Working Capital Business Cash Flow Funding: Essential Solutions | 7 Park Avenue Financial

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YOUR COMPANY IS LOOKING FOR BUSINESS FINANCING & CAPITAL FUNDING SOLUTIONS!

FINANCE SOLUTIONS FOR CANADIAN COMPANIES

You've arrived at the right address! Welcome to 7 Park Avenue Financial

Financing & Cash flow are the  biggest issues facing businesses 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

7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8

 

 

 

"Cash is to a business as oxygen is to an individual: never thought about when it is present, the only thing in mind when it is absent." — Warren Buffett

 

 

 

Canadian business financing solutions.

 

Does it seem that the capital funding you need to finance your business is always ... elusive?

 

Knowing how healthy your company is will allow you to select methods of financing your business.

 

  

 

Cash Flow Crunch: How Working Capital Solutions Rescue Canadian Businesses

 

 

Many Canadian businesses struggle with inconsistent cash flow that threatens daily operations.

 

Without adequate working capital, companies face delayed supplier payments related to their current liabilities, missed growth opportunities, funding operational costs/accounts payable, and the constant stress of financial instability. These can strain cash flow!

 

Let the 7 Park  Avenue Financial team show you how working capital business cash flow funding provides immediate relief through flexible financing options tailored to your business cycle, ensuring you maintain operations while pursuing strategic expansion opportunities.  

 

 

 

 

MAKING THE RIGHT DECISIONS IN BUSINESS FINANCE

  

 

 

Over the long term, this adds value to your business and allows you to make the best decision about accessing capital or buying a competitor or a synergistic partner. So consider us your mentor on one of the biggest challenges to business in the SME sector today—funding!

 

 

 

FINANCING NEW ASSETS

  

 

Are you effectively financing your assets?  

 

How you do that effectively allows you to manage your cash flow and working capital, budget for next year, and determine if you're as profitable as possible. In cases where you are not generating profits now, the ability to finance assets and growth for immediate cash flow can turn that around quite nicely.

 

Quick case in point: The other day, we met with an established small business with modest revenues in the 400k range.

 

They had aggressive plans to grow to well over a million dollars this year. The only problem? They don't have the financing to get there or eliminate the current operating losses due to heavy investment in marketing their product to the ' BIG BOX ' stores.

 

 

  BUSINESS FUNDING TO ACCELERATE GROWTH   

 

Our recommended solution to the client? A receivable / inventory working capital line of credit combined with a supply chain/PO financing solution. If implemented, the client would have a lot more confidence in reaching that new aggressive sales goal. Hey, maybe they could turn a profit also!!

 

Working capital loans for Canadian businesses complement other business credit facilities you might have in place, such as business lines of credit.

 

They allow you to run and grow your business and focus on asset turnover and profits.

 

Many small businesses received purchase orders from new of existing clients that they are challenged to fill because of financial constraints.

 

Purchase order financing solutions allow businesses to accept larger orders and contracts and even expand internationally, with the comfort that suppliers will be paid upfront by the purchase order financing company.

 

Many businesses invest in new technology, software, and IT infrastructure. Technology finance solutions around equipment leasing and equipment loans allow companies to conserve capital and upgrade technology hardware and software while conserving cash flows in existing credit facilities.

 

For companies that choose to acquire commercial real estate or upgrade leasehold improvements to their rented premises, numerous financing solutions are available to develop or renovate.

 

 

Business Acquisition - Many companies buy a business via the business transfer financing process for transition capital rather than growing organically.

 

This might involve acquiring a competitor, a management buyout, or funding via a planned succession strategy. Talk to the  7 Park Avenue Financial team about business acquisition financing in Canada.

 

 

  

BUSINESS FUNDING FROM THE GOVERNMENT?  YES, YOU CAN!  

 

The Canada Small Business Financing Program is an excellent capital funding solution for Canadian business financing needs.

 

In 2022, the Government of Canada made significant positive changes to the guaranteed small business loan program. Additional financing available under the program and increased limits make it a viable financing alternative for the thousands of small businesses in Canada that access it each year for billions of dollars! Numerous financial institutions, such as traditional banks and credit unions, participate in the program.

 

Traditionally, the program has funded only commercial real estate, leasehold improvements, and business assets. Changes to the program include financing intangible assets, franchise fees, and lines of credit and working capital for business needs.

 

The maximum loan amount has also increased to 1.1 million dollars. Canada's business development bank also provides business loans.

 

This small business financing program funds leasehold improvements, equipment, and even real estate. Interest rates are very competitive.

 

Small business loans for startups are difficult in the best of times - let's not even mention a pandemic !!! , so the ability to fund your company at an interest rate and term that suits your capital needs is a solid benefit to the entrepreneur.

 

Under the program, the government of Canada allows a financial institution, such as a chartered bank or business-oriented credit union, to administer the program under government auspices. While many business owners chase venture capital, angel investors, and friends and family funding, they eventually find these solutions for the smallest number of eligible firms.

 

 GRANTS FOR BUSINESS & R&D  TAX CREDIT FUNDING

 

The federal, provincial and local Canadian government provides grant programs for several uses. Government websites offer access to numerous available grant programs for Canada's economic development and business training,   as well as government financing programs such as the Canada Small Business Loan - ' CSBFL'  -  No personal assets are taken for collateral

 

In many cases, contributions are via matching programs, which require the business to match funds based on a formula for that specific grant. Grant financing for matching funding programs is available.  

 

The Scientific Research and Experimental Development program, aka ' SR&ED,' provides cash for research project R&D expenses in the form of refundable tax credits that reduce business investment in R&D.

 

 

UNDERSTANDING YOUR FINANCIAL STATEMENTS IS CRITICAL

 

 

Many clients we meet shy away from the financing—or, dare we say it, ' accounting '—aspects of their business.

 

Sometimes, they entrust that role to a bookkeeper or other employee, far from a finance analyst, controller, CFO, etc. 

 

Our point—you don't have to be any of those to have a firm handle on your business. It's simply about understanding some business relationships (others call them ratios) and getting some solid assistance from, let’s say, a Canadian business financing advisor to implement solutions around some of those balance sheet, profit, and cash flow parts of your business.

 

Being prepared is all about successful business financing -  A solid conservative business plan is always a great way to help ensure success.

 

7 Park Avenue Financial prepares business plans that meet and exceed the requirements of banks and other business lenders.

If available, business owners should also be prepared to provide up-to-date and properly prepared financial statements and interim internal statements. Focus on a realistic financial projection around revenues and a cash flow forecast without being overly optimistic.

 

Clearly identify sources and uses of funds and all businesses should be prepared to provide basic info around management, owner experience,  and other data that business lenders might request.

 

 

 

CAN YOU ANSWER THE FOLLOWING QUESTIONS ABOUT FUNDING OPPORTUNITIES? 

 

Investing some time and internal or external expertise allows you to finance your assets to their highest use.  Are you 100% comfortable in answering the following questions:

 

- Are we aware of all options for financing inventory and equipment needs? Purchasing new, used, or upgraded assets is key for any business and will often help improve capacity and increase production efficiencies. It is critical in business financing to match the useful asset life of a business asset with the appropriate financing.

 

 

Will it be necessary to put in more owner capital? (Sometimes, it is, but never always!)

 

- What are the basic sources of traditional and alternative capital?

 

- Should I lease business assets, or purchase them outright?

 

-  Can we generate more cash flow out of our accounts receivable?

 

 

Case Study on Benefits of Working Capital Business Cash Flow Funding

 

A Toronto-based manufacturing company specializing in custom components faced a significant challenge when it received its largest order. The company required $175,000 in raw materials upfront, while the customer's payment terms were net-60.

The company's bank line of credit was already utilized for equipment financing, and traditional lenders offered timelines too lengthy to meet production deadlines.

 

By implementing a strategic working capital solution combining purchase order financing and invoice factoring, the company secured immediate funding for materials while establishing a consistent cash flow cycle around the company's working capital needs.

 

Results achieved within 90 days:

• Successfully delivered $450,000 order on schedule via the short term finances
• Increased production capacity by 35%  via the financing of the companys  current assets
• Hired five additional skilled workers
• Secured two follow-up contracts from the same customer
• Improved supplier relationships through timely payments

 

 

KEY TAKEAWAYS

 

 

• Understanding your cash conversion cycle reveals the time between spending cash and receiving payments. Calculating working capital needs highlights exactly where working capital gaps occur.

 

• Regular cash flow forecasting identifies potential shortfalls before they happen, allowing strategic funding arrangements instead of emergency borrowing for your business growth

 

• Establishing optimal inventory levels prevents cash from being tied up in excess stock and lost sales from stockouts, creating balanced working capital efficiency.

 

• Managing accounts receivable through prompt invoicing and structured follow-up procedures dramatically reduces payment delays that drain working capital.

 

• Leveraging supplier payment terms effectively allows businesses to preserve cash while maintaining vendor relationships, creating a natural extension of working capital.

 

• Knowing your seasonal patterns enables proactive, positive net working capital planning, turning predictable fluctuations into manageable financial events rather than crises around negative cash flow / negative working capital

 

• Diversifying funding sources provides flexibility when market conditions change, ensuring working capital remains in a positive cash flow mode during economic shifts.

 

• Recognizing the true cost of each financing option beyond the stated interest rate reveals the actual impact on your business's financial health around balance sheet current assets

 

 

  

CONCLUSION  

 

When getting a business loan in Canada, focus on the real need for the loan or financing to ensure your business needs will be met.

 

Being prepared helps guarantee success regarding any required documentation, and understanding the flexibility you have regarding loan terms. Different types of financing require different borrowing strategies, from a startup to an established business focusing on growth financing.

 

Your ability to ensure cash flows will manage debt load successfully is key, and provisions should be made for any cash flow gaps that might occur.

 

Interest rates are important, but don't forget to assess the right amortization terms and the flexibility a lender might offer. Many senior lenders will require certain debt covenants that must be met to avoid default, as well as external collateral, which may sometimes, but not always, be required.

 

Cash flow loans should be supported by ... you guessed it - Cash flows!

 

Business Financing Canada style doesn't have to be the challenge and mystery that it seems to be for many business owners and financial managers.

 

Call 7 Park Avenue Financial,  a trusted, credible and experienced Canadian business financing advisor who can assist you with advisory services and your finance and funding needs around the full potential of your business success.

FAQ FREQUENTLY ASKED QUESTIONS PEOPLE ALSO ASK MORE INFORMATION

 

 

 What are the 7  sources of finance?