Franchise Loans Canada : Let The Sun Rise On Franchising Finance Success

Are You ‘ All In ‘ When It Comes To Franchising Finance in Canada You Don’t Have To Be !

OVERVIEW – Information on franchise loans in Canada . Franchising finance properly executed doesn’t have to be the financial personal commitment that some franchisees think it needs to be . Here is why


Franchising finance makes many would be ' entrepreneurs ' feel like they must be ' ALL IN ' when it comes to franchise loans in Canada. ‘ALL IN ' of course connotation major personal investments in their franchises. Does it have to be that way? Not necessarily! So let's dig in.

When it comes to financing a franchise in the current ' hot ' Canadian franchise market the clients we talk to seem to think that comes with significant personal investments, overdrafts on personal lines of credit, and complicated financing packages that inter mingle with their personal finances. Again, that’s what they think, but it’s not necessarily the case.

We must emphatically say that the would be franchisee would be entrepreneur must in fact contribute some capital to the business. It goes without saying there no ' free ride ' on ' OPM ' - i.e. 100% other people’s money.

In fact some of the amounts required to properly finance this type of business in fact are normally not financeable - those include the actual franchise fees themselves, brokerage or consultant fees, etc. These types of charges typically come out of the owner’s capital investment.

As a broad rule you should be prepared, depending on the overall situation, to put down anywhere from 10-50% of the total amount of financing required to kick start your venture.

Funding the balance of franchise loans in Canada is typically dependant on the size of the purchase, the quality of cash flow forecasts, and lenders interpretation of the viability of your franchisor as a whole. Not all franchisees might be aware that many franchisors are willing to let a franchise fail, knowing they can re-sell it to another potential viable franchisee. Here issues such as ' location/ location/location' and mgmt competence and experience are important.

Never forget that at the end of the day the actual repayment of the franchising loan, which typically is amortized over 5-7 years will in fact come from ongoing cash flows and profits. Since most franchisees tend to be 100% cash businesses that is important.

In Canada franchises are financed via a small handful of specialty finance lenders, the Govt SBL loan, and a combo of various other financing solutions that might inlcude equipment financing, merchant advances, working capital term loans, etc.

So our advice? You don't have to be ' all in ' thinking you have to pledge your personal assets in franchising finance. More important is the ability to seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your funding 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 FRANCHISING FINANCE EXPERTISE





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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

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

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Buying A Franchise?

What do I need to do to get to the goal line? That's a favourite client question when it comes to franchise financing in Canada. We're talking about a franchising business loan to finance your new business (or one that exists already which you're buying).

Franchise Finance

Information. Solid info that you want on the qualifications and process involved in getting approved for your franchise investment. Let's dig in.

Franchise Loans Canada

To say that franchise finance is a ' specialty' area of Canadian business financing is an understatement. There is a fundamental misunderstanding of how this type of finance works, the processes around it, and the risks that you can avoid by doing things properly... with some expert advice along the way.

Franchising In Canada

Is there a systematic way, or method that Canadian franchisees can use to get the financing they need? We think there is. Essentially it is really two very simple concepts, planning, and knowing the process. Simple as that.

Many new Canadian franchisee ' wannabees' view financing as an obstacle. We can forgive those clients sometimes because in the last few years any type of business financing has been a challenge, whether you're General Motors or purchasing a new franchise in the restaurant industry!

Many franchisees (mistakenly so) think the franchisor you are working with is either going to provide you with the financing you need or in some cases at least steer you in the right direction. They might do a bit of the latter, but let's be honest here; the franchisor's job is selling franchises, not financing them.

 Even various banks and other franchise lenders probably would like to see franchisors being more involved in the franchising finance business, but we simply don’t think that is going to happen.
Education. And guess what, we are not talking about educating you, we're talking on your need to be able to educate your franchise lender about why you are the perfect franchise financing in Canada candidate.

Financing A Franchise In Canada

And who are the franchise lenders in Canada? That's probably the main thing you wanted to know, isn’t it? There are 4 key franchise lenders in Canada. They are the Canadian chartered banks under a special program called the BIL/CSBF program, one or two very specialized franchise finance lenders ( they only do very large transactions ) , and thirdly some independent finance firms that offer equipment financing tailored specifically for the franchise industry.

But didn’t we say there were 4 lenders? We did. And we're pretty sure you know that 4th lender already. It’s yourself because your own equity portion or down payment into your business is viewed of course as a debt or a loan.

So what's the clear process in qualifying for franchise financing in Canada. Is there a clear road map you can follow? We categorically think there is. And here it is.

Identify the total franchise funding you need. Determine what amount of owner equity you are prepared to put into the transaction. Anywhere from 10 - 40% is typically required. Determine which of the 3 other methods of financing will allow you to cobble together a total solution to finance your new business.

Next step - prepare a package that includes a business plan, cash flow, info on yourself and the franchisor, with a focus on success and repayment of your debt. Along the way don't forget that you need reasonable personal credit history, and boy does some specific industry experience or general business knowledge help in confirming your future ability to be successful for a franchise finance business loan.

Focus on the best financing that matches your needs; we strongly recommend the BIL program which has great rates, terms, structures, and limited personal guarantees.

Going it alone. It’s possible. A better idea? Speak to a trusted, credible and experienced Canada business financing advisor on information and help on franchise financing in Canada. Next step = ' You're approved '!





7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com

Click Here For 7 PARK AVENUE FINANCIAL website !



7 Park Avenue Financial provides value-added financing consultation for small and medium-sized businesses in the areas of cash flow, working capital, and debt financing.



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. He is an experienced

business financing consultant

.

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 financing 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.









Stan Prokop
7 Park Avenue Financial/Copyright/2020