OVERVIEW – Information on working capital lenders in Canada and the solutions they provide in cash flow and working capital finance lending in the SME Commercial finance segment of Canadian business.
Working capital lenders are a critical part of the SME COMMERCIAL FINANCE lending arena in Canada. When it comes to your ‘cash flow drivers’ in your company it’s the right finance solution that counts. It should be your goal to be a ‘ driver’ on that cash flow bus, not a passenger! We’re examining some of those solutions to ensure you’ve got the right finance model in place. Let’s dig in.
Various parts of your business play a key role in the cash flow/working capital conundrum. The ability to generate a profit is certainly very close to the top of the list. The increases and decreases in your working capital account are next in line. Finally, other cash outflows come from the need to buy fixed assets – although the majority of businesses finance those needs via lease financing and term loans.
Business owners quickly realize there’s a huge difference between profit and cash flow. If you or your accountants are showing a positive working capital position on the balance sheet that doesn’t necessarily mean that you are generating positive cash flow from operations. It’s short term working capital lenders that provide the solutions to those investments you are making in A/R, inventory, and other misc. investments.
And those solutions? They include:
Canadian chartered bank business credit lines
Non bank asset based credit lines
Refundable tax credit finance – primarily the ‘ SR&ED’ program
Unsecured cash flow loans
Sales/royalty finance solutions
As you convert those inventories and receivables into cash you repay those facilities.
Cash flow finance lending is made by banks and commercial finance lenders based on your overall ‘ risk profile. This includes the perceived values of your assets, how you convert them, and the controls and practices you have in place.
That ‘ risk profile ‘ also determines whether you can finance your business via a chartered bank or a commercial ‘ specialty lender’. Many businesses need to seek non bank solutions due to issues such as volatile financial changes in their business or simple seasonality needs that drive high fluctuations in cash flow needs.
In most cases your company will always be able to generate higher borrowing levels via commercial lenders who provide you with more margins on the levels of your assets – although typically at a higher cost.
The value of, and turnover of your A/R and inventories is the essence of solutions from working capital lenders.
If you’re looking to access proper financing from those cash flow drivers in your business seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success
who can assist you with your finance lending needs.
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 WORKING CAPITAL FINANCE LENDING EXPERTISE
7 Park Avenue Financial
South 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.