Flashover Media

Guess What Your Business Needs? Working Capital and Small Business Finance Loan/Loans Options

admin — Sat, 05 May 2012 00:00:38 +0000

Just picture your firm having access to all the working capital you need. Seem impossible? Not really… if you have a solid understanding of your options and your firms capability of qualifying or executing on those options.

Whether you’re the largest corporation in Canada or a small new start up (and everything in between) your business needs working capital. In Canada small business financing loans and financing arraignments for working capital are limited to a handful of possibilities – but being aware of what they are and qualifying for them could be the solution to your constant focus on cash flow via some sort of working capital loan.

It is probably easier than you think to ensure you are addressing the cash flow challenge correctly – where it gets somewhat ‘ thorny ‘ is matching a solution to the problem or locating an expert that can provide you with the business financing assistance you need.

Two key elements of your first step working capital assessment are your gross margins and your turnover. That’s the big problem we have with text book / academic solutions to working capital – they point you to the text book calculation – give you a formula which essentially has you subtracting current liabilities form current assets, and voila! the inference is you have working capital. However, our clients have never paid a supplier or completed a company payroll with a ratio!

To properly assess your working capital needs focus on understanding your turnover – how much inventory do you carry, what are the days outstanding in inventory, and as importantly, or more importantly, are your receivables turning over. Have you realized that for many firms 80% or so of the total of all the business assets you have are tied up in A/R, inventory, and, on the other size of the balance sheet let’s not forget payables.

So can you have financial success based on your new found knowledge and analysis of your cash flow and asset turnover. We think you can.

Canadian business financing solutions to small business finance loans really revolve around a couple viable solutions. Typically, in our experience Canadian chartered banks cant satisfy your business working capital needs – if only for the reason that they rarely finance inventory and require significant merit in your overall financials, profitability, external collateral, personal credit worthiness, etc.

So, where do you go from there? The other solutions are very viable and can take you to a potential 100% turn around in cash flow – they include working capital financing as a bundled line of credit on a/r and inventory via an independent finance company. For firms that are larger we believe the ultimate tool is an asset based line o f credit that provides high leverage margining on all you business assets. Other more esoteric solutions, but still very viable although somewhat misunderstood are securitization, and purchase order financing of new contracts and orders. (Your suppliers are paid directly for the orders you have in hand – what could be better than that?)

Finally, coming up the road at lightening speed is factoring and invoice discounting. We mention them lastly but they are probably the most popular method, gaining traction everyday. Our favorite is confidential invoice financing, allowing you to control your financing.

So there you have it. You have identified new ways to determine the need; we have outlined 4 or 5 solutions that will take the guess work out of working capital. These loan and financing options are available with a bit of research, and, if you choose, speak to a Canadian business financing advisor who can provide you with timely and valuable assistance in your cash flow needs.

Corporate Finance – Some Key Terms

admin — Sat, 05 May 2012 00:00:29 +0000

Corporate finance in business is a general term used to describe anything in a monetary field to do with businesses. It is used to describe not just terms which involve the flow of money throughout a business e.g. revenue and costs, but also describes the tools which are used in order to calculate said figures, in order for data that has been collected to be analysed. This gives the numbers meaning, or better, an actual context which could be used in order to help a business keep on top of its cash flow and run more efficiently.

There are hundreds of different terms used in businesses to talk about money and each of them have different meanings, or just something minor which is different from the one before, in order to produce a totally different number all together.

The following are a few terms used within business to describe certain aspects of the business on a monetary basis: Assets (Current & Net), Stock, Shares, Costs (Total, Fixed, Variable), Profit (Gross & Net) and Price Elasticity. Price Elasticity is more to do with the running of a business, not as a whole, it is more aimed towards certain products themselves instead of the whole product portfolio. All of the other terms look at the business as a whole, or can be used to take a step back and look at it as a whole instead of smaller departments.

What is the point in knowing these numbers if you are not going to do anything with them? Well the answer is there isn’t really that much of a point. As the previous titles stand, they are pretty much meaningless, not giving a user any indication of what is what it is just there. Hence, why the handy tools known as formulas were invented, in order to turn that data which is gathered into some much needed knowledge and understanding.

Some of the following formulas are used within the business world: Profit, Contribution, Break Even, Investment Decisions, Company Accounts and many more. Each have their own contribution in telling a user how the company is doing and some are used to predict trends to give a possible snapshot of the future e.g. Profit and Loss accounts & Time Series Analysis. These simple predictions take into account the trends that have been developing, then keeps the trend going to give a brief outlook on what would happen if everything continued at the same pace. This can help give an excellent outlook into the future of your business and finances.

Top Ten Finance Jobs – The Best Financial Jobs

admin — Sat, 05 May 2012 00:00:24 +0000

If you’ve got no idea which finance job would suit you best, worry not we’ve compiled a list of ten of the most popular financial jobs.

Auditor – there are two types of financial auditors, internal and external. The principle difference between the two types is who the employer is. If you wanted to be an external you would be employed by one of the big city financial firms. While internal auditors normally work within the company. As a consequence only companies of a certain size can justify employing internal auditors.

Banking – there are dozens of branches on every high street in every town, and that’s only the frontline staff for customers. By the time you’ve factored in all the behinds the scenes staff and the people working at head offices, the scope jobs offered by banks is huge. As well established companies, they offer some great benefits for employees with reliable job security.

Underwriter- insurance is a dynamic and interesting sector to work in. Underwriters are ultimately responsible for working out how much your premium is. Whether its car, holiday, health or any other kind of insurance there are specialist underwriter jobs which can provide engaging job opportunities.

Private Equity – though hugely complex, those working in private equity usually work funding business start ups. Often they are looking for a portfolio of investments where the individual projects might be quite risky but collectively creates a rewarding investment. Private equity typically attracts two types of people, industry experts who are able to identify the companies that offer the best chance of proving successful and those with more of a financial background who are responsible for managing the portfolio and the investments.

Payroll – the most important person in any company is the person responsible for payroll, they make sure you get paid! The larger and more complex the structure of the company the more difficult the role becomes. A good understanding of payments as well as the various tax and pension laws is vital for anyone thinking of pursuing a career in payroll.

Accounts Assistant- for many people it’s difficult to know where to start when looking for a career in finance, especially if you have no specific qualifications or experience. An Accounts Assistant job may be an ideal opportunity. These entry level positions offers a chance to experience many of the different disciplines which are involved in finance, which may help you decide where you would like to specialise.

Credit Controller – Accounts Receivable is one of the most popular departments to work in within a busy account department. Credit controllers roles can vary enormously but normally they job is based around ensuring that invoices created by the company are paid in a timely manner.

Financial Director – When it comes the Finance the FD is the top dog. Of course the size company makes a huge difference, but whether it’s a SME or a FTSE 100 company FDs are normally in charge of everything financial in the company. With these positions comes great responsibility but usually the experience of FD enables them to carry out their roles with confidence.

Management Accountant – Of all the disciplines of accountancy management accounts is among the most popular, usually they focus more of forecasting the future than assessing the past like auditing.

Business Analyst – while you get many different kinds of business analysts specialising in different industries, there are a significant number of financial business analysts who fulfil a role not dis-similar to management accountants. They are given responsibility for analyzing the needs of their businesses customers and stakeholders to highlight financial business problems and suggest solutions.