Business Finance Problems – Here;s Some Canadian Capital Financing Solutions

Business Finance Problems – Here;s Some Canadian Capital Financing Solutions

If there is one benefit of meeting and speaking to numerous companies with business finance problems its that one quickly gets a sense of what financing solutions are needed… and when!

In fact a lot of what we could call early warning signs in business challenges emerge pretty clearly – even though those same signs are often ignored or misinterpreted by the Canadian business owner and financial manager. Let’s look at some of these business warning signals and how you can nip them… in the bud as they say!

Experienced business owners know that access to capital tends to come and go… its those good times, bad times and boom and bust that makes the journey somewhat… exciting.

Most owners / managers are simply happy to ensure they have access to the right financial solutions for their company. Even more important is ensuring those solutions come with terms, rates and structure that suit those present situations.

Your ability to have access to up to date information at any time is critical to both managing your business and having access to solutions. So when we meet a client that can’t produce regular monthly balance sheets and income statements that has always been a warning sign of bad things to come.

Mismanagement of current assets is the real killer in working capital and cash flow problems. If there is any good news in that it’s that there are some great finance vehicles to help you both manage those current assets and address the cash flow challenges that come with any business that’s both surviving, and growing.

Let’s take a look at some of those current asset warning signals. Key in that category is the double whammy of growth and slowdown in accounts receivable. Not knowing your day’s sales outstanding and the ongoing relationship of sales and receivables is a business killer. Financing receivables in Canada can come in a number of different ways – they include”

Receivable financing / factoring

Comprehensive asset based credit lines that margin A/R at 90%

Bank credit facilities

All of the above solutions come with different rates and structures – some will work for your firms overall credit quality, some might not. What these solutions do provide though is an immediate increase to your ‘ cash on hand ‘… and that’s a good thing.

Inventory deterioration, or even inventory build up are also key warning signals to a business finance problem. It’s important to know your inventory turns, and, similar to receivables monitor those inventories so they arent continually representing more and more a percentage of your total assets.

We’ve been talking ‘ current assets’ but at the same time fixed asset concentrations can be a killer also. Here is where proper use of term debt and lease financing are critical.

In summary, knowing what financing you need, and when it critical to the fix for some of those early warning signals we’ve talked about.

Speak to a trusted, credible and experienced Canadian business financing advisor on ‘ realistic ‘ financing vehicles for your firms operations, challenges, and growth.