Getting To Know Sources Of Working Capital In Canada

OVERVIEW – Information on working capital sources in Canada . Non bank commercial lenders offer a dizzying array of financing not generally know to all business owners and financial managers in the SME sector of Canadian business financing



Working capital sources in Canada often seem hard to come by for Canadian business owners and financial managers. And you simply don’t need a ‘ black box’ to locate the key information you need around commercial lenders offering quite frankly a dizzying array of financial solutions to the cash flow challenges your business faces. Let’s dig in.

Your firms need for cash flow and working capital solutions will almost always be evident from your balance sheet. But can the business get approved for, and in fact support the type of finance solutions that revolve around working capital?

A growing business (much more than a start up or a company with fairly flat revenues year over year) simply eats cash. That’s because the day to day needs of fixed asset obligations as well as the continual need to build up inventory and receivables due to the sales growth are a massive consumer of cash.

Some concepts are difficult to explain to clients who are more focused on sales growth, profits, etc – which by the way are all good things. A simple way we explain it sometimes is that the whole situation around ‘ working capital’ simply revolves around understanding what you customers owe you as well as your total current ongoing investment in A/R and inventories.

You might have some positive cash on hand, and you ‘ might’ have access to revolving credit facilities, but at the end of the day those balance sheet accounts are going to dictate the ‘ cash flow’ situation. There is a whole handful of ‘ cash flow’ definitions but we’ll get into that some other time!

Every company is naturally different, a tech firm specializing in software solutions in fact has no need to worry about ‘inventory ‘, while a retailers total business revolves around financing the inventory component of their business. A wholesale distributor might have great sales, profits, but be cash strapped because they have demand for more orders and no cash because clients won’t be paying them in another 60-90 days – and we wont even get into seasonality and bulges in business!

The good news is that your business has in fact access to working capital financing within banking solutions, and outside Canadian chartered bank solutions. Those include:

A/R Financing

Inventory Finance

Tax Credit SR&ED financing

Asset based lines of credit (these facilities, similar to bank lines, monetize A/R, inventory and equipment into one borrowing facility

PO /Supply Chain Finance


Royalty/Revenue Financing – a newer concept getting more popular

Sale Leaseback

Bridge loans

Unsecured mezzanine type cash flow loans

It’s critical to think of this type of financing as short term, and commercial lenders in Canada will always be a bit more, or a lot more expensive than the low cost financing we associate with our banks. In many cases the finance solutions are very specifically structured to the type of business situation your firm finds itself in.

So while commercial lenders can’t compete on price, they definitely compete on the solutions you need to secure asset financing Focus on need, opportunity to grow, and cost and structure when looking at working capital sources you require operating and growing. Consider seeking out a trusted, credible and experienced Canadian business Financing Advisor with a track record of success to in effect become your ‘ black box’ for critical info on finance solutions in Canada.

Author: Stan Prokop – founder of 7 Park Avenue Financial

Originating business financing for Canadian companies, specializing in working capital, cash flow, and asset based financing. In business 10 years – has completed in excess of $90 Million of financing for Canadian corporations. Core competencies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details:


Greg LaBella
7 Park Avenue Financial
Off.   905 829 2653

Cell   905 302 4171

7 Park Avenue Financial
Canadian Business Financing