OVERVIEW – Information on business loan alternatives in Canada . Cash flow financing requires the right combination of asset monetization, debt and potential equity / quasi equity solutions
Business loan challenges aren’t always associated with ‘ fun facts’ for Canadian owners/financial managers. When it comes to either cash flow financing, monetizing your assets, or even exploring some equity options there are numerous sources that might not have been either identified or understood. Let’s dig in.
While in some cases one simple financing/refinancing solution might do the trick more often than not it’s a combination of a couple of different solutions that are required to ‘ cobble together ‘ the financing your business needs.
Businesses that own their facilities, or own specific assets without liens can utilize a sale leaseback strategy to generate working capital.
Lease to own strategies are very common solutions acquiring assets and minimizing cash outflows in that process. A popular asset category has become computers/tech/software assets that are higher cost and always requiring upgrades.
The best way to approach solutions for cash flow financing is to balance outside debt with your ability to totally maximize your assets. A true irony in business is when owners or other perceive high levels of inventory and receivables as positive when in fact these are no being turned over and are putting the business at risk. Naturally having orders / contracts and no inventory to satisfy these is the opposite of that problem, and a problem in and of itself. In recent years companies have turned to Purchase Order Financing to satisfy order growth when traditional financing is not available.
When running your business on a daily basis you can very easily analyze levels and performance in inventory and A/R. These analytical tools ( for example Days Sales Outstanding ) can become your ‘ early warning system ‘ ahead of a financial Tsunami of bad news and financial results, often making it even more difficult to achieve busines loan / cash flow solutions.
While buying assets, financing existing assets, and taking on external debt might seem unrelated in some ways the reality is they are very closely intertwined in your overall business financial plan.
You don’t necessarily have to take on debt or take on business term loans to finance working capital – in fact business credit lines, ABL asset based credit lines, or inventory and tax credit financing strategies do that job well.
What is important is to always understand that you will need cash flow financing alternatives to avoid what we can call ‘ business disruption. And by the way exploring long term financing always takes a lot more time than you might think – whether from a commercial finance company or bank.
So, while ‘ fun facts’ isn’t easily associated with business financing knowing where to turn, and when, is key to business success. Seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can provide a current and long term road map to financial success.
Author: Stan Prokop – 7 Park Avenue Financial :
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 :
7 PARK AVENUE FINANCIAL = CANADIAN CASH FLOW FINANCING & BUSINESS LOAN EXPERTISE
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