Saturday, December 12, 2009

Ron Finch - When the BANK SAYS NO, there is an alternative solution

My Mechanic said “I couldn’t fix your brakes, so......” “I made your horn louder.”
This was not the alternative solution that I was looking for. At one point or another, every business is confronted with cash flow problems, and although there is an economic downturn at this time, it doesn’t just happen during difficult times!

Businesses need cash for many reasons. A company may be experiencing sudden growth, there may be a need to expand production, there may be a need to fund a major transaction, or there may be an opportunity for big discounts on supplies or raw materials if acted upon quickly. All can create an immediate, sometimes urgent need for funding.

Current research shows that a good proportion of small and medium sized businesses fail because of difficulties in meeting short term financial obligations - not because business is bad. So it seems contradictory for a growing and profitable business to get into serious financial trouble, even go broke. But on closer examination, it’s not surprising. Even if one or two of your larger accounts fails to pay their invoices on time – even if they take an additional 30, 60 or even 90 days to pay - you’ve got a cash flow problem!

Traditionally, business people have relied on corporate lines of credit that are derived from conventional lending sources. When a cash crunch hits, the process of acquiring financing can become a lengthy, arduous and sometimes impossible experience. But today, there is a viable alternative to surviving those cash-strapped cycles.

When the BANK SAYS NO, there is an alternative solution that doesn’t involve giving up your equity or increasing your dept load. This alternative form of financing is known as Factoring and is sometimes referred to as Accounts Receivable financing. That Outstanding Invoice to your customer is cash that you are owed. The problem is that your customer wants to keep it a little longer, sometimes as much as 120 days. But until the invoice is paid, you are handcuffed.

At Liquid Capital Solutions Okanagan, we recognize that invoice as an asset. Quite simply, when a company has credit-worthy accounts receivable, it’s possible, through Factoring, to get immediate cash based on those receivables. So when the bank has to say No, Liquid Capital can usually say YES and provide the much-needed financing that a business requires. More and more, Factoring has become a realistic and workable solution, allowing businesses to prevail when cash flow uncertainties can threaten survival.

Ron Finch

Factoring Kelowna BC
Liquid Capital Solutions
250 469 9606
250 826 8446 (cell)

Friday, December 11, 2009

Are you Feeling the 'CRUNCH' ?

Take advantage of your Receivables by turning them into immediate CASH FLOW.

There are many reasons that businesses often experience that cash flow crunch. Particularly in economic downturns, customers are not so quick to pay your outstanding invoices on time, leaving a short fall. A downturn also typically equates to less sales, thus less cash available to look after standard expenses such as payroll. Unexpected expenses arise such as equipment maintenance or refitting. Seasonal expenses such as taxes, can add a stress on finances.

I recently did a presentation to Okanagan members of the commercial team of the Royal Bank of Canada about Accounts Receivable financing. In my research for that presentation, I happened upon an excellent booklet published by the RBC in May of 2004, named “The Definitive Guide to Maximizing Cash Flow”. It is a well laid out “Sourcebook for Successful Small Businesses and Entrepreneurs”.

In one article, “Covering Shortfalls” it has a great analogy: “If you think of managing cash flow as one of the pistons in a business engine, its ‘downstroke’ occurs when there is a gap between available cash and outgoing payments that must be met. You must fill the gap with short-term financing until the business reaches the ‘upstroke’ in its cycle, when sales activities turn into cash.”

It goes on to explain that there are measures to assure cash flow such as a “Revolving Line of Credit” or a “Trade Credit” (where your suppliers give you time to pay them). Also it refers to “Asset-based Financing” as a source which includes Factoring (page 19) which uses Accounts Receivables as viable assets.

At Liquid Capital Solutions Okanagan Ltd., we provide immediate cash flow without disrupting your balance sheet.

It’s Not a Loan, It’s an Advance.

Contact us at 250 826 8446 or at

Friday, February 20, 2009




No matter what business you are in, the least appealing aspect is to ask your good customers for money. Many small business owners, especially the less established ones, lack the desire and in many cases, the skills to do professional collection calls. They would much rather spend their time and efforts doing what they do best; providing their goods or services. When a job is done, payment, in good faith, should be automatic. In a perfect business world, that would be the case. However, the facts are, most customers expect terms of at least 30 days, and often extend them well past due. In these tight economic conditions we can expect even more reluctance to pay on time.

If done professionally, only as a gentle reminder, your customers will not take offense. Studies have shown that consistent collection calls generate an average 30% decrease in days outstanding. It just makes sense that you will more likely be paid before the companies that don’t make the calls.

Most large companies, who have realized that cash flow is critical, have an in-house Accounts Receivable Department and taking into account their salaries, the industry standard cost of collection calls is between $32.00 to $46.00 per invoice.

At Liquid Capital Solutions Okanagan, our professional collection call service includes on-line, daily updated, reports that show: aging / days outstanding, balance statement, and most importantly, collection notes. Why are these customer comments so important? Most businesses lose 10 – 20 % of their customers each year, for many reasons, but one reason is that they have been disappointed in some way. Rather than tell you, they chose to take their business elsewhere. How valuable would it be to your business to have built in customer feedback that could reduce your attrition rate?

However, as much as collection calls are crucial, and can significantly reduce your days outstanding, wouldn’t it be nice to be paid immediately for your goods or services?

Thursday, January 8, 2009

Accounts Receivable Financing

Typically referred at as "factoring", AR Financing is neither equity nor debt, yet strengthens a balance sheet - and control of the business always stays with the owner. It is a trusted and effective method of both financing short-term cashflow and outsourcing the administration of credit and the task of arduous collections.

Factoring is a time-honored financing solution that offers many advantages while allowing business owners to focus on operating and building their client base. As opposed to banks, for instance, we offer flexible underwriting. We don't require the lengthy process, personal credit score, business history and restrictive covenants necessary for traditional debt.

Generally, we begin funding about a week after the application process begins. We support startups and high growth businesses, as well as businesses recovering from financial difficulties. Our ability to fund and service your business can keep up with the demands of growth without having to requalify you for a larger loan and charge any subsequent fees.

Your balance sheet remains strong, most importantly. Because we actually purchase the invoice from you and do not take an equity position, you incur no debt and keep control of your own business.

Additionally, we provide a thorough credit analysis on all potential and existing customers so that you can make an informed decision on extending credit, thereby minimizing the risk of bad debt.

Furthermore and finally, our professional collections team relieves you of the considerable time, energy and effort and expense required to follow up with customers to ensure timely payment.
Ron Finch
Liquid Capital Solutions
250 469 9606
250 826 8446 (cell)

Wednesday, January 7, 2009

Purchase Order Financing - Kelowna Factoring

Purchase Order Financing is the perfect solution for short-term funding requirements. It can be used to finance the purchase or the manufacture of specific goods that have already been sold. We enable this process by issuing letters of credit or providing funds that allow our clients to secure the inventory they need to fill their open sales orders.

Through purchase order financing, we also support both domestic and international transactions, and clients enjoy the working capital needed to grow sales and take advantage of profitable opportunities that are larger than they can otherwise support. We are not a bank and are not bound by the restrictions necessary for traditional lending products. Our focus is the underlying transaction and its economic and commercial viability.

Purchase Order Financing is used by manufacturers, distributors, importers and exporters. It can be used for payments to third-party suppliers for goods, issuing Letters of Credit, and for making payments for direct labor, raw materials and other directly related expenses.

Our clients consider Purchase Order Financing if they lack either sufficient capital or international expertise to complete their transaction. With respect to the latter, they might prefer to reduce foreign risk and in some cases protect the identity of their manufacturer from the end customer. In all cases, however, they appreciate the speed of funding, preservation of equity and increased profits at the end of the day.
Ron Finch
Liquid Capital Solutions
250 469 9606
250 826 8446 (cell)