It would be better to hear our clients say they have no problems in working capital finances and challenges, and that solving cash flow problems is the least from their worries. Unfortunately we have never met one customer who seems comfortable sharing with us.
Let’s look at the root of some of the working capital challenges; What is the problem, what causes problems and then talks about why you might read this … You want a working capital solution.
This is of course good to have sales – and sales and profits are even better. In general when you have those who have the essence of a healthy business. But those who apply what we can call paper transactions and it always returns to a 100-year-old cliche such as ‘cash is king’ and ‘sales are not made until you get paid’.
The cash is needed for all worldly things, paying suppliers, paying employees, and fulfilling your obligations on loans and rent.
Your challenge is typical, how you make cash flow in the long run, and handle short-term protrusion to ensure you have liquidity.
Naturally when you have a good handle on cash flow, everyone looks at you in positive light, the most important supplier and lender.
The solution to the challenges of cash flow often comes out of the inability to plan or overcome the right type of cash flow solution. You run the risk of liquidity problems when your current assets cannot be converted in a timely into cash – these assets are usually accounts receivable and inventory.
There is no day when we do not experience textbook types of capital finance challenge – simple requires products to fulfill large or new or new orders, generate invoices, and then wait 30, 60 or 90 days for payment. It is a textbook challenge when we talk to clients who ask for help to solve cash flow problems.
So we have done a good job to tell you what your problems and challenges are – let’s discuss some real-world solutions.
At the core of the working capital financial challenges are your inability to access business credit. We encourage all customers to find Canadian Bank Business Credit Cartered when they are in a position to do so. Unfortunately many clients cannot meet the wealth of business business, personal net wealth, and liquidity ratios and agreements that your bank might need. We also strongly believe that inventory financing by banks in Canada is increasingly difficult to achieve.
Don’t borrow – monetize. That is the best advice and plan that we set with clients to solve cash flow problems. You can get a loan term working capital cash flow, but it only creates additional debt on your balance sheet. Instead, take assets that you already have in your books and monetize them – these assets are inventory mentioned earlier, A / R, and in some cases of tax credit because of your equipment and not burdened.
Liquidity for these assets can be achieved with accountship financing programs, asset-based credit lines, or short-term bridge loans on assets such as tax credits or paid for fixed equipment such as equipment. Many of these solutions are outside the bank charter system in Canada and can be accessed by speaking with trusted business financing advisers, credible, and experience.