Clients who are contemplating purchasing a new or existing franchise in
It should not come as a surprise to Canadian entrepreneurs that there is no one single option of solution for financing a franchise in
The main source of financing in
We firmly believe that this is the best program, bar none, for rates, terms, and loan structures in
That’s the good news, the less than good news is that in many cases you cannot totally complete your business franchise purchase with this loan financing on it own. Why is that? Simply because the program is structured and has limitations on what can be financed.
What can be financed under this program? The answer is 3 items only-
Equipment
Leaseholds
Real Estate
So if your acquisition of a new franchise involves anything other than these three items additional financing sources are needed.Those additional financing sources tend to come from your own personal resources, otherstructured term loans, and in some cases a vendor take back from either the franchisee you are buying theexisting business from,or potentially the franchisor itself . Don’t focus too much on the latter because in case you haven’t guessed by now, franchisors or master franchisors are interested in selling you a franchise so they can build another franchise unit into their network! They aren’t in the finance business per se.
The benefits of the franchise loan structure of the BIL/CSBFL program are significant. For a starter they carry only a 25% personal liability, and secondly the rates (3% over prime) (In 2010 Canadian primes continues to be very low!) are excellent. Under the spirit of the program the loan finances 90% of your eligible expenses. But don’t think that only a 10% equity or personal investment by yourself is going to get you approved. You should in general be thinking of anywhere between 25%+++ as your own personal contribution to the business.
In summary, financing a franchise in
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