Naturally just the creation of additional sales revenue creates profit for your firm, but it's clear to every business owner that is simply not enough, given the investment you then have made in current asset accounts such as receivables and inventory.
One Canadian solution available is the conversion of short term debt into long term debt via a working capital term loan. This creates a long term working capital component to your financial structure. Small and medium sizes firms can source this type of solution via a government related bank - larger firms can utilize mezzanine or subordinated debt type financing to accomplish the same goal... only from a larger perspective.
Not often thought of as a cash flow loan, but in reality it is the creation of a sale leaseback for assets your already own. You in effect sell the assets to a lessor or working capital company and create a similar cash flow loan along the lines of the term loan we had reference above. All these solutions achieve the same goal.
Probably the most popular method today of generating cash flow is the sale of receivables via a factoring or securitization type facility. The good news for Canadian business is that this type of financing is available for a 10k solution as well as a 10 Million dollar solution.
We seem to be continually explaining this type of solution to clients, and it's frankly quite simple to understand. It's your selling of your receivables as you generate them for cash flow... today. What makes it complicated, and we're not to proud of it we can assure you, is how the working capital company sometimes complicates things around how this whole process works, what it costs, and how it affects your company on a day to day basis.
When you exactly face the decision to go out and look for more working capital. Really it fundamentally comes down to three areas, starting a business, growing your business rapidly, and then simply financing those day to day activities because for some reason cash flow is failing you.
You have clear options in the Canadian business financing environment .Its a questions of knowing those alternatives and determining what is achievable based on your unique needs. Very typical fundamentals you should have under your belt are up to date financials, a strong sense of your cash flow needs (via a cash flow budget) and some ' education' on what facilities are available for a firm of your size and credit quality.
The premier working capital and cash flow loan solutions in Canada are as follows - receivable financing, a working capital facility that combines A/R and inventory, or a true asset based lending arrangement which replaces a bank facility but gives you higher borrowing margins. We of course also touched on the cash flow term loan earlier.
Three more esoteric ( but totally viable ) financing solutions for your business are purchase order financing, inventory loans, and financing your tax credits if you have access to them.
One of the biggest mistakes that businesses make when it comes to their CRM software is the features they don’t use. This happens because they invest in CRM with a handful of problems in mind, so they’re content as long as it solves them. But if you want to maximize your ROI, you should be utilizing every feature available to you. more
VoIP makes a lot of sense for educational institutions—and it’s not just because of the substantial cost savings. Other benefits include increased efficiency and integration options. Emergency responsiveness can even be improved. more
The telemedicine revolution is finally happening. Experts have been discussing the potential for patients and healthcare providers to connect remotely for years, but the market is just now moving to adopt it—in a big way. Data suggests this market will grow over 14% annually through 2020! more