A Statement Of Cash Flows And Its Related Disclosure Receivable Financing Problems: Here’s What Really Matters

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Receivable Financing Problems: Here’s What Really Matters

Business Incapacity needs to increase cash flow as you operate and grow your business. One strategy we recommend to clients is to maximize cash flow and ‘lose money’. This is of course not a trick statement and when business owners understand the many types of finance available

Want to learn more about how invoice factoring can solve their challenges? Let’s dig in!

A/R financing is a source of working capital – it is not a loan or loan. In technical terms, this is sales or the current sales of your A/R generated from your sales. That transaction is done on a ‘discount’ basis, typically 1 to 2 percent per month if you top your collection. That’s where the ‘loss’ comes in – it’s a financing cost but at the same time it delivers all the cash flow you need. Suffice to say your business should be able to handle a 1 or 2 percent drop in gross margin – cash flow!

Invoice factoring allows you to run and grow your business, sell more by taking orders and contracts, and also has the unique ability to negotiate supplier prices. why Because you have cash !!

Receivable financing is used by almost every industry in Canada. Those Bay Street boys also use – they apply a fancier name – securitization.

So what are the two major advantages of this method of Canadian business finance? You have the ability to get a cash advance on your sales and of course get a fast turnaround- usually 24 hours! Bottom line – pretty good same day funding

Yes factoring is more expensive than Canadian chartered bank financing = that is the perception. But that must be balanced against the harsh reality that thousands of businesses don’t all qualify or need some of the cash flow financing they need. And that bank credit line doesn’t help when you’re carrying 60=90 days.

Best Form of Accounts Receivable Cash Flow Financing? We call it Confidential A/R Finance – you bill and collect your own receivables, earning benefits and eliminating disclosures.

We are open enough to say that the vast majority of firms that actually entertain factoring receivables are unable to secure financing elsewhere, particularly with their bank. But also don’t forget that many examples include companies like yours that are growing rapidly or that have landed that ‘big deal’ or order.

At this point business owners appreciate the fact that their net worth, profits, debt coverage or operating losses are no longer under the microscope. And your firm is free to explore other methods of debt financing outside of your A/R assets.

Talk to a trusted, reliable and experienced Canadian business financing advisor with a track record of success in this key area of ​​Canadian corporate finance.

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