OVERVIEW – Information on working capital finance in Canada. Business credit loan solutions reflect the hard reality of the cash flow needs of Canadian business.
Working capital finance might just be a good thing to ‘ pre – order ‘ when it comes to an owners’/financial managers search for a business credit loan financing. We’re ‘ unfiltering ‘ some of the reasons and benefits for that type of thinking and planning. Let’s dig in.
Your company’s ability to both generate cash and properly finance your assets is often termed the ‘ lifeblood’ of your business. Technically speaking working capital seems pretty simple – only requiring a quick look at your balance sheet and subtracting ‘ current liabilities’ from ‘ current assets’.
But the real issue, practically speaking in our ‘ unfiltered’ format is that you need to ensure you have a path to liquidity for those liquid/near liquid assets on the balance sheet. How you manage and finance them is really the key to business health. By the way, lenders, or even investors will always look at all that as a key metric around whether your firm will get a business credit loan or investment of some sort.
The other benefit of working capital finance, other than general ‘ business health’ we’ve referred to is that a positive flow of funds in your business allows for growth and expanding your products and services.
On the other side of the coin what really happens when you’ve got negative working capital? It’s here that your financial creditors and suppliers raise the ‘ red flag’. Ironically this might even be in a time when your sales are growing, with the real picture being that money tied up in receivables and inventories is simply not moving.
The whole issue of ‘ assets’ is key to cash flow and working capital finance. Even though your assets might be sizeable on the balance sheet if you don’t have operating liquidity you won’t stay in business over the long term – instead your company is working its way downward to that ‘edge of slippery slope”.
Whether you’re a start up or an established business the same challenge needs to be faced – ensuring that revenue monetization covers operating expenses.
While various simply analytical tools are available to monitor and assess your working capital finance needs one of the best ones is the ‘ turnover ratio ‘ – taking your net annual sales and dividing it by the average working capital during that time period. Safe to say that only businesses relying on investing in A/R and inventories have this challenge- as retail or ‘ all cash ‘ firms generate cash quickly.
The policies and techniques we’ve highlighted are the essence of achieving a business credit loan – including tactics such as financing assets properly and managing expenses.
The actual financing tools for a business credit loan and asset monetization are numerous. They include:
Bank and Non Bank revolving credit lines
Sale leasebacks of owned assets
Tax credit financing
Royalty finance solutions
Good financial planning will allow you to anticipate (aka ‘ pre order ‘) working capital finance solutions that make sense for your firm or industry. Seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can help you with an ‘ unfiltered’ view of cash flow needs.
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 100 Million $ of financing for Canadian corporations . Info /Contact :
7 PARK AVENUE FINANCIAL = CANADIAN WORKING CAPITAL FINANCE EXPERTISE
7 Park Avenue FinancialSouth Sheridan Executive Centre
2910 South Sheridan Way
Office = 905 829 2653
‘ 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.
7 Park Avenue Financial
Canadian Business Financing