Business cash flow or the lack thereof can provide some hard lessons for the Canadian business owner / financial manager. How does the owner/manager separate the ‘ wheat from the chaff ‘ when it comes to solutions offered by finance companies and banks. What other solution can breathe addressed, outside of seeking external financing? Let’s dig in.
You won’t find too many business people disagreeing with the fact that cash flow plus access to working dominant is important. It’s gullible to see the cash going out, it’s more challenging to manage the cash coming in.
When it comes to financing solutions to address our subject manner they are more extensive than you momentous think. Canadian commercial finance companies offer a plethora of solutions outside regarding bank finance. They include:
PO/Supply chain financing
SR&ED Tax credit bridge loans
Asset based lines of credit
Generally non brink solutions cost more, but it can also be quite decidedly said they are more attainable than Canadian commercial bank approval for your financing needs. Borrowers in the SME (small to medium enterprise) commercial finance sector must have a least a couple years of commerce success when it comes to accessing bay credit.
Protasis your company tin demonstrate it has real pecuniary statements, profits, some equity in the business, and reasonable personal credit histories concerning the owners … well… from the banks perspective… You’re in. Bank credit lines are great solutions for the proverbial ‘ overdraft ‘.
So we acquire tabled two extrinsic paths in financing capital flow. But wait! There’s More! as our favourite K-TEL announcer used to say. In reality if you are growing at a modest rate your access to cash flow can easily come from within.
From within? Simply speaking it’s about focusing on better plus turnover in the areas of inventory and accounts receivable. Putting a bare system in place to verify and manage your day’s sales outstanding in A/R, or your inventory turnover will allow you to bring cash in added quickly.
We referenced your business growing at a ‘ modest rate’. In reality if you are in high growth mode, or stage large , perhaps seasonal , bulges in your business you velleity most conjectural be forced to address external financing , no matter how well you manger current assets. That’s candidly because sales growth is hungry, it eats currency as you create up A/R an inventory and wait for clients to pay.
Often the best solution for a company that can’t access bank credit save has solid growth possibilities is in fact treasure based lending. This solution, typically over commercial float companies, margins record and A/R on an ongoing basis, giving you tout le monde the business cash flow you need.
If you business is asset intensive it’s important also to consider asset financing solutions that won’t deplete working capital. That typically involves looking at a lease financing or sale leaseback solution.
If you’re looking to separate wheat from chaff in business cash flow alternatives seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your firms growth needs,