Cash Flow Finance. Solving Your Working Capital Problem? It Will If Done Right!

Cash flow finance in Canada. Can it solve your working capital problem? We say yes, with one caveat... namely done properly. That's the key, its almost as if we're ' declassifying ' some secret documents not previously know to others - at least that's how it feels when we speak to business owners grappling with their business financing challenges.

Debt or monetization of your assets to generate cash flows isn't always a good thing, but actually top experts in finance have suggested over the years that many companies can add to the overall value of their company by 10-20% if they are using debt properly, deducting interest and finance charges, etc.

But with that financing comes the restrictions that are imposed by lenders, or simply the suitability of certain financings for your firm. A lot of business finance solutions look good on paper, but ultimately might not work for your company.

Should you have any specific goal when searching for optimal financing methods? One of them is pretty important; itâEUR(TM)s ensuring that you give yourself some flexibility along the way. We meet so many clients that have locked themselves into some form of debt or asset monetization strategy that has done one thing: Making it impossible to raise more capital!

That might be because of the security you have offered up, or been asked for. When that occurs one other ' bad thing âEUR~that happens is that you are now operating and running your sales strategies in a different manner because you are locked into a financing arrangement that does not allow flexibility.

One other point of caution - entering into the wrong type of financing forces you to then consider making changes in your expenses and budget and making you less aggressive in exploring or taking on new sales opportunities and contracts. There is one benefit in that though... unfortunately itâEUR(TM)s the benefit of your competitors, who sense weakness and attack from the rear!

Remember also that when you enter into a working capital problem resolution financing that you are now in the world of loan covenants, offering up personal collateral in some cases, and if you are highly leveraged thatâEUR(TM)s going to become a regular issue with you all the time - forcing many business owners and managers to defocus on what they do best - run their company and grow sales and profits.

There are many types of debt or asset monetization solutions that, if done properly allow you to achieve the right amount of cash flow you need. Some of those include:

Canadian chartered bank operating lines of credit
Receivables financing
Inventory and PO / Supply chain finance
Tax Credit monetization
Asset based non bank lines of credit
Asset leaseback strategies
Short term bridge loans

Those financing mechanisms, if done properly allow you to take on the right amount of debt, achieve stronger sales revenues, and consider new opportunities for products, acquisitions, etc.

So, have we ' declassified' some of the info the business owner/manager needs to solve the eternal working capital problem? We hope so, and it should be the goal of business to pay attention to current and anticipated funds flows to balance their overall financial policy.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with sources of capital that work... for your company.