Canadian Franchisee Funding & Business Loans – In Over Your Head In Lenders & Finance ?

All of us in business are sometimes ' out of our element ' when we are required to create a ' win ' in an environment we sometimes don’t fully understand. So we forgive all clients who seem overwhelmed in the area of franchise finance lenders, funding for their new life as a franchisee, and getting business loans that... oh yes... hopefully make sense!

What we want to do now then is make what you perceived as a journey into a ' short trip “! By the time we have met you quite often you have made the decision to purchase a franchise in an industry either intrigues you, or, hopefully more so, one that you are sure you can be successful in.

Franchising today, in terms of total sales, is a mega portion of the economy - the numbers are staggering. Industries such as automotive, home improvements, business and consumer services, food, specialty and entertainment all have great franchise opportunities.

So whats harder, picking a franchise or trying to figure out who are the franchise finance lenders in Canada and whats the best method of franchisee funding? We'll let you be the judge of that.

Start up or acquisition financing of a franchise in Canada does not have to be as formidable as it might seem. You need a plan, some expert help (much of which is free) and you should have a roadmap to succeed. We'll boil down guaranteed success to 3 very simple issues.

The 3 issues that you should focus on or rationalize vis a vis your franchise finance funding are as follows : a reasonable personal credit record and net worth ( in relation to the size of your franchise investment ) , a basic but clear presentation or proposal ( aka ' business plan' ' executive summary') .. and finally, knowledge of who you are going to present it to for guaranteed success . Simple enough?

Your proposal or plan reflects how you present your business - the essence of the document is info on yourself, your franchisor, and your financial plan re sales / profits / cash flow, and info your industry sector. That's not at all complicated, and with some able assistance that type of document can be prepared in days.

Let’s remember we're talking about business loans, not a personal loan when it comes to franchise finance. Typical financings we see come in at the 350 - 500k range - naturally many franchisees select smaller businesses, some larger .

So, who are the franchise lenders in Canada? That seems a mystery to many clients for some good reasons. One of which the largest franchise financing program in Canada was probably never mean to be just that. We're talking about the governments BIL/CSBF program. Thousands of successful Canadian entrepreneurs use the programs for rates, terms and structures that you could only think ' the big boys' get in terms of attractive finance.

Alternatively one large specialty franchise lender in Canada has a significant presence. In many cases they are aligned on a program basis with your franchisor who might be participating in some manner on the financing.

Don’t forget also that many franchise business loans revolve around the purchase of a franchise business from an existing franchisee. In many cases that becomes a true business loan with a focus on what assets are being purchase, is the business profitable, what are the cash flows and future potential of that business.

Franchise finance funding can also be compliment ed by a working capital term loan, or working with a specialized equipment finance firm to acquire assets outside the main franchise loan . Additionally innovative merchant advance funding arrangements can help you with working capital and cash flow.

Bottom line. It's of course that you shouldn’t feel overwhelmed or not in control of a key element of your franchise decision, the financing. You have alternatives, assistance in the form of an experienced Canadian business financing advisor you may wish to consult with... providing you with the knowledge you can be successful in approved funding and business loans for your new venture.





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 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/franchise_finance_lenders_funding_business_loans.html

Don’t Make Mistakes When Searching For Franchise Finance Lenders When You Buy A Franchise In Canada

Business folks often refer to the term ' key to success ‘as part of their business plans. Certainly the key to success when you buy a franchise is to finance it on time, and properly; we tell clients you don’t get a lot of chances to make mistakes when you are working with franchise finance lenders!

The concept of financing your franchise is a broad one... it might be one single loan or a couple different finance strategies to get you to the goal line, which is of course acquirng and owning your own business under a franchise umbrella... in effect the Canadian dream .

Try and try again generally doesn’t work in franchise finance - you more or less, in our opinion, get one chance to do it right . That therefore involves getting all your ' ducks' lined up properly and working with an experienced Canadian business financing franchise advisor, or if you prefer, yourself and the lender directly.

As we said, making mistakes in business finance is not where you want to be - so plan, do it right, and do it once. Let's examine some of those underpinning you need to be successful and avoid those errors.

In general some of those cornerstones are decent personal credit history (more about that in a minute - as we can hear our clients already " what's decent?!), a down payment that makes sense. and a financial plan that demonstrates your ambition to be successful .

This latter point is usually covered off in a business plan. We can’t ever imagine buying a business without a plan, and humbly submit that if you don’t have a plan you are primed to fail - and that’s not a good thing when you have your own funds at stake.

Can you buy a franchise in Canada, and finance it without a good personal credit history. We tell clients the sad truth is that it is difficult, if not impossible, to do that successfully. That’s because franchise finance lenders view your business as both a start up and a small business, and they relate those two terms directly to how you manage your own personal finances as the owner. To put is very simply, the lender is saying ' if this man or woman isn’t paying Visa then why should I think they are going to pay us....’ In Canada the credit bureau system is based on a score to 800 and you need a certain specific number to qualify for franchise financing. Speak to a trusted, credible and experienced business financing advisor as to how you can manage and work through that process.

You probably have spent a large part of your life dreaming about crafting a great business plan, opening balance sheets, 3 years of projected cash flows... loan amortizations, etc. Uh... we're beign a bit sarcastic of course!! But the reality is you need a solid business plan to demonstrate how you will be successful. It’s a great document for benchmarking down the road even how you are doing against your plan.

In Canada the majority of franchises are financed and subsidized so to speak by a special federal program called the BIL program. Don’t make a mistake in not understanding what the qualifications are, and work with an expert if you don’t feel you are comfortable in navigating the finance maze.

So, is financing the key to Success when you buy a franchise in Canada. We'll let you be the judge... but if you are on the side of our opinions plan, and work with an expert , do it right, and avoid mistakes that will jeopardize closing the transaction .

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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 6 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/franchise_finance_lenders_buy_a_franchise.html