Analyse The Cash Flow Problems A Business May Experience Here’s 5 Immediate Solutions for Working Capital Financing for Your Cash Flow Business Needs!

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Here’s 5 Immediate Solutions for Working Capital Financing for Your Cash Flow Business Needs!

These days you will be happy with 1 solid working capital financing solution for your cash flow business needs.

We’ll beat it and give you 5! How about alternative solutions for your working capital and cash flow needs?

Funding working capital is a big challenge for Canadian businesses of all sizes – you want to grow your business and that requires investment, and you also want those suppliers and employees to get paid on time.

Let’s examine some concrete real-world solutions to your cash flow needs – in some cases they may all work for you, but in general some of these solutions will also solve the current problems you face on a daily basis.

The most liquid asset in any business, (next to cash) is your receivables. Working capital financing is best generated through collection or financing of your receivables. This can be done either through quick collections, or selling your receivables as you generate them. This financing is called receivable discounting or factoring, and is becoming more popular every day.

Have you ever considered the Government of Canada as one of your best working capital financing partners? Our customers are surprised when we suggest ‘Partner’ as a solution. But a special government program, technically called the BIL/CSBF loan program, finances any equipment and leasehold improvements you need through a heavily subsidized loan program. We say subsidized, because even if you are a startup, the rates are great, the guarantees are limited, and the maximum loan amount is up to 350,000.00. Our clients who take advantage of this program carefully consider the best financing in Canada for small and medium businesses, including start-ups.

You’ve spent your working capital – do you want it back? Customers always ask what we mean by this. Any equipment you’ve already paid for can often be refinanced, the technical term is a sale leaseback, and we find that either that strategy or a short-term bridge loan with equipment is the security our clients need to bridge the cash flow gap.

We talked about receivables financing above – one of the best facilities for a Canadian business is a combo working capital facility that finances or ‘margins’ both your A/R and your inventory. With many companies previously unable to finance their inventory elsewhere or through banks, the combined liquidity of borrowing against your A/R and inventory is real power! Generally this type of financing is known as asset based loan facility and makes more sense when the facility is leased in the 250k range and the sky is the limit after that.

Many clients are completely unaware that purchase order financing is available in Canada. This is a strong potential cash flow saver and generator, as your suppliers are paid for the product when you place the order, once you receive the PO. A PO lender takes inventory and receivables as security, but actually finances your entire sale. . This is an expensive option if you have good gross margins and cannot accommodate the sales of your large new orders and contracts.

In summary, educate yourself about your Canadian business financing options. Working capital and cash flow are available if you have assets and orders. We have clearly demonstrated it to you through 5 separate solutions. Talk to a trusted, reliable and experienced Canadian business financing advisor to determine what works for your firm.

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