Business finance in Canada often has owners feeling that fundamental needs such as cash flow financing only exist in some ‘ alternate universe’ – that hypothetical different dimension physicists tell us about.
The reality though? If you spend some time on what we could call a ‘ bullet proof’ strategy for success will alter your observations on financial success. Let’s dig in.
Business owners/ mgrs first of all have to focus on the timing of their need – i.e. is it short term financing or longer in nature. While the owner/financial manager often knows what stumbling blocks will exist in the finance journey the reality is that many times a banker, external advisor, accountant, lawyer, etc will provide some objective advice around what results can realistically be achieved.
Timelines need to always be considered – many clients we meet are looking for funding ‘ yesterday ‘ but the harsh reality of assessment, due diligence, documentation, etc requires in some cases a painful amount of time.
While many other factors can very easily affect your success in business financing (economy, technology, govt, new competitors, etc!) the fundamentals around business need revolve around your ability to understand your past and current financial performance/condition.
Can you as the business owner/mgr really say that you understand the true financial position of your company? There are some real basics that don’t require the ‘ rocket scientist ‘ type work that we imagine those Bay Street boys are doing on every company. It boils down to simply understanding your balance sheet and income statement and how those two documents affect your cash flow
Typical issues to consider include – your payables and relationships with suppliers , account receivable turnover, inventory turns , how much debt you have relative to owner equity , and and the amount of new equipment of technology you need now or in the future.
Just knowing those and being able to tie them into your finance strategy will create a win when you are in front of banks or commercial lenders , While we only have 6 or so banks in Canada the commercial lending and alternative finance world is quite huge these days .
Having a clear business plan will often help your overall strategy. That plan covers putting proper words to the numbers.
If you’re looking for some help in a ‘ bullet proof ‘ overall finance strategy for financing around receivables, inventory, equipment, tax credits, etc seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can ensure access to capital and funding.