What Are Short & Long Term Financing Options For My Business

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The Best Canadian Financing Options For Your Business

Short and long term financing options are not always comparable to the U.S. borrowing options we read and hear about in the business news. That is a double-edged sword when it comes to financing your company with the right loans, debt and cash flow options that allow the business owner and financial mgr to fund the company.

At 7 Park Avenue Financial new clients tell us they feel strongly that there is a lack of proper business funding options for small and medium enterprise firms in the Canadian business landscape.

For those companies that are clearly a ' barrier to growth', let alone survival in economic turbulence! Primarily we're talking about debt financing as well as ' asset monetization' to grow cash flow and working capital without taking on debt. Solutions such as business credit lines, either via the bank or a non bank lender, are critical to operating any business.

Businesses are funded in different manners, whether they are new and ' out of the gate ', often funded by owner personal investment and the proverbial ' friends and family '. Debt financing for the SME sector in Canada has historically been difficult to achieve.

Many new businesses, franchises included, are funded by the Canadian Govt Small Business Loan progra,m which offers significant capital to new and growing businesses. A combination of generous limits, low rates, and government guarantees and low personal guarantee makes this program very appealing to thousands of businesses every year.

We spoke of the business finance options in the U.S. It is important to note that there is probably a lot wider variety of options and lenders in the United States.

EXAMPLE : Canada set up its own version of the U.S. ‘SBA ' program. In Canada we call it the ' SBL ' - It's a govt guaranteed loan with the federal govt guaranteeing 85 % of your loan to the bank. In Canada, the program only finances equipment, leaseholds and real estate. In the U.S., numerous other options are available under the same program.


A different banking and financial system create the perception that there are more banks and lenders in the U.S., offering a larger variety of funding. But Canadian businesses should realize that a combination of traditional, as well as Alternative Financing solutions, do exist for borrowing needs.

Our Canadian chartered banks are significant ' deposit takers', as a result they are understandably risk averse, leading of course to a stronger banking and financial system ( that's a good thing ), but on the other hand limited business lending options to a certain degree.

The good news is that Alternative Lenders are providing more choices every day to thousands of Canadian firms, due somewhat in part to U.S. business financing models becoming more popular in Canada. Short term working capital loans, asset based lending ( ' ABL ' ), and numerous A/R and Sales financing solutions are now readily available to the Canadian business borrower.


The traditional financiers in Canada are:


Banks

Business Oriented Credit Unions

Insurance companies

Leasing Companies

Mortgage Institutions


Traditional financiers in Canada use the same approach for almost all borrowers, which of course has a tendency to restrict financing. In Canada companies seeking SME COMMERCIAL FINANCE (small to medium sized firms) constantly are challenged to finance sales and assets. Access to business lines of credit is always a challenge; Our previously mentioned Asset based lines of credit in Canada have exploded in popularity.


WHAT FINANCING OPTIONS ARE AVAILABLE TO ENTREPRENEURS & BUSINESS OWNERS?


Offerings Business owners should consider include:


A/R Financing

Non Bank Asset Based lines of credit

Equipment financing

Sale leasebacks

Bridge Loans - asset based

Tax Credit Financing (film and SR&ED)

Franchise Loans

Govt Guaranteed Loans

Working capital term loans

Merchant advances


To borrow with a full understanding of your business finance options seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success who can assist you with loans, funding and growth finance and survival options specifically suited to your business needs.


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


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.
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 finance executive 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.

Stan Prokop

Business Acquisition Loans In Canada : Simple Rules And Financing Options

Captain’s Log : Existing Business Acquisitions

OVERVIEW – Business acquisition loans in Canada . Information on financing options for purchasing an existing business

Business acquisition loans in Canada require some key considerations for those contemplating acquiring or merging with another company, not the least of which are purchase price amount. In the SME (small to medium enterprise) sector various financing options exist to consummate your transaction. Let's dig in.

Experts agree that a poorly executed purchase of a company often has the buyer too focused on price without planning around terms associated with the financing, as well as a poor focus on future sales growth.

While it's no ' cake walk'

around your finance options there does exist several key alternatives around successful finance execution of your purchase. Safe to say the global 2008-2009 financial crisis didn't help, with lenders such as banks changing borrowing rules on almost every aspect of their business, including mergers and acquisitions.







Your equity (aka ' down payment ‘) on the transaction will typically be in a large range of 10-50%. Ultimately the purchase price will depend on some combination of down payment / seller financing/bank financing/third party commercial financing company. It's safe to say that down payment/equity needs have risen over the last few years.


Anytime the seller chooses to participate more in your transaction (known as the ' vendor take back) your chances of total finance success increases. Note though that some banks and finance firms will also possibly view the seller take back as potential debt - it varies among lenders. Sellers tend to secure their ' VTB' typically with a promissory note of some type. A typical rate range is in the 5-10% area.

When it comes to interest rates and financing costs associated with business acquisition loans those will vary depending on what source of capital you choose - traditional or a commercial alternative lender.

If there was a ' perfect world ' ( apparently it isn't )

scenario around the target company that firm would have minimal or no debt , a solid asset base, and demonstrable past , present and future cash flows. Those are key areas that will drive your financing cost... and success. When those criteria are proven your transaction is an excellent candidate for Canadian chartered bank financing - if they are missing other sources of finance will often have to be considered.

A good way to look at your financing challenge around purchasing a business is to think of it in ' layers'. More often than not it might include several of those layers of capital. Here it's important to have a strong sense of value of the assets and how cash flow will be generated for debt repayment and growth of the business.

Firms with little or no assets can still be financed if they have receivables, cash flows, or both. More often than not these are ' service based' firms. One can assume that unsecured cash flow loans are more challenging to acquire!

Many purchasers often forget the Government Small Business Loan as a source of finance. The one limitation is the maximum loan amt., which is 350k, clearly defining the size of the transaction that it can successfully complete. Nevertheless it’s a solid alternative.

What then are the key sources for financing options for your acquisition? A summary is:

Canadian chartered banks
Government Crown Corporation Bank
Govt Small Business Loan
Asset based lenders
Specialty Lenders - receivables /inventory/ asset bridge loan solutions
Cash Flow / Mezzanine finance solution

At the end of the day a well thought out financing strategy will help your chances of success in getting a solid deal structure in place. Seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you in identifying financing options for a merger or acquisition strategy.


7 Park Avenue Financial :
http://www.7parkavenuefinancial.com

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 . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS ACQUISITION FINANCING EXPERTISE


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

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' 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.
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 finance executive 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 start ups 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.




Stan Prokop

Business Finance Sources : We’re Name Dropping On Financing Options

Getting It Wrong In Business Finance Is Not An Option

OVERVIEW – Information on business finance sources in Canada . Avoid these financing options pitfalls with careful planning and expert assistance





Business finance sources in Canada can, unfortunately come with pitfalls if not planned picked or executed carefully. Let's take a look at those financing options while demonstrating that getting it wrong is a costly option. Let's dig in.

Whether a firm's business is in a great economic recovery or even when times are tough any type of business financing is a challenge. Growth? Access to Capital? Cost of Financing? All of those play into the business owner/ financial manager challenge.

While ' low cost' financing seems logical to every applicant the reality is that low rate financing is typically only available from our Canadian chartered banks. If your business can't meet the hurdles imposed by banks (the holy grail of profits, clean balance sheets, strong cash flows)

then it becomes a question of will your business make it with alternative finance solutions.











We promised to ' name drop ' on some of those traditional and also alternate sources of capital. They include, but are not limited to:

A/R Financing

Inventory Finance

Purchase Order/ Contract financing

ABL’S (asset based non bank credit lines)

Equipment Financing

Working Capital term loans

Sale leasebacks

Bridge Loans

Tax Credit Monetization

Business owners with needs in SME Commercial Finance also have the challenge of separating their personal and business assets in the area of personal guarantees that are required by many lenders, including the banks by the way.

Many capital needs for your business, whether operating, or term in nature are actually rooted in the need for, or lack of planning. We couldn’t count the amount of clients we meet that often have no knowledge of, let alone actual cash flow budgets.

When you don't know how you'll make loan payments, or take on new or larger orders a downward spiral often starts.


Don't forget also that its not just about accessing new cash, it's also about managing what you've got. Adopting strong metrics in collections, inventory turns, and utilizing equipment financing proactively to acquire new assets (it conserves cash flow) should by your new normal.

Looking for professional help? That might come from your lawyer, accountant, or by seeking a trusted, credible and experienced Canadian business financing advisor who will help ensure that ' getting it right ' is your new strategy for Canadian business financing success.




Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

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 90 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN EXPERTISE IN BUSINESS FINANCING OPTIONS





Have A Question /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

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop

Financing Options : How To Survive and Thrive With These Cash Flow Finance Solutions

At the end of the road in Business Loan Solutions ? Avoid Doomsday with these solid choices

OVERVIEW – Information on financing options for medium and small sized businesses in Canada. Which of these cash flow finance solutions works for you











Financing options in Canada - they are all about the ability of your business to thrive, and yes survive.

So whether its cash flow finance solutions or taking on the right amount of needed debt, we're examining the ability of your company to achieve business loan solutions and avoid the ' doomsday' that unfortunately comes with being unable to finance the company. So let's dig in.

The right amount and type of financing is often a solid indicator of general business health. Depending on which ' top expert' you're listening to these days you won’t find any naysayers when it comes to acknowledging the importance of day to day cash flow.

We're quite sure that a good amount of business owners in the SME Commercial sector don't really how much time large corporations, equity investors, and even VC's place on analyzing cash flow in businesses they are looking at.

The ability of your company to access financing options involves how you manage the ins and out's of cash. When it comes to financing things definitely don't happen automatically in business.

Several things need to happen:

Your business has to be able to track financial performance - if you can't show you have a handle on collections, granting credit, identifying cash flow gaps, etc you are in fact on the road to doomsday.

Managing asset turnover and growth is key

The business owner/ financial manager must be able to distinguish between short term needs and long term needs

What are key short term and long term basic financing options - they include, but are not limited to:

SHORT TERM -



Bank lines of business credit
A/R Finance/Confidential Receivable Financing
Inventory finance
SR&ED claim financing (if applicable)
Asset based ABL lines of credit
Royalty financing
P O / Contract financing



LONG TERM



Working capital term loans
Equipment leasing
Cash flow loans

Depending on how well you manage your business your firm will qualify for either traditional bank financing or the alternative, which is in fact ' alternative finance"!

When you approach the accessing of finance key questions the owner/manager needs to address are:

Overall business credit quality - as demonstrated by historical, present, and future cash flow

The amount and type of financing you need (While much business can in act access some form of bank financing we often meet with clients that just can’t get enough!

How does your profit and sales growth enable you to expand business opportunities?


Although traditional financing options are the most flexible and inexpensive, alternative solutions can often provide (at higher cost) all the financing you need to grow. Alternative lenders love assets and high growth!

Avoid that doomsday feeling. Consider seeking out a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you in your cash flow financing solutions. There are, (almost always) financing options for every business and every industry.




Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

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 90 Million $ of financing for Canadian corporations . Info /Contact :

http://www.7parkavenuefinancial.com/financing-options-cash-flow-finance-solutions.html





Have A Question / 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

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com

' Canadian Business Financing with the intelligent use of experience '





























Stan Prokop

Business Credit Line Financing Options : How To Get Good At Bank And ABL Option Choices

Business Credit Lines – Which One Of These Is Right For Your Company

OVERVIEW – Information on business credit line facilities in Canada. Which Financing options make sense for the Canadian business owner . Two key choices are bank vs. ABL solutions



Business credit line choices in Canada generally come under two categories. Which of these cash flow / working capital options is right for your firm? Does the ' relatively ' newer ' ABL' option make sense to investigate? It just might, so let's dig in.

While a corporate credit line is pretty well a must for any growing business (we’ll talk about why later) Canadian business owners feel somewhat stifled when it comes to the creativity and innovation that comes with a flexible business credit facility.

While these types of facilities allow you to operate on a daily basis they can also be used to finance the growth the entrepreneur envisions, including by the way, having the ability to acquire another business.

Management can even use this type of financing to acquire the company they are working for. However this typically necessitates additional financing required to round out the transaction.

As we have noted, two distinct choices are available for revolving credit facilities. It's essentially a simply choice:

1. Traditional Canadian chartered bank commercial credit lines (Both secured and unsecured)

2. ABL (asset based lending) facilities that focus on the pool of assets you have in the ' CURRENT ASSET ' part of your balance sheet - namely receivables and inventories. By the way things get really creative when the ABL facility is sometimes structured to allow you to borrow against fixed assets and purchase orders/contracts)

A/R and inventory are any firms ' self liquidating ' assets. In the course of your business operating cycle they liquidate themselves on an ongoing basis... everyday. The key issue is simply the TIMING around that liquidation, which necessitate the financing options we're talking about.

We've focused on differentiating the traditional bank line of credit from the Asset Based Lender offering. But it's important to note that some subsets of ABL can provide many firms with the capital they need. Separately they include:


A/R Financing
Inventory financing
PO / Contract financing
Tax Credit Monetization (‘SR&ED"

The above 4 subsets of ABL are often used by start up and high growth firms who cannot meet the stringent criteria of our banks in Canada.

The real purpose of any credit line is to fund the time between production and collection from your clients ABL lending has a higher cost typically, but if your business can turn its assets, and grow revenues its a very realistic and accessible option .

If you're looking for a business credit line that meets your needs consider discussing ABL or bank financing options with a trusted, credible and experienced Canadian business financing advisor . You’re in a position to get good at choosing finance solutions that meet your requirements.


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/business-credit-line-financing-options-abl.html






Have A Question /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



Email = sprokop@7parkavenuefinancial.com

Stan Prokop

Canadian Business Loans : On Your To Do List For Accessing Financing Options?

Feeling Lost Out On Loan And Finance Options In Canada?


OVERVIEW – Information on access to Canadian business loans in Canada. Commercial financing options are not just available from our banks



Canadian business loans and financing options are often very near the top of the business owner/financial manager’s TO DO list when it comes to running and growing the business. It can be also said that it’s often common for the owner/manager in the SME sector to feel ' lost ' when it comes to achieving those finance goals. Has to be the case? Not really... let's dig in.

By now pretty well everyone seems to recognize that the SME (small to medium enterprise) sector in Canada is one of the constant powerhouses of the economy. Everyone seems to have a different definition of what this sector is; some maintain its, for example, companies with under several hundred employees and sales of 20 Million as an example. That's not that SME to us! , but less focus on the solutions available to finance those firms.

The one thing everyone does seem to agree on though is that ' size counts ' in business financing and the small to medium guy has a lot more of a challenge in accessing. More often than not it feels like an obstacle course, as the owner /manager finds it very difficult to obtain long term financing options that will help secure business growth.

On occasion it might help to put yourself in the shoes of the bank or the many commercial lenders that offer financing solutions to Canadian business. Lenders focus on key items such as tangible equity, assets, and in many instances outside collateral.

Canadian chartered banks in Canada are often the ' point person' when business financing discussions come up. While often criticized for providing the financing business needs they do participate positively in a number of ways.

Banks typically provide:

Govt Guaranteed Business Loans
Very Small Loans
Small overdrafts
Mortgages

They are successful because they are on every corner, have very clear rules and borrowing applications, and can be a source of constant contact with the owner/manager.

While bank solutions are low cost and accessible its in fact commercial finance firms that provide a lot of the other financing options that will get your company to the goal line. Commercial finance firms generally aren't regulated, take more risk, and are profit motivated. Additionally they provide options simply not available from the banks.

Those options:

Receivable Finance
Inventory Financing
Non bank business credit lines
Asset Leasing/ sale leasebacks
Purchase Order Financing
SR&ED Tax Credit Cash Flow Loans
Unsecured Cash Flow Loans
Franchise Financing

Whether its bank financing or non bank commercial finance options the SME borrower doesn't have to feel lost

when it comes to financing options that suit their needs. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your operational and growth goals.











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/canadian-business-loans-financing-options.html




Have A Question /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



Email = sprokop@7parkavenuefinancial.com

Stan Prokop

Why Exactly Is Cash Flow King? Avoid Business Rehab With Business Finance Financing Options

Getting Financially Intelligent About Business Cash Flow


Information on cash flow financing options for Canadian business. Business Finance options almost always come back this key concept .



We're not 100% sure where the ' cash flow is king ' saying came from, but we sure hear it a lot. It always comes down to financing options for your company as it becomes very clearly , certainly to newer business owners and financial managers that running out of cash becomes .. a killer.

When we talk to clients we're always amazed that their focus tends to be the income statement. Truth be told they are not even calling it the income statement, their names for it tends to be ' sales '!

America's greatest business investor, arguably Warren Buffett seems to have a home town saying for everything, and he says ‘cash is hard to fudge ' ..! That cash flow, or lack of it, is exactly why you are experiencing challenges with suppliers and term lenders.

Another key point is that when you are addressing financing options for your company it's important to focus on a longer term solution in your business finance needs... or at a minimum an intermediate solution. Juggling a cash flow crisis on a daily basis is clearly... not optimal.

What are some of the cash flow financing options available to Canadian business? Here we are talking mostly about monetizing assets, i.e. ' cash flowing' your business. Those solutions include:

Asset based lines of credit

Chartered bank lines of credit

Receivable financing facilities

Supply Chain Financing

Monetization of Tax Credits

Inventory financing

Unsecured cash flow loans

We've always felt that it enhances the reputation of the business owner when it comes to their ability to talk cash flow with any prospective lender in the above noted financing solutions.

Simply said, if you are equating profit with cash flow when you're talking to one of your lenders you clearly will be deemed ' out of your league ', and we won't even comment on whether your financing will be approved. So remember that a lot of the actions that you take in your business relative to recognizing sales revenue, giving terms, spending on assets , always come back to that ' cash flow ' guy!

Remember also that when you become a bit better at understanding why cash flow is king you quickly will become a 'problem spotter'... Keep thinking about our main mantra for today - ' Turn those profits into Cash '.

Speak to a trusted, credible and experienced Canadian business financing advisor who can get you out of business financing rehab and into the cash flow pleasure zone - business success.

7 PARK AVENUE FINANCIAL
CANADIAN BUSINESS FINANCE SOLUTIONS

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 7 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/business_finance_financing_options_cash_flow.html

Ten Things Mom Didn’t Tell You About Financing Options For A Canadian Franchise Business Loan

Demystifying Franchise Finance in Canada


Information on financing options for a Canadian franchise business loan . Debunking popular myths in franchise finance and focusing on how to successfully complete your acquisition of a new or existing franchise opportunity .


If there is one business segment that is not ‘out of favor ' these days its the franchise industry ... not the least of which reason is that a huge per centage of the Canadian economy depends on sales from this entire industry .

Clients have very similar questions when it comes to a franchise business loan, revolving around their need to realize the entrepreneurial dream with financing options that make sense for their particular situation.

We thought we would cover off ten of the most popular questions/issues around franchise business loan financing options, many of which stem from mis - information they have received or simply their desire to get some solid answers to fundamental questions.

So here we go! How long does the financing process take? Typically we advise clients that they should be assessing their financial options in tandem with their progress on selecting and formulating their final decision around which franchise to purchase. We see many instances where a client has lost a lease or location because they were not able to commit to financing approval. In many franchise segments the proverbial three things reign supreme - location, location, and... you guessed it... location!

Is there a lot of ' red tape' when it comes to exploring financing options for franchising? Our answer to that simply is that a franchise is a business and you should understand that the key issues revolving around the purchase of any business - i.e. due diligence, a business plan, a financial plan, miscellaneous costs, etc are all in place in franchising.

If we are turned down elsewhere can financing approval be still obtained. Absolutely... positively, it’s a case of seeking the best alternative that fits your total purchase price and owner investment into the business... ie your equity contribution.

Can both small and large franchises be financed? One or two specialized commercial finance firms dominate the major franchise market when it comes to large cap franchise investments. These transactions can be in the millions, and often involve real estate. However thousands of franchises are financed everyday in the 50-500k range.

What are franchise loan funds used for? In the mainstream of financing for franchises the finance covers equipment assets, leasehold improvements, and in some cases working capital. Many soft costs, such as your franchise fee typically can’t be financed.

How much can we borrow? Boy do we get that one a lot. The BIL program which covers a majority of franchise financing options does max out at 350k... other complimentary financing such as working capital term loans, merchant financing, and equipment leasing can provide top up financing.

What are my requirements to get approved for a franchise loan? Two key requirements are a reasonable personal equity investment into your new business, as well as a reasonable credit history and business track record in your new or related industry.

Can franchise financing be arranged on an existing franchise? Absolutely, positively... that’s a yes! A different strategy is involved, as we are now looking at an existing business with financials, assets, cash flow record, etc. But re -sales can be financed!

Can real estate be financed with a franchise acquisition? Our answer to this one is simply that normal real estate financing guidelines apply, so whether you are purchasing a mfg. company of a restaurant franchise the real estate component would typically be financed separately through a holding company you might set up.

Does franchise financing cover the construction costs of my new business? Yes, that is exactly what many programs are used for.

That covers a lot of the basics. Carefully planning via a business plan and financial projections are key. In any business expert advice gets you to the goal line faster. Seek and speak to a trusted, credible and experienced Canadian business financing advisor who can help you get to ' the dotted line!’



Stan Prokop is founder 7 Park Avenue Financial ;


see http://www.7parkavenuefinancial.com

Originating financing for Canadian companies,specializing: working capital, cash flow, and asset based financing , the 7 year old firm has completed in excess of 80 Million $ of financing for companies . For info / free consultation on Canadian business financing / contact details see:


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