Mad? Disappointed ? Here’s Your Where And How On Business Cash Flow Sales Financing
OVERVIEW – Information on business cash flow solutions for Canadian business owners and financial mgrs. Financing sales revenues comes from the proper use and combination of debt and cash flow monetization. Here’s the where and how
Financing sales revenues and the ability to access business cash flow solutions often leaves business owners / financial mgrs feeling disappointed and even… mad. Feeling ‘ under fire ‘ on such a critical part of your business isn’t necessary if you follow some of the following rules and guidelines. Let’s dig in.
Microsoft founder Bill Gates had a rule that, unfortunately, most companies can’t follow. That rule? Have enough cash in the bank to cover off one year of sales revenues. You only wish, right? So the alternative is therefore to ensure you have the right combo of debt and cash flow financing/asset monetization strategies
The challenge with any form of debt financing for your business is a combination of interest rate and the ability to access that capital. Canadian chartered banks are very focused on your current debt and capital structure when it comes to bank borrowing. Typically they look for a maximum ration of 2:1 vis a vis that debt to equity relationship, with cash flow coverage closely resembling that same ‘ ratio’
Business owners often also might not realize that when they access senior bank debt they are also in fact tying up ‘ all ‘ of the assets of the business. The refusal of the bank to give up collateral can put companies in the difficult solution of not being able to access other capital.
For firms with good cash flow one solution around the above mentioned problem is an unsecured’ cash flow loan ‘. It’s in effect a ‘ bridge ‘ between your ‘ senior’ debt and your ownership equity. This allows you to access business cash flow for both working capital, fixed assets, or even make an acquisition of a competitor.
One alternative to senior bank debt and bank revolving credit lines is the asset based line of credit. While it has a higher cost than bank interest rates it provides almost an unlimited ceiling on cash flow needs provided your firm has growing sales and good assets.
The actual sources of debt and cash flow financing are:
Government (i.e. the Govt Small Business Loan – which comes with a govt guarantee to your lender
Banks – credit lines, term loans
Commercial Finance Companies (these firms are often niche lenders and provide solutions such as A/R factoring, equipment leasing, sale leasebacks, purchase order financing)
When focusing on either a debt or cash flow solution looks for a lender that will provide some creativity around your business needs- this works best when you have up to date financials and an owner/mgmt that can provide a solid overview of the business.
Eliminate that ‘ mad’ and ‘ disappointed’ feeling around your business capital needs. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you on the ‘ where and how ‘ of financing sales revenues and your planned growth.
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 = CANADIAN BUSINESS CASH FLOW FINANCING EXPERTISE
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Office = 905 829 2653
Fax = 905 829 2653
‘ Canadian Business Financing with the intelligent use of experience ‘
ABOUT THE AUTHOR
Stan 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