A successful businessman

This Leadership Skill Can Unlock Growth and Profit

Can you be a super leader?

Leadership skills

“The top 10 companies on the Empathy Index increased in value more than twice as much as the bottom 10, and they generated 50% more earnings.”

How often do we attempt to understand things from someone else’s perspective? As an entrepreneur or small business leader, this skill is critical in human resources, but it also impacts your bottom line.

Empathy includes everything from how employees perceive you to whether customers are satisfied with your products or services. And while it’s often dismissed as overly “touchy-feely” or “wimpy and emotional,” practicing empathy is linked directly to financial gains, so ignore it at your own risk.

Why Empathy Drives Business Growth as Much as Solid Working Capital

According to the Harvard Business Review, empathy means understanding our emotional impact on others and making a change as a result. “It’s more important to a successful business than ever, correlating to growth, productivity, and earnings per employee,” HBR explained.

Need proof, check out the global Empathy Index, which analyzes the ethics, leadership, company culture, brand perception and public social media messaging of 170 companies listed on major financial indexes. Staggeringly, companies that performed well in “empathy” also had equally high overall business performance.

“The top 10 companies on the Empathy Index increased in value more than twice as much as the bottom 10, and they generated 50% more earnings (defined by market capitalization).”


5 easy steps for entrepreneurs to practice better empathy


Great business relationships, especially those involving growth capital and funding, start with a face-to-face understanding of the client’s needs, fears and goals.

As business partners, we’re always listening for ways to make our services more responsive. Renowned leadership advisors and empathy experts SYPartners recently published a list of 5 Ways to Cultivate Empathy, and it struck a chord. (This cutting-edge management consultancy also created an app called Unstuck that helps people understand what’s holding them back and how to move forward — it’s worth checking out.)

According to SYPartners, empathy enables leaders to “build stronger teams, design more ingenious solutions, and deepen their emotional intelligence, an increasingly covetable skill in the next era of business.”

Try their five proven ways of practicing empathy: 

1. Put down your guard.

“Your ability to feel emotions is what triggers them in others. If you want to connect with someone, you have to let yourself be vulnerable, too.”

ACTION ITEM: It’s easy to dismiss chitchat around the office, but sometimes these genuine interactions can take your business relationships to the next level. When someone asks how you’re doing, be real with them. Share a story from your weekend or a challenge you’re facing right now. SYPartners recommends starting your meetings with a “pulse-check” to invite your team to share what they’re excited or anxious about. By getting real with your colleagues, even for a moment before jumping into business, you’ll be practicing empathy.

2. Help others know they matter

“As Oprah often says: “Every human being is looking for one thing, and that is to be validated, to be seen and to be heard.” Your job as a leader is to help others know they matter.”

ACTION ITEM: In modern business, devices control our lives. Computers, tablets, smartphones and even smart watches. But they can also destroy our attention spans and ability to focus on the people around us. Can you go through an entire meeting without your gaze drifting to your screen? Often, that text or email can wait. When it matters most, give your full attention to the people around you — in face-to-face meetings, client conversations and critical moments with your staff.

3. Pay attention to body language

“Thousands of invitations for empathy cross your path every day. Do you notice them and shift your behavior, or do you let them glide past?”

ACTION ITEM: Your actions speak volumes, especially when you can pick up on subtle cues from your team’s body language — and then respond empathetically. In presentations, for example, notice how the room reacts to your comments. Pause to let key points sink in, allow curious minds to ask questions or shift your tone and topic if the message isn’t resonating. When you sense changes in your coworkers’ body language, these are visual reminders for you to acknowledge the mood and react accordingly.

4. Stand in someone else’s shoes

“It’s not always possible to get all the necessary voices at the table. But that doesn’t mean you can’t summon your imagination and best acting skills to pressure-test your team’s thinking.”

ACTION ITEM: True empathy comes from experiencing a situation from another perspective. SYPartners recommends that you take on personas in your next team meeting or workshop, assigning roles to each team member. By acting as skeptical customers, investors, competitors or a long-term client, they’ll be forced to take on those people’s characteristics — facing the challenges from a different point of view. You can also have the team interview these real people in advance to get a first-person perspective and immediate feedback.

5. Take a field trip

“It’s hard to get perspective when you sit at a desk every day. To better understand whom you’re designing for or collaborating with, go to them where they are and observe their routines.”

ACTION ITEM: Whether it’s a different team, department, office location or your client base, you’ll never get more first-hand experience than visiting where they work. Take your team on a “seeing exploration” to observe their environment, as SYPartners explains. Ask questions about how they operate on a daily basis, the major challenges they face, what they are proud of and even potentially how you can help out.

Business illusration

Learn This Quick Way to Take Advantage of Supplier Discounts

cash cycle

Sometimes you’ll come across a business deal that’s too good to pass up, but the payment terms are too short, or worse yet…there are no terms.

That’s the time when working capital is crucial, and there’s a quick solution to get you the necessary capital.

For instance, if your supplier network offers a limited-time bulk sale, you can take advantage of that deal with the Purchase Financing Program (PFP). This doesn’t tie up any working capital to finance the cost of the payment, so you can keep your day-to-day operations intact.

Who is the Purchase Financing Program made for?

PFP is a very attractive solution for companies that already have a strong credit rating but may have maxed out their bank loan options, or need a faster solution.

No matter where your supplier is located, your in-transit inventory can be financed. That inventory can be goods for resale, inventory or consumption. You receive the goods, then pay the PFP invoices as agreed. It’s that simple.

The Purchase Financing Program can effectively reduce your CCC by extending your purchase terms. If you have the ability to pay in regular terms, but not the short or no terms set out by the supplier, this program can help you.

Example: How PFP can lock in a great supplier deal

Jacksons Preserves, run by Meg Jackson, is a 30-year family-run business with excellent sales, suppliers, a dedicated customer base and a strong credit rating. It is currently quarter-end when Jacksons pays out many expense and payroll bonuses, and their main supplier has just offered a deep discount on an overstock of canning supplies. The catch? Payment is required on delivery (COD), and it’s first come, first served.

Jacksons holds inventory for an average of 14 days before shipment, has a standard net-30 day payable terms, and gets paid on average after 60 days. If they take the discount, they’ll be left tight on capital after also paying the bills.

Cash Cycle Reminder:

With this bit of information, we can calculate the “cash cycle” for Jacksons Preserves, which tells you how many days it takes them to turn their inventory purchases into cash. That number (known as the CCC) is one key indicator that lenders and other financial providers use to assess your potential risk level. Want to learn more? Get all the details and figures in part one of our cash cycle series.

How PFP works in this case

Jacksons calls up their Liquid Capital partner to use the Purchase Financing Program and snag this supplier deal while it lasts. Liquid Capital pays the supplier directly, deferring Jacksons’ payables outstanding for this transaction to 30 extra days, giving them time to gain working capital from other sales.

Here’s how the cash cycle calculations would look when comparing PFP to an ordinary situation. It’s quite a dramatic improvement.

CCC = 14 – 0 + 60 CCC = 14 – 30 + 60
CCC = 74 days CCC = 44 days

Improved CCC by 30 days


In this instance, Jacksons Preserve will have an extra 30 days of breathing room to pay the expense on their supply deal. By taking advantage of the discount, their production expenses will decrease and profits will likely increase. This more than pays for their short-term financing solution.


More in the Cash Cycle Series:

Part 1: How to Determine Your Company’s “Cash Conversion Cycle” 

Part 2: 7 proven cash flow tactics every CFO needs to know          

Part 3: Leverage your assets to grow your working capital

Part 4: Keep suppliers happy and the cash in your pocket

workplace expectations mix of images from past to now

See how our workplace expectations have changed since 1946

workplace expectations

What motivates you at the office? How do you approach meetings and group work? Do you challenge authority or look up to them? All of your answers are probably quite different than other generations in the workforce, and unlocking the answers for each generation you deal with can be a solved mystery that will make you more effective in business.

Think how your first boss would have answered those questions. It’s probably quite different. What about that new up-and-comer entering the office this year? They will have an entirely transformed approach.

Unlocking the mysteries: How other generations think

Workplace expectations in business are very different than they were even 20 years ago, and they have hugely changed from those of 50 years past. Six key factors have all contributed to a massive upheaval of what leaders and employees feel they have a right to expect in their work life:

  1. The Rise of Woman Power
  2. Right-brain/Left Brain Thinking
  3. Education
  4. Technology
  5. Confidence
  6. Values

When considered individually, each of these factors have played a role in changing conditions within the business workplace. Together, they have created the perfect environment for the rights and expectations of individuals to become as important as the vision of the leaders and where employers need to keep their staff happy in order to keep them at all.

Taken from Confident Leadership in 21st Century Business: Bridging the Generation Gaps, the following chart offers a comparison of changing workplace expectations in business since 1946. Notice how each generation has their own shift in the way they approach the business world.


Category Boomers I Boomers II Gen X Gen Y Gen Z
Birth Year 1946-1954 1955-1965 1963-1980 1980-2000 1995-
Coming of Age 1967-1975 1976-1986 1984-2001 2001-2021 2008-
Meeting Style Value meetings and opportunities to brainstorm. Value the invitation to participate, and eager to show themselves capable. Like meetings with a purpose. Don’t like to waste time. Prefer independent time. Prefer short, casual meetings with team activities. Want to be entertained. Eager to participate. Little patience for repetition or delays.

Toward Authority

Honor, respect Disillusioned and untrusting Skeptical, suspicious Need to be respected by leaders Need to be valued by leaders
Technology Master it Improve it Enjoy it Employ it Adapt it
Interactive Style Self-absorbed Self-sufficient Self-starting free agents Team player Collaborative
Work is… An exciting adventure An arduous adventure A necessary challenge Meant to be meaningful A means to a better world
Characteristics Driven, optimistic, competitive, think people should pay their dues The “in-it-for-me” group, struggling to compete with Boomers I Latch-key kids, survivors, skeptical, self-reliant Ask why, prefers teamwork and supportive structure, craves feedback and instant gratification Analytical information processors, world-wide collaborators, ready to tackle global issues
Message that Motivates You are important to success You matter We need your ideas You and your co-workers can turn this place around The world needs you


One career for life? Not anymore.

Choosing a career for life is no longer the norm. Today, multiple and highly divergent careers are increasingly common.

As little as five years ago, career life expectancies averaged about 10 years. Today we are much closer to half that amount. Job changes happen even more frequently — in fact, two years between companies is the norm. If you last three years in the same job now, you will either be considered the “superstar” or complacent.

Twenty years ago, business people expected to work in an office building, Monday to Friday, and with set hours. Today, workdays and hours are flexible and individuals that can work remotely are considered an asset.

Rather than choosing the corner office with a view, we would rather avoid the stress of commuting and office conflicts by working from home or even from another country. Yet we still value teamwork over individual projects. To make this working style a reality, we can now use new technology to stay connected and productive from anywhere. Ah, technology — that wonderful and ceaselessly advancing opportunity for so much more than conversation at the water cooler.

Do employees have more rights?

In essence, we have gone from employee rights rising from minimal to maximum importance. Employees that once valued security above all else, now “vote with their feet” if they are not satisfied that their psychological needs are being met.

We have moved from predominantly individual work to fully collaborative teams, and our pyramidal hierarchy of business organization is slowly, but surely, morphing into a circular design. Today, employees and leaders alike are looking to be happy, fulfilled, engaged and productive in the workplace. Individual voices, as well as collaborative teams, expect and demand to be heard.

The business that can provide this ultimate workplace culture and fulfill workplace expectations is the one that will attract and retain the best people, at least for today.


Business author and speaker, Rosemarie Barnes, highlights the challenges that leaders may face when dealing with multiple generations in one workplace. Learn more about how the generation gaps in business are affecting company health and profits in her book, Confident Leadership in 21st Century Business: Bridging the Generation Gaps, now available on Amazon (US and Canada). Rosemarie can be booked for presentations via rbarnes@confidentstages.com. For more information, visit confidentstages.com.


Featured image via Daniel X. O’Neil 

Mix vies of NYC and graphs

Is that “angel investor” actually a demon in disguise?

angel investor

You’ve seen them on TV — those sharp-dressed, smooth-talking angel investors with big personalities and even bigger wallets. Sure, they’re charming and have the business chops to prove their success. But are the sharks and dragons of the world actually the right people to partner with in your next business venture?

Yes, due in part to the smash hits Shark Tank and Dragons’ Den, angel investors can be a consideration when startups and small businesses look for funding. In fact, the typical angel investment can provide $25,000 to $100,000 of funding — a significant stake in your business. Is that investment worth its value, and are there hidden costs or risks associated with this new business relationship?

There’s no doubt that many angel investors can bring incredible experience to the table. They know how to grow a company, have savvy business minds, never fear the unknown and have a wonderful ability to take on what others may see as a risk. Compound all those traits with their deep pockets and you’ve got a recipe for huge returns.

However, not all angels are watching out for your best interest. Keep your eyes peeled for these six types of angel investors that may actually be demons in disguise.

The Tire Kickers

You likely need fast funding and don’t have time to waste with investors who aren’t serious about committing funds. This isn’t a used car lot, so watch out for “The Tire Kickers.”

“As a founder, the last thing you need is to have your chain yanked. A firm “no” is far better than “we’ll think about it” or “we’ll take it under advisement.” If you feel like an angel is stringing you along, trust your gut,” advises Jenny Q. Ta in Fast Company. “Chances are pretty good they are afraid of making a commitment until they know who else is joining the round. Beware of the sheep in angel’s clothing.”

The Sharks

You’ve undoubtedly seen this personality shine on the reality shows. A would-be entrepreneur pitches their product, but can’t recall every financial figure and stat to back their claims. That’s when “The Sharks” see their prey — and they attack.

According to Martin Zwilling in Business Insider,“This is the ultimate bad guy whose sole intention of getting involved in early-stage investing is to take advantage of what they believe is the entrepreneur’s lack of financial and deal-making experience. If the term sheet process turns to pure torture, it may be time to respectfully bow out.”

The Overachievers

Angel investors are naturally more risk tolerant, and they may expect you to be as well. With high risk comes the potential for higher returns, and “The Overachievers” are going to want to see the money. Be prepared for these angels to expect bigger payouts than the average investor.

“It isn’t unusual for an angel investor to expect a rate of return that equals 10 times their original investment inside the first 5 – 7 years,” states Murray Newlands with Startup Grind. “When you are being held to this type of standard, the pressure to generate may be intense. If you are considering angel investors, you must determine whether the startup is within a position to expand at the rate the investor expects.”

The Archangels

Every good angel has a mentor, and these higher-ups are called “The Archangels.” They can bring other investors together and make deals happen fast. The Archangels can shape any idea, organize creative funding agreements and turnaround entire companies. These angels are the key contacts that everyone wants to be in touch with, and for good reason — since their influence can attract would-be investors from other industries and geographies. But be warned, as certain Archangels aren’t so trustworthy…

“There are a lot of people that pretend to be “Archangels” and offer to connect you with people that have money, sometimes for a fee,” says Todd Vernon in a recent Inc. article. “If your “Archangel” Investor is not actually investing his or her money, but simply acting as a proxy for others, take note; that is a warning sign.”

The Know-it-alls

Experienced angels have often been in the game for years, and many of them have grown their own companies by completely disrupting their industries with innovative products and methodologies. But in some cases, this is a breeding ground for “The Know-it-alls.” Because these people have been uber-successful by forging their own paths, they may now believe that their way is the right one. And it can be hard for The Know-it-alls to let go and allow you to chart your own territory.

The trick is dealing with this type of angel in a particular way, as Jonathan Moules explained in a Financial Times article. “Be diplomatic about how you receive an angel’s advice, adopting the tips on more “timeless” matters – such as how to find a good salesperson or how to launch a product – and politely ignoring the advice on matters specific to the investor’s previous forays into business.”

The Control Freaks

Although you might be looking for a hands-off investor, be assured that most angels still need to be involved in certain parts of how your company is run. “The Control Freaks” take this to a whole other level though, looking at every detail of how you run your business with a microscope, and then micromanaging to ‘tell’ you how to move the business forward.

“Angel investors aren’t going to shell out big bucks without taking an interest in how the money is used. If you’re expecting them to take a completely hands-off approach, you may be in for a rude awakening,” cautions Rebecca Lake at Quickbooks. “It’s more likely that your angel will want to take an active role in making decisions that affect the outcome of your business.” Lake warns that even with “The Control Freak” making decisions on your behalf, you are still accountable. “Even if they leave the reins in your hands, you’ll still be accountable for explaining the reasoning behind your choices.”


If you’re looking for investors and enhanced business funding, angel investors can still be an option. Do your homework and due diligence to know exactly who you’re working with, understand their expectations and make the right funding partnership. And if the agreement isn’t sitting well with you, don’t sign on the dotted line until you’ve looked at all your options.

There are always alternatives to secure funding for your business, like with Liquid Capital Factoring or Asset-Based Lending. Feel free to reach out and we can discuss your options.

Ship illustration

Keep Suppliers Happy and the Cash in Your Pocket

Part 4 in the Cash Cycle series: Using PO Financing to get faster shipping.

cash cycle

Sometimes suppliers demand that you pay for your orders in advance or at the point of shipment.

What if you don’t have the money to pay up front? You might have a letter of credit so they’ll start the order, but what if you can’t get that either? Will they ship your goods?

How to get suppliers to ship your goods

Purchase Order Financing (PO Financing) helps you close the gap where suppliers are not providing adequate – or any – terms. By extending the number of days you have to pay your accounts payable, you can keep cash in the company and effectively increase your working capital. This financing option will also improve your cash flow, and your cash conversion cycle (CCC), which can help you meet supplier terms.

In normal circumstances, you might have to wait 30, 60 or 90 days to collect on your sales (DSO = 30, 60 or 90). But a supplier may demand that you pay immediately before they will release your shipment (DPO = 0). If you don’t have significant working capital on hand, this leaves a serious gap. (More on these figures in a bit.)

As you’re stuck waiting to collect on your invoices, you’re still managing the ongoing costs of running your business and your shipment might not be released. Unfortunately, you’ll never be able to meet supplier terms without finding an alternative solution.

PO Financing can extend your cash cycle and help get your product shipped. When you receive a PO from your customer, you place that with your supplier. As your financing partner, Liquid Capital would then provide your supplier with a letter of credit and they would release the shipment. Your customer invoice is then generated.

With PO Financing, businesses often use factoring to obtain faster payment on their customer invoices once they are generated, so that they can take advantage of both solutions at once.

Example Scenario: Financing the cost of the product

The Gregory twins have been running their online retail venture the past

couple years, selling car and truck accessories to the enthusiastic custom

car community. Their suppliers are located across North America and overseas, so shipping is a big concern for the duo. Their business is growing, but their cash flow is still struggling. It’s tough to get supplier payments, orders and payments to align.

Currently, their main overseas supplier requires payment at the point of shipment for a large order ready to leave. Once the parts are on the boat, they’re considered sold to the Gregory brothers – and time begins ticking – but the duo are cash-strapped and can’t pay the entire invoice. They’re in dire need to get the parts in their customers’ hands, as customer invoices usually take at least 35 days to be paid.

Fortunately, they have major customer orders with supporting POs, and Liquid Capital assists by supplying a letter of credit to the supplier. Liquid Capital finances the Gregory twins’ product costs until the order is delivered to the customer, which takes 12 days to arrive. They’ve secured not only payment, but breathing room.

And by factoring their receivables, they’ll now only have to wait 5 days to see cash flow improve from their customer invoices

CCC = 60 – 0 + 35 CCC = 60 – 12 + 5
CCC = 95 days CCC = 53 days

Improved cash cycle by 42 days

    (Get the full cash cycle formula and descriptions here.)

What is the end result?

With PO financing alone, the Gregory brothers shorten their cash cycle by 12 days. That means they will convert inventory into liquid cash almost two weeks faster.

If they also take advantage of factoring their customer invoices, they could shorten by 30 more days, so their cash cycle is dramatically shortened. That’s a big difference from the three-month timeframe without financial support.


Get more information on the cash cycle, how to calculate it and strategic tactics for your company:

Part 1: How to Determine Your Company’s “Cash Conversion Cycle” 

Part 2: 7 proven cash flow tactics every CFO needs to know          

Part 3: Leverage your assets to grow your working capital

A swimmer and a shark illustration

What is Fintech Stacking & Why You Need to Avoid It

Why unsecured loans are eating away at many company’s bottom lines.

fintech loans

It seems like a less than savoury business practice – companies resorting to fraudulent activity to access tens or hundreds of thousands of dollars, often just to cheat the system. Taking out multiple online loans from new fintech companies who offer almost-instant cash, borrowers prey on a new financial system based entirely on unsecured loans.

This is “loan stacking,” and it’s hitting the fintech industry hard. The bigger problem is that it’s also crippling the companies in need of real funding.

What is loan stacking?

According to the Lending Times, loan stacking occurs when a consumer secures multiple loans of the same type from different financial institutions – and it is also one of the main types of financial fraud. This is an obvious problem for the lenders, but also a highly risky game for the borrower.

Although reputable business owners may indeed be shopping for multiple loan options, most stacking is associated with being intentionally deceitful. In the latter case, the borrower takes advantage of time lags in the credit bureau reporting, with no intention of paying the lender back.

In fintech, this issue can be exacerbated, since their “soft credit checks” and online loan approvals typically take less than 24 hours – not enough time for a lender to realize the borrower just requested similar loans from other institutions. Between 2013 and 2015, such occurrences in the market nearly doubled, causing fintech underwriters to ring serious alarm bells.

Why are some businesses stacking loans? And are these people really criminals?

According to a recent USA Today article, only one in five small business owners in need of financing will get approved by a traditional bank. According to Nonso Maduka from the financing comparison website NerdWallet, “that leaves 80% who can’t get funding from a traditional bank source, even though that’s likely the lowest cost.”

If traditional bank loans aren’t an option, these companies will be forced to look elsewhere and find creative solutions to their funding woes. Maduka goes on to explain some of the major challenges forcing companies away from the traditional system. “If you’ve gone through the process of applying for a bank loan and aren’t eligible, you haven’t been in business long enough, the amount of money you’re requesting is less than $500,000, if you’re thinking about speed, or just need cash in order to keep moving, an alternative lender might be a good option.”

After the 2008 crash, business funding dropped dramatically, making access to that capital much more challenging. And by 2014, the number of loans was down nearly 60 per cent from its peak in 2007, according to the Woodstock Institute’s report on small business lending.

It’s apparent that there’s a massive need for funding in the business community – to grow more rapidly, hire employees and make investments. But there’s an equally apparent shortage of options for many companies, forcing them to get creative.

That doesn’t mean that all companies obtaining multiple loans are deceitful – far from it. There are countless hardworking, honest business owners that are in search of higher working capital to keep their companies afloat and growing in the right upward direction. And obtaining multiple loans is possible if you’re being transparent with the lenders. But stacking loans is not a viable solution.

The true offenders are the “borrowers” intentionally preying on this system, posing as credible business owners. This could have the adverse effects of raising fintech costs, slowing down lending cycles and making it even more challenging for legitimate borrowers to access capital in the future.

The astronomical costs of fintech loans: Are they to blame?

For the fortunate business owners that can access traditional loans or leverage their personal assets including home equity, property or other investments, finding cash flow may not be the biggest issue. But when these options aren’t available, other businesses may turn to fintech and other unsecured loans – supported by creditworthiness, rather than collateral. The Globe and Mail pointed to discussions at The Future of Lending Now conference, which stressed that unsecured fintech lending, “opens the floodgates to increased risk of fraud and more personal and business bankruptcies.”

Taking on fintech or other unsecured loans can get businesses out of sticky financial situations, but they aren’t long-term solutions. Most unsecured loans like credit cards, revolving loans, personal lines of credit, payday lenders and merchant cash advances come with steep interest rates to protect the lender. For business owners, stacking debt and taking on multiple loans to hit their desired level of capital, the impacts can be shockingly unexpected.

Even though obtaining such a loan could bring immediate relief, Woodstock Institute cautions against such activity, citing dissatisfaction from those same borrowers. In fact, their study found that, “high interest rates, onerous terms, and relatively poor customer service are unfortunately common among such providers.”

368% interest rates

Looking directly at the hard numbers, Woodstock Institute’s analysis found that the interest rates for such fintech loans can start at 26% and go up to an astronomical 368%. Compare that to the current traditional bank loan in the range of 6.5 to 9% and you’ll see why dissatisfaction amongst borrowers could skyrocket.

This is where stacking and refinancing really becomes a problem. When a company is in that deep, the problem has become how they’ll pay off such exorbitant interest rather than paying down the original debt. The focus shifts away from their business operations and strategy – the original intention of the loan.

Opportunity Fund, a US-based non-profit lender and organization tackling economic inequality, also offers “microloans” to business owners in need of assistance – including those that have been handcuffed by their fintech loan. In fact, after analyzing 150 of businesses needing refinancing on their fintech loans, they found the companies were paying an average interest rate of 94%, with a high of 358%. The average monthly payment on those loans was 178% of the borrower’s available net income. This leads to financial instability for the business and their personal assets. “Every month these borrowers owed more to the lender than they had available from both business and personal net income.”

Multiply that disastrous impact even further if a business was stacking their loans or taking on multiple fintech debts, and that could spell complete financial ruin and bankruptcy.

Better funding options to avoid the pitfalls

Avoiding high interest and unsecured loans altogether is one option that some business owners have taken.

That’s where financial products like Asset-Based Loans (ABL) enter the picture and fill a much-needed gap. For companies who don’t meet the qualifications of a traditional bank loan, or simply don’t want to go that route, they can obtain a loan or line of credit that is secured against their company’s assets. With such a loan, assets can include accounts receivable, equipment, inventory or real estate. Timing of ABL loans can take longer than an unsecured option, largely because of the due diligence process that reviews the borrower’s financials and collateral. However, only a week or two is needed to establish a trusted relationship with the ABL lender and access capital.

For Asset-Based Lending, funding levels are based on the value of the available company assets, and the lender will assign a loan-to-value (LTV) – a percentage that the business can borrow against. For well-established businesses, this provides much more flexibility than unsecured options. Although lending amounts are typically higher for ABL, the solution can provide the business incredible amounts of capital – sometimes up to $10 millions in funding. As for ABL rates, although they can be higher than a traditional bank loan, they are substantially lower than average fintech loans, and are far more stable.

ABL delivers a variety of additional benefits:
  • Improved customer optics – your ABL solution is invisible to the end customer
  • Leverage multiple asset categories to generate extra capital as required
  • Rates are lower than fintech loans or a pure factoring solution
  • Available borrowing amounts are typically calculated weekly (not monthly as with a bank) so if you’re in a strong growth cycle, your ability to borrow increases more quickly

But ABL isn’t the only option available.

Transform your customer invoices into quicker cash flow

For less established or smaller business, other options like accounts receivable financing (also known as factoring) can come into play. By leveraging incoming invoices, a company can gain almost-instant cash flow without the risks associated with unsecured fintech loans. In these situations, a factoring company will purchase a business’ accounts receivable and provide immediate payment, holding back a small reserve fee. Because this is a less strenuous process and doesn’t rely on company collateral, the timing is also notably faster than ABL to access capital.

The transaction can have the resemblance of a business line of credit, although it is technically a sale of accounts receivable, and in some cases the fees are even deductible. Factoring fees are typically higher than ABL, but are once again substantially lower than unsecured options with significant penalties. Since they are based on incoming accounts receivable, businesses also are not struggling to make their factoring payments, as the funds come directly out of the collections on those invoices.

When presented with both options, a company will generally lean towards ABL due to its flexibility. Either way, compared to the unsecured options and high-interest fintech loans, it is in a business’ best interest to investigate and compare all their options before taking on unnecessarily stacked levels of debt.

Cash cycle illustration

Leverage Your Assets to Grow Your Working Capital

cash cycle ABL

82% business failures are due to cash flow problems, according to a U.S. bank study. If your company is spending more money than it’s currently bringing in, you likely have a cash flow problem. It’s very common with the majority of businesses and can signal immediate changes are needed.

For well-established companies with good financial reporting systems, another option exists for improving cash flow and lowering your “cash cycle” – commonly referred to as your CCC. That means you can turn inventory into cash faster, have more liquid cash on hand and grow your business faster.

One financial solution called Asset-Based Lending (ABL) could be a bright solution for your company. Skip ahead if you’re ready to learn more about ABL now.

Quick Recap: What is the cash cycle?

The cash conversion cycle (CCC) tells you how many days it takes for your company to turn your inventory purchases into cash – a strong indicator of your company cash flow. The CCC also helps lenders and other financial providers assess your potential risk level.

Through a fairly simple formula, you can calculate your own company’s cash cycle. The CCC is equal to the number of days it takes to sell your inventory, plus the number of days you need to collect on your sales, minus the days it takes you to pay your vendors.


DIO Days Inventory Outstanding The average number of days it takes your company to turn inventory into sales. A lower number is better.
DPO Days Payable Outstanding The number of days it takes you to pay your accounts payable. The higher this number, the longer you can hold onto cash. A longer DPO (higher number) is better.
DSO Days Sales Outstanding  The number of days you’ll need to collect on sales of that inventory after the sale has been made. A lower number is better.


ABL can dramatically reduce your cash cycle

Asset-Based Lending (ABL) could be your answer, especially if you don’t currently meet bank loan criteria or if you have seasonal and time-sensitive capital requirements.

There are many advantages to ABL. First, it is one of the most option-rich financing alternatives available and allows you to leverage your inventory, equipment, real estate and accounts receivable to secure funding. For larger companies that have strong credit ratings and valuable assets, ABL offers you access to more working capital than many other funding products since it’s based on a percentage of your assets. It could even offer funding as high as $10 million.

ABL is also cost-effective, very flexible and discreet – something that most large companies value. You don’t have to change the invoicing process with your customers, and you can almost immediately access a significant amount of working capital.

How does this impact the cash cycle? By securing ABL funding, a company will effectively reduce their DSO (Days Sales Outstanding) and effectively reduce the number of days it takes to turn their inventory into cash. The company no longer has to wait the full time to collect on their sales, since the ABL delivers that capital much faster.

Example: How ABL can work for companies in real life

Clarence is the CFO of a tool manufacturing enterprise that has a large operating facility including a warehouse, office building and manufacturing plant. He prides himself on their impeccable financial reporting, and averages 60 days for their accounts payable, and 90 days for collections.

The Sales team is working on a huge deal to sell existing inventory in their warehouse, and expects to close that within 45 days. Another big deal is on the horizon that will require the production to ramp up, but cash flow is tight and Clarence needs to find capital to buy all the additional supplies that will be needed.

So he works with Liquid Capital to leverage their manufacturing equipment along with their existing receivables to secure a financing agreement. Liquid Capital approves the deal and advances them the required $2 million in funding 25 days later, taking over their existing receivables. The new deal goes through and Clarence approves the purchase of the required supplies.

CCC = 45 – 60 + 90 CCC = 45 – 60 + 25
CCC = 75 days CCC = 10 days

Improved CCC by 65 days

Through Asset-Based Lending, Clarence’s cash flow cycle is dramatically shifted, from 75 days to just 10 days. By freeing up resources, he’s now certain their new deal can go through.

In this example, Clarence was able to access such significant capital by leveraging the company assets in combination with his accounts receivable. For companies in similar situations, it’s worthwhile learning about your options and comparing them against other financing alternatives. By making the most of your options, you could access up to $10 million from Asset-Based Lending with Liquid Capital.


Get more information on the cash cycle, how to calculate it and strategic tactics for your company:

Part 1: How to Determine Your Company’s “Cash Conversion Cycle”

cash cycle

Part 2: 7 proven cash flow tactics every CFO needs to know

CFO cash flow

millennials gen y

Generation Gaps in Business: The Abyss of the Millenniums

millennials gen y

Being a business owner, employer or leader in today’s business world requires an awareness of the needs of all the generations in the workforce: the Baby Boomers, Generation X, Y and Z. Whether engaging with staff, clients or stakeholders, understanding the differences in generational values and motivations will lead your business to run more effectively and ultimately improve those bottom-line profits.

Change is inevitable…and it’s happening faster than ever before

Where previous generations were fearful of change and determined to hold onto the status quo, Millennials and the new Generation Z view it as exciting and normal.

Some generations have caused more of a ruckus than others. Today, it’s Millennials (also called Generation Y) that are getting a lot of bad press. Entitled, self-absorbed, and unfocused are typical adjectives swimming in the ocean of negativity that describe our workforce’s majority generation. They cannot survive without their cell phones, have grown up playing video games and expect instant gratification. Many argue that this generation cannot make a decision without consulting everyone they know. Others say they are downright lazy and expect respect just for showing up.

Does all this sound familiar?

It should, because similarly harsh criticisms of each new generation have rung through the rafters since the end of WWII. Think back to the panicked parents when Chubby Checker became popular. Remember the “rebels” created by The Beatles? What about the sacrilegious burning of draft cards? Young upstarts have created chaos with every passing generation, and for that we should be completely grateful.

Each generation brings innovation that shapes our future, and your leadership can make all the difference.

Strategic leadership can tame any circus

confident leadershipAs described in Confident Leadership in 21st Century Business: Bridging the Generation Gaps, taking a leadership role in today’s business world is akin to being a ringleader in a circus. With so many different performers and acts on stage, the ringleader must recognize everyone’s talents and provide them with the tools they need to put on a successful performance.

Likewise, a business leader must recognize the different generations within their team and modify the tools and tactics to work with each of them. A leader’s role is also about uncovering what makes each generation tick, and using that information to direct their abilities.

In business, the good leader is aware that Generation X prefers carefully funneled information, Generation Y feeds on mentorship and praise, and the upcoming Generation Z needs to understand how their tasks fit in with the whole.

We created the qualities of Gen Y

Nevertheless, while some people may see the Millennial generation as entitled and demanding, let us remember, they were raised differently than generations before them.

We awarded them trophies even when they lost, and we lauded them for every activity they undertook. By buying this new generation multitudes of electronics, we taught them to understand the world of quick responses, and have instant information at their fingertips. They took advantage of every opportunity to learn the complex world of computers, and we praised them for their ingenuity in solving problems in a flash.

Communication styles changed, and as Gen Y began to grow into their teens, the world shifted toward a dramatically new direction – with unprecedented changes equal to those of the Industrial Revolution. We provided cell phones so we could keep in touch with them, smartphones with instant Internet access and computers virtually anywhere they went. They took advantage of that technology to learn how to adapt quickly, keep in touch with the world and with each other at every moment.

Gen Z: A newer generation impacting business

Gen Z has never known a world without smartphones, wearables, and a world of Internet-connected devices. They are being raised amid institutional and economic instability, are heavily influenced by depleting resources and climate change, and are globally connected via social media. They have always had information at their fingertips, are masters of technology and analytics, and are going to further change the way the world does business. Not even the Millennials will be able to easily understand this new shift.

Young people push boundaries. It is what each generation before them has done – and it is right to do so. We have taught them to fearlessly try new things. We’ve encouraged them to uncover innovative ways to accomplish their goals. This generation is brilliant. Business leaders will find that leading Gen Z to find their fit in the organization will help harness their knowledge and enthusiasm, ultimately driving results and improving profits.

Yes, it is difficult to manage people who know more than we do – and yes, they do things differently than we did. Although memories of life without cell phones and personal computers surface from time to time, it is hard to imagine conducting business today without them. There are fantastic possibilities still to come, the ideas for which will undoubtedly be created by the younger generations of the workforce.

Mentor them, guide them, studiously avoid micromanaging them, and be grateful for the courage of the generations of change.


Business author and speaker, Rosemarie Barnes, highlights the challenges that leaders may face when dealing with multiple generations in one workplace. Learn more about how the generation gaps in business are affecting company health and profits in her book, Confident Leadership in 21st Century Business: Bridging the Generation Gaps, now available on Amazon (US and Canada). Rosemarie can be booked for presentations via rbarnes@confidentstages.com. For more information, visit confidentstages.com.

Chained computer illustration

Are Your Clients Safe from Hackers?

hackers and cybersecurity

When it comes to cyberattacks, the targets are typically the behemoth companies and organizations you read about in the news. But according to IBM, small and mid-sized businesses are the target of 62 per cent of all cyberattacks – which equals about 4,000 attacks per day. The reason? They are an easy target.

Can your company or clients be under attack?

We hear a new story about cyberattacks almost every day. A business gets hacked — allowing sensitive proprietary and customer data to be accessed and compromised. The list of the world’s biggest data breaches is littered with recognizable names, including Anthem, JP Morgan Chase, and Target.

But don’t think for a second that hackers only target large organizations. In fact, small businesses are often just what hackers are looking for. Why? The main reason is that small businesses often have inadequate online security, and with sensitive data housed in the cloud they become an easier victim.

A quick night’s work for a hacker can mean disaster for your business. According to a report by the U.S. National Cyber Security Alliance, 60 percent of small businesses that suffer a cyberattack are out of business within six months.

Nobody will protect your business except you

Banks and the government haven’t done much to assist small businesses with hackers and data breaches. The recently introduced MAIN STREET Cybersecurity Act in the United States will help small businesses protect their digital assets from cyber threats, but it’s far from a silver bullet. Businesses of all shapes and sizes need to start taking data security seriously — proactively and with full accountability.

Now is the time to put together a solid security plan.

Don’t just go with the first solution you find. Instead, take the time to find the approach that fits your business, customers and industry. There is no one-size-fits-all solution. More importantly, don’t leave data security to just the IT staff. Get everyone involved — including your managers and all levels of employees. Train each of them on protection measures and show them how to stay compliant. For example, teaching employees to avoid opening suspicious email attachments can be a safeguard against malware that could easily creep into your network.

If your workforce is highly mobile, you may want to consider the rules around any bring your own device (BYOD) program you may have in place. Security Magazine explains how a BYOD program, whether formally in place or not, could create unintentional risk within the organization — simply based on the lack of awareness of such programs. The publication states that, “17.7 percent of survey respondents who bring their own devices to work claim that their employer’s IT department has no idea about this behavior, and 28.4 percent of IT departments actively ignore BYOD behavior.”

Once you start protecting your company, you must take the next steps to stay safe.

Obtain cybersecurity insurance, create a strong password strategy for your users, and utilize virtual data rooms (VDR). For in-house IT departments and office managers, it’s important to upgrade your tech as well. Start with this list of five tools and services your small businesses can use to protect against cyberattacks.

Taking cybersecurity to the next level

web security and hackers

Want to dig deeper? Consider employing an ethical hacker — a cybersecurity expert who works within your company to locate weaknesses and vulnerabilities by duplicating the intent and actions of hackers.

Also talk to a company that specializes in cybersecurity protection. Many of these businesses will offer free vulnerability assessments to give you an idea of where your weaknesses may lie. They’ll also explain how they can help you manage those threats. If you don’t currently have an in-house IT team, outsourcing the work could be an efficient option.

As if all that wasn’t enough, here’s one more thing to consider. When crafting a data security policy, make sure you’re actually protecting data privacy by including the following nine elements in your policy, as detailed once again by Security Magazine. It’s crucial to consider your policy from all angles – after all, your data can make or break your business.

1 Ensure Data Security Accountability All IT staff, workforce and management must be aware of their responsibilities.
2 Create Policies that Govern Network Services How to handle remote access, IP addresses, routers and network intrusion detection.
3 Scan for Vulnerabilities Have a routine in place for checking your own networks regularly for hacking vulnerabilities.
4  Manage Patches Implement code to eliminate vulnerabilities that can help to protect against threats.
5  Create System Data Security Policies Rules around company servers, firewalls, databases and antivirus software.
6  Have a Response Plan for Incidents If a security breach occurs, have measures for handling the issue along with evaluation and reporting.
7  Educate Staff on Acceptable Use Employees should understand and sign an acceptable use policy, which includes disciplinary action.
8  Monitoring Compliance Regular audits to ensure staff and management are complying with the data security policy.
9  Account Monitoring and Control Designate someone to monitor and control users, and keep track of active and inactive user accounts.

It seems like a lot, but it can be done. More importantly, it must be done. When it comes to today’s advanced hackers, organizations must be prepared for when — not if — they will have a data breach. Taking small steps now will ensure you’re not facing bigger problems down the road.

Working desk illustration

7 proven cash flow tactics every CFO needs to know

CFO cash flow

The CCC is your “cash conversion cycle” (or simply referred to as the “cash cycle”) and it tells you how many days it takes for your company to turn your inventory purchases into cash. The shorter the CCC, the more flexible your working capital, and that is every business owner and CFO’s dream.

With a shorter CCC, you’ll be able to pay bills, make payroll, take advantage of supplier discounts, order new product or inventory, and execute on your growth strategy with much more ease.

But to shorten the cash cycle, you need to first find a way of adjusting these three key variables:

  1. DIO: Days Inventory Outstanding.
    • The average # days you turn inventory into sales.
  2. DPO: Days Payable Outstanding
    • The # of days it takes to pay your accounts payable.
  3. DSO: Days Sales Outstanding
    • The # of days it will take to collect on sales after they’ve been made.

Want more details on CCC including DIO, DPO and DSO? Read part 1 now.

To positively impact the three variables and shorten your CCC, you have multiple options:

1. Improve sales times

If your sales team can speed up the time to make deals, you’ll be shortening your DIO – the time it takes to turn your inventory into sales. Sell faster – it’s every company’s goal, but often easier said than done.

2. Enhance supplier relationships

Likewise, improving your supply chain can create efficiencies in your DIO. By developing good relationships with suppliers you can take advantage of just-in-time inventory practices, where your goods arrive only as needed. This may already be a common option for some industries, like manufacturing and perishables, but it is also becoming more popular in retail with the rise in drop shipping, where companies never handle their own inventory – instead, when your customer orders arrive you’ll purchase the inventory from a third party who ships directly to the end customer on your behalf.

3. Better credit and collection process

There’s no doubt that an effective collections department will improve your ability to collect customer invoices on time. Effective collections can help create a more stable and reliable DSO. However, this requires staff training, likely more personnel hours (translating into payroll costs) and leadership’s time to make sure this process is effectively managed.

4. Ask for extended payment terms

Extending your accounts payable will increase your DPO, and help offset the other two factors of your CCC. But this could negatively impact your relationships with suppliers if you extend too much, and breaching the terms could put you at risk of becoming the delinquent account you’re trying to avoid in your own A/R.

5. Reduce your 30/60/90 day payment terms

Fortunately, you’re in control of your accounts receivable terms and can shorten them to receive payment earlier. By reducing your terms, you lower your DSO and speed up your cash cycle.

Unfortunately, many customers request and expect longer terms. Some industries abide by certain time frames to pay, which may not match up with your cash flow needs. And other customers will be delinquent on payment no matter what terms you agree upon. You may risk losing sales to competitors offering better terms.

6. Early pay discounts

These are generally not very effective at reducing your DSO and some customers take the discount even when they pay on normal schedules. Overall, this can lead to lower revenue than expected, which doesn’t amount to a cheap option.

7. Smart & strategic financing

Being strategic with your billing and collections is one of the most accessible ways to improve your cash cycle, and you can use commercial finance solutions to dramatically shorten your DSO. In fact, instead of having a DSO of 30/60/90 or more days, you can have a DSO of one day.

Up Next: Learn how to calculate your cash cycle with this key formula.

cash cycle