Experiencing A Shortage Of Cash Flow? Here’s Why And Here’s The Fix

OVERVIEW – Information on working capital issues, challenges and fixes in Canada

Working Capital . There’s very few businesses in Canada that can make the statement they have never experienced a cash flow shortage. We’ve toiled ourselves in some of larger multinationals in the world ourselves and we can assure you it happens to everyone. In some ways we are saying that we can condone any obsession you are having on cash flow – just keep it a healthy obsession please! Let’s dig in.

After many business owners meet with their own financial managers and accountants we can forgive them for getting a bit confused on technical definitions of working capital (it’s those ratio guys again!) we tend to view it from a different perspective, the so called real world.

So it’s simply a matter of sitting down with clients and pinpointing solutions that will finance the ebb and flow of the inventory cycle ( raw materials become finished goods ) ,the collection cycle, , and understanding that you should only pay suppliers when they are due . In fact it’s even more recommended that you negotiate special terms if you can, as those special terms equal… CASH FLOW. (Less cash going out)

Again, to re-enforce our point any supplier payment relationship can be potentially negotiated. Also, you’re in a position to ask for discounts on prompt payment by the way. We read some great terms for types of client that affect your whole ‘ payables/cash flow ‘ strategies – They included the ‘ dictator client, the narrow focus client, and the ‘ incorrect scorecard’ client.

The actual days that your money sits in inventory, A/R, and then gets spent in A/P becomes what are known as your conversion time.

At the end of the day proper a/p management of terms:

INCREASES PROFITS
GROWS PAYABLES AND CASH

Remember also that they are various forms of what we can call ‘ Specialized Lending’ when it comes to working capital. These include:

FACTORING/CONFIDENTIAL RECEIVABLE FINANCING
INVENTORY FINANCE
PO/SUPPLY CHAIN FINANCE
ASSET BASED CREDIT LINES THAT HIGHLY MONETIZE A/R AND INVENTORY

And lets not forget COMMERCIAL BANKING FACILITIES if your firm qualifies.

These specialty lenders are focused on quick approvals, asset monetization, and can often bring significant expertise to your business via their own industry knowledge. That deeper understanding means only one thing, more business credit for your firm.

The small business and SME sector are crying for more financing these days. Time is better and they want to grow. Hopefully we have shown that the fix is in. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your financing needs.

Author: Stan Prokop – founder of 7 Park Avenue Financial

http://www.7parkavenuefinancial.com

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:

7 Park Avenue Financial = Sale Leaseback Financing


CONTACT:

7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 302 4171
Email = greg@7parkavenuefinancial.com

7 Park Avenue Financial
Canadian Business Financing