YOUR COMPANY IS LOOKING FOR WORKING CAPITAL AND CASH FLOW SOLUTIONS!
Financing Working Capital Current Assets
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
Oakville, Ontario
L6J 7J8
Working capital financing in Canada. As a business owner or financial manager are you 100% comfortable in knowing the signals of when you really have to better manage your business's current assets?
More so, do you know the tools and solutions that come with that business loan short-term financing challenge? We think we do, so let’s dig in!
DO YOU REALLY KNOW YOUR FINANCIAL STATEMENT KEY STATS?
When we talk to certain clients in hindsight about their inventory finance and the accounts receivable investment challenges they make on a day-to-day basis they are often surprised about how little of some key basics they in fact did not know about their current assets and current liabilities. Terms such as the ' quick ratio ' and other solvency statistics in your financial statements are important to understand.
That's because it’s difficult for some to cut through all the finance and financial statement jargon and concepts to figure out the real root of some of those challenges.
What aspect of the business couldn’t be more complicated today, whether it’s financing, growing your company, staying on top of the competition, maintaining payment terms to suppliers -etc?
We're NOT suggesting industrial espionage, but if you knew your competitor had very slow-moving inventory or uncollectible or very slow receivables you would be in a great position to profit and exploit market opportunities. Most customers today can't take advantage of a cash discount offered by their suppliers.
THE QUALITY OF YOUR A/R AND INVENTORY ALLOWS THEM TO BE FINANCED PROPERLY
That goes for your firm too, which brings us to the key subject today, the quality of your current assets - i.e. A/R, inventory, and the need and ability to finance them properly.
One of the best ways you can interpret critical upcoming problems in our working capital and cash flow situation revolves around a few ' slick tricks' solutions, as we call them, around your accounts receivable and inventories.
CALCULATING DSO AND INVENTORY TURNS IS KEY
The way most people and even stock analysts look at a company's accounts receivable or industry status is to calculate the day’s sales outstanding, i.e. DSO, or inventory turns.
TRACK SALES GROWTH VIA THE SAME GROWTH IN A/R AND INVENTORIES - IT WORKS!
But wait; there is even a better way to look at all this! And that is to monitor those two asset categories as they pertain to sales going up or down. If you set up a simple tracking system that captures your sales and a/r and inventory amounts over specific periods of time, i.e. monthly, quarterly, etc ( By the time you get to annually we can guarantee you it will be too late !) you will be able to spot poor collections in customer payments and growing inventories. International trade issues for out-of-country clients also present a funding challenge.
You just might find that sales growth, which hides a lot of problems, is in fact fast becoming your biggest problem. And that's even when your income statement shows you're making a profit. (Yes, profitable companies can go under!)
So the bottom line is that growth in accounts receivable and inventory on the company's balance sheet with stable or declining sales will signal huge upcoming cash flow problems in the immediate short term in your company's investment in those key current asset accounts.
At the same time, the Canadian business owner or manager will get a lot of comforts knowing that if their sales are growing and a/r and inventories are staying the same, declining, or growing commensurately will mean you're a winner in the cash flow and working capital game.
UNDERSTANDING ACCOUNTS RECEIVABLE FINANCING METRICS - RECEIVABLE FINANCING PROBLEMS AND SOLUTIONS!
Let's try and illustrate a quick example, which is tougher to do when you don't have a chart in front of you. But let's assume you are tracking A/R trade credit, inventory, and sales on a simple chart or spreadsheet. Let's assume for our sample that sales are growing by 20% ( congratulations by the way ) but a/r seems to have ballooned to 100% in that same period?!
What has happened? Simply that your sales success has shifted problems into your A/R account. And that affects cash flow and cash in the bank around your short term financing challenges.
SOLUTIONS FOR FUNDING WORKING CAPITAL VIA INVENTORY FINANCING & AR FINANCE - HERE THEY ARE!
The solution? Monitor those current assets such as accounts receivables as you extend credit to clients as we have suggested Speak to 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can assist you with working capital, receivable financing, and inventory finance solutions that can eliminate negative working capital such as:
A/R Financing
Inventory Loans
Working Capital Loan / Term loans / short term working capital loans - Merchant advances for loans of less than a year duration are also available to businesses such as retailers.
Access to Canadian bank credit - Traditional financial institution
Non bank asset based lines of credit - The asset based lending solution
SR&ED Tax credit financing
Equipment / fixed asset financing
Cash flow loans
Royalty finance solutions
Etc!
CONCLUSION
A company is usually unable to fund the entire ' operating cycle ' of its business by juggling accounts payable solely- External funding is needed in excess of the net profits you generate. Small businesses / Medium Businesses - You've got the power now!
Long-term working capital management is in sight! Short-term liabilities and short-term obligations can now be more effectively managed on a day-to-day basis. Financing the balance sheet does not necessarily mean taking on more debt and allowing a return to financial health.
Call 7 Park Avenue Financial today, we're a trusted and experienced Canadian business financing advisor - solving your cash flow & working capital/business financing needs.
FAQ: FREQUENTLY ASKED QUESTIONS / PEOPLE ALSO ASK / MORE INFORMATION
What are accounts receivable and inventory financing?
Accounts receivable and inventory financing is the use of key current assets such as a/r and inventories which allow a business to secure business lending for short term working capital needs via lines of credit or shorter-term working capital loans. That cash flow allows a business to address liabilities such short term debt such as accounts payable and maintain a positive net working capital position.
Proper management of key balance sheet asses allows a company to not have to pursue equity financing from finance companies. Using a finance company or a bank line of credit to fund receivables and inventory is traditional working capital funding - Current assets on the balance sheet are financeable. Net profits of a company help to shore up working capital.
What is receivable financing?
Accounts receivable financing allows a business to receive cash on outstanding invoices for the goods and services delivered . Financing can be achieved via factoring solutions or unsecured bank lines of credit . Finance companies charge a fee to fund receivables, while banks charge an interest rate .
What is inventory in financing?
Inventory finance is short-term financing via loans or lines of credit that allow inventories to be used as business collateral for financing related to additional purchases. Inventory is in various stages in a business, ie raw materials, work in process and finished goods.
