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Managing cash flow in a crisis

As the economy emerges from the shadow of the pandemic, many businesses are looking to pivot, expand and capitalize on new opportunities. But that typically requires growth capital – a potentially daunting hurdle at a time when cash flow is top of mind for many business owners.

To help businesses better understand their cash flow and increase their resiliency during economic down times, American Express and local startup CanadaWheels joined OBJ for an interactive discussion about managing working capital in a crisis.

This is an edited transcript of a discussion between Vincent Hubert, Saleh Taebi and OBJ publisher Michael Curran. To hear the full interview, please watch the video above. Prefer an audio version of this podcast? Listen to it on SoundCloud or Spotify.

CURRAN: Saleh, give us a sense of how CanadaWheels coped during the pandemic.

TAEBI: We were well-positioned when the pandemic started because we were already an online retailer. However, growing the company during the pandemic was really difficult because everyone was working from home. We also had to adapt how customers were paying for our products because some were having trouble making large lump-sum payments at one time, so we implemented a smaller payment system to help make it easier for clients to purchase rims and auto parts. 

CURRAN: We often think of AMEX as a blue credit card. Bring us up to speed on the modern AMEX?

HUBERT: AMEX is a second-tier bank in Canada offering unsecured credit. We are off balance sheet, meaning we do not show up on financial statements as a line of credit rather as a supplier which has a positive impact on a company’s liquidity ratio. Typically we are a closed loop, so we have an impact on both the receivables and the payables, which makes AMEX complementary to traditional banks for a lot of businesses. 

CURRAN: Vincent, cash flow is something that needs constant attention. Why is it so important? 

HUBERT: Whether you’re a startup business or in a growth stage, a cash-flow analysis can tell you a lot about your company’s financial health. It’s also important to understand that cash flow and profitability are not the same thing. You can be a very profitable company in the long run, but have negative cash flow at a very specific period of time. Doing an analysis of money coming in and going out of your company can help you figure out if you need to get more access to liquid investments or decrease your spending. 

Looking for financial advice?  

Contact American Express:

Vincent Hubert, American Express