How To Buy A Franchise : Franchising Financing Companies

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The Other Half Of The Battle – Financing Your Franchise

How To buy a franchise. We guess that's challenge # 1.  And # 2?  It's of course franchise financing companies and solutions that will allow you to realize on the franchisee dream in Canada. That's our job we guess. Let's dig in.

 

PROPER  FRANCHISING FINANCE SOLUTIONS HELP THE ENTREPRENEUR BE SUCCESSFUL

 

It goes without saying (but we will anyway) that the goal of every new entrepreneur in the franchise industry is to be successful. Putting a proper financing package together with solutions that match your needs, budget and cash flow is what that's all about.

 

FINANCING TO PURCHASE THE BUSINESS - AND FINANCING TO RUN THE BUSINESS

It's really a combination of financing you need to purchase and acquire the franchise and then funds required to run it. Although most franchises are run on a cash flow positive basis - ie cash sales, etc there still is a working component to your transaction. No matter how carefully you've prepared your budget and cash flows Murphy's Law always seems to kick in on occasion.

 

FRANCHISE LOANS ARE A COMBINATION OF YOUR EQUITY DOWN PAYMENT AND DEBT

 

In Canada the financing that you secure comes from yourself, that’s the equity component, and one or a combination of debt scenarios - your loan/loans. Financing from debt and equity typically covers franchise fees, equipment, leasehold improvements, and potentially a working capital component. Spending some careful time on the breakdown of those components will save you a lot of grief in the long run. Oh, and by the way your banker or commercial lender needs to see those also! Personal finances are also important, and you should be able to demonstrate a good credit score and reasonable net worth as well as business experience.

 

SBL LOANS TO THE RESCUE - THE CANADA SMALL BUSINESS FINANCING PROGRAM TO THE RESCUE

The goal of every business borrower in Canada is to minimize risk - to that extent you should try and avoid securing personal assets at all cost. One way to do buy a new franchise  is via an ' SBL '.

 

An ‘SBL’..? It's the trade name for the Government of Canada Small Business Loan, and hundreds, if not thousands (we’re not really on a first name basis with the govt) of franchisees utilize this program. It was certainly NOT created to specifically address the needs of franchisees in Canada, but boy has it turned out that way.

 

So why an SBL franchise loan? Some pretty basic reasons really - low competitive rates, limited personal guarantees, no personal collateral, and flexibility as to repayment without penalty etc. That's a powerful combo of benefits in case you haven’t figured it out already.

 

Franchisees can of course pay cash for their business purchase, and even contribute their own capital to financing the operations and growth of the franchise. However, we've always guided our clients not to collapse RRSP's, take out collateral

Home mortgages, borrow from friends and family. While those solutions work they quite frankly mix up your personal and business finances in an unhealthy way.

 

If you aren’t securing a Govt small business loan for your franchising you need the assistance of a specialized franchise finance firm. Alternatively, other Canadian lenders can assist you with solutions based on equipment finance scenarios that can help franchise owners.

 

A good credit score is required for all franchise loans, and it should be noted that typically the franchise fee itself is not financeable. The interest rate on a franchise business loan is very competitive and the government-guaranteed loan program has numerous other benefits that add the flexibility of the program. If the franchisors franchise agreement allows existing franchises can be purchased and financed.

 

One suggestion? Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your goal to buy a franchise and the solutions available to complete a successful acquisition of a new or existing business in Canada's fastest-growing business segment. A business plan is strongly recommended, if not required for any type of business financing and at 7 Park Avenue Financial we prepare business plans that meet and exceed the requirements of government loan programs and Canadian banks.

 

7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com

Click Here For 7 PARK AVENUE FINANCIAL website !



7 Park Avenue Financial provides value-added financing consultation for small and medium-sized businesses in the areas of cash flow, working capital, and debt financing.



Business financing for Canadian firms, specializing in working capital, cash flow, asset based financing, Equipment Leasing, franchise finance and Cdn. Tax Credit Finance. Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations.

' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR

Stan has had a successful career with some of the world’s largest and most successful corporations. He is an experienced

business financing consultant

.

Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.


Stan has over 40 years of business and financing experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in-depth, hands-on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.


Click here for the business finance track record of 7 Park Avenue Financial



Stan Prokop
7 Park Avenue Financial/Copyright/2020

Looking To Buy A Franchise ? Affordable Financing For Franchisees Is Available In Canada .. If ..

Everything You Wanted ( And Needed ) To Know About Buying and Financing A Franchise In Canada


OVERVIEW – Information on financing franchisees in Canada. Entreprenuers should know these facts when they wish to buy a franchise









Looking to buy a franchise in Canada? And by the way, that might be an existing franchise already owned and in business (so why is he or she selling by the way?), or a new turnkey operation.

When it comes to financing franchisees in Canada what in fact does the entrepreneur need to know. In some cases that information is interesting, in some cases key, and in some cases critical. And oh yes, affordable franchise loans are in fact available. Let's dig in.

At the core of arranging your franchise loan is the concept of matching the right type of financing based on the requirements of your business. That might be a term loan, overdraft facility, equipment and leasehold financing, etc. In most cases it will be a combination of some of all.

The amount of ' down payment ‘, aka what the banks and your franchisor call ' equity ' is also critical to both your financing package as well as being tied to your overall success. In reality many of the misc start up costs associated with a franchise financing are in fact covered by the borrower - that might typically include the actual franchisee fee itself, design fees, incorporation costs etc.

In hindsight when we look back at the franchisees we ourselves have helped an interested enigma emerges - some have borrowed too much and are laden with debt, some didn’t borrow enough and issues such as slow sales and constant working capital needs in many cases lead to franchise failure .

How then does the entrepreneur know how much financing is needed, where it should come from, and where he or she will get it?! Part of the answer to that question lies in the business plan. A properly crafted business plan and financial projection will always identify cash flow timing, working capital needs, and estimated term debt related to asset acquisition/replenishment.

Naturally any good franchisor will share their financial experience with their franchisees in order to maintain the overall success of the chain.

Franchise lending in Canada, as we have noted, is in fact ' affordable '. It comes also, by the way, from a variety of sources. While hundreds of franchises every year are financed by the Govt Small Business Loan (perfectly suited to franchise acquisition), many others are financed by specialized franchise finance firms complimented also by independent lease finance and commercial finance firms.

For business owners (‘the franchisee’) with good personal credit history financing is abundant because lenders in Canada have recognized the vibrancy of the industry and its role in Canadian business and economics.

If you're looking for affordable franchise loans that are properly structured to meet your long term goals of entrepreneurial success seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a track record of success in financing franchisees in Canada.


Stan Prokop - founder of 7 Park Avenue Financial


http://www.7parkavenuefinancial.com


Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :


7 Park Avenue Financial = Canadian Franchise Financing Expertise





Have A Question Or Comment On Our Blog Or Canadian Business Financing Alternatives ?



CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653

Email = sprokop@7parkavenuefinancial.com



















Stan Prokop

Buy A Franchise. Next Step? Franchising Financing Companies And Solutions !

The Other Half Of The Battle – Financing Your Franchise




OVERVIEW – Information on financial info needed when you buy a franchise in Canada . What franchise financing companies and solutions can help



Buy A Franchise . We guess that's challenge # 1. And # 2? It's of course franchise financing companies and solutions that will allow you to realize on the franchisee dream in Canada. That's our job we guess. Let's dig in.

It goes without saying (but we will anyway) that the goal of every new entrepreneur in the franchise industry is to be successful. Putting a proper financing package together with solutions that match your needs, budget and cash flow is what that's all about.

It's really a combination of financing you need to purchase and acquire the franchise and then funds required to run it. Although most franchises are run on a cash flow positive basis - ie cash sales, etc there still is a working component to your transaction. No matter how carefully you've prepared your budget and cash flows Murphy's Law always seems to kick in on occasion.

In Canada the financing that you secure comes from yourself, that’s the equity component, and one or a combination of debt scenarios - your loan / loans. Financing from debt and equity typically covers franchise fees, equipment, leasehold improvements, and potentially a working capital component. Spending some carefull time on the breakdown of those components will save you a lot of grief in the long run. Oh and by the way your banker or commercial lender needs to see those also!

The goal of every business borrower in Canada is to minimize risk - to that extent you should try and avoid securing personal assets at all cost. One way to do that is via an ' SBL '?

An ‘SBL’..? It's the trade name for the Government of Canada Small Business Loan, and hundreds, if not thousands (we’re not really on a first name basis with the govt) of franchisees utilize this program. It was certainly NOT created to specifically address the needs of franchisees in Canada, but boy has it turned out that way.

So why an SBL franchise loan? Some pretty basic reasons really - low competitive rates, limited personal guarantees, no personal collateral, and flexibility as to repayment without penalty etc. That's a powerful combo of benefits in case you haven’t figured it out already.

Franchisees can of course pay cash for their business purchase, and even contribute their own capital to financing the operations and growth of the franchise. However, we've always guided our clients not to collapse RRSP's, take out collateral
Home mortgages, borrow from friends and family. While those solutions work they quite frankly mix up your personal and business finances in an unhealthy way

If you aren’t securing a Govt small business loan for your franchising you need the assistance of a specialized franchise finance firm. Alternatively other Canadian lenders can assist you with solutions based around equipment finance scenarios.

One suggestion? Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your goal to buy a franchise and the solutions available to complete a successful acquisition of a new or existing business in Canada's fastest growing business segment.


7 PARK AVENUE FINANCIAL - CANADIAN FRANCHISE FINANCE EXPERTISE





Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/buy-a-franchise-franchising-finance-companies.html



7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653
Email = sprokop@7parkavenuefinancial.com




Stan Prokop

Don’t Make Mistakes When Searching For Franchise Finance Lenders When You Buy A Franchise In Canada

Business folks often refer to the term ' key to success ‘as part of their business plans. Certainly the key to success when you buy a franchise is to finance it on time, and properly; we tell clients you don’t get a lot of chances to make mistakes when you are working with franchise finance lenders!

The concept of financing your franchise is a broad one... it might be one single loan or a couple different finance strategies to get you to the goal line, which is of course acquirng and owning your own business under a franchise umbrella... in effect the Canadian dream .

Try and try again generally doesn’t work in franchise finance - you more or less, in our opinion, get one chance to do it right . That therefore involves getting all your ' ducks' lined up properly and working with an experienced Canadian business financing franchise advisor, or if you prefer, yourself and the lender directly.

As we said, making mistakes in business finance is not where you want to be - so plan, do it right, and do it once. Let's examine some of those underpinning you need to be successful and avoid those errors.

In general some of those cornerstones are decent personal credit history (more about that in a minute - as we can hear our clients already " what's decent?!), a down payment that makes sense. and a financial plan that demonstrates your ambition to be successful .

This latter point is usually covered off in a business plan. We can’t ever imagine buying a business without a plan, and humbly submit that if you don’t have a plan you are primed to fail - and that’s not a good thing when you have your own funds at stake.

Can you buy a franchise in Canada, and finance it without a good personal credit history. We tell clients the sad truth is that it is difficult, if not impossible, to do that successfully. That’s because franchise finance lenders view your business as both a start up and a small business, and they relate those two terms directly to how you manage your own personal finances as the owner. To put is very simply, the lender is saying ' if this man or woman isn’t paying Visa then why should I think they are going to pay us....’ In Canada the credit bureau system is based on a score to 800 and you need a certain specific number to qualify for franchise financing. Speak to a trusted, credible and experienced business financing advisor as to how you can manage and work through that process.

You probably have spent a large part of your life dreaming about crafting a great business plan, opening balance sheets, 3 years of projected cash flows... loan amortizations, etc. Uh... we're beign a bit sarcastic of course!! But the reality is you need a solid business plan to demonstrate how you will be successful. It’s a great document for benchmarking down the road even how you are doing against your plan.

In Canada the majority of franchises are financed and subsidized so to speak by a special federal program called the BIL program. Don’t make a mistake in not understanding what the qualifications are, and work with an expert if you don’t feel you are comfortable in navigating the finance maze.

So, is financing the key to Success when you buy a franchise in Canada. We'll let you be the judge... but if you are on the side of our opinions plan, and work with an expert , do it right, and avoid mistakes that will jeopardize closing the transaction .

--

Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 6 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/franchise_finance_lenders_buy_a_franchise.html

How to Protect your franchise investment with smart financing options when you buy a franchise

It was, or will be an easy simple decision right? We're talking about the minor issue of your decision to purchase a franchise.

We're just kidding of course, because we know the franchise investment you make when you buy a franchise is one of the larger decisions you'll make in your life. And we clearly recognize the franchise cost of that investment is never a small one. So we are thinking you want to do it right?!

You can protect your franchise purchase by financing it properly. You want to be in a position to satisfy yourself, and your lender that you have the right amount of debt (I.E. loans, etc) and equity into your transaction.

It seems that it’s always about the money, and that was probably one of the concerns you had when you made the decision to purchase a business via the franchise industry. You recognized it was a potentially great way to build wealth and equity, but wondered where start up capital would come from.

The reality is that start up capital for your franchise investment comes from two sources, yourself, and one or two other lenders who specialize in franchise financing. Actually a large majority of franchises in Canada are financed under a government program that is technically called the BIL/CSBF program. Bar none it is the best financing deal in Canada for any new business, and franchisees have flocked to it for years. More about that program and how you can achieve success via it later...

We can’t over emphasize that one of the key factors for franchise approval, under our above noted program, and others is simply that you require a decent personal credit history. Without getting to technical we can simply say that means that you have historically paid your bills, not been bankrupt, and aren't over borrowing in your personal life. Enough said about that. When we meet with clients looking for franchise financing this is one of the first areas that we (delicately!) explore.

But clients want to know why this is such a key factor, and its simply because the reality is that a franchise is , no matter how you look at it, a small business start up, and lenders look at how you run your personal life as a mirror as to how you will run your business .

Planning - that’s the keys secret in financing a franchise investment you are going to make and ensuring the franchise cost of that decision is properly financed. You do this in a variety of ways, one of which is documenting your purchase and plans via a properly prepared business plan. This document should highlight yourself, your business experience, and show the financial fundamentals of your business, i.e. Cash flow, ability to repay your loans, what the opening balance sheet will look like, etc.

We clearly realize that not all our clients have the financials skills, background and ability to prepare such a document, let alone present it. That’s why it’s a good reason to consult a Canadian business financing advisor or expert who is credible, experienced and trustworthy and an expert in franchise finance in Canada.

We also remind you that step one when you buy a franchise is financing it - step 2 is making sure that you have a plan around how you will grow your business while having enough working capital to run it.

In Canada franchise cost is financed via the Government BIL program we noted - The borrowing limit is 350k, and we have found that this financing can be supplemented with equipment and lease financing for certain assets of the business . Those two strategies, coupled with your own investment of funds will get you to the goal line.

Speak to that ' in the know' advisor we talked about and you should not have any worries in your ability to finance and buy a franchise.

--

Stan Prokop - founder of 7 Park Avenue Financial - http://www.7parkavenuefinancial.com
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 6 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/buy_a_franchise_cost_franchise_investment.html