Recognize These Symptoms? It Time For New Business Financing And Capital Strategy Options !

Business financing in Canada

Business financing in Canada. Or lack thereof?! Are there some symptoms for finance capital options we can look for, and fix? We think there are.

Here's one for you. How many business owners would associate overdue receivables, poorly moving inventory, or under used fixed assets as a symptom of too much financing. We're pretty sure that few business owners (or even their financial managers) would associate those symptoms with having too much capital!

Then of course there is the other side of the coin, which is what clients always are looking for - business financing solutions. So what would some of those symptoms be? They are pretty obvious more often than not:

Little or no cash on hand

Vendor payment issues

Manufacturing timing / shipment issues (You can't make ' em fast enough!)

Also, by the way, if you feel you are getting too little of a return on investment on all your assets its pretty clear that might be a symptom of a capital strategy problem.

It's safe to say that the right amount of cash flow, working capital, and other assets would probably fix any challenges your firm is facing. Naturally every business is different; for example a service company requires little fixed assets and tends to be more cash flow based.

Here is one for you. Did you know that some analysis around your fixed capital can actually help you solve your problems? Take a good look at your long term debt and equity on the balance sheet and measure that relationship once in awhile - yearly would be a minimum timeframe.

We're still looking for some other symptoms though, right. Here's some more. If you feel on an ongoing basis that you're experiencing large increases in receivable and inventory growth you are strong candidate for some hard analysis of some new financing and capital options. It's those 'investments ' in receivables and inventory that devour your cash flow, forcing you to address new financing options. For the SME owner those large growths in A/R and stock actually mean you will probably be able to take less out of the company in the form of dividends, mgmt. bonuses, etc.

By the way, if you are looking at new purchases of assets ensure those assets will generate profits, not eat up capital or create losses. That's just common sense.

New Business financing options can be addressed if you have a strong handle on a very few basic calculations - those include some rudimentary things like expense per day, receivable turnover, inventory turns, etc.

Oh, and by the way, lenders of short term and longer term capital are looking at those same things in your balance sheet, so being able to talk to those issues will help you... a lot.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with capital options in the short or long term (and crisis) situations.

by: sprokop

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