How Much Should You Worry About Business Financing In Canada ? Business Finance In Canada

OVERVIEW – Information on financing cash flow for Canadian businesses. Business finance solutions are critical to operating and growth successBusiness Finance In Canada

Business Finance
in Canada seems to come with a lot of worrying these days. Is that really necessary? Not if you’re financing cash flow needs properly. The benefit? Your business simply is now able to ‘ take off ‘. Business Finance In Canada Let’s dig in.

The ramifications of no cash are pretty obvious to the business owner / financial manager that struggles with day to day working capital challenges. Being unable to purchase or upgrade assets, pay employees, or meet loan and other debt obligations places a lot of stress on owners/mgmt.

There’s a two lane road or journey that every business travels on – keeping the business alive, and growing revenues/profits. One of favourite mentors describes any business that isn’t generating cash and profits as simply ‘ a hobby ‘ – and most Canadian business owners don’t think of their daily work as ‘ hobbies’.

The text books give us some clearly defined definitions around cash flow – it’s your net profits plus depreciation. Unfortunately most business owners can’t run their finances with text book definitions – so paper profits on the income statement and cash flow ratios from their accountant mean little when every day is a struggle.

Payment from clients is the best example of shortages of cash. Since businesses sell on terms paper profits look strong and cash on hand looks… poor! Your ability to finance A/R properly (as well as manager client payments) is one major key to business finance success.

While inventory finance needs also complicate the problem even service companies who have heavy labor costs are also affected by the cash drain. But real pain occurs when the combination of inventory financing and accounts receivable investments drain cash.

It’s not that ironic that both high growth as well as falling sales can exacerbate cash flow shortages.

Financing cash flow in Canada boils down to business credit lines via a Canadian chartered bank, or commercial A/R and financing facilities from commercial finance companies. Some of the solutions provided by non bank finance firms include:

A/R Finance

Inventory financing

SR&ED Tax Credit Loans

Sale Leaseback / working capital term loans (these two are debt strategies as opposed to asset monetization strategies

Asset based lines of credit

Banks place a significant emphasis on your ability to provide quality information to justify borrowing facilities. That includes historical accountant prepared financials, cash flow forecasts, other collateral available, and of course information on the owners.

How does the owner/manager decide on the amount and timing of financing Identifying key ‘ gaps ‘ in your future cash flow needs is the real key to success – as well as of course addressing these gaps with the right finance solutions.

Instead of worrying about business financing requirements seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can help your business ‘ take off ‘ with solutions tailor made for your needs.

Author: Stan Prokop 7 Park Avenue Financial :
Business Finance In Canada

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 – Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :


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