OVERVIEW – Information on financing a company in Canada. Whether start up or established, small business borrowing for cash flow & capital requires solid information and assistance – Here’s why and how
Small business borrowing in Canada forces business owners and financial mgrs to recognize the needs for cash flow and capital but in many cases these two key areas are a challenge. What solutions are in fact available, and do they need to be temporary, current, or permanent. Is there a ‘self driving ‘solution available?! Let’s dig in.
We can’t count the number of clients we meet who want to gear up for growth but can’t due to business financing constraints – Recent 2016 studies indicate a 87% of small to medium sized businesses want to invest more in their company . Currently alternative financing is so popular due to its access to credit and flexibility.
In a lot of cases it’s a permanent solution that is required and that of course necessitates a good understanding of your growth and capital needs. Even hiring new people needs cash! We always remind clients that Equipment leasing is the most solid method of investing in new equipment / technology, software, etc.
The best way to grow sales and profits is to ensure you have the right working capital solution to your specific needs. A typical need we encounter via many of our clients is simply their ability to have enough working capital on hand to buy inventory and fulfill new contracts and orders.
If you are carrying the additional inventory and receivables that come with that growth you have a working capital challenge. Therein lies the challenge of course – what type of solution do you need, and how do you find it. Naturally you want a facility that meets your needs, can grow with your firm, and is structured under the right terms and rates.
If you have a proper working capital facility that should generally require no permanent additional working capital.
Many business owners simply don’t know or understand where that cash flow comes from. It comes from two areas, your ability to maximize on your current assets, i.e. receivables, inventory, and purchase orders, or new debt that you are willing to take on in the form of a cash flow working capital loan.
If we refer to the former solution Canadian chartered banks offer the best rates, terms and structure for maximizing working capital. The challenge simply is that you are not always able to get the capital you need for growth in the Canadian chartered banking environment.
The key to understanding your needs is your ability as a Canadian business owner or financial manger to understand your working capital cycle – i.e. how fast do you collect your receivables, how does your inventory turn, and what are your payment terms or pressures from suppliers.
By having a clear understanding of those numbers you can determine working capital needs, and also assess what the proper solution is. In short term working capital that means several things – a new or better banking facility, financing your receivables through a more aggressive non bank working capital facility. This could be either a factoring arrangement for receivables only, or a more extensive
Asset based lending arrangement. In medium sized to larger firms in Canada it could also be effectively addressed by a mezzanine or sub debt cash flow loan.
Start up firms will always require special expertise and assistance in accessing capital – Here it’s important to differentiate between what type of investment you need ( assets ? overdrafts ? cash flow? ), as being able to demonstrate the right level of owner commitment and expertise.
If you’re looking for that ‘ self driving ‘ solution to business funding seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your small / medium business borrowing needs.
Stan Prokop – founder of 7 Park Avenue Financial –
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years – Completed in excess of 100 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing. Info & Contact Details :
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Office = 905 829 2653
Email = email@example.com
‘ Canadian Business Financing with the intelligent use of experience ‘
ABOUT THE AUTHORStan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.
Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.
7 Park Avenue Financial
Canadian Business Financing