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When Giulian Larovere, owner of Core Builders in London, Ont., walks into a client's home he is assessing many things about the project. What's the scope, the time it will take to complete and, first and foremost, what is the budget?

"The budget is probably the main thing I look at, to come up with a clear estimate, and make sure the client understands the costs involved with what they want done," says Mr. Larovere.

But as a home renovation specialist, working on everything from kitchens to garages, his own budget is also on his mind. As Mr. Larovere knows, cash flow, or lack of it, is one of the main reasons that small businesses fail.

According to the Business Development Bank of Canada's cash flow guide for entrepreneurs, "Even a profitable, fast-growing company can face a serious cash flow crunch while waiting for money to come in. In fact, it's surprisingly common for profitable companies to go out of business because they ran out of cash."

One of the solutions is actually responsible debt. Debt isn't always a bad word for small business. As a strategy to maximize cash flow Mr. Larovere relies on revolving credit to get him through, in the form of a credit line or credit card.

Contractors, like many small business owners, often have to front the money for a project out of pocket before they're paid by the customer.

"When you're in need of capital, or you're taking on a new client or project, you have to get to a certain point before you can request a draw for the job," explains Mr. Larovere. "So you need a way to purchase materials and pay your workers for this period."

Adrian Lang of BMO says a business credit card, when used correctly and paid off in a timely fashion, can be an invaluable financial instrument.

Her bank has just introduced a new suite of business cards that she says provides a convenient method to finance projects or opportunities that will help grow a small business.

"Business credit cards can help with cash flow because the owner can use it through the month to free up capital for other things, says Ms. Lang, the bank's Head of Governance and Small Business Solutions, North American Retail Payments, Canadian Personal and Business Banking.

Owners need to develop a business plan that can survive the long-term and the ins and outs of cash flow says Julia Deans, CEO of Futurpreneur Canada. Her non-profit organization offers resources and mentors to help aspiring business owners plan and manage their cash flow, and avoid common pitfalls like being overly optimistic about their sales projections and underestimating expenses.

If you're caught short, "it's frightening and can really impact the business," says Mr. Larovere.

Being in the construction business, Mr. Larovere knows the importance of the right financial foundation and tools. A business credit card and revolving credit are among them, whether an entrepreneur has hit a cash crunch, needs capital to pursue a specific business opportunity or is looking to expand.

"Some business owners fail because they mistakenly think that cash flow is just about 'numbers' that their bookkeeper or accountant can take care of," says Ms. Deans, "instead of understanding those numbers and using them to make better business decisions."

To find out more about the suite of BMO's new small business credit cards, and other products and services for small business, visit

This content was produced by The Globe and Mail's Globe Content Studio, in consultation with an advertiser. The Globe's editorial department was not involved in its creation.

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