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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 - INFO@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Direct Line = 416 319 5769
Office = 905 829 2653
Email = sprokop@7parkavenuefinancial.com
Cash flow for Canadian businesses and the ability to finance working capital is a top priority for successful companies - of any size - start-up, SME, or large corporation. Let's examine how and why companies need and use working capital - and by the way, it doesn't require superintelligent artificial intelligence! Let's dig in.
In truth, the ability to finance your business daily means different things to different owners/managers and how they address the challenge differs often. The essence of successful short term financing for your business is ensuring your ' current assets ' - cash / A/R / inventory are turned and financed properly. The ability to both run your company and plan for growth is what cash flow is all about.
Unexpected cash flow needs always pop up in business - some call it ' seasonal bulges ‘; in other cases, it might be new or large orders/contracts. Retailers planning for seasonality is a solid example. The goal? To have enough cash on hand to meet your obligations.
One of the great surprises ( and by the way it shouldn't be !) is that fast-growing sales and profits can actually lead to a business failure for the simple reason that working capital needs consume cash as you build up inventories, buy new assets, and grow your a/r . Firms that invest in longer-term assets and projects should consider:
Equipment Financing
Working Capital Term Loans
Cash Flow financing
To address their long term plans.
Firms that invest in R&D and who are not public companies should take strong advantage of the governments SR&ED program - and by the way these refundable tax credits can be financed for short term working capital - eliminating the need to wait for your claim.
By the way, it's unfortunate that many business owners/mgrs, most often in the SME sector, seem to think they can use CRA obligations to finance their working capital needs. This often leads to disastrous consequences, given the heavy hand that CRA can hold over a business based on unpaid ' super priorities.
A good way to always consider how and why you need to finance your working capital is to view the need for positive working capital as the right balance of any debt you have combined with your owner equity. The problem? Companies in the SME sector, including start-ups, often can/t raise equity or debt to the extent they need it.
Mistakes in cash flow financing are often made when firms don't match short term finance solutions with short term needs.
Short term financing solutions to be potentially considered are:
Chartered bank facilities for business credit lines - these open-ended ' loans' provide great liquidity at good rates and maximum limits are typically established.
Commercial finance A/R financing
Asset-based non-bank business lines of credit - A solid way to finance assets and generate cash flow based on your sales and assets - it is the non bank alternative to cash flow
SR&ED tax credit financing
PO/Contract financing
If you're looking to finance working capital and cash flow needs with traditional or alternative solutions that make sense for your business seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your needs.
Stan Prokop
