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

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