YOUR COMPANY IS LOOKING FOR BUSINESS FINANCE AND CASH FLOW SOLUTIONS!
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Financing & Cash flow are the biggest issues facing business today
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs
EMAIL - sprokop@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8
Turn Tomorrow's Revenue into Today's Growth Capital - Without the Wait
"Revenue is vanity, profit is sanity, but cash is king." - Unknown
7 Park Avenue Financial originates business financing solutions for Canadian Businesses – We offer Business cash flow financing and working capital solutions – Save time and focus on profits and business opportunities
7 Park Avenue Financial: “Canadian Business Financing with the intelligent use of experience”
Understanding Cash Flow Financing
The Reality of Business Finance in Canada
Business finance in Canada often has owners feeling that fundamental needs such as cash flow finance and cash flow financing only exist in some ‘alternate universe’ - that hypothetical different dimension physicists tell us about.
Building a Bulletproof Strategy
The reality, though? If you spend some time on what we could call a ‘bulletproof’ strategy for success, it will alter your observations on financial success. Let’s dig in.
Breaking Free From the Cash Flow Crunch: A Modern Solution for Canadian Businesses
Most SMEs in Canada are familiar with the cash flow squeeze! Between late-paying clients, growing expenses, and the inability to take advantage of new opportunities, the need for cash flow finance solutions for the working capital you need is more critical than ever.
Timing!
First, business owners and managers must focus on the timing of their needs—i.e., is it short-term financing or longer-term? While the owner or financial manager often knows what stumbling blocks will exist in the finance journey, the reality is that a banker, external advisor, accountant, lawyer, etc. will often provide some objective advice about what results can realistically be achieved.
Understanding Timeline Expectations
Timelines always need to be considered—many clients we meet are looking for funding ‘yesterday.’ Still, the harsh reality of assessment, due diligence, documentation, etc., requires a painful amount of time in some cases.
Core Financial Fundamentals
While many other factors can easily affect your success in business financing (economy, technology, government, new competitors, etc.!), the fundamentals around business need to revolve around your ability to understand your past and current financial performance/condition.
Assessing Your Financial Position
As the business owner/manager, can you say you understand your company’s financial position? Some real basics don’t require the ‘rocket scientist’ type work that we imagine those Bay Street boys are doing on every company. It boils down to simply understanding your balance sheet and income statement and how those two documents affect your cash flow.
Key Financial Considerations
Typical issues to consider include - your payables and relationships with suppliers, account receivable turnover, inventory turns, how much debt you have relative to owner equity, and the amount of new equipment or technology you need now or in the future.
Navigating Canadian Lending Options
Knowing those and being able to tie them into your financial strategy will create a win when you are in front of banks or commercial lenders. While we only have six or so banks in Canada, the commercial lending and alternative finance world are huge these days.
Strategic Business Planning
Having a clear business plan will often help your overall strategy. That plan covers putting proper words to the numbers.
Business finance in Canada often has owners feeling that fundamental needs such as cash flow financing only exist in some ‘alternate universe’ - that hypothetical different dimension physicists tell us about.
The reality, though? If you spend some time on what we could call a ‘bullet proof’ strategy for success will alter your observations on financial success. Let’s dig in.
First, business owners and managers have to focus on the timing of their needs—i.e., is it short-term financing or longer-term in nature? While the owner or financial manager often knows what stumbling blocks will exist in the finance journey, the reality is that many times a banker, external advisor, accountant, lawyer, etc., will provide some objective advice around what results can realistically be achieved.
Timelines always need be considered—many clients we meet are looking for funding ‘yesterday.’ Still, the harsh reality of assessment, due diligence, documentation, etc., requires a painful amount of time in some cases.
Cash Flow Loan Options
There are several cash flow loan options available to businesses, each designed to meet different financial needs:
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Invoice Financing: This option allows businesses to secure funds against their outstanding invoices, providing immediate cash flow while waiting for customers to pay.
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Merchant Cash Advance: This type of loan provides businesses with a substantial upfront cash payment, with repayment structured around a predetermined percentage of the business’s future debit and credit card sales.
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Revolving Credit Facility: This loan allows businesses to draw and repay funds as needed throughout their contract, offering a continuous source of capital.
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Cash Flow Lending: Based on a company’s expected cash flows, this loan uses the generated cash flow to repay the loan, providing a flexible financing solution.
These cash flow loan options can help businesses manage their cash flow and improve their financial stability.
However, it’s essential to understand the terms and conditions of each loan option and choose the one that best suits the business’s needs. By carefully selecting the right cash flow loan, companies can ensure they have the necessary funds to support their operations and growth.
While many other factors can easily affect your success in business financing (economy, technology, government, new competitors, etc.!), the fundamentals around business need to revolve around your ability to understand your past and current financial performance/condition.
As the business owner/manager, can you say you understand your company’s financial position? Some real basics don’t require the ‘rocket scientist’ type work that we imagine those Bay Street boys are doing on every company. It boils down to simply understanding your balance sheet and income statement and how those documents affect your cash flow.
Typical issues to consider include - your payables and relationships with suppliers, account receivable turnover, inventory turns, how much debt you have relative to owner equity, and the amount of new equipment or technology you need now or in the future.
Knowing those and being able to tie them into your financial strategy will create a win when you are in front of banks or commercial lenders. While we only have 6 or so banks in Canada, the commercial lending and alternative finance world are huge these days.
Having a clear business plan will often help your overall strategy. That plan covers putting proper words to the numbers.
Key Takeaways
- Future revenue streams form the foundation of qualification, making historical performance crucial for approval
- Credit requirements prove more flexible than traditional lending, focusing on business health over personal credit
- Payment structures align with revenue patterns, reducing strain during slower periods
- Advanced technology enables faster approvals and funding than conventional financing methods.
- Risk assessment focuses on cash flow patterns rather than hard assets or collateral.
Conclusion
If you’re looking for help in a ‘bulletproof’ overall finance strategy for financing around receivables, inventory, equipment, tax credits, etc., call 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can ensure access to capital and funding.
FAQ
What is Cash Flow Financing?
Cash flow financing is a type of business financing that leverages a company’s expected cash flows as collateral for a loan. This financing method is particularly beneficial for companies that generate substantial cash from their sales but lack significant physical assets. By using the cash flow generated from operations to secure the loan, businesses can access the funds they need without relying on traditional asset-based collateral. Cash flow financing allows companies to borrow against their future cash flows, providing a flexible and efficient way to manage their financial needs.
Understanding Cash Flow
Understanding cash flow is crucial for businesses aiming to manage their finances effectively. Cash flow refers to the movement of money into and out of a business, and it is the lifeblood of any enterprise. Effective cash flow management ensures that a company has enough liquid assets to meet its financial obligations, which is vital for its survival and growth. A positive cash flow indicates that a business generates more cash than it is spending, which is a sign of financial health. Conversely, a negative cash flow can lead to financial difficulties, making it essential for businesses to monitor and manage their cash flows diligently.
What is The Cash Flow Statement
The cash flow statement is a vital financial document that reports a company’s inflows and outflows of cash over a specific period. It is an essential tool for businesses to manage their cash flow and make informed decisions. The cash flow statement is divided into three main sections: operating activities, investing activities, and financing activities. Operating activities include cash flows from sales, accounts receivable, and accounts payable. Investing activities cover cash flows from investments, such as purchasing equipment or property. Financing activities encompass cash flows from loans, debt, and equity. By analyzing the cash flow statement, businesses can gain insights into their cash flow from financing and other activities, helping them make strategic financial decisions.
What are Types of Cash Flow
Businesses need to understand three primary cash flow types: operating cash flow, investing cash flow, and financing cash flow. Operating cash flow refers to the cash generated from a company’s core business operations, such as sales and services. Investing cash flow pertains to the cash generated from investments, including purchasing or selling equipment and property. Financing cash flow involves the cash generated from financing activities, such as obtaining loans, issuing debt, or raising equity. Understanding these different types of cash flow is essential for effective cash flow management and ensuring the financial stability of a business.
What are Cash Flow Loans
Cash flow loans are financing based on a company’s expected cash flows. These loans benefit businesses that generate significant cash from their sales but do not have substantial physical assets to offer as collateral. Cash flow loans use the generated cash flow to repay the loan, making them a flexible financing option for businesses. By leveraging their future cash flows, companies can access the funds they need to support their operations and growth without relying on traditional asset-based loans.
