WELCOME !

Thanks for dropping in for some hopefully great business info and on occasion some hopefully not too sarcastic comments on the state of Business Financing in Canada and what we are doing about it !

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.



Showing posts with label financing franchises. Show all posts
Showing posts with label financing franchises. Show all posts

Friday, January 5, 2018

How to Achieve Franchise Financing Success in Canada









BREAKING NEWS - Franchising is Hot !



Information on franchise financing in Canada. The ability to access and place proper business finance in place is key to franchisee success in Canada's hottest industry segment



Franchise financing is an integral part of the Canadian entrepreneur’s challenge of obtaining and building a success Canadian franchise. As most Canadian business owners quickly discover, franchisors do not provide direct or indirect financing in the Canadian marketplace. This leaves the business owner essentially on his or her own to generate the capital they need from chartered banks, finance firms, and other institutions.

It goes without saying that the budding entrepreneur needs to first make a significant investment in general franchise knowledge – i.e. the pros and cons, as well as of course focusing on financing the franchise.

Franchises in Canada are product and service related. When you purchase the franchise you should have strong level of confidence that the concept is proven and successful, as you will be trying to replicate that success based on the products, services and brand awareness of the franchisor.

Franchisees are encouraged to do a proper level of due diligence based on that availability of information with respect to the business success of the franchisor. If you are considered a franchise that is owned and run by a large well know public company – think McDonalds! You of course have the ability to carefully review the financial statements and management commentary that is available to anyone by virtue of the companies listing on the public stock exchanges.

The good news about franchise financing and the risk that the business entrepreneur takes is that there is a significant amount of disclosure required by law to you as a franchisee. In Canada, as well as the United States you should have the ability to get a copy of the franchisors financial statements. If you don’t feel qualified to read and interpret a financial statement you should use the services of a trusted franchise financing advisor, or even your accountant or lawyer would be good choices.

Many franchisors in Canada will of course gladly give your franchisee references, and you should clearly talk to other franchisees about financial performance with respect to what you hope to achieve based on your personal investment and borrowed funds . When we say ‘ financial performance ‘ we of course mean general business basics such as sales, profits, working capital challenges , leverage ( how much debt do you need to take on ), etc .

In financing a franchise you clearly want to understand how much debt you are going to take on – this is also directly commensurate with what you need to put into the business as your own investment. Most business owners today fully realize that a franchise can never be 100% OPM. OPM= Other Peoples Money!

Our experience in Canadian franchise financing is that the financing of your newly acquired business has is a combination of your own investment, as well as borrowed funds. Franchise financing success in Canada is most commonly achieved by your utilization of the CSBF program, which is one of Canada’s best programs for small and medium sized business. This program provides up to 90% financing of leaseholds and fixed assets. When our firm structures a franchise financing we supplement the CSBF program with a combination, as required, of lease financing, and in some cases a cash term loan if in fact that is required .

In summary, by carefully selecting your franchisor, understanding your overall financial risk, and carefully putting together a financing package that fits your needs, you will have a very strong chance of being successful in your franchise venture.

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

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.

















Friday, April 12, 2013

Financing Franchises . The Rules For Franchise Funding In Canada




Can You Imagine Franchise Funding Going Smoothly ?



OVERVIEW – .Information on franchise funding in Canada . Financing franchises is not easy, but gets easier when you know the rules and have he right access to help and expert information




Financing franchises in Canada. Boy would it help to know some of ' the rules ' when it comes to franchise funding going smoothly. We know some of those rules, so let's dig n.

To say that the actual successful acquisition and financing approval for a franchise is a big step for the entrepreneur is a bit of an understatement. Coupled with all the selection, administrative and legal issues that surround acquiring a franchise comes the finance challenge. In some ways entrepreneurs view it as the biggest challenge.


The amount of funds you yourself have to invest often plays a key role in your final franchise decision. While a good portion of your total purchase will in fact be debt of some sort - (leases, loans, working capital, etc) there is the equity component you have to consider. You may not be aware, but many franchisors in fact make a franchisee decision related directly to the amount you have to invest, and they are pretty clear about that on their website and introductions with you.

So where do clients we talk to raise equity for their ' down payment ' portion of the transaction. Some collapse savings, some approach friends and family. While using savings as a key component of your equity in the deal it is certainly not preferred to collapse registered type investments, RRSP's etc in order to avoid the tax bite.

When approaching a bank or a specialized finance firm they will absolutely be focusing on that down payment. And it’s not a question of just showing up with the down payment ability - the bank or lender will typically want to know how it was achieved.

We have referenced banks as a source of financing for financing franchises - that needs to be clarified. Unless you are a very high net worth and valued client of the bank it is somewhat, in fact quite doubtful that the bank will finance the purchase directly. While Canadian chartered banks do realize the benefits a proven business models and market share and systems in place to succeed they rarely finance a franchise outright.

What they do though is to in many cases; utilize the Canadian BIL/CSBF loan program that is provided under the auspices of the government. It's a perfect match for franchise funding by the way, even though we suspect it was designed for that!

The true beauty of that loan also is the fact that no outside collateral is required, so you won’t be asked to collateralize your home, other personal assets etc. Clients are always asking us for a clear explanation of the loan criteria for a BIL Franchise loan. That basic criteria is as follows -

- Good personal credit history
- Ability to contribute 10% minimum permanent equity in the business
- You must have business experience and be able to demonstrate that in a business plan and cash flow forecast
- Your business must have a permanent address and lease that is at least as long as the loan term
- You should be able to demonstrate commitment and enthusiasm - just ' buying a job ' doesn't cut it!



In many ways you can expect that the bank and franchisor are looking at the same things - your business experience, your financial stability, etc. Remember though that the bank or specialized franchise lender isn't an equity partner, they also won’t be sharing in monthly royalties.

So ensure your business plan and cash flow reflects profits and repayment ability! Don't forget also to address the fact that you have working capital and potential long term financing needs, which need to be well thought out.

Can franchise funding go smoothly? It can with the right knowledge, info and resources. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who is an expert and has a track record and can assist you with your franchise financing needs via the right ' RULES'!





CANADIAN FRANCHISE FUNDING





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
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































Friday, April 5, 2013

Financing Franchises In Canada . Expert Facts On Obtaining A Franchise Business Loan In Canada



A STUPID QUESTION ROUND UP ON FRANCHISE FINANCING


OVERVIEW – . Information on successfully completing a franchise business loan in Canada . Financing franchises requires the right expertise and professional advice



A franchise business loan in Canada . We challenged ourselves recently to come up with some ' stupid' questions on financing franchises in Canada. Actually it turned out to be not that hard. No one would ever ask these questions would they? We're hopeful they wouldn’t but there’s a lot of misinformation around these days. So let’s dispel some serious fallacies around financing your business as a franchisee entrepreneur. Let's dig in!

Question # 1 - ‘Do I really need to finance a new franchise. Can I just pay cash or collapse my savings, registered, investments, or put a collateral mortgage on my house. That's what my banker recommends’

Answer - We suppose that you could pay your franchisor the full amount per your banker’s request. But why would you honestly do that? You incorporate as a franchisee to separate your business life from your personal life. That limits your liability to the assets of the franchise, aside from any personal guarantees. There’s a whole world of financing help out there when it comes to financing your business - specialized franchise finance firms, leasing companies, working capital solutions, even private equity firms in certain circumstances. Don't risk your personal financial assets if you can properly finance a franchise with rates, terms and structures that make sense.

P.S. You might want to remind your banker that the Canadian SBL/BIL/CSBF loan program is in fact one of the most popular methods of financing a franchise via a bank . Or is it that they don’t want to do the extra work that’s required to complete one of the best loan facilities in Canada for a franchise .


Question # 2 - ' I know what I am doing; I don’t need to spend time or pay for a business plan, do I?

Answer - Business plans, whether they be detailed or in executive summary format are required for all commercial lending opportunities when it comes to buying a business such as a franchise. They also later serve as a management tool to measure how well you are doing compared to your original financial goals. It's one of the best scorecards you can have when done properly. If you don’t have the time or financial expertise to prepare a business plan seek the advice and help of a Canadian business financing advisor.

Question # 3 - ' Once I finance via a franchise business loan I don't require further financing, right?"

Answer - While many types of franchises are in fact cash flow positive from day one certainly not all come under that category. So you need to spend some ' financial time ' in two areas - the early days of the franchise when more is going out than coming in, and secondly for long term growth and replacement of assets or leaseholds that might need updating. In some cases your franchisor may in fact insist that certain assets and leaseholds be updated/replace. So don’t forget to factor in ongoing working capital needs which can often be identified through your business plan or a cash flow forecast.


In summary - don’t let the challenge of financing franchises become a major hurdle in your success as a franchisee. The research and effort you put into picking and checking out a franchise should continue in the financing process.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your franchise business loan project.



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 :


FRANCHISE BUSINESS LOAN - FINANCING A FRANCHISE





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