Why It’s Good To Be Right About Working Capital

OVERVIEW – Information on the importance of business working capital for Canadian businesses. It’s all about timing on finance options for cash flow solutions that make sense

The business working capital search often has owners/financial managers/entrepreneurs with that ‘ are we there yet?)working capitalfeeling as they struggle for finance options for their companies. That’s of course because that journey is often endless as your business grows / experienced challenges. The importance of being ‘ right’ in this area can’t be over emphasized. Let’s dig in.

Working capital is dependent on sales and assets, as you generate revenues which become receivables you’re in a better position to reduce your short term obligations such as payables and loan and operating commitments. The big ‘ IF ‘ is if you are turning those assets over and generating quality receivables. It all about how ‘ efficient’ your business is, and that’s what of interest to suppliers, lenders, or potential investors.

Problems often arise when sales fluctuate dramatically, leaving your company in a negative working capital position. The worst part of sales fluctuation is of course when sales go down dramatically- at this point not even better collections can reverse the tide. It’s at these times that your ability as an owner/financial manager is challenged to the hilt.

There are some ways to address working capital challenges in the absence of a sales slump. One of these is to sell of inventories if that asset class is a part of your business – one other solution is to consider a SALE LEASEBACK of existing assets. Often simply trying to forecast your short term needs by careful analysis of your balance sheet accounts will also avoid cash crunches.

It’s important to point out that every industry has different working capital needs and some finance options will work for some but not all. Companies dependent on cash sales or fast inventory turns can often escape working capital drama. Even more challenging is the steep hill ‘ start up ‘ businesses face as they try to be taken seriously by banks and commercial lenders. The ‘ short list ‘ of working capital solutions includes:

Bank Credit Facilities

A/R financing from commercial finance companies

Inventory finance – suited for retailers or as a combination of A/R and inventory business revolving credit facilities

Working Capital Term Loans

Asset based non bank revolving credit facilities

PO Financing

Lease financing – preserves cash flow and credit lines as you match long term assets with minimal cash outlay

Sales/Royalty finance

In accessing the right working capital finance options for your business it’s critical to be ‘ educated’ about your firms overall financial position. Consider also seeking out and speaking to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you in ensuring you’re ‘ right ‘ about the perfect finance options for your business.


7 Park Avenue Financial :

http://www.7parkavenuefinancial.com
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 100 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS WORKING CAPITAL FINANCE EXPERTISE

 

7 Park Avenue Financialworking capitalSouth 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