YOUR COMPANY IS LOOKING FOR BUSINESS FINANCE SOLUTIONS!
You've arrived at the right address! Welcome to 7 Park Avenue Financial
Financing & Cash flow are the biggest issues facing businesses today
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Direct Line = 416 319 5769
Email Address = sprokop@7parkavenuefinancial.com
BUSINESS FINANCING CASH FLOW SOLUTIONS
Business financing solutions in Canada require a good knowledge of the 'current assets' on your balance sheet. These assets are the key to working capital and cash flow solutions and are tied directly to what the pros call liquidity.
In the SME world that's also known as 'making payroll', paying suppliers, and being up to date on loan and lease payments! Let's dig in.
CASH FLOW BASED LENDING
In the majority of the business world companies sell their products and services on credit - that, of course, creates receivables, and the ability to understand how to manage ( and finance ) A/R is key to business success.
Your true ' real ' cash flow revolves around generating positive cash from the management of a combo of a/r, inventory, and a/p. Check the third part of your firm's financial statement - the 'Statement Of Cash Flows ' to see if you are winning or losing - and putting together a cash flow projection is a great tool for assessing business funding needs.
If you're losing on 'cash flow' it's potentially good news! What do we mean by that? Simply that your sales and success require your company to make a higher investment in A/R, inventory, and payables. It's of course a different story if your firm is mismanaged, losing money, or has inadequate cash flow financing in place!
Your company's expected cash flows are the collateral for cash flow finance solutions and generated cash flow repays loans. The ability to forecast cash flow is key to the successful financing of your business.
ALTERNATIVES TO NEW EQUITY FINANCING - TYPES OF LOANS AVAILABLE TO BUSINESSES
One key goal in your working capital and cash flow management is simply planning for what capital you need via any type of cash flow loan and sources of financing that makes sense for your business. At the extreme is the owner’s desire or necessity to bring new equity into the business - in certain cases that just is not possible. Two other solutions exist -
Debt Financing
Financing your current assets
Before you address your current asset finance strategy remember that simply turning over receivables and inventory at a faster percentage than you create them creates instant cash flow.
FINANCING SOLUTIONS FOR CANADIAN BUSINESS - CASH FLOW LOANS FOR BUSINESS
What types of solutions are available to finance funding needs? From a commercial finance perspective they include:
A/R Financing / Invoice financing - allows a business to continually maintain a positive net cash position as it generates sales
Bank business credit lines - in some cases personal assets are required as additional collateral - Banks will often have ratios or covenants a firm must maintain around the company's outstanding debt for unsecured loans and other types of bank facilities.
Working capital term loans / Merchant cash advances - allows small business owners and even retailers to borrow against future cash flow based on historical cash flows and revenue generation
Non-bank asset-based revolving credit facilities - Often called ' ABL ' loans - A company can borrow money via asset-based financing based on collateral on the balance sheet such as receivables, inventory, equipment and commercial real estate owned by the business.
Tax Credit finance - Two areas of tax credit financing exist in Canada - SR&ED and Film/TV
Purchase Order / Contract Financing
Sale-Leaseback finance
Inventory Loans
One of the most popular solutions we recommend to clients who can't obtain all (or any?) Canadian chartered bank financing is Confidential Receivable Financing. It's a business credit line based on receivables that allow your business to bill, collect and finance its A/R with no notification to any third parties, i.e. your clients. Financing receivables and your operating income from sales allow your business to fund day-to-day operations.
Want to be a 'winner' in solid cash flow and working capital finance and performance? Our recommendation =
1. Ensure you know what external financing solutions are available for your firm's industry needs - some are even specific to your industry
2. Understanding what factors impact managing cash flow needs - i.e. sales growth levels, operating performance, capital intensity
CONCLUSION - HOW TO FIND THE RIGHT FINANCING FOR YOUR BUSINESS
So what is the right type of financing or business loan to address your business cash flow problem?
Speak to 7 Park Avenue Financial, a trusted, credible, and experienced Canadian business financing advisor who can help your firm 'unearth' the right capital solutions and determine how much cash you require and what type of financing solutions works best for your business needs.
FAQ: FREQUENTLY ASKED QUESTIONS/MORE INFORMATION/PEOPLE ALSO ASK
What is cash flow financing?
Cash flow financing is a method for businesses of all sizes to finance the business with their expected future cash flows. Loans can be in the form of operating lines of credit or a term loan structure that is backed by cash flows of the business as cash generated from revenue growth occurs. A company's cash flow projections can help determine appropriate financing to match the business's needs and ensure enough cash is on hand.
Lenders also look at earnings, and sales projections, Lenders review the company's cash flow statement and the overall quality of the financial statements in the company - Three key activities determine cash flows - operating activities, investments, and financing activities.
Cash flow lenders focus on a company that has net income ( revenue minus expenses ) that can meet its debt obligations.
Some business owners make mistakes by mismatching financing by incorrectly funding growth initiatives or working capital.
What is cash flow in business finance?
A business's cash flow reflects the movement and flow of funds in and out of a company - The cash flow statement is part of a company's financial statement that reflects cash inflows via positive cash flow or negative cash flow based on changes in the working capital accounts - Cash flow statements are a useful tool for lenders when they grant credit to a business. Cash generated from companies that are profitable can be used to reduce debt or fund investments in the business.
