YOUR COMPANY IS LOOKING FOR GROWTH FINANCING!
GROWTH CAPITAL FINANCING BENEFITS AND OPTIONS IN CANADA
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?
CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs
EMAIL - sprokop@7parkavenuefinancial.com
Struggling to secure funding for your business's growth? Discover how Growth Financing can be the key to unlocking your company's full potential.
7 Park Avenue Financial originates business financing solutions for Canadian Businesses – We offer GROWTH FINANCING solutions that solve the issue of cash flow and working capital – Save time and focus on profits and business opportunities
Growth financing in Canada. It's a harsh reality for many business owners that with newfound revenue growth comes a cash flow problem. Knowing why that problem exists and what to do about it is what we're talking about today.
Financing growth is the fuel that allows businesses to expand and achieve sales and success. Getting the amount of capital you need to achieve that can be challenging around the right type of financing your business needs to make the difference.
WHAT IS GROWTH FINANCING FOR THE SME SECTOR IN CANADA
A company's growth can be financed in a cost-effective manner using debt, equity, and hybrid financing techniques. Companies with rapid growth need to make sure they have the money and resources for it. Debt financing solutions such as asset-based finance allow a company to use its own assets as collateral for example, without the ownership dilution that comes with equity financing alternatives such as venture capital or angel investors.
Small businesses don't have the options available to larger corporations - Large Companies may use growth financing to make improvements and bring in new opportunities via pension funds, institutional investors, mezzanine financing, insurance companies, and other public funds for business expansion.
BUT WHAT ABOUT SMALL AND MEDIUM-SIZED BUSINESSES? FINANCING SOURCES FOR THE LITTLE GUY!
Cash flow goes higher and lower with growth. Simple as that. But why those changes? That is the key question. It's because your working capital accounts change all the time, every day in fact. Those working capital accounts are receivables, inventory, and payables on the other side of that balance sheet. Managing and financing those assets properly can significantly increase your firm's growth potential.
THE CASH FLOW PROBLEM CHALLENGE
So if there is any one point you can take away here it's that as your assets and payables increase your business cash flow goes ... DOWN as your company grows! It, therefore, goes without saying (almost) that if your sales go up and your working capital assets such as inventories and A/R stay the same or decrease your working capital cash flows get... Better!
ASSET MANAGEMENT IS KEY
You can either finance or turnover those working capital accounts that will ultimately make you successful in growth financing and solving any cash flow problem you have as a good fit for your business.
The big takeaway here, again, is that you have to watch your receivable and inventory growth. Not all companies have an inventory challenge, such as service type Companies, but pretty well all of us have A/R. One internal way you can address a cash flow and working capital challenge is to slow down payables. As we have pointed out in the past that is a very double-edged sword given that you value your supplier and vendor relationships which can often be key to long-term success.
Don't forget also that when your sales go down for whatever reason that also has, somewhat ironically a positive effect on your working capital. The trick here is to also reduce some of your expenses as much as you can.
It's also a good tip, over time, to monitor your levels of inventory and A/R in conjunction with sales going up and down. That's because it’s simply a great tool for predicting better or worse cash flow in the coming months based on history.
So is a cash flow problem necessarily a bad thing? Ironically, not. It's all about the reason for that issue, which typically is a good environment for growth.
WHAT FUNDING SOLUTIONS ARE AVAILABLE
We've talked a lot about internal issues and knowing when and why a problem might exist. But a better question from clients is of course ' What solutions exist?! '.
Here the key rule of thumb is to match the right type of financing with the actual problem. To put it even more clearly, finance shorter-term working capital with short-term cash flow solutions. In this case we're talking about some traditional and not-so-traditional solutions.
POTENTIAL FINANCE SOLUTIONS FOR GROWING YOUR BUSINESS
For small businesses in Canada, a wide variety of finance solutions exist - including
Bank lines of credit
Receivables financing
Cash flow Loans
Working capital facilities / Short term working capital loans, merchant advances
These funding solutions can be non-bank in nature and finance both A/R and inventory, as well as purchase order or supply chain financing for that large order or new contract.
If you have a SRED claim you can even finance that for short term cash flow, as these loans don’t even carry monthly payments!
KEY TAKEAWAYS
Venture Capital: Funding provided by investors to startup companies and small businesses with significant growth potential.
Debt Financing: Obtaining capital by borrowing money from a lender with the promise of repayment, often with interest.
Equity Financing: Raising funds by selling shares of ownership in the company.
Angel Investors: High-net-worth individuals who provide financial backing for startups or small businesses, typically in exchange for ownership equity or convertible debt.
Strategic Partnerships: Collaborative agreements between companies aimed at achieving mutual growth objectives through shared resources and expertise.
CONCLUSION
Speak to the financial experts at 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor for solutions to growth financing with an optimal capital structure that makes sense for your firm with financial resources tailored to your needs for the growth potential you're looking for in domestic or other new markets.
FAQ: FREQUENTLY ASKED QUESTIONS / PEOPLE ALSO ASK / MORE INFORMATION
What are two types of growth financing
There are two types of financing: equity and debt. The main advantage of equity is that there is no obligation to repay the money acquired through it
What is external financing
External financing is when a company obtains money from outside of the company while internal financing comes from profits retained by the firm for investment in growth
How can Growth Financing help my business expand?
Growth Financing provides the necessary capital to fuel expansion initiatives, whether through equity investments, debt financing, or strategic partnerships. By securing funding tailored to your growth goals, you can invest in new markets, products, or technologies to drive business growth.
What are the advantages of Equity Financing for startups?
Equity Financing allows startups to raise capital without incurring debt, providing flexibility in managing cash flow. Additionally, investors become stakeholders in the company, aligning their interests with the success of the business and potentially providing valuable expertise and connections.
How does Debt Financing differ from Equity Financing?
Debt Financing involves borrowing funds from lenders with the obligation to repay the principal amount plus interest over time. In contrast, Equity Financing entails selling ownership stakes in the company to investors in exchange for capital, without the obligation of repayment.
Can Growth Financing help established businesses innovate?
Yes, Growth Financing is not limited to startups; established businesses can also leverage various financing options to fuel innovation. Whether through venture capital for research and development or strategic partnerships for joint ventures, businesses can access the resources needed to drive innovation and stay competitive.
