Need To Re-Engineer Your Cash Flow Financing Solutions?

OVERVIEW – Information on how business owners can implement cash flow management formula solutions for their company to enhance working capital and optimal financing for growth

Is there a cash flow formula (or formulas) that can help the business owner/financial manager with cash flow financing solutions. Your ability to re-engineer your financing as its needed is key to business success. Let’s dig in.

It’s your operating assets that fundamentally generate profit and getting the right financing in place for those assets is key. Understanding the relationship between sales on your income statement and accounts receivable is also critical

Although every aspect of the balance sheet, liabilities included affects cash flow we can place a lot of emphasis on financing current assets for cash flow. Those current assets on the balance sheet typically include receivables inventories, and your prepaid expenses.

In theory it’s possible to have a ‘ lean’ working capital position. While the business owner/manager wants to have optimal working capital and cash flow just simply turning over your inventories, keeping lower inventory on hands, and collecting accounts receivable when due helps you stay ‘ lean’.

What are the methods that Canadian business utilizes to finance current assets? Typically they are bank operating lines, non bank working capital facilities (they finance a/r and inventory and equipment under 1 credit facility)… as well as certain key ‘ niche ‘ financing solutions such as tax credit financing and Factoring .

Business owners / managers quickly realize that almost never does profit equal cash flow. There’s a great old saying around that: ‘ IF WE’RE IN THE BLACK WHERE THE HECK IS THE GREEN?!)

The reality – cash flow from your firms operating profits move in the opposite direction to your changes in operating assets. That’s tough one for many of our clients to grasp sometimes.

What you do with your cash flow also affects your cash flow, right? Typical uses include replacement of assets. (This cash outflow can often be alleviated through the use of EQUIPMENT LEASE FINANCING. Surplus cash can also go to the owner’s accounts or to pay off term debt. The actual ‘ cash flow statement’ of your financials (rarely read by the business owner by the way?) shows you exactly how all that transpires.

You can achieve a better cash flow management formula for your company by spending a bit more time on cash flow planning. That saves a lot of emergency running around when growth kicks in and you haven’t planned for it. Most lenders you will deal with will also respect you more (and lend you more) if you show better cash flow planning.

Never forget that all the benefits of sales and additional profits are offset by a cash flow drain on your business. It’s a common saying in business that you have to spend cash to get cash, right?

Can you honestly say your business has a total handle on cash working capital challenges and solutions? Consider seeking out and speaking to a trusted, credible and experienced CANADIAN BUSINESS FINANCING ADVISOR who can assist you in developing the right finance ‘ formula’ for your business growth

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
Phone = 905 302 4171
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