In 2004 I founded 7 PARK AVENUE FINANCIAL. At that time I had spent all my working life, at that time - Over 30 years in Commercial credit and lending and Canadian business financing. I believe the commercial lending landscape has drastically changed in Canada. I believe a void exists for business owners and finance managers for companies, large and small who want service, creativity, and alternatives.
Every day we strive to consistently deliver business financing that you feel meets the needs of your business. If you believe as we do that financing solutions and alternatives exist for your firm we want to talk to you. Our purpose is simple: we want to deliver the best business finance solutions for your company.
Thursday, January 30, 2014
Financing A Franchise In Canada : Qualifications For Franchising Loan Success Explained
Do You Qualify For Franchise Financing In Canada ?
OVERVIEW – Information on financing a franchise in Canada . When it comes to finance qualifications for a franchising loan it’s important to know the criteria and what counts!
Financing a franchise in Canada comes with certain qualification criteria the franchisee must meet. What are these criteria, and what is the best way to overcome any obstacles in borrowing success for the Canadian franchisee entrepreneur? Let's dig in.
Business loans come with qualifiers, and when it comes to a franchising loan there's no difference there. Criteria for qualification and approval are made by specialty franchise lenders, banks, and commercial finance companies which often supplement and compliment a franchise finance package.
Fundamental to any financing proposal is the required reasonable personal credit history of the borrower. But how is this determined? The majority of the times it’s simply based on two fundamental factors - the personal ' net worth ' of the franchisee, and his or her credit rating at credit bureaus. (There are two main credit bureaus in Canada and your score won’t be dramatically different at one of the other). It's a numerical scoring system wherein a score of 650 is in fact the ' magic number ‘.
The net worth statement itself couldn’t be more basic - it’s a financial form that you complete that simply sows assets and liabilities - in simpler language, what you have and what you owe.
In Canada banks do a great job of advertising small business and franchise programs - the general consensus from' the street ' though is that the aggressive advertising is sometimes not reflective of the actual approval possibilities.
But when it comes to banks in Canada they don't necessarily finance franchises directly ( without a lot of personal collateral backing up the loan ) - they do however have specific programs in place with some of the larger well known franchisors that can fast track an approval . (Think hamburgers/clowns and hockey/donuts)
Where a Canadian chartered bank can do a great job for you (if you're working with the right banker) is under the auspices of INDUSTRY CANADA'S CSBF/BIL program, more commonly called the 'SBL ' loan.
Here's where any franchising loan fewer than 350k that covers assets and leaseholds (not working capital though) can be financed with solid terms - those include good interest rates, low personal guarantee, no repayment penalty, aggressive amortizations.
Other criteria for success in franchising loans include a solid business plan and cash flow projection, information on the background and expertise of the borrower, as well as effective narrative highlighting the current success of the franchisor.
If you are looking to succeed in the franchise industry in Canada financing a franchise properly is key to your success. Seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with your loan needs.
Stan Prokop - 7 Park Avenue Financial :
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 :
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