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 funding empowers businesses to thrive by providing the financial flexibility necessary for operational success.
"Unlock your business's potential with smart working capital solutions—don't let cash flow challenges hold you back!"
7 Park Avenue Financial originates business financing solutions for Canadian Businesses – We offer WORKING CAPITAL FUNDING solutions that solve the issue of cash flow and working capital – Save time and focus on profits and business opportunities
FINANCING WORKING CAPITAL NEEDS
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!
Funding working capital is the lifeblood for enterprises aiming to maintain or expand their operations, making it essential for businesses to understand what options are available - its mechanisms and advantages. Access to working capital allows companies to meet daily expenses, handle unforeseen costs, and capitalize on new opportunities without compromising their financial stability. As such, mastering working capital management and funding can significantly impact a business's ability to grow and succeed in competitive markets.
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 you must 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 for short term financial health. 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 - Business line of 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 - Focus on business owner's personal credit
Business credit cards
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, maturity 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 constant thing 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!
KEY TAKEAWAYS
- Types of Working Capital Loans — Understanding different financing options available helps businesses choose the right one for their needs.
- Working Capital Management Techniques — Efficient management of assets and liabilities ensures optimal use of resources.
- Working Capital Ratio Analysis — This financial metric assesses a company’s ability to cover its short-term obligations, crucial for financial health.
- Benefits of Adequate Working Capital — It ensures businesses can operate effectively without financial strain and seize growth opportunities.
- Impact on Business Operations — Adequate working capital directly influences a business's operational efficiency and its ability to meet emergent needs.
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. Call 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor - for working capital credit prescriptions that work for your operating capital needs.
FAQ
How does working capital funding benefit a small business?
Working capital loans provide the necessary financial buffer to cover operational costs and support growth without disrupting cash flows.
What types of working capital funding are available?
Businesses can access various options including bank loans, lines of credit, invoice financing, and merchant cash advances.
How does working capital impact daily business operations?
Adequate working capital ensures that a company can meet its short-term liabilities and invest in growth opportunities.
What is a good working capital ratio for a company?
Typically, a ratio between 1.2 and 2.0 is considered healthy, indicating that the business can cover its short-term liabilities effectively. That ratio measures the company's current assets and current liabilities.
How can a business improve its working capital management?
Effective inventory management, stringent credit control, and prudent cash flow management are crucial strategies.
What is the difference between working capital and fixed capital?
Working capital covers short-term operational needs, whereas fixed capital is used for long-term investments in assets. Negative working capital can result from poor mismatching.
Can poor working capital management lead to business failure?
Yes, inadequate management can result in cash flow problems, affecting the ability to sustain operations when working capital financing is poor.
Are there any sector-specific working capital challenges?
Different industries face unique challenges based on their operational cycles, financial health and market dynamics around working capital finance needs.
What is the role of inventory management in working capital funding?
Efficient inventory management helps in maintaining the right balance between stock availability and cash flow.
How does the economic environment affect working capital?
Economic fluctuations can impact customer demand and payment cycles, directly affecting a company's working capital.
