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Cash Flow Sources In Canada: The Best WorkingCapital Finance Solution?

Business.com / Funding / Last Modified: February 22, 2017

Informationon cash flow sources in Canada. The best working capital finance solution is a combination of internal operating efficiencies and understand and accessing true corporate solutions that fund current assets

The working capital finance solution for your business is all about' quicker access' to cash flow sources. The challenge? Where to find those solutions and which work best for your company? Let's dig in.

The fuel for your firm's survival and growth is of course cash flow. It covers operating expenses and positions your business for growing sales/revenues.

There are of course a number of external methods to raise cash that are in our opinion more closely related to owner personal financials - for that reasons they are not on our ' highly recommended ' list . They include

family and friends loans, collapsing personal investments, reliance on credit cards, collateralized home mortgages. Etc. Again, they all deliver but with a heavy reliance on owner commitment. Naturally the main reasons businesses incorporate is to minimize personal risk, not add to it. Enough said.

Many businesses have existing assets that can either

be sold

be refinanced (via sale leasebacks, etc )

The sale lease back option is in fact a very viable permanent working capital solution for any business.

We've often referred to internal methods to enhance cash flow - they should not be forgotten - they include: getting deposits from clients, deferred payables to the extent you can.

The true essence of working capital in your business always comes back to both receivables and inventories A/R financing, often called ' factoring ' is the poster boy model for a cash flow solution. The ability to cash flow your sales as you generate them has a huge appeal to the thousands of Canadian businesses that utilize this method of financing.

What many business owners/financial managers don't understand is that the actual cost of A/R financing, if you're collecting your receivables promptly is in the 1 - 1/5% ranges.

If your firm has good A/R turnover and decent gross margins that's a small price to pay for virtually ' unlimited' cash flow. By the way, our recommended solution is CONFIDENTIAL RECEIVABLE FINANCING, allow businesses to bill and collect their accounts receivable, fund them, with no notice to any customers, suppliers, etc.

By the way, large and successful corporations utilize this method of financing too - in some cases they dress up the name and call it ' securitization. At the end of the day it's still a sales financing solution.

If you're focused on ' cash flow success' seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can put those working capital worries ' to bed'!

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