secured loans and leases are utilized for asset and technology acquisition - Helping businesses maintain positive cash flow by properly matching short-term and long-term business funding needs.
Sale Leasebacks are a business finance solution focusing on already-owned assets. Conserving cash flows while refinancing capital assets is a solid cash flow strategy.
Working capital/cash flow term loans (That becomes permanent working capital) - Understanding how cash flow loans work is key - In some cases, online lenders might be the solution - The merchant cash advance concept in the U.S. spawned merchant cash advances in Canada which are now terms short term working capital loans - funds are deposited into your bank account based on the credit score/ personal guarantees and sales volume / annual revenue of the borrower tailored and unique to the short term loan requirement of the business - not the credit history of the company.
These cash flow lenders are experts in cash flow lending and cash flow-based loans based on their proprietary algorithms of financial statements and projected cash flow. They typically focus on your ability to pay back loans within a year.
This type of working capital loan is fast and easily accessible, with realistic repayment terms, but it has higher interest rates.
Having originally been used for retailers' debit card sales and cash flow sales, they now serve all industries via this type of loan agreement. For retailers, a percentage of daily sales is usually taken as payment.
Some firms utilize a business credit card for short-term cash needs when they require capital for the company’s cash needs. They of course, do not require collateral and can be repaid quickly when used to buy inventory, etc
KEY TAKEAWAYS
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Revenue verification stands as the primary qualification factor, superseding traditional credit requirements.
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Flexible repayment structures align with your business’s actual cash flow patterns.
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Quick approval processes typically complete within 48-72 hours
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Automated payments reduce administrative burden while ensuring timely remittance
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Future revenue projections determine current borrowing capacity
What is Cash Flow Lending?
Cash flow lending is financing that allows businesses to borrow money based on their expected future cash flows.
Unlike traditional loans that rely heavily on credit history and collateral, cash flow lending focuses on the projected revenue streams of the business. This makes it an attractive option for small businesses that may not have a strong credit history or substantial assets to offer as collateral.
Businesses can use cash flow lending to cover various expenses, including startup costs, expansion projects, equipment purchases, and temporary cash flow crunches.
By leveraging their future cash flows, businesses can access the funds they need to grow and operate smoothly, even during periods of financial uncertainty.
Cash Flow Finance vs. Traditional Loans
Cash flow finance differs significantly from traditional bank loans in several key ways. Traditional bank loans typically require strong credit, extensive business history, and substantial collateral, making them less accessible to newer or smaller businesses.
In contrast, cash flow finance is based on a business’s forecasted cash flow, allowing companies with less established credit histories to secure the funding they need based on the current cash flow statement and projected cash flows
Another major difference is the speed and flexibility of the application process. Cash flow finance often has a faster application process and decision-making than traditional bank loans.
This is particularly beneficial for businesses needing immediate funds access to address short-term financing needs. While traditional bank loans can be used for both short-term and long-term financing, cash flow finance is primarily geared towards short-term financial requirements, providing businesses with the agility to respond to immediate financial challenges.
Types of Cash Flow Finance
There are several types of cash flow finance available to businesses, each catering to different financial needs:
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Merchant Cash Advances: This type of financing allows businesses to sell a portion of their future sales for immediate cash. It is beneficial for businesses with high credit card sales, as repayments are made through a percentage of daily sales.
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Invoice Finance: Also known as invoice factoring, this type of financing allows businesses to borrow money against their outstanding invoices. It provides immediate cash flow by advancing funds based on the value of unpaid invoices.
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Revolving Credit Facility: This type of financing provides businesses with a line of credit that can be drawn upon and repaid as needed. It offers flexibility and can manage cash flow fluctuations or unexpected expenses.
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Cash Flow Loans: These loans provide businesses with a lump sum of money that can be repaid over time. They are typically unsecured and based on the business’s projected cash flows, making them accessible to businesses without significant collateral.
Real-World Example of Cash Flow Lending
Consider a seasonal business that sells fresh vegetables. During winter, sales are typically lower, leading to a cash flow crunch.
The business takes out a cash flow loan to cover operating costs during this quiet period. This loan provides the necessary funds to maintain operations and prepare for the busy summer season.
When sales increase in the summer, the business can repay the loan with interest. This financing allows the business to maintain a positive cash flow during the off-season, ensuring they have the necessary funds to operate smoothly and capitalize on peak sales periods. The business can navigate seasonal fluctuations and sustain its growth trajectory by leveraging cash flow lending.
CONCLUSION - CASH FLOW FINANCING SOLUTIONS IN CANADA
Don't let cash flow gaps slow your growth.
Small business owners need to understand the requirements of the cash flow lender when assessing business loan options -
If you recognize the need to focus on the correct type of chemistry and, dare we say, financial ' magic ' in your business, call 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can assist you with your loan cash flow needs.
FAQ: FREQUENTLY ASKED QUESTIONS
What is a cash flow loan?
Cash flow loans are a great way to finance your company’s growth! They can be used for any project you want, from investing in marketing campaigns and product research to hiring salespeople. Suppose things get tricky when trying to take on new clients or ordering more inventory due to an influx of demand. In that case, These types of business financing will help cover shortfalls caused by unpredictable circumstances without stressing existing lines of credit. A cash flow loan is unsecured, meaning it does not require personal or business assets as collateral.
How do cash flow loans work?
A cash flow loan is unsecured borrowing that small businesses can use to finance day-to-day operations. The funds are used to finance items such as inventories, payroll, and rent, among other things; they’re paid back with incoming revenues from a business’s revenue stream. Lenders may place a general lien on the borrower's entire business, allowing them to use the business as collateral without requiring specific assets.
How does a cash flow loan help my business grow?
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Provides immediate access to working capital
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Enables bulk inventory purchases
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Supports expansion opportunities
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Helps maintain vendor relationships
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Allows for strategic hiring decisions
What makes cash flow loans different from traditional financing?
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Based on revenue rather than credit history
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Faster approval process
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More flexible repayment terms
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Less documentation required
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No traditional collateral is needed
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Unlike a traditional bank loan, which comprehensively evaluates a borrower's credit history and financial status, cash flow loans are primarily based on projected cash flow.
