Having a closed in attaining capital financing and business capital working through commercial lending mind simply could not be better.
Let's focus on working capital financing and talk specifically about the kind of cash flow solution that would best suit your business – you have not even considered.
Nobody disagrees with you solutions for financing Canadian companies are not difficult to achieve, but only imagine. By itself the equity financing and cash flow is no guarantee of a firm financial position or lenders. So how do you go about financing your business and determining what, in the current challenging environment (post 2008-2009) are the best solutions for business capital?
When you think about it, it's really all about your cash cycle, how funds flow through your business and the history of how your business has operated with this "cash cycle" in mind. Every business, or rather the industry seems to have a bit of its own nuances.
And if you are a service focused business, then the accounts receivable generated a more uniform required as we need to determine how you will use the financing for working capital to fund business operations focus pose. This does not mean that companies such service can not be funded, it just becomes a matter of securing financing that meets your specific needs – but still needs financing cash flow – as the financial people would say that the business is not capital intensive or asset – sales to grow its accounts receivable and operational requirements also grow.
So let's go to the heart of our discussion, what are the solutions available for working capital in the vicinity of the current Canadian business loans are?
If you're more of a service company (ie not capital intensive – example = MFG) and can prove to be recurring sales and receivables prhyme you are a candidate for a financing receivables. Our precious and made the recommendation is a facility off / confidential invoice financing. This type of line of credit is available primarily through what we call non-banks – ie independent private financial companies. It allows you to generate cash flow and working capital and to generate sales and then you can focus on fulfilling their obligations and operating personnel prior to collection of customers. Also does this in confidence, it ie no notification to their customer base, as is the case with the more traditional financing receivables.
Companies that are asset intensive need to consider the ABL (asset based lending) facilities, creating a combo of inventory, a / r financing team is marginalized (daily.) To give all cash flow and business capital you need. Canadian companies are well aware that long collection periods can become the death of your business.
Also in many cases the amount of receivables financing need is simply not always available in the Canadian commercial banks – we find many clients of all who have some commercial loans from banks, but never seems to be enough when it is in growth mode or experience another kind of business challenge. This then causes the owner of the Canadian company and CFO for assessing options that you do not necessarily have to consider, that is, getting additional capital and diluting their ownership.
In short, yes we agree in their complicated – term loans, asset-based lending, factoring facilities, financing of unsecured cash flow … A lot of considerations. And what is truly best for your company. As we have said it may not be as complicated as you think .Speak a financing advisor Canadian companies credibility and trust experience to understand the best solution and the cost and ramifications of commercial loans that makes sense for your company.