Why Exactly Is Cash Flow King? Avoid Business Rehab With Business Finance Financing Options

We're not 100% sure where the ' cash flow is king ' saying came from

, but we sure hear it a lot. It always comes down to financing options for your company as it becomes very clearly , certainly to newer business owners and financial managers that running out of cash becomes .. a killer.

When we talk to clients we're always amazed that their focus tends to be the income statement. Truth be told they are not even calling it the income statement, their names for it tends to be ' sales '!

America's greatest business investor, arguably Warren Buffett seems to have a home town saying for everything, and he says 'cash is hard to fudge ' ..! That cash flow, or lack of it, is exactly why you are experiencing challenges with suppliers and term lenders.

Another key point is that when you are addressing financing options for your company it's important to focus on a longer term solution in your business finance needs... or at a minimum an intermediate solution. Juggling a cash flow crisis on a daily basis is clearly... not optimal.

What are some of the cash flow financing options available to Canadian business? Here we are talking mostly about monetizing assets, i.e. ' cash flowing' your business. Those solutions include:

Asset based lines of credit

Chartered bank lines of credit

Receivable financing facilities

Supply Chain Financing

Monetization of Tax Credits

Inventory financing

Unsecured cash flow loans

We've always felt that it enhances the reputation of the business owner when it comes to their ability to talk cash flow with any prospective lender in the above noted financing solutions.

Simply said, if you are equating profit with cash flow when you're talking to one of your lenders you clearly will be deemed ' out of your league ', and we won't even comment on whether your financing will be approved. So remember that a lot of the actions that you take in your business relative to recognizing sales revenue, giving terms, spending on assets , always come back to that ' cash flow ' guy!

Remember also that when you become a bit better at understanding why cash flow is king you quickly will become a 'problem spotter'... Keep thinking about our main mantra for today - ' Turn those profits into Cash '.

Speak to a trusted, credible and experienced Canadian business financing advisor who can get you out of business financing rehab and into the cash flow pleasure zone - business success.

by: sprokop

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