Turbocharge Your Working Capital Financing Needs Via Cash Flow Business Loans

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BUSINESS FINANCING VIA WORKING CAPITAL LOANS & OTHER FUNDING SOLUTIONS

Business loans in Canada, along with working capital financing and other cash flow solutions aren't that different than shoes ... cash flow loans come in different sizes and styles!

UNDERSTANDING YOUR NEEDS

So how can you ensure you're achieving finance success similar to your competitors? Let's examine what small business owners/financial managers are looking for these days in their financial statements - Many businesses have a busy season when it comes to company finance solutions for a company's revenues and its growth - Let's dig in.

Part of the challenge we tell clients is simply the terminology. Working capital means different things to different business owners, as do debt solutions and asset monetization.

ADDITIONAL WORKING CAPITAL

Working capital can be achieved successfully, and in a fairly timely fashion in the following three manners:

1. A cash working capital term loan that injects permanent working capital into your firm and is paid back over a specific period at a fixed rate. Government Small Business Guaranteed Loans also provide long term financing for equipment and leasehold improvements and come with solid interest rates - Loan terms for federal small business loans typically range 3-5 years when it comes to repayment terms, occasionally longer terms are available.

2. Monetizing your current asset accounts - i.e. advance high levels of margin against your business customers accounts receivables and inventory. Here solutions via unsecured loans include: bank lines of credit, as well as the alternative asset-based non bank credit line/business line of credit

3. Various subsets of Asset Based Lending for secured loans including financing the balance sheet via other lenders in the alternative finance area :

Short Term Loan Via Merchant Advance solutions /short term working capital loans - loan terms are typically 12 months and based solely on the criteria of sales and owner credit history

FINANCING CASH FLOWS INTERNALLY - ITS ALL ABOUT ASSET MANAGEMENT

Is it possible to increase cash flow/working capital at no cost? We're glad you asked! We will call it our internal strategy - You can increase your working capital tomorrow at no cost - we repeat, no cost - by doing the following:

1. Collecting your accounts receivables more quickly to fund the short term gap in the business cycle

All of those require management skills and a greater level of customer intrusion - which is to say you do so at the risk of potentially offending suppliers and valued customers. But it is the perfect way to achieve working capital nirvana... trust us on that.

The current business environment makes it very challenging for you as a business owner to achieve any level of working capital via a loan or monetization of your current assets.

Canadian chartered banks are among the most respected in the world, but business owners know that it is extremely difficult to achieve working capital via traditional bank financing. As a business owner, you need two things - reliable financing, and financing to grow your business. If you have bank financing and are unable to replace it the situation becomes of course even more challenging because you become 'self-financing' at a good point.

Key Point - If your firm has positive working capital (subtract current liabilities from your current assets) you need external financing. For a starter, you are essentially stopping or at a minimum hindering your growth when you are self-financing or have financing challenges with traditional institutions.

One of the best pieces of advice we feel we give business owners is to not focus on one solution only as the 'holy grail' to their working capital challenges. The reality, in our experience, is that the solution to cash flow challenges will come from a variety of different sources, certainly two at a minimum that will allow you to achieve working capital and cash flow piece of mind.

Is the cost of financing important? Yes it is, but don't forget to ask yourself the questions around access to capital and what you can do with those funds, vs. just focusing on the cost of capital. Short-term solutions such as overuse of business credit cards are not the long term fix - Separating your personal finance issues between your business financing is important to most business owners to maintain their credit score.

Most alternative financing structures come at high rates than traditional banking. We address this issue with clients by saying that in some cases these solutions will actually save your firm from extinction, but on a more positive note, they can, despite their costs, help you grow sales and profits, thereby offsetting much of the perceived higher costs.

CONCLUSION: BUSINESS LOAN OPTIONS

Small businesses should not be afraid to consider traditional as well as alternative working capital and debt sources. Speak to 7 Park Avenue Financial, a trusted, credible, and experienced Canadian business financing advisor who can ensure you're getting the same access to financing as your competitors for business growth and your goals of growing rapidly with financing via good options that make sense

FAQ: FREQUENTLY ASKED QUESTIONS / MORE INFORMATION

What is a working capital loan?

A working capital loan is a short-term, unsecured loan that can be taken for the purpose of financing day-to-day operations for working capital needs - It's typical for businesses to use borrowed capital. These loans are used to finance a company's everyday operations, not long-term assets.

' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop is the founder of 7 Park Avenue Financial and a recognized expert on Canadian Business Financing. Since 2004 Stan has helped hundreds of small, medium and large organizations achieve the financing they need to survive and grow. He has decades of credit and lending experience working for firms such as Hewlett Packard / Cable & Wireless / Ashland Oil

Business Loans Cash Flow Working Capital Financing | 7 Park Avenue Financial