Made In Canada Franchising Finance Solutions
OVERVIEW – Information on how franchisees can access franchising loans in Canada . The bank franchise loan is one method in which to complete a successful financing
Franchising loans in Canada , like most other types of business financing in the Canadian business financing marketplace are often associated with our Canadian chartered banks . So how then does the potential franchisee successfully complete a bank franchise loan , if in fact that is possible? Let's dig in.
Our banks are recognizing more and more the contribution made by the franchise industry - in fact top experts tell us that a huge portion of the Canadian economy runs through the franchise business model . So how in fact do banks participate in financing franchisees . Some of the ways will surprise most applicants.
In the case of certain large well known , let us call them ' branded ' names ( we're quire sure every franchisor feels they are a brand !) there are in fact ' programs' in place that can help the franchisor and the applicant in effect ' fast track' a successful financing. We're quick to point out that in pretty well all cases these ' programs' in no way guarantee a proper and successful financing, they simply can expedite it . The bottom line, normal bank credit criteria applies .
That bank criteria is of course known by hopefully all - positive personal credit scores, tangible net worth, homeowners - hopefully , and assets and savings outside of the balance being pledged in a franchise loan.
In many cases the bankers are aligned with lawyers and accountants who can help you finalize the entire process.
The ' ammunition' required to complete a successful bank financing if you're part of a successful franchisors program (i.e. one that is aligned with the banks ) is pretty basic - business plan, personal net worth, cash flow projections, CV . The bottom line is that an approved bank program will greatly simplify your financing journey .
As we have mentioned, only a small portion of franchisors in Canada are in fact aligned with a bank program . That leaves a lot of applicants spending a lot of time and money sourcing bank loans that ultimately aren't appropriate for the borrower. Is there ea solution to that?
We point out also that when sourcing a franchising opportunity strong consideration can be given to purchasing an existing franchise . This process eliminates a lot of the time it takes to complete a franchise loan, has an element of built in success given the franchisee's ability to investigate current profits and chance of busines growth .
When a formal bank program isn't a part of the franchise opportunity you are looking at the Canadian banks can still play a strong role . They do that through what is commonly known the ' SBL ' loan via Industry Canada . It's a government 'guaranteed' loan that over time has come to finance thousands of franchisees in Canada. We're quite sure that wasn’t the original intention, as the program was originally modeled after the U.S. counterpart - the SBA program .
The benefits of an SBL , as they relate to franchising, are sign cant . They include :
Competitive rates
No prepayment penalty
Long amortizations
Limited personal guarantees!
Canadian business owners and entrepreneurs, rightly or wrongly, gravitate to the ' bank' when it comes to financing of any type . It's important to know you a franchisee can access some form of bank financing to reach the finance challenges that the financing of any business can present .
In many cases the right financing advice will also lead you to other forms of external financing including : specialized franchise finance , equipment financing, working capital finance, and cash flow financing – All can make up a component of a total financing package.
For the right type of franchising loans in Canada 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 franchise finance 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 franchise financing expertise!
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Email = sprokop@7parkavenuefinancial.com
' Canadian Business Financing with the intelligent use of experience '
Stan Prokop
