Clearing Up The Confusion Around Cash Flowing! Effective Working Capital Finance Strategies
working capital solutions

 

OVERVIEW – Information around cash flow and working capital solutions in Canada. Business finance strategy depends on how well you know your funds flow

Business finance strategies require a solid understanding of what the pro’s call you ‘ funds flow. It’s a combo of cash flow and working capital basically. There’s some real myths and misunderstanding, all of which can create confusion around your success in financing your company. Let’s dig in.

Business owners/financial mgrs in the SME Commercial area of industry often have a problem in interpreting their financial needs as reflected in their financial statements. Success in this area means you will have a solid understanding of how you’re winning (or losing) in this area of your business. At the end of the day you’re looking for ‘ suitability ‘ in putting a strategy and policy in place around business finance.

The core of the cash flow issue? It’s quite simple actually – your assets and what you owe change with your sales. Even more complex sometimes is the fact that your profits almost never equal your cash on hand! That’s why it’s important to finance your current assets properly!

Effective ways to finance cash flow / current assets properly are:

Bank credit lines

Non bank asset based business lines of credit

A/R factoring

Inventory loans

Tax Credit Financing (SR&ED Credits are financeable!)

PO Finance

It’s important also to understand whether your company uses cash, or generates it. The hard reality of business is that you will probably need equipment or technology to produce more sales. One of the most effective ways to finance those is equipment leasing finance. On occasion the sale leaseback strategy also makes perfect sense.

As we have said, knowing how sales affect your ‘ flow of funds’ is key. The best way to think of this in terms of cash flow is that NORMALLY your current assets move in the same direction as revenues , but often at different rates, depending on how well you mange assets such as A/R and inventory. Think of this whole scenario as how funds flow thru your business. By the way, it’s not bad to have sales growth consuming cash while generating ‘ paper profits’

The pro’s call the right financing of a business the ‘ suitability principle’. It’s all about using cash from the right sources. A business credit line is a temporary source of cash, and should be used to finance daily operations. Buying a long term plant equipt asset is best suited to a lease or term loan type financing.

Owners/mgrs have more control than they think when it comes to financing choices. Remember though that you lose some elements of control in your business when you finance your business for cash flow needs. To ensure you’re doing it right seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success
who can assist you in clearing up cash flow ‘ confusion’ with effective business finance solutions.


Stan Prokop
– founder of 7 Park Avenue Financial

http://www.7parkavenuefinancial.com

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 FINANCE 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.

 

Stan Prokop

7 Park Avenue Financial
Canadian Business Financing