One of the common questions we’re asked by business owners and accountants on behalf of business owners is what do surplus cash. The 90-day GIC is not the best option.  

The problems with the GIC is that funds are locked-in, pays an extremely low interest and to add more insult interest is taxable.

The best option is to open a Working Capital Account (WCA).  Its what successful people like Ted Rogers, Walt Disney, J.C. Penney and Ray Kroc (McDonald’s) did!

  1. The WCA provides guaranteed liquidity which means you have access to your funds anytime need it.
  2. Lower taxed corporate deposits mean you get full maximum value from your business.
  3. Deposits are very flexible in later years which means you’re in control of your cash flow and how you deploy it, without having to wait 90 days. 
  4. Provides safe growth at returns, better than GICs, without risk of an economic tsunami, which means more abundance with peace of mind. 
  5. All growth is tax-sheltered which means no tax on growth (the government is contributing free money to you).
  6. No loss in fund growth when accessed which means you are not sacrificing any opportunities while you deploy your money on other great opportunities. A GIC does not do this.
  7. Provides instant cash without further asset commitments or guarantees meaning you’re in control, not the bank.
  8. Preferred rates of interest when borrowing mean you don’t have to complete form after form and release your financials to be qualified by the bank.
  9. Privacy of funds used which means you’re in control not the bank or the government.
  10. Interest may be tax deductible as per normal conditions.  This means  your money goes even farther!
  11. Taxable gains (if any) could be used to owner’s advantage.  This means you may be able  to offset any losses you may have elsewhere.
  12. Flexibility of repayments including totally open loan which means you’re in control, not the bank telling you what to do.
  13. No legal fees meaning no rules and red tape to drag on your returns and access.
  14. Protects your business against the loss of a key person. This means your business will have the funds to help it weather the storm to continue to serve your clients.
  15. Provides funds to repay business loans that will ensure your business has the liquidity to continue to be successful for many generations to come.
  16. Provides funds to buy out other owners when they pass unexpectedly, which means your partners spouse and their lawyer will never become  your new partners.
  17. Provides funds to create a legacy when you pass unexpectedly, which ensures you will leave a lasting legacy.

To learn more and how to start a Working Capital Account, click here to book a call. 

12 Aug 2021

Business Owners Must Plan Ahead!

“The small business person must plan ahead... Otherwise, the business will die when they do.” John Bulloch, Founder and former Chairman of the Board of Canadian Federation of Independent Business Owners…

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