YOUR COMPANY IS LOOKING FOR BUSINESS FUNDING CASH FLOW FINANCING SOLUTIONS!
WHAT TYPE OF BUSINESS / CASH FLOW LOAN IS RIGHT FOR YOUR BUSINESS
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?
CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs
EMAIL - sprokop@7parkavenuefinancial.com
SME SMALL BUSINESS FUNDING IN CANADA
Cash flow financing in Canada for your business funding needs. And the B A P? I guess we'll have to confess and advise that it stands for ‘BIG A$$ PROBLEM’...! Not sure if that’s the term we would use in talking with our bankers it’s probably a term that our cousin Frank would use if we were describing business financing challenges in Canada. ‘(Doesn’t everyone have a cousin Frank who is a bit rough around the edges?)
Are you so successful your firm is going broke ?!
Profits and sales growth are not cash, in fact, growing sales and profits often mean you have significant investments in carrying receivables, inventory, and new headcount - so while outward appearances might not show you are ' struggling ' the reality is that companies experiencing growth can easily have cash flow stress via lack of cash inflows !- the company must look to the same solutions as would a struggling or challenged company!
UNDERSTANDING BUSINESS PROFITS VS. CASH FLOW!
Canadian business owners must focus on and understand the differences in cash flows in their business versus the profit they report - Many growing and profitable businesses have failed due to the misunderstanding of this concept!
Your cash flow is the day-to-day movement of funds in your business while profits are simply your sales minus expenses - A big difference!
Issues such as depreciation complicate the matter - at the end of the day business lenders will though focus on a combination of profits and cash flow in their credit approval decisions.
DO YOU RECOGNIZE THESE 6 CASH FLOW FINANCING PROBLEMS
It is of course those cash flow/working capital problems that keep a small business from moving forward and generating the sales and profits you need to. Naturally, every business owners situation is a bit different, but at the end of the day when it comes to business cash flow loans doesn't it boil down to these categories:
Here are 6 of them -
1. Your growth is being penalized due to cash flow challenges
2. Your competitors seem to be beating you to the punch (how is it that they are doing that ... i.e. financing their growth
3. You're spending all your time worrying about cash flow challenges
4. A lot of the solutions you have heard about seem somewhat technical and hard to understand how they would work on a daily basis
5. You don't know where to start - it’s an overwhelming and confusing feeling for many new, growing small businesses who might not even have a business plan or financial modelling skills
6. Small Business Owners - Insert your own problem here !!!!! And let's not even talk about COVID 10 or Pandemics!
So where do Canadian business owners and financial managers start? One firm calls the plan your ' growth and financing navigator '... it's all about knowing where to start.
Cash flow funding is ensuring you have the financing in place that can be backed up by your firm's ability to generate cash flows for repayment.
First things first so you need a handle on your business, and it’s not as hard as you think. Spend some time addressing how your company looks from a balance sheet point of view, what amount of funds you really think you need, and what are specific issues around your industry or company. I guess that’s where we say : 'INSERT YOUR OWN PROBLEM HERE'!
DIFFERENT STAGES OF GROWTH DEMAND DIFFERENT TYPES OF FINANCING
Naturally, all companies are in different stages - either start-up, early revenue growth, or mature with prospects of growth. In some cases, your firm might be established and looking for alternative financing to enhance your growth prospects via a venture capital/angel investors type of investment. The ability to produce proper financial statements is a key part of being successful in your business capital search.
In some cases, your firm might be looking at acquisition financing to acquire a competitor or a startup. Financing a business acquisition requires the correct amount of debt, equity, and asset financing solutions to successfully complete a deal. Call 7 Park Avenue Financial if you are looking for a loan to buy a business in Canada or acquire companies.
In many cases in the SME sector owners of the company are also the managers, so you need to be in a position to both step back and also when it might be time to bring in a trusted business financing advisor who can objectively assess risk management and liquidity solutions.
THE DEBT / EQUITY QUESTION - INVESTOR CASH FLOW OR BUSINESS LOANS?
That’s when you have to assess whether you're going the debt or equity route. Equity is a whole different kettle of fish and not our subject for today. That, therefore, leaves us with either new debt, or, our favourite solution, monetizing existing assets to accelerate cash flow.
Through the whole process, reality checks are often needed, i.e. what is really achievable here?
CAPITAL FINANCING OPTIONS
At 7 Park Avenue Financial, there are probably at least ten if not more solutions to cash flow financing for your firm.
As we said, they are a combo of debt, cash flow loans, and monetizing assets
A/R Financing - the most popular and commonly used small business financing solution for small established businesses that are growing and have delayed cash payments from clients
Inventory Loans
Access to Canadian bank credit/term loan
Non-bank asset-based lines of credit
SR&ED Tax credit financing - via Canada Revenue Agency refundable tax credits to help fund r&d project costs
Equipment / fixed asset financing
Cash flow loans / Merchant Cash Advances / Short Term Working Capital Loans - Cach flow loans for small business
Royalty finance solutions
Government Of Canada Small Business Loan Program - Government financing programs such as the Guaranteed federal business loan via the SBL program which promotes economic development in Canada via financing to the SME sector via this and other business support Canadian government funding program solutions such as SRED or IRAP / business grants - Business start up and franchise financing is a common use of the program by thousands of businesses in Canada - Loan guarantees are provided by the government for the loan
Securitization
Commercial Real Estate Financing
ETC.!
CONCLUSION
Cash flows in your business allow you to pay suppliers, invest in future projects, fund daily operations and provide you with a comfort level the business owner can fund and grow the business. At 7 Park Avenue Financial, we advise all clients to keep up-to-date financials, ( understanding that cash flow statement is key ) ensure they are monitoring asset turnover, and focus on ensuring you have access to the right business financing advice around accessing solutions that make sense for your firm or industry.
So, as our rough around-the-edges cousin said, figure out your B A P and then also consider speaking to a Canadian business financing advisor to assist you in the cash flow loans/financing cash flow for the acquisition of capital assets and business funding for your business growth.
FAQ: FREQUENTLY ASKED QUESTIONS / PEOPLE ALSO ASK / MORE INFORMATION
WHAT IS CASH FLOW FUNDING?
Cash flow financing solutions for Canadian businesses are finance solutions/funding programs that provide financial support for a business based on the operating cash flows of the business. While some businesses explore equity or Canadian government grants or guaranteed loans via the government of Canada, etc the business lender in a bank or non-bank institution offers small business financing that monetizes assets or provides short-term or long-term permanent working capital to a business.
WHAT ARE THE THREE TYPES OF CASH FLOWS IN A BUSINESS?
The financial statements of a business reflect three types of cash flow - they are an indication of the ability of the business to stay liquid and solvent -
Cash flow from operations - reflects cash inflow and cash outflows via changes in working capital
Cash flow from Financing
Cash flow from Investment
Is cash flow the same as profit?
Cash flow and business profits are not the same - The proft statement or income statement reflects revenues and business expenses, some of which might be non cash expenses such as deprecitaion. The cash flow statment reflects profit plus depreciaiton and then adjustment for changes in working cpaital accounts such as accounts receivable and inventory to show a realistic cash generated position
Why cash flow is better than profit?
Over the long term the ultimate success of the business is the profit that is generated for owners or shareholders. Positive Cash flow that a company generates is critical on a day to day basis for day to day operations such as retiring accounts payable and debt repayment and interest payments due on leases or loans on long term debt
What is the difference between a cash flow loan and an asset-backed loan?
Cash flow financing solutions differ from asset based lending solutions - in asset finance lending facilities which may be either lines of credit or term loans or bridge loans the collateral for the loan are the assets of the business. Typical assets in 'ABL' solutions incude accounts receivables, inventory, fixed assets and company owned real estate .
Cash flow loans, sometimes known as mezzaning financing or working capital loans use the cash flows generated by a business that are the collateral for the loan facility.
Click here for the business finance track record of 7 Park Avenue Financial
