How To Qualify For Franchise Financing In Canada – A Franchising Finance Business Loan That Makes Sense!

The GOOGLE fellow tells us that 2,687 people have read the following post we did in 2011


Posts
Entry Pageviews

How To Qualify For Franchise Financing In Canada –...

May 6, 2011,

2687


Here's The Post :

 http://businessfinancingcanada.blogspot.ca/2011/05/how-to-qualify-for-franchise-financing.html

Franchising Loans In Canada : Top Franchise Financing Tips Explained

Unlocking Franchise Financing Secrets In Canada

OVERVIEW – Information on franchising loans in Canada . What franchise financing strategies are available to the prospective franchisee

Franchising loans in Canada, properly obtained and constructed, help guarantee entrepreneurial success for prospective franchisees. We're going to unlock some of those ' secrets’ to help ensure that success story. Let's dig in.

We can categorically say, notwithstanding the tremendous growth in franchising in Canada, that there's no ' easy money ' on the table when it comes to this type of loan or finance solution. In fact, we can safely say that many of the requirements of any business loan apply to almost all franchise scenarios.

So it becomes a question of leverage ( the amount of debt ) the franchisee can take on, the collateral value of assets being financed ( equipment, leaseholds, real estate, rolling stock ) as well as the business experience of the owner .

Often overlooked, or simply forgotten, is the franchisee's ability to misgauge the working capital and growth financing that might be needed post acquisition. While in some cases it might be assumed your business will lose money in the early stages it clearly makes sense to focus on cash flow and profitability from day one.

We meet with many franchisees who are interested in, or in the process of acquiring an existing franchise. Getting past the fact that the franchisor itself must approve this type of sale it's absolutely critical to determine what levels of success (or distress) that business was experiencing pre purchase. This necessitates a strong look at existing financials, personnel, and market conditions re location, industry growth, etc.

While it might seem logical that Canadian chartered banks are the predominant financier of franchises in Canada this might actually not be the case. While the banks do in fact align themselves with the big names in the business those franchises are often, for the obvious reasons, more expensive and require much more capital investment and personal financial commitment.

The reality in Canadian franchise financing? It's that most operations are financed by a small handful of specialty lenders, as well as those borrowers to choose to opt for the Government Small Business Loan (aka the ' SBL ‘). Other forms of supplementary financing are also utilized and available to borrowers - they include equipment lessors, term lenders for working capital loans, merchant advance cash flow financiers, and loans secured by personal assets of the franchisee, the latter not recommended.

If you're looking to be successful and wanting to navigate the tips and tricks of the franchise finance maze 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 on the journey to entrepreneurial 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 LOAN EXPERTISE





Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:
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


' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop

Franchise Financing In Canada : Franchising Business Loans Comes In Different Shapes And Sizes

Visualizing Franchise Loan Success In Canada ? Owning A Franchise Comes With Financing Challenges

OVERVIEW – Information on franchising business loans in Canada . Franchise financing challenges require expert navigation of different loan and finance strategies to successfully complete entrepreneurial ownership for the potential franchisee


Franchise financing success in Canada is visualized by the potential franchisee - it's the end of the road in their journey as a new franchisee. But the reality is that attaining that goal is dependent on information and experience often not fully recognized by the borrower. Let’s dig in.

Franchise opportunities in Canada are diverse, many of them offered by franchisors that are both Canadian and also U.S. origin. It's not secret that finance loans for a franchise are somewhat more plentiful in the U.S. with diverse lenders participating in this high growth economic sector.

In Canada, as we have stated, franchisee loans come in different ' shapes and sizes'. Let's explore the who and the how.

The borrower must also be prepared to spend some time to distinguish between the types of finance package he or she is looking for. That might be :

A turnkey acquisition opportunity

A re-purchase of an existing franchise ( ‘ Refranchising ‘ )

Financing for a multi - unit transaction

Master franchise scenarios

Working Capital

Asset and Leasehold improvement


The amount invested in the business by the franchisee is one of the key determinants of loan ' shape and size’. In Canada this can range anywhere from 10- 50% depending on franchise lender requirements. Franchise loans are typically secured by the assets, tangible or otherwise, of the business. It's fairly rare for franchisee personal assets to be attached to a franchise loan.

That above scenario therefore mandates that franchising business loans need to demonstrate they can be repaid out of cash flow. Here's where a solid business plan, cash flow and opening balance sheet will go a long way to reflect loan approval success. The borrower, or his advisors are well recommended to ensure some type of contingency financial modeling also occurs - if only for the reason that Murphy's law

is everywhere in all aspects of business!

Clients often ask what are the ' rates and fees' in Canadian franchise financing. Almost always these transactions are in the single digits, which also reflects the relatively low current interest rate environment.

In Canada the franchise opportunity is financed by either a specialty lender or a combo of financing derived from a bank or a commercial finance firm. This includes lease companies, merchant advance firms, working capital term loan lenders, and the Canadian SBL program. The latter is extremely popular and is suited to a number of franchise opportunities.

If you're a franchisee that can visualize the end to your acquisition journey, but don't necessarily know who to get there 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 sorting out those different ' shapes and sizes' inside the financing puzzle .





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!




Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:

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


' Canadian Business Financing with the intelligent use of experience '

Stan Prokop

Franchise Financing In Canada : Funding Franchises Shouldn’t Be Hard

Engineering the right Franchise Financing Loan In Canada

OVERVIEW – Information on franchise financing solutions in Canada. Funding franchises successfully is dependant on a number of key factors



Funding franchises in Canada shouldn't be difficult, but for many... it is. Let's look at the right way to approach franchise financing in Canada, which by the way includes simply the right information and the proper assistance. Let's dig in.

After the potential franchisee has spent a significant amount of time in seeking out the right franchise opportunity it’s critical to engage your franchisor in the right discussion around financing requirements. While they directly don't finance your new business they can often provide both guidance and direction on how franchises in their system are in fact financed.

In Canada some of our chartered banks do in fact have ' programs' in place with large franchisors that have significant ' branding ‘. (Think donuts/hockey player and clowns/burgers as an example!) . It's these types of relationships that can often help a large financing challenge become easier.

More often than not though, as much as he or she doesn't want to be, the franchisee is in fact on their own. So if they don't have the expertise to understand the lender landscape in Canada they are somewhat doomed to failure.

For any type of business financing in Canada its all about criteria, understanding, and meeting! Being armed with the right information required by a lender will get the ball rolling. That information typically is a solid business plan/executive summary, a financial road map that includes an opening balance sheet and cash flow projections, as well as the usual information around the owners financial worth and credit history, etc. 99.99% of franchisees incorporate their business, or buy an incorporated business, so some of those details need to be attended to also.

The lending landscape for franchising in Canada, unlike the U.S., can hardly be called ' robust. If you are dealing with a ' specialized' franchise lender the solid alternative is utilizing the Canadian govt SBL loan. It funds a lot of new businesses in Canada, and the franchise industry here has found it’s well suited for business funding. It's the Canadian equivalent of the ' SBA ' program.

Key aspects of the SBL program in Canada include, but are not limited to:

Limited personal guarantee

Competitive start up pricing on financing

Ability to finance assets as well as leaseholds

Solid structures including 5-7 year typical amortizations


Some potential franchisees might think that they might receive assistance around the actual final price as agreed to by you and the franchisor. This is NOT the case.

Additionally many entrepreneurs choose to buy an existing franchise for a variety of reasons. Here again the actual value of the franchise being purchase must be determined by yourself and the seller. As a general rule franchises in certain industry segments are sold and valued as a % of the actual sales revenue. For example an existing automotive transmission business typically might be valued at 40 - 50% of actual annual sales revenue. A QSR (quick serve restaurant) might typically go for 30% of actual revenues being achieved. Suffice to say many other factors should be considered when valuing and financing an existing franchise.

In financing a franchise in the Canadian marketplaces you should focus on size of investment required, break even analysis on sales, expected income for the owner, and ultimately whether the opportunity is a good ' Return on Investment '.

In Canada in certain cases even franchisors themselves will need financing of some sort. Here issues such as # of corporate/franchise locations, gross chain revenues, and exit or repayment strategies must be on the table.

If you are looking for the right way to ' engineer' franchise funding in Canada seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your franchise financing needs.









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!







Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:

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


' Canadian Business Financing with the intelligent use of experience '

Stan Prokop

7 Park Avenue Financial - Canadian Business Financing Blog Stats

Tweet





Our blog has surpassed 360,000 page views - Next goal = 400,000 !

Thanks to the Canadian business people and other readers and interested parties that make this possible !


CLICK ON THE PIC TO SEE DATA




7 Park Avenue Financial provides the financing you need for working capital, cash flow and business loan needs. Our reputation is based on 16+ years of trust and Canadian business financing expertise. All major Canadian banks have referred and continue to refer transactions to our firm for business finance solutions.

We strive to provide flexible alternative finance as well as traditional finance solutions to companies that are growing or experiencing cash flow challenges. We are experts in alternative finance solutions.

We focus on financing solutions that are available in the least amount of time possible and strive to provide the finance solution most applicable to your firm's needs. That might be acquisitions, growth, or restructuring and refinancing needs.

Our solutions include asset based credit facilities, purchase order financing, accounts receivable and factoring solutions, term loans, equipment leasing, and franchise finance as well as tax credit loans.

Referral sources for 7 Park Avenue Financial solutions come from bankers, consultants and advisors, brokers, accountants, law firms, and of course our clients!


Click here for the business finance track record of 7 Park Avenue Financial








Stan Prokop
7 Park Avenue Financial/Copyright/2020

How To Kick Start Franchise Financing Success. Funding Your Franchising Loan Needs In Canada

Canadian Franchise Financing Tips / Tactics


Information on franchise financing in Canada . How does the entrepreneur access funding for a franchising loan ?



Thousands of Canadian would be entrepreneurs in Canada clearly recognize the trend that franchising in Canada is a major industry and a leading contributor to the economy as a whole. You want to be a part of that trend!

So, that being said how does the entrepreneur translate that opportunity into his or her ability to kick start franchise financing funding in a manner that makes getting a franchising loan a success as a part of their overall entrepreneurial strategy?

Let's share some solid advice on what type of financing you should utilize to successfully complete your new or existing business acquisition. Yes, existing franchises can be purchased and financed also!

The amount of money that you yourself put into the business is a key factor in your potential sales and profit success. But two questions immediately arise: Do those funds necessarily guarantee you success based on how much you put in, and secondly, where do you access the balance of the finances you require?

One somewhat intangible issue that also always comes up is the ability of the entrepreneur/ borrower to demonstrate how much experience they have in a chosen industry or business. So things like your own outlook on being an entrepreneur / business owner (it’s not as easy as you think) and matching your skills to the type of business you buy and finance are critical.
By the way, we think there are very few executives in even the largest most successful corporations in Canada that have the total skills involving sales, marketing, operations and finance as a total skill set . Those people are the real superstars.

Naturally one of the reasons you purchase a franchise is that you are buying into, hopefully, a proven system of a brand, business model, marketing and advertising assistance, etc.

OPM is important when it comes to franchise financing. That of course stands for Other People Money, which represents the balance o the funding you need for your franchise purchase. In Canada, along with your equity, or we'll call it a down payment the balance of your financing comes from either a commercial finance company that either specializes in franchise finance, or one that can compliment the financing you need. A good example of that is an equipment finance company that can acquire and lease assets for you such as POS systems, other hard assets, vehicles, etc,

In general anywhere from 10 to 40%, sometimes more is required as a down payment or equity contribution to your business. We quickly add that that doesnt always necessarily mean that money is permanently contributed or ' tied up ‘, but you just must show that you have access to liquidity to get the busines off to a good start for working capital and growth purposes.

Two key points for the franchisee - a solid majority of the franchising loan scenario in Canada is done via the government BIL/CSBF program. It offers great rates, terms and structures for the acquisition of your business. Where the program falls down a bit is when it comes to a service type business where there are limited or no assets to purchase / finance.

Our other key point - have a crisp ' package ' in place when it comes to a business plan, industry overview, financial projections, etc. This isn’t the rocket science it sometimes seems when it comes to getting a good proposal in front of your lender. You can't afford to miss out on your business purchase just because of a poor presentation package, and it can also be easily accomplished by using an expert such as a Canadian business financing advisor that is experienced and has success and knowledge of franchise finance.

7 PARK AVENUE FINANCIAL
CANADIAN FRANCHISING FINANCE EXPERTISE




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 . 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 :



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

Franchise Financing In Canada . Boring Or What? Franchisee Loan Info In Buying Franchises

Canadian Franchise Financing – Not Exciting .. But ….


Information on franchise financing in Canada. Implications of buying a franchise and the franchisee loan process.


Franchise financing in Canada. Boring... right? Well it might not be if in fact you're a franchisee looking for a loan when buying your franchise.

We're reminded at the same time of Sisyphus, of Greek mythology. He had to roll that boulder up the hill, requiring immense strength and endurance, only to be destined to see the rock fall down and to have to repeat the action in perpetuity. Anyway ... with the right info and contacts you certainly don't have to be a Sisyphus when it comes to franchise finance!

7 Park Avenue Financial - EXPERT FRANCHISE FINANCING



It makes sense that if the franchise that you have chose is in fact part of a successful chain that it will require a probable substantial investment, both in terms of equity as well as the franchisee loan. All businesses are founded with that combo of debt and owner equity.

The positive side of the story is that franchise financing is in fact available and generally viewed as a positive in nature that financing is in fact available. And a well known or reputable franchisor is in fact just the icing on the cake.

Typically the down payment required to open and fund a franchise tends to be anywhere from 10- 50% depending on the structure of the financing you require. While some permanent equity is a must it is to the benefit of yourself and the lender that you demonstrate some working capital and what we can call ' financial cushion ' in case things are off to a slow start. We're reminded of a saying by an old boss we had in the 80’s - he said he never met a forecast he didn’t like!

So what in fact is the franchise loan offering in Canada. Well it’s a combination of bank financing, specialized finance via a commercial finance firm, and then what we call a cobbled together approach of equipment, line of credit, etc.

Many franchisees, once established are considering cash advance financing, which in effect monetizes future sales which are then repaid over time as you generate new sales. They are done on a revolving and or term basis and typically have higher financing rates attached to them.

Most franchisees choose the BIL/CSBF program which is perfectly structured for franchise financing less than and up to 350,000$ with attractive borrowing and criteria features attached to it.

The essentials of any franchise financing requires a solid, preferably ' crisp ' business plan outlining your background, a financial forecast, and info on the franchisor and your chosen industry, whether it is a service or a product.

Typical debt to equity ratios apply , and you want to ensure that amount you borrow is repayable out of operating cash flow. Optimally you want to cover your loan payments, build equity, and of course draw a reasonable salary that you and your family can live on. The appeal to the franchisee is of course the proven business model offered by your franchisor that presents a reasonable, hopefully proven method of generating profits, cash and equity.

So, boring. Maybe, but not if you're on a search to properly finance a major business/career decision in your life. Speak to a trusted, credible and experienced Canadian business financing advisor on how you can access franchise financing 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 7 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 :

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

Pulling The Trigger Successfully On New And Resale Franchise Financing Costs in Canada . Buying And Finance Tips

Financing Restaurants and Other Canadian Franchise Concepts – What You Need To Know



Information on franchise financing in Canada for new and resale franchises. How costs of franchise finance are financed.



Buying a new or resale franchise in Canada? Let's try and show you how you can in effect ' pull the trigger ' successfully on franchise financing those costs.

We read recently that a franchisee/ franchisor relationship is not unlike a marriage between you and the franchise firm that you have selected as your future partner for hopefully... a long time!

Although our focus is on financing it's safe to say that what we refer to as the ' soft issues ' of success in franchising are as exceptionally critical. Typical attributes of a successful franchisee are of course being sales or people oriented, driven to succeed, and are of course committed to working hard and growing their business. Sounds easy, probably isn’t we think!

When it comes to financing you need to be in a position to have thoroughly investigated the financial aspects of the business. That might have included the costs of buying an existing franchise. It might be a company or ' corporate ' store currently held by your franchisor, or simply another franchisee, just like you, who wants to sell their business. Do we even have to mention you probably want to thoroughly investigate why that franchisee is selling, as that decision might be critical to your success!

Various franchisee associations and industry associations exist in Canada, and if you have ever wondered about ' picking someone’s brain ' we'd say that time is now when it comes to exploring the information around the industry itself, its regulation, etc. We would also point out that much of the legislation in the industry seems to significantly favor the franchisee rights, which, if you're a franchisee is a good thing. If you're a franchisor... well... that’s a different story we guess!


Franchise financing costs vary in Canada. You can purchase a small service oriented franchise, or, as many do participate in the Canadian QSR, FSR and Full service restaurant industry. (Quick service, fast service, full service).

In Canada the majority of franchises are financed with a co - signer, in effect the government of Canada! We're hoping these days that they are good for it!!

That's because the government small business loan program, typically called the SBL / BIL or CSBF program finances thousands of franchises.

As we noted in our introduction you can successfully use the program to finance both a new or resale franchise. In the case of buying a resale franchise you want to ensure that you have full financial disclosure from the current owner. That would of course include proper financial statements which would allow you to determine a valuation or proper pricing. This is a great time to enlist the help of an experienced business financing advisor, a lawyer, accountant, banker, etc - simply speaking: Someone to help you make the right decision.

In the case of a resale franchise you need to have a proper valuation done on any hard assets in the business. This can easily be accomplished by using a proper appraiser that can give you a sense of the actual value of the assets you're buying.

In the case of purchasing a resale franchise your transaction must be completed as an asset sale, not a share sale, which is typically difficult to finance if the seller insists on a ' share sale ' of the franchise.

Proper equity from yourself, plus a solid business plan and cash flows, plus some miscellaneous related busines financing application info will allow you to successfully complete franchise financing in Canada. In certain cases, with certain franchisors, you might qualify for financing from a highly specialized franchise finance firm. General financial criteria remain the same when it comes to financing from a non-regulated commercial financing firm such as a leasing company, etc.

At the end of the day successfully ' pulling the trigger' on financing costs for your new business come down to homework by yourself, working with a solid advisor or advisors, and presenting a strong business plan highlighting your experience and business growth potential.

Speak to a trusted, credible and experienced Canadian business financing advisor if you are interested in pursuing financing for a new or resale franchise in the Canadian market.







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 . 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 :


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

Does Canadian Franchise Financing Success Mean Everything To You ? Tips/Info Franchising Company Lenders / Loans

We can pretty safely bet that after you have made a decision to purchase a franchise in Canada that franchise financing becomes, at least temporarily, one of the most important priorities in your life. Let’s examine some tips, info, and strategies allowing you to work through, successfully, the finance company and the various lenders and loans available to yourself.

In speaking to many clients it’s quite clear that the type and style of franchise they wish to purchase is often tied to their perception of their ability to close financing on that purchase. And when we look through the business news these days it seems that all types of businesses, from start up to large corporations have formidable financing challenges.

The reality is though, that if you have priced your franchise purchase properly relative to your own personal situation, which includes your credit history... that you should be in a position to acquire the financing you need.

So what are the ingredients to that success? Some of the key basics are a ' proper' proposal and your ability to commit some capital to the business. Clients are always concerned about how much owner equity they will have to put into the business - In Canada our experience is that typically is in the 10 - 40% range, with 10%being the absolute minimum.

Franchise financing is sold on the basis of your business plan. That document does not have to be as formal as you think, but it should include the essence of what you are trying to achieve. Those basics include info about yourself, your work and career history, your personal financial situation. The document should then cover off details on your franchisor, the business model they operate under, and finally, and perhaps most importantly a credible financial projection.

We're often asked how much detail goes into the financial projection for the franchise financing company or bank. The simple answer to that is that you should be demonstrating in a clear fashion how the loan or loans will be repaid.

We encourage all clients, via vigorous discussion to ensure they are in a position to defend their sales and cash flow projections - and, as importantly, are prepared to answer any questions the lender might have. A clear presenation,backed up by your confidence and experience are key to franchise financing loans that are successful.

Contrary to the beliefs of many franchisees in Canada your franchisor typically doesn’t play a large part in the actual financing of your franchise. In certain cases they possibly might have some sort of program in place with a finance partner, but that somewhat rare in the mainstream of franchises that sell in the 100-350k range.

So how are these financed then? Good question! One or two specialty franchise finance firms provide acquisition loans in the industry. These typically are for the largest brand names and when ticket size of the purchase is quite significant.

The reality is that the government, via the Canadian BIL / CSBF program has evolved into one of the largest financier of this business segment in Canada. The program has been adopted by hundreds, probably thousands of business owners to facilitate franchise financing loans. And for good reason, low financing rates, great terms, structures, and maximum flexibility on repayment.

In many cases financing of your franchise is complemented by specialty equipment financing for certain assets, as well as working capital loans when that is prudent and feasible. We always remind clients think in terms of acquiring the franchise, and then focusing on ensuring it will be financed properly on an ongoing basis. Running out of money right out of the gate is not recommended! That’s where your business plan and financial projections must be realistic.

Don't let the financing of your franchise overwhelm you - speak to a trusted, credible and experienced Canadian business financing advisor on a finance strategy that makes sense for your particular situation.



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 . 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 :

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

Don’t Risk Losing Out On Franchise Financing Loans - Info For Canadian Franchisees Re: Franchising Loan Success

You’ve Got An Important Decision To Make - So Get Informed On franchise finance in Canada

Information on Canadian franchise financing . What types of loans are available , who is lending , and is there one franchising loan strategy that makes the most sense .




The reality of owning your own franchise business should not be over shadowed by the risk of not obtaining the right, and full amount, of franchise financing you need for a franchising loan. So let’s examine the right, and wrong way, of franchise loans and lending in the current environment.

The right amount of financing you need for your acquisition is often a somewhat stressful time in the total process of buying a business in this segment of Canadian business ownership.

Commercial lending financing does exist in the Canadian environment, it’s a situation of knowing what’s available, and then, of course, executing on completing the financing. Sounds simple, but many Canadian would be entrepreneurs often find themselves challenged by the whole franchise financing journey... and in reality it’s a process, not a journey.

In a perfect world you are looking for a franchise loan that has low or at least acceptable interest rates, nominal fees associated with the transaction, and has the right term or maturity that suits your payback plans and general cash flow situation.

But, does such a loan exist? It actually does, and you'd be surprised where you might find it. Many clients tell us they have spoken to the Canadian bank with whom they typically have had a long term relationship, only to find that little information has been forthcoming as to how they might be able to successfully finance their new business venture .

Naturally any bank that finds you willing to personally pledge and collateralize your home, savings, etc is very anxious to have your business and approve that loan, but it mixing your personal assets with your business venture the optimal solution. We find it rarely makes sense to follow that strategy, buy hey... that’s just us.

In Canada the financing options of franchise lending and loans is available, but somewhat less limited than in the U.S. . . . One or two large firms dominate the major franchise financing opportunities in Canada - these firms focus on the largest name brands and larger transactions that in many cases can range up to several million dollars in total financing required.

But what about the hundreds, even thousands of franchise loans that are required for purchases in the 100-500k range. Who finances those, and if they are financeable does the financing come with those low rates and great terms and structures we spoke of previously?

Actually the Canadian BIL/CSBF loan program addresses that question pretty perfectly. It finances your franchise on terms that compete with the big boys. And we're always rooting for the little guy!

The BIL program assists business purchasers such as yourself to effectively finance the franchise you wish to purchase. Rarely will your franchisor be able to assist you with financing so your ability to prepare a solid 'package' of info and position the package from a solid financial point of view is critical. Other financial solutions such as specialized equipment and asset financing can also round out your financial solution.

Bottom line, franchise financing should not be a risky or stressful time for the completion of your business acquisition. Speak to a trusted, credible and experienced Canadian business financing advisor who can help you complete franchise financing with lending that makes sense... today.

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

Can A Franchise Finance Business Loan Be Creative ? Here’s How Canadian Franchise Finance Works!

Is it actually possible to get ' creative ' when considering a franchise finance business loan for you new Canadian role as an entrepreneur in franchise financing? There are some tried and trusted rules we use in the franchise lending area, but a little creativity has never hurt anyone we believe!

If you haven’t considered how to finance your new business in the franchise industry then we feel it’s probably a little too late in some ways, as your ability to finance your business properly we think has a lot to do with the ultimate growth and success of your business. There are very focused lending sources for the franchise area of financing in Canada - the trick of course is to know what they are and more importantly how you can navigate the ' maze ' successfully.

The reality is that if you have some industry experience in your new business and a proper finance plan you have a much better chance of financing your business properly.

So, who can you turn to in terms of creativity and resources for franchise financing? Clients are amazed when we tell them the most creative partner in franchise financing in Canada is none other than the Canadian government !How could that possibly be? Simply because a program guaranteed by the government and administered by the banks could not be any more creative than this.

The program is the ' BIL ' loan program, and it provides you with financing up to 350k for your new business. Are the terms onerous? Hardly! The essence of the program is a 5-7 year term loan, with great rates, limited personal guarantees, and some other elements of flexibility. If that isn’t creative then we don’t know what is!

Naturally all the creativity in a business loan of that type for your franchise finance scenario should not be reliant on just one lender - the other lender is someone you know very well. Yourself. That's simply because when you look at the total financing of a franchise in Canada the two components are simply debt (the funds you have borrowed) and the equity, or money you have put in yourself. These equity funds, i.e. your commitment to the business, typical come from savings, the proverbial ' friends and family ' support, and investments or collateral that you have available.

Getting back to our key subject of creativity, our above noted BIL loan program only covers certain aspects of a franchise finance scenario. You can augment that loan with flexible equipment financing that has low down payments and extended amortization terms, as well as, in some cases, a working capital term loan.

We never forget to remind clients that the franchise financing plan is a two stage process, acquiring the business, and making sure they have some capital and funding to operate and grow their new business.

In summary, you can be creative when you are looking for info on how Canadian franchise finance works. You need knowledge on what funding sources are available that are specialized to the franchise industry, and assistance in executing a proper financial plan. Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in maximizing that creativity!

-


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 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

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

Worried About Getting A Loan For A Franchise ? - Here's your 2011 Franchise Financing Guideline!

We know you'd rather start the New Year off with a positive attitude about your new role as entrepreneur - let’s demonstrate how you get a loan for a franchise and how franchise financing works in Canada.

Buying a franchise is clearly one of the bigger decisions you'll make in your personal and business life, and you want to be able to do that with specialized information and assistance to help you succeed.

We would never say there are a large number of ways to finance a franchise in Canada , but there are some tried, tested, proven and recommended methods and strategies and we'll show you how they work!

You never want to feel you have been pushed or misguided when you are thinking of getting a franchise financing loan. That's where professional info is always the best solution.

We're the first to agree that the attractiveness of buying a franchise is a powerful concept - you're literally buying a proven formula and it’s no secret that you have a better chance of surviving if you purchase a franchise as opposed to starting your own independent business that has no track record.

So when you decide to finance that franchise the ' legwork’... if we can call it that, is important. Your goals are threefold actually, you want to be able to successfully purchase the franchise, ensure you have some capital to operate it, and finally, growth is important to your overall success, so you want access to growth capital for your business if you need it.

The majority of franchises are cash flow based, i.e. the restaurant industry, so operating capital and growth capital are not as important in those scenarios. But if you are purchasing a business that has receivables, inventory, and equipment needs, well... be aware that those items need working capital financing.

Franchise financing has three parties to it, yourself as the borrower, the franchisor itself, and of course the finance firm or bank. Generally most franchisors in Canada will determine if you are a qualified candidate for them - that includes a combo of business and or industry experience, as well as some sort of qualified financial credit check on yourself that determines you have the wherewithal to successfully purchase a business.

You only need two things to finance a franchise and get a loan for a franchise. Simple, right. Well those two things tend to be the 2 items that our clients worry about - they are Debt, and Equity. Equity is of course the amount of funds that you personally will put into the business - debt is what you'll borrow of course.

In Canada the current environment calls for a 30-50% range owner equity infusion... this number in our opinion seems to have crept up over the years. The debt or loan for franchise acquisition comes from predominantly the government. The government!! clients ask? Yes, because the majority of franchises financing in Canada are done under a special loan program called the BIL/CSBF loan program. To qualify you need a business plan, and miscellaneous info required to support your application.

This loan eliminates a huge part of the risk in getting a franchise, because your personal guarantee is limited, thanks to our friends in Ottawa who sponsor the program. Also, and we think this is great; the loan finances things like leasehold improvements, which typically would be impossible to get elsewhere.

Speak to a trusted, credible, and experienced Canadian business financing advisor who will assist you to complete franchise financing successfully. Getting a loan for franchise finance is not as hard as you think, if you have an expert on your side in 2011.
--

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_financing_loan_for_franchise.html

How The Right Franchise Financing Will Successfully Solve Your Franchise Cost Challenge !

You have selected, or are selecting a Canadian franchise. You're down to those two last seemingly minor questions - how much does the franchise cost, and what franchise financing is available! Pardon our questions, but those are hardly minor points.

Franchise opportunities in Canada seem unlimited these days as the industry continues to grow and grow. A huge portion of the Canadian economy is services by franchisors and their franchisees in Canada.

There is no one method that serves all you’re financing needs for your new proposed business. However several tried and true methods of financing are utilized successfully everyday in Canada; let’s explore some of those methods and hopefully provide you with tips, strategies and tactics to successfully complete you business acquisition. In most cases you will be buying, or building a franchise with your franchisor partner, in some instances you are negotiating with an existing franchisee to purchase their business. Both of these scenarios are financed differently.

In the case of purchasing an existing franchise a more formulaic approach is available to you. The basic process involves negotiating a fair price around the business, validating the financial statements of the owner, and, more often than not, obtaining an appraisal of any of the hard assets and leaseholds of the business. The appraisal value is a key point in your overall financing strategy. We also caution business clients to take some time to ' normalize' the financial statements of the existing business. This is what even sophisticated financial analysts do when they are looking at a merger or acquisition type scenario. The process simply involves taking a look at all the costs and expenses and eliminating those that might not be relevant as you move the new business forward.

Quick example on the above: Previous owner is taking 80,000.00 out in salary; you feel you can continue with a 50k salary - that obviously allows you to put 30k of profit and cash flow back into your business assumptions. You might well want to utilize the services of a trusted, credible and experienced financial advisor who can assist you in this area if you are a non- financial type!

The most common method of financing a franchise in Canada, existing or new, is a BIL .Great says our clients, now what is that?! It’s the technical name for the Canadian governments Small Business Financing program, and it provides up to 350k in financing for your business. Sounds great, right?

The challenge our clients face is typically understanding the criteria of the program , how it works, what information and back up is required to process a financing, and what other types of financing might compliment this proven and popular strategy. (We have found equipment financing or leasing to be a great add on complement to the government loan strategy)

Franchise financing around the franchise cost should not be viewed as coming from your franchisor, they are in the business of building their empire, not financing yours! That is a common misconception among clients.

However, in the case of purchasing an existing franchise you may well want to negotiate at least a nominal (or greater if you can!) vendor take back to compliment the overall financing. It’s a great strategy that motivates you and the current franchisee to work together to continue the success of the business.

Our final point and tip around franchise cost is clearly to assess what your own investment will be in the business. Typically franchise lenders are looking to get a very reasonable owner equity or down payment on the transaction, which is of course relative to the size of the business you are buying or starting.

Speak to a trusted Canadian business financing advisor to ensure you have a clear strategy and a solid plan to finance your entrepreneurial vision.

--


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 45 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/franchise_financing_franchise_cost.html

5 Franchise Business Financing Tips for Entrepreneurs in Canada

Expert advice is always a good thing – so wouldn’t it be great to get some solid advice on one of the larger decisions you’ll make in your business life – buying and financing a franchise in Canada. Franchise business financing is specialized and you want to ensure you have the proper ammunition to make the acquisition of your business successful. And that means of coruse a new turnkey franchise, or, in some cases, the purchase of a franchise from an existing seller or franchisor.

Let’s explore 5 key tips that should ensure your business financing success – they are as follows –

Pick the right franchise finance partner

Ensure the type of financing offered meets your needs

Don’t count or rely on the franchisor itself for financing – that rarely if ever happens

Understand franchise lending criteria in advance, and then ensure you can qualify for those criteria
Ensure your franchise is financed for purchase as well as ongoing needs


Let’s walk through some of the key points in those 5 tips – allowing you to feel more comfortable about the franchise financing process.

In Canada franchise financing is broadly available and at the same time very boutique and specialized in nature. What do we mean by that statement? Well the majority of franchises in Canada are financed under a special government program called the BIL or CSBF program. It is underwritten and supported by the government, but in case you haven’t seen a government franchise financing office on your corner, here’s the deal on that! The program is administered by Canadian banks, but under the government auspices. We tell clients that only a limited number of Canadian bankers understand the program, can move through it efficiently, and get you approved.

We mentioned a key point in our Tips that indicated you must understand the criteria for both the above mentioned program, as well as other financing available. We advise clients that general criteria for a franchise loan are as follows : decent personal credit history , a respectable down payment ( more about that later ) , some industry experience in the type of franchise you are purchasing, and you must be a Canadian citizen or landed immigrant – bottom line – can you legally borrow in Canada . Broadly speaking satisfying those criteria should allow you to get out of the gate quickly and commence your franchise financing process.

That brings us to another tip we noted, who exactly is your franchise finance partner. For a starter, given the unique nature of franchise financing we recommend you work with a trusted, credible and experienced franchise financing consultant. He or she will guide you through the finance maze and make you aware of all issues and conditions on an up front basis.

Secondly, don’t count on your franchisor to provide financing – they like selling franchises, not borrowing on their own account to get you started. Having said that a good franchisor will give you guidance on their own chains experience in how their franchisees are typically financed. Alternative to the bank franchise finance program sponsored by the government are a handful of specialized financed companies. We also have actively recommended working with equipment financing firms to finance some of the hard assets in your new business. That rounds out the strategy quite nicely.

Purchasing the right franchise and getting it financed is job 1. Job 2 should be ensuring that you have ongoing financing needs covered for things such as working capital, additional equipment or assets that might be needed down the road, staff and sales expansion, etc. You can address this most properly by carefully tuning your initial business plan to ensure that ongoing sales and costs can be financed properly.

Make sure the business can support any debt that you take on at a future point in time.
If you cover off carefully our 5 ‘Tips’ you are well on your way to entrepreneurial success in franchise financing 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 6 years - has completed in excess of 45 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details:
http://www.7parkavenuefinancial.com/franchise_business_financing.html

How You Can Address Franchise Cost and Franchise Financing In Canada

It is of course, understandable that franchise cost and franchise financing can be two major challenges, or worries, that you face when you make the decision to be an entrepreneur in the franchise environment. Let’s look at how you can address some of those issues and concerns with information that will assist you in making an overall solid franchise investment decision.

Franchise financing and franchise cost should never be put near the end of your decision making process. You should address those key areas up front and be armed with the right information on how the industry finances a franchise.Many clients, somewhat mistakenly, think they will receive franchise financing assistance, or even the financing itself from their franchisor. Nothing could be further from the truth – you should simply focus on the fact that the franchisor is in business to sell units and grow their business, not put capital into your venture. That being said we hasten to say that almost all franchisors can be a valuable tool in the franchise finance arena in a number of ways.

So how can you use the franchisor itself as a tool for your financial planning around your venture? Follow a couple basic rules – review the franchise disclosure documents carefully for any financial data that will help you make a better financial decision. Also, ask for franchisee testimonial and contact info – if possible talk to some franchisees in the chain and ask them about their finance strategy hen they acquired the business. Also cover off if the financial expectations they had around the business in fact materialized.In some cases your franchise lender may wish to obtain info on the franchisor and their overall financial status. This generally is not required with well known brands.

In the challenging economic environment we are currently in it is important to deal with an expert to ensure you have the right financial strategy in place – your lawyer or accountant might be familiar with a franchise financing expert in Canada who can more quickly assist you.

In order to finance a franchise successfully in Canada we recommend to all clients that you have an appropriate mix of debt and equity – equity is of course the funds you put into the business yourself, and debt is the franchise financing itself . Typically we see clients putting anywhere from 10-50% of the franchise cost in as owner equity. This varies per type of business, and whether the business is somewhat asset based or service based.

You need a business plan and financial projection! We can’t be clearer than that. This valuable tool serves a number of purposes – it shows the lender you have thought out the ‘ financial ‘ aspects of your business – and quite frankly it should solidify in your own mind that you have a solid business opportunity . Carefull attention to revenue projections, costs, and debt servicing should all be a part of that plan. Typically you should have the plan prepared by a professional and we don’t think you should pay more than 750-1000$ for a decent plan.Don’t spend thousands on a business plan – that’s a waste of money in our opinion.

So how is the franchise cost financed in Canada? As we said the key component is your own personal investment .After that a huge majority of franchises in Canada are financed under a special government program that is technically called the BIL or CSBF program .Most clients typically refer to the program as the Government Small Business Loan. Ensure you are aware of the requirements and that you can meet the requirements. It is recommended you speak to a trusted, credible and experienced advisor in this area who often can help you put together your package, guarantee that you meet the requirement and at the same time work with you, the lender, and the franchisor to accomplish every ones goal – which is of course – getting you approved for franchise financing !

It is rare that one financing will cover all your total financing. Many of our clients that require some form of asset financing with their franchise investment utilize an equipment leasing or equipment financing option. This makes sense from a variety of reasons – it spreads out your credit so you aren’t concentrated with one lender, it is easier to get approved, and you can use the government loan to cover a lot of the leasehold costs that otherwise might not be able to be financed .

In franchise financing you should categorize your financing needs in three areas – soft costs, hard asset costs, leaseholds. Soft costs might be things such as the franchise fee, hard costs might be signage or POS computers and software, and leaseholds might be painting, pluming, air conditioning, etc.It is absolutely critical to segregate these into separate categories and ensure you have a financing strategy in place for each one. You do not want to finance all your hard assets via the government loan and then find out you can’t get leasehold financing from anyone else.

So whats our bottom line in franchise cost and franchise financing. Its simply do your homework, solicit the help of a franchise finance expert, prepare a solid business plan and segregate your costs so that you can finance them in the right manner. Completing all that should put you in a perfect position to execute on your franchise ownership dream.

--

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