Turning Working Capital Challenges Into Opportunities ? One Guarantee You Won’t Like At All !

OVERVIEW – Information on working capital management for Canadian businesses. Addressing the need of business credit in the financing landscape of Canadian businesses

Business credit challenges in Canada often revolve around your firms overall working capital management. How you address improvements in cash flow management via internal management and external financing solutions makes and breaks a business in Canada.

If you’re in the SME ( small to medium enterprise) commercial sector in that’s often even more of a challenge, as the big guys seems to have solutions and access to capital crawling all over them . We wish! Does that have to always be the case? We don’t think so, let’s dig in!

A lot of the cash flow needs in a business are in fact ‘ hiding’ in your financials – it’s your job to identify and fix them. While a healthy amount of clients we meet seem to initially only be focusing on revenue / sales management often the root of the problem is in your current asset accounts – i.e. inventory and receivables.

So it’s the job of the business owner / financial manager to identify those root causes and implement improvement. In the case of A/R it’s all about a sound credit granting policy and collection of accounts – if your company is growing that is even more important as your inventory and A/R ‘ eat’ cash! So addressing solutions for the ‘ appetite’ we’ve just spoken of are simply critical to business survival.

In cash flow and working capital management its all about current assets and liabilities. Liabilities? Didn’t we just say that it’s all about the A/R and inventory? We did of course, but its easy for the business owner/manager to forget that effective management of payables stops cash outflows, and the more you get your key vendors and suppliers on side is a classic win/win.

How you finance your A/R and inventory ties directly into your overall access to business credit for growth.

So that’s why taking some time to understand some key terms such as your cash operating cycle is in our opinion a million dollar investment of your time. Simply speaking it’s the time it takes for a dollar to flow through your business.

When it comes to assessing external business credit solutions its all about flexibility and cost.

The solutions around working capital credit come from a small handful of external financing solutions

They include:

Canadian chartered bank credit lines
Receivable Financing… aka ‘ Factoring’
Inventory Financing
Asset based non bank lines of credit (they combine A/R, inventory and equipment into one credit facility)
Tax credit monetization – i.e. bridge loans for SR&ED claims
PO/Supply chain financing

Which one/ones are right for your business?

Any one or a combination of these solutions delivers cash flow. They come with different costs, they operate differently on a daily operational basis, and in some cases are limiting and in other cases (Asset based credit lines) offer unlimited growth financing potential

Looking for an iron clad guarantee in business credit. Here’s one. We guarantee if you don’t manage and finance your current assets properly you’ll be out of business fairly quickly.

Probably not the guarantee you were looking for? Instead, consider seeking a trusted, credible and experienced Canadian business financing advisor who can assist you with working capital management solutions.

Author: Stan Prokop – founder of 7 Park Avenue Financial


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:


Greg LaBella
7 Park Avenue Financial
Off.   905 829 2653

Cell   905 302 4171