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
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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
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