Looking for Working Capital and Business Capital in Canada? Commercial Lending Isn’t What You Think
Cash Flow Financing Decisions, and Alternatives!
You Are Looking for Working Capital Financing!
You've arrived at the right address! Welcome to 7 Park Avenue Financial
Financing & Cash flow are the biggest issues facing business today
Unaware / Dissatisfied with your financing options?
Call Now! - Direct Line - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs
Email - INFO@7parkavenuefinancial.com
Having a closed mind on achieving working capital and business capital financing via commercial lending just might not be the best thing.
Let's focus in on working capital financing and talk specifically about the type of cash flow solution that might best suit your business - which you haven’t even considered!
No one is disagreeing with you that Canadian business financing solutions aren’t difficult to achieve, let alone envision. By itself, working capital financing is more unsecured from a finance firm or lenders position. So exactly how do you go about financing your business and determining what, in today’s challenging environment (post-2008-2009) are the best solutions for business capital?
When you think about it, it's really all about your cash cycle, how funds flow through your business and historically how your business has operated with this 'cash cycle' in mind. Every business, or rather industry, seems to have its own nuances.
And if you are a service-focused business then the receivables you generated pose an even more of a required focus as we need to determine how you will use working capital financing to finance business operations. That is not to say that service type businesses can't be financed, it just becomes a question of securing financing that meets your specific needs - as the financial folks would say, your business is not capital or asset-intensive - yet you still require cash flow financing - as your sales grow, your receivables and operational needs grow also.
So let’s get to the nub of our discussion, what are the solutions available for working capital in the current Canadian commercial lending environment?
If you are more of a service business ( i.e. not capital intensive, example = manufacturing) and can demonstrate ongoing recurring sales and receivables you are a prime candidate for a receivable financing facility. Our favourite and in fact recommended is a confidential invoice discounting/financing facility. This type of commercial lending facility is generally available through what we call non-banks - i.e. private independent finance companies. It allows you to generate cash flow and working capital as you generate sales, and you can then focus on meeting your obligations of staffing and operations prior to collecting from clients. You also do this on a confidential basis, i.e. there is no notification to your client basis, as is the case with more traditional receivable financing.
Firms that are more asset-intensive need to consider ABL facilities (asset based lending) that provide a combo of inventory, a/r and equipment financing that is margined (on a daily basis!) to give you all the cash flow and business capital you need. Canadian businesses know only too well that lengthy collection periods can become the death of their business.
Also in many cases the amount of receivable financing you need simply isn’t always available from Canadian chartered banks - we meet many clients who have some commercial lending from banks, but it never seems to be enough when you are in growth mode or experiencing some sort of other business challenge. This then forces the Canadian business owner and financial manager to assess options that you don’t necessarily have to consider, i.e. getting in additional equity and diluting your ownership.
In summary, yes we agree that it's complicated - term loans, asset based loans, invoice discounting facilities, unsecured cash flow financing ... a lot of considerations. And which one is truly best for your firm? As we've said, it might not be as complicated as you think. Speak to a trusted credible and experienced Canadian business financing advisor to understand the best solution and the cost and ramifications of commercial lending that makes sense for your firm.
' Canadian Business Financing With The Intelligent Use Of Experience '