It’s a ( Cash Flow ) Gusher !cash flow formula

OVERVIEW – Information on cash flow based financing solutions in Canada and the importance or working capital management for business success.

Cash flow based business financing solutions deliver on what every business owner/financial mgr. dreams of – their business being a (cash flow) gusher! It was actually Warren Buffettthat coined the term ‘ endless gushers of cash ‘ as one of his key investment criteria. Let’s dig in.

It’s no secret that owners/mgrs prefer their business to ‘ throw off ‘ cash, as opposed to using it. That constant use of funds requires that you either inject more into the company or come up with a financing strategy that fixes the problem – and there are several!

We’ve observed over the years, particularly in the SME Commercial sectors, that working capital and cash only seems to be a problem when it dries up – the constant day to day focus of generating sales and managing your business often defocuses the business on cash flow and turnover of key assets such as inventory and A/R.

That ability to grow sales while managing key ‘ current assets ‘ is key to success in business – you have only to watch the business news TV stations to hear every day the focus on ‘ cash flow’ ‘ ‘ free cash flow’ and ‘ ebitda’. Winning on those areas allows you to grow the business and put funds into owner pockets; shareholder pockets in the case of those large public companies.

As we have noted, the ability to manage cash is as much a need as the requirement to get a cash flow based financing solution. It’s a combination of ‘ technique’ and ‘ policy’ and ‘ solution’ that gets you to where you want to be. Having ‘ assets’ alone just doesn’t work – at least in the long run.

Unless you’re in an ‘ all cash’ or retail business Accounts receivable is the heart of cash flow. Unfortunately the real world dictates that owners/mgrs can’t predict when clients will pay. That issue, combined with you operating expenses and need to purchase materials and assets is kind of the heart of cash flow 101.

Firms that have larger ticket items/assets for sale as part of their revenue should also consider offering vendor financing to clients. This generates sales and improves cash flow – given that full payment is received when your client accepts the product.

A/R Financing is often at the heart of cash flow based solutions for your business. If bank credit facilities can’t be accessed the ability to finance your receivables via a third party commercial firm is key. These facilities, known as invoice financing, factoring, A/R discounting, etc typically provided up to 90% of cash as soon as you generate invoicing. Our recommended solution in this area is CONFIDENTIAL RECEIVABLE FINANCING, allowing you to bill and collect your accounts with no notification to other clients.

Those other ‘ cash flow based financing solutions’? They include:

Working capital term loans
Tax credit financing
Asset based non bank lines of credit
Sale Leasebacks
Royalty Finance
PO Financing

If you buy into the concept of making your business a ‘ cash flow gusher ‘ seek out and speak to a trusted , credible and experienced Canadian business financing advisor who can assist you with your working capital and growth needs.


7 Park Avenue Financial :

http://www.7parkavenuefinancial.com
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 100 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN CASH FLOW FINANCING EXPERTISE

7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Office = 905 829 2653

greg@7parkavenuefinancial.com

‘ 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.

 

Greg