OVERVIEW – Information on sources of business working capital in Canada. Numerous cash flow finance solutions make sense for your firm , but how to you assess what works based on your needs and financial picture.
Sources of Business working capital in Canada is, unfortunately, not a ‘ one size fits all’ scenario for Canadian business owners/financial managers. That’s when the search for real world cash flow and working capital solutions creates a real conundrum for your company. Let’s dig in.
The current financing environment in Canada requires a fair bit of understanding when you’re on the search for capital. Why is that? Some key reasons include:
– The rise of the internet in accessing both info and solutions
– Every industry has different needs
– Emergence of new highly competitive business models
– Risk based pricing
– The requirements of business to access ‘easy and convenient’ financing
– The increased/diminished role of banks in financing today’s businesses
The role of the Canadian chartered bank has changed a lot over the past post recession years. Their continued need for companies that achieve good sales, good operating histories, and solid credit scores for the business owners and the business itself often leads to a lack of access for businesses that can’t meet these basic criteria.
Debate continues to rage around whether our banks can satisfy all business lending needs. Bottom line, the image of the traditional banker has certainly changed, and competition from non bank lenders is quite fierce.
When it comes to ‘ working capital ‘ its all about ‘ liquidity ‘, your ability to grow your business while financing short term financial obligations. More often than not this is all about the amount … and management! of receivables and inventory. Most business owners quickly realize the turnover, and financing ability around those two key assets are the key to financial health and re-investment in your company.
Although it shouldn’t be a mystery many business owners/managers are stymied when sales are growing, profits are in the income statement, but cash is gone! There’s actually some basic arithmetic around planning your working capital needs, and it’s as simple as sitting down and looking at how fast your are growing, the amount of your receivables/inventory against payables, and the turnover required to make these numbers work.
Start up, newer, or businesses facing financial challenges are clearly with their backs to the wall when it comes to accessing cash flow solutions. Never is it tougher to be taken seriously if you’re in this category.
To effectively access bank, or alternative financing your key essentials include financial statements, a cash flow projection, proper aging of your receivables as well as payables obligations. In some cases only outside collateral will make your financing work, so consider that option also.
Numerous sources of alternate financing are currently available in the Canadian marketplace. They include:
Asset based lines of credit
SR&ED Tax credit financing
Sale leaseback strategies
If you require help for the right cash flow and working capital financing seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success
Author Stan Prokop – 7 Park Avenue Financial :
http://www.7parkavenuefinancial.comBusiness 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 SOURCES OF BUSINESS FINANCE EXPERTISE
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