Business finance problems in Canada? It's no secret to Canadian business owners and managers that the funding they need to solve those challenges all comes down to the overall borrowing quality of the firm. Banks and commercial lenders make it their business to in effect ' predict ' failure.!br>
But what can the owner/manager do to ensure the right access to choices for loans and working capital and can the right type and amount of financing lead to the successful turnaround of your firms' financing fortunes. Let's dig in!
A good way to look at things it to ensure that the type of financing you seek corrects the poor performance your company might be experiencing due specifically to lack of, or wrong financing. We speak to clients in terms of 2 1/2 solutions to funding challenges in Canada.
They can be broadly grouped into:
And the 1/2? That comes about by better knowledge and management of existing assets. That might include refinancing assets under a sale leaseback, or just common sense basics such as better receivable and inventory turnover.
Both owner/managers are also cautioned to ensure that the financials reflect the true value of their assets and liabilities. This allows you to look at your company in 4 different ways -
Immediate liquidity challenges
It could probably be debated, but ' liquidity ' is in fact the best predictor of immediate financial problems. Here it's all about the ' Current Assets' part of the balance sheet -how you manage those inventory turns, receivable days outstanding, etc.
Immediate solutions in this area include bank or non bank business lines of credit that are commensurate with your overall credit quality. Other solutions include Purchase order or contract financing, future revenue stream finance, and receivable sales programs typically achieved through a receivable discounting facility. All of these fall into one of two categories we have already mentioned, traditional, or alternative!
That's a nice segue into our next point , which is that those other 3 areas - debt, operational efficiency, and profits will in fact dictate whether you're better to explore traditional or non traditional Canadian business financing solutions .
When it comes to business finance the bank or commercial lenders you're working with will take a hard look at the financial performance history. However good commercial lenders tend to pride themselves on ' failure prediction '. That's why it's important for the owner/manager/CFO/Controller etc has to ensure all the bases are covered in our 4 different ways we've offered above to assess your historical and current financial performance.
How do the right financing solutions then fix your business finance problems? Properly executed they will show there is a turnaround solution in place, and be able to fix financing challenges within a generally specific timeframe.
If you want to ensure you have the right fixes and solutions in place to support sales growth seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in areas of traditional and alternative finance. They include:
Bank and Non Bank business lines of credit
Tax Credit Monetization
P.S. Your take away? Focus on seeking expertise in the 2 1/2 ways of financing your funding needs - Traditional, Alternative, and... Internal!
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Stan Prokop - founder of 7 Park Avenue Financial – www.7parkavenuefinancial.com
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing. Info re: Canadian business financing & contact details :
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