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You've arrived at the right address! Welcome to 7 Park Avenue Financial
Financing & Cash flow are the biggest issues facing business today
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
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CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8
Direct Line = 416 319 5769
Email = sprokop@7parkavenuefinancial.com
What is Cash Flow Financing?
Understanding the Importance of Cash Flow
Business finance, particularly your cash flow financing needs, requires a strategy.
Many owners/financial managers in the SME (small to medium enterprise) commercial sector find themselves constantly falling into the 'worry hole' in this business aspect. Are you tired of falling into that hole? Let's dig in.
Breaking Free from the Cash Crunch: A Modern Solution for Canadian Businesses
The Problem? Many Canadian businesses struggle with unpredictable cash flow cycles, which create stress and limit growth potential. Late-paying customers and seasonal fluctuations can paralyze operations and force difficult decisions.
Let the 7 Park Avenue Financial teams show you how Cash flow financing offers a dynamic solution. It provides immediate working capital based on your revenue patterns rather than traditional credit business loans and metrics.
3 Uncommon Takes on Cash Flow Finance:
- Cash flow financing can improve customer relationships by removing the pressure to accelerate collections
- This financing method often leads to better financial record-keeping practices as businesses optimize their receivables
- It can serve as an early warning system for business health by highlighting cash flow pattern changes
Why Cash Flow is Critical to Business Success
While the phrase 'cash is king' is sometimes a bit cliché, paying suppliers and employees with promises is difficult.
The extreme event of poor cash flow is, of course, business failure. So your ability to view your access to cash flow solutions as the 'lubricant' that keeps your business running is, in fact, key.
Many asset-rich businesses are bankrupt, with assets sold for pennies on the dollar because the company could not meet its cash obligations.
How to Avoid Cash Flow Problems
So, to avoid falling into that 'worry hole' we've talked about, it’s a combination of managing your cash and accessing financial solutions that make sense for your industry.
The Key to Success: Anticipating Your Cash Flow Needs
What is the difference in successful firms in this area of their business? It's about anticipating your cash flow position and knowing what solutions are available.
Business Cash Flow Financing Solutions
Common Cash Flow Financing Options
The following financing options can help solve cash flow issues:
Choosing the Right Financing Solution
It's really all about knowing when you need these solutions and which ones you qualify for based on your particular situation.
How to Address Business Cash Flow Needs
Key Strategies for Managing Cash Flow
How does the business address cash flow needs?
The options are pretty simple:
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Take on some form of new debt
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Delay accounts payable
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Take on cash flow loans
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Monetize assets - finance your A/R and inventory, refinance your fixed assets
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Reduce cash outflow spending
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Increase sales and asset turnover
The Importance of Cash Flow Monitoring
The essence of cash flow 101 is constantly monitoring these options. Proper and conservatively prepared simple cash flow budgets will help identify future cash flow needs and positive cash flow
The Challenge of Budgeting for Cash Flow
The challenge in budgeting your cash flow and anticipating your finance needs often revolves around your business receivables.
These cash flows are typically irregular due to your sales volatility and customer payment habits. Solid credit extension policies and good collection practices are key here as cash generated is key to the amount of cash needed
Alternative Cash Flow Solutions Versus Traditional Financing
The Role of A/R Financing
Many businesses that can’t qualify for traditional financing seek alternative solutions such as A/R Finance.
These solutions monetize your sales as soon as you create a sale. Waiting is eliminated, and the cost is typically 1-2% of your invoice. For example, a $10,000 invoice financed under a factoring solution would cost you $200.
Maximizing the Benefits of A/R Financing
Effective A/R management and good use of the funds you receive from financing your receivables can be a solid interim solution for your cash flow needs.
Case Study:
A Toronto-based manufacturing company faced seasonal revenue fluctuations that impacted their ability to purchase raw materials during peak production periods.
By implementing cash flow financing, they secured a $500,000 facility based on their revenue patterns. This allowed them to increase production capacity by 40% during high-demand periods, resulting in a 25% annual revenue growth and more stable cash flow management.
Conclusion
All industries have different cash flow needs.
Are you looking to avoid falling into the 'worry hole' of a constant cash flow crisis?
Call 7 Park Avenue Financial, a trusted, credible, and experienced Canadian business financing advisor who can assist you with business finance solutions appropriate to your firm and it's financing activities.
FAQ
What security or collateral is required for cash flow financing?
Cash flow financing typically requires:
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Minimal or no hard assets / physical assets on the balance sheet as collateral
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Personal guarantee from business owners
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Clean banking history
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Proven revenue track record
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Basic business documentation
How does cash flow financing work regarding the impact my business credit?
The impact on business credit includes:
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Positive payment history reporting
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Improved business credit profile via cash flow management around net cash flow in the business
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Enhanced funding credentials for future projected cash flow needs and access to better interest rates
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Stronger financial relationships around all your business expenses re suppliers, payables,etc
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Better future borrowing terms for business loans
What are the typical approval rates for cash flow financing?
Approval statistics show:
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70% approval rate for established businesses
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45% approval for businesses under 2 years
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85% approval with strong revenue history
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Higher success rates in B2B sectors
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Increased approval odds with digital banking
What factors determine cash flow financing amounts?
Lenders evaluate several key criteria:
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Monthly revenue averages
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Business sector stability
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Length of time in business
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Bank statement analysis/cash flow projection around predicted cash flow
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Revenue consistency patterns
How do repayment terms work in short-term cash-flow financing/merchant advances?
Repayment structures are customized based on:
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Daily or weekly payment options on income cash proceeds
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Percentage of revenue model
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Flexible payment scheduling
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Seasonal adjustment capabilities
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Revenue-aligned terms
What makes a business ideal for cash flow financing?
Ideal candidates demonstrate:
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Consistent revenue patterns in the income statement
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Strong customer base
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Positive growth trajectory
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Clean banking history
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Ability to address the cash flows statement
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Clear business model
