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Times Might Be Tough -
Generating Cash From Short Term Assets.
Many small and
medium sized companies, including start-ups, find that traditional
bank lenders are not providing the financial resources they need
because their balance sheets do not support the amounts required.
Solutions can be found from financial service companies who look at
the underlying assets rather than the balance sheet to assess the
risk of providing much-needed cashflow. The amounts involved can
range from as little as $25,000 and go as high as $10,000,000.
The principal
assets involved in this exercise are Accounts Receivable. Provided
you have a marketable product or service with a good profit margin
which generates short term receivables (up to 60 days invoices that
cannot be disputed or negotiated) and your buyers are financially
sound, a financial service company can lend up to 90% of the value
of those receivables and will also monitor their collection. The
collection aspect is important as it relieves you of the need to
maintain a collections department and allows you to focus on your
core business. Outsourcing of Accounts Receivable management has
become common in Canada and is part of a worldwide trillion dollar
industry.
The main
benefit of this process is by releasing cash from your assets, you
can grow your company at a faster rate thereby increasing the return
to the stakeholders.
Written by - John Lightbody Bibby Financial
Services (Canada) Inc.
www.bibbycanada.ca
email:
jlightbody@bibbycanada.ca
The world will stand aside to let the people who
are focused through. Unknown |
