Franchising : Make Franchise Business Financing Loans Your Finest Hour

Feeling ‘ Unfriended ‘ By Franchise Finance Solutions ?

OVERVIEW – Information on franchise business financing loans for the Canadian would be franchisee . Franchising finance requires expert laser like focus to successfully complete finance needs



Franchise business financing loans can often make the potential or existing franchisee fee very... shall we say ' Unfriended ‘when it comes to achieving the goals they have set out.

Franchising for the entrepreneur or existing franchisee comes with two business challenges at the start of the journey- how to buy a franchise and how to grow one. Let's dig in.

We can't think of a ' hotter' industry to be a part of these days, and that’s a good thing given the tremendous importance the industry plays in economic growth, employment, etc. In many cases both experienced and new entrepreneurs view this business model as a way of achieving viable employment and business ownership

If all of the above is the case why then are many business people challenge for the franchising finance they need. While it might seem logical that the franchisor itself might be a source of financing for the business those situations are very rare ones. It's not that the franchisor doesn't want to help; it’s just that their business model involves selling franchises, not financing them.

So who then are the lenders that focus on Canadian franchising finance? While they are a very small select handful of specialty lenders the majority of franchises in Canada are financed by the Govt SBL loan, owner equity, and assorted finance strategies from commercial finance firms that play a key role in asset acquisition and cash flow finance.

For your bank to consider financing in this Canadian business segment it’s a case of ensuring your relationship with the bank is well established. That will come down to providing income history, employment history and experience, and ensuring you have the credit score and financial net worth to approve a stand alone loan. While some maintain that the type and name of the franchise you are looking to acquire is important we maintain it's all about the basics we've mentioned already.

When a Canadian chartered bank won’t finance your business on a stand alone basis doesn’t forget you have a great partner in the CSBF loan, which has recent changes making it even more attractive to entrepreneur. Don't forget also that we're talking about existing franchises also - if you have determined valid reasons for a current owner to sell, and the franchisor will allow that sale the benefits of buying an existing and proven business are significant .

In specialty, or indirect franchise financing the basics NEVER go away. They include having a solid business plan, cash flow forecast, good personal credit, and the ability to verify your assets and net worth.

When considering the purchase of an existing franchise don’t forget to do the right amount of due diligence - get the current and historical financials, examine bank statements to verify cash inflows, and ascertain the right reason the owner is selling.

Don't forget that franchise business financing loans are a journey in some respects. Financing is needed to acquire the business, and you'll need working capital and possibly new debt alternatives to grow the business.

Don't want to get ' unfriended ' by the challenges of financing? If you want to make franchising success your finest hour consider seeking out and speaking to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you in your loan 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 :

http://www.7parkavenuefinancial.com/franchise-business-financing-loans-franchising.html




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

Franchising Success Is Pretty Well Guaranteed With The Right Franchise Loan For Profitable Franchises In Canada

Just Say ‘ Yes ‘ When It Comes To Profitable Franchises

OVERVIEW – Information on franchising profitable franchises in Canada . The right franchise loan can make or break entrepreneurial success . Whether specialty lending or utilizing the BIL program it’s important to understand requirements and issues




Success via a profitable franchise is of course the dream of every franchisee entrepreneur when he or she is seeking a franchise loan. While most would agree that nothing is ' guaranteed' in business profitable franchises within growing industries certainly provide a strong level of comfort to the borrower. Let's dig in.

When applying for a franchise loan (these are done via a specialty lender or under the BIL program in Canada) the concept of profits as they relate to cash flow and loan repayment are key.

In the case of a turnkey situation the franchisee and the lender of course will rely on the business plan and cash flow projections of the borrower. Loans are repaid from cash flow; it’s as simple as that. So your ability to project reasonable success in a business plan and cash flow statement is key.

We often meet with clients who are looking for a bit of a different story when it comes to a franchise loan. That story? They either wish to purchase an existing franchise from a current operator or, in some cases wish to complete a parternership buyout. (Partnerships are difficult!)

In the case of ' refranchising ' - i.e. the purchase of an existing location it’s critical to get a strong handle on the current financials of the business. If in fact is a predominantly cash business ( a huge per cent age of franchises are ) its critical to understand what happens to cash ( !) , is cash being reported and recorded properly , and if its sufficient to repay both existing and new debt . One tactic we've used successfully over the years is to ensure we are provided with 3 months of bank statements and credit card transactions to allow us to see the inflows and outflows of cash.

Again, staying with the idea of purchasing an existing business, it’s critical to get an appraisal done on the existing assets and leaseholds. These will form the basis for any term loan refinancing, and you want, as a prospective buyer to get a handle on current values, replacement values, and liquidation values. Those are of key interest to your lender also.

Many franchisors these days will mandate ongoing replenishment of leaseholds and assets to keep the business ' fresh '. That’s why your business plan and cash flow projections (if you're not in a service business) should account for ongoing asset upgrades as needed.

Leaseholds are difficult to finance and they are in many cases best financed via the Govt SBL loan which allows for this type of financing. (It’s difficult for many lenders to accept ' fresh paint' as collateral for your loan!)

Your business plan and cash flow is often best when you approach it as a living document - using it to answer basic questions of profitability, cash flow, reasonable growth, etc. We recommend that down the road the franchisee revisit the plan as a useful template to track financial and personal goal success.

Purchasing a franchise in a sector that has a strong chance of profit is part of the winning combination of franchising in Canada. The properly constructed franchise loan and financing plan will help guarantee this success. Seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can help you achieve that guarantee.


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 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

905 829 2653

Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '


























Stan Prokop

Buy A Franchise. Next Step? Franchising Financing Companies And Solutions !

The Other Half Of The Battle – Financing Your Franchise




OVERVIEW – Information on financial info needed when you buy a franchise in Canada . What franchise financing companies and solutions can help



Buy A Franchise . We guess that's challenge # 1. And # 2? It's of course franchise financing companies and solutions that will allow you to realize on the franchisee dream in Canada. That's our job we guess. Let's dig in.

It goes without saying (but we will anyway) that the goal of every new entrepreneur in the franchise industry is to be successful. Putting a proper financing package together with solutions that match your needs, budget and cash flow is what that's all about.

It's really a combination of financing you need to purchase and acquire the franchise and then funds required to run it. Although most franchises are run on a cash flow positive basis - ie cash sales, etc there still is a working component to your transaction. No matter how carefully you've prepared your budget and cash flows Murphy's Law always seems to kick in on occasion.

In Canada the financing that you secure comes from yourself, that’s the equity component, and one or a combination of debt scenarios - your loan / loans. Financing from debt and equity typically covers franchise fees, equipment, leasehold improvements, and potentially a working capital component. Spending some carefull time on the breakdown of those components will save you a lot of grief in the long run. Oh and by the way your banker or commercial lender needs to see those also!

The goal of every business borrower in Canada is to minimize risk - to that extent you should try and avoid securing personal assets at all cost. One way to do that is via an ' SBL '?

An ‘SBL’..? It's the trade name for the Government of Canada Small Business Loan, and hundreds, if not thousands (we’re not really on a first name basis with the govt) of franchisees utilize this program. It was certainly NOT created to specifically address the needs of franchisees in Canada, but boy has it turned out that way.

So why an SBL franchise loan? Some pretty basic reasons really - low competitive rates, limited personal guarantees, no personal collateral, and flexibility as to repayment without penalty etc. That's a powerful combo of benefits in case you haven’t figured it out already.

Franchisees can of course pay cash for their business purchase, and even contribute their own capital to financing the operations and growth of the franchise. However, we've always guided our clients not to collapse RRSP's, take out collateral
Home mortgages, borrow from friends and family. While those solutions work they quite frankly mix up your personal and business finances in an unhealthy way

If you aren’t securing a Govt small business loan for your franchising you need the assistance of a specialized franchise finance firm. Alternatively other Canadian lenders can assist you with solutions based around equipment finance scenarios.

One suggestion? Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your goal to buy a franchise and the solutions available to complete a successful acquisition of a new or existing business in Canada's fastest growing business segment.


7 PARK AVENUE FINANCIAL - CANADIAN FRANCHISE 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 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 :

http://www.7parkavenuefinancial.com/buy-a-franchise-franchising-finance-companies.html



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




Stan Prokop

Are You A Franchisee Looking For a Franchise Finance Loan . Here’s Franchising Capital 101!

How To Finance A Franchise


OVERVIEW – Information to franchising finance in Canada . Here’s what a franchisee needs to know to be successful in getting a franchise finance loan for his or her new business opportunity




Isn't the scary

part of getting a proper franchise finance loan in place the fact that you've already spent a ton of time, and probably some money in addressing your project? That of course means you have probably covered off already key issues such as researching franchise trends, choosing the franchisor with which you wish to become aligned with, checking out industry trends and competition... and on it goes.

So with all that good staff work behind you it must seem daunting to know that getting franchising financing might still be your biggest obstacle. Not necessarily though, so let's discuss.

If you are focused and can address 4 or 5 issues surrounding your potential purchase and financing you are going to have a lot less of a challenge than you think.

The first key issues is that of ownership equity, aka the proverbial ' down payment '. Every client we talk to seems to want to know the minimum amount of capital they can put into the transaction. Surprisingly though we even see the other extreme where some business entrepreneurs are prepared to risk it all and pay cash for their franchise - often collapsing savings or taking mortgages on their homes.

So our key point on that issue - if we had to summarize we would say that somewhere between a low down payment and a 100% cash purchase is probably what you want to be focusing on. You're never going to be successful with 100% debt, and the reality is that no financing is in fact available on the ' OPM ' concept - i.e. 100% other peoples money! Over the years we met franchisees who have told a sad tale of losing it all, personally, after their business failed and they had pledged all personal assets.

We would add that the Canadian govt business loan, aka the BIL/CSBF program requires that you provide only a limited guarantee of 25% of your entire borrowings. That as well as good rates and flexible terms make it a prime candidate to research when you are looking for a financing facility for your transaction.

Another key issue that we always focus on is the concept of doing a bit more planning around how financing will work after you have closed your transaction. So a proper business plan and cash flow that you'll need should also stay focused on how the business will address wages, how much salary you will draw, covering the franchise royalty fees in your agreement with your franchisor. Typical royalty fees we see seem to be in the 6-8% range, sometimes more, and can take a significant chunk of your profits and cash flow.

One of the ways that you can address on going working capital, other than wrestling with your spreadsheets.. is to discuss carefully with the franchisor and other current franchisees as to the ongoing capital and expansion requirements of your business.

Many business owners start with modest drawing of salaries when they start a business. A franchise scenario, at the end of the day is still a start up. Yes, its a proven business model with a good chance of guaranteed revenues, but at the end of the day its as close to a start up as you can get, so budget accordingly for your personal needs relatives to a salary, living expenses, etc.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in addressing the key issues of franchise finance success 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 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 :

http://www.7parkavenuefinancial.com/franchise-finance-loan-franchising-franchisee.html



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

















Stan Prokop

Looking For Franchise Business Funding ? Stay In The Loop On What’s Important For Canadian Business Lenders When It Comes To Franchising Loans

What You Need To Know Franchise Loan Financing In Canada

Information on franchise business funding in Canada . What take aways you need for business lenders around your franchising loan .




‘In the loop’ ... it’s of course being informed and up to date on a subject. So when it comes to a decision such around franchise business funding and staying in the loop on issue surrounding franchising loans, lenders, and other related issues what could be more important ? !

The whole issue of purchasing a franchise and then sourcing franchising loans to complete that purchase is clearly a journey these days... we like to think about it as simply basic steps you can implement in an orderly fashion.

It should be no secret that the franchise you ultimately choose, whether it be in hospitability or service business has to match and complement your financial resources. Naturally related to those decisions are key areas such as suitability of the business when it comes to work experience, fields of interest, etc.

What many franchisees may not realize is that your actual experience in the business is certainly one key factor that a franchise lender considers with respect to a final approval of your transaction. This is probably most evident in the hospitality area, when it comes to a restaurant as an example.

While we personally believe a solid mix of business and marketing skills should make a strong case for a positive supplement to your franchise loan approval the hard reality is that in many cases no experience in an industry often raises a red flag with lenders when it comes to probability of financial success in the business. In any business management experience, rather mis - management is cited as a case for business failure, and this is equally so in franchising in Canada.

Your own investment in the business, i.e. your equity or down payment is of course a strong motivator for you to make the right decision. Although we see some franchisors providing what we could call at best ' guidance ' to your financing needs it should be clearly understood that you're on your own when it comes to franchise business funding in Canada . The one caveat is that in some cases franchisors have a program established with a financial institution of some type, but this is absolutely certainly no guarantee of final approval.

Doing the right due diligence around the financial aspects of your purchase is critical. Understanding revenue potential, profits after your salary that would define a reasonable return on investment, and the ability to finance the business on an ongoing basis are key to being ' in the loop. This can be accomplished through research, talking to current franchisees in the system, and getting some solid advice or mentoring from your accountant, lawyers, or business peers.

Franchising sales account for a huge part of the Canadian economy. Financing your franchise via a specialized loan program such as the Government SBL/BIL program allows you to limit your liability while at the same time having access to solid rates, terms and structures. It quite frankly the ' proper ' financing for your franchising business loan.

Speak to a trusted, credible and experienced Canadian business financing advisor on which type of financing best suits your needs... and , as we said, you'll be ' in the loop '!






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_business_funding_lenders_franchising.html

Who Else Wants A Franchise Financing Loan ? Franchisee Info On Canadian Franchising Loans

Secrets of Success In Canadian Franchising Finance


Information on securing a franchise financing loan in Canada . Franchisee Success is about franchising loans that suit your project.




A franchise financing loan. It’s one of two things you need to successfully gain your entry intro entrepreneurship - the other is of course selecting the right franchise and being approved for it!

Franchising finance in Canada requires a focused commitment by yourself as a franchisee. It is a combination of positioning yourself as ' finance worthy ' and at the same time ensuring you create the perception that you can successfully run and grow a business in the Canadian franchising environment.

Getting that franchise loan can be a challenge and a journey if you don't have some proper preparation done in advance. And don't despair, it doesnt have to be a solo journey. You can easily amass a core team of solid help - they might include your franchise lawyer, a banker or accountant, or a Canadian business financing advisor. Their advice and experience alone can take you over the top, which in your case is.. you guessed it.. Approval.

There still exists the odd would be entrepreneur out there that thinks that 100% OPM might actually work in Canadian franchisee finance. OPM is of course ' Other People Money ' and we can categorically say that 99.999999 % (have we made out point?!) of franchise loans in Canada require an equity contribution from you, the owner.

Don't even ask your next question; we know it already: ' How much do I as an owner have to put into the business to make the financing work?". For a starter that’s partly a wrong question or assumption already because you should be thinking in terms of financing the franchise so that is has a proper combination of debt and equity... and also the ability to grow via having some working capital for operations.

The majority of franchises in Canada probably don't necessarily have an accounts receivable component... but you certainly need cash flow for inventory, operations, payroll, your salary, etc!

In Canada some very popular and established financing programs can accomplish financing your new business with only a 10% equity component - however to both qualify and be successful at the same time additional equity is often needed to make certain financial rations work.

In certain cases your franchisor might be able to steer you towards some financing success - either through a referral or relationships they have established sources. The mistake here is that franchisees sometimes assume this either guarantees approval, or that the franchisor in some manner will support or guarantee the financing. A word of advice from experience - this is not the case!

Actually though the best co-signer in Canada has stated they are willing to guarantee the majority of your financing. What? We can see the expression on our clients faces as we make that statement. However in reality it's true, because the government of Canada in fact guarantees the financing they make under the Canadian BIL / CSBF program. And the majority of franchises in Canada are in fact financed in this manner. Talk about some great help!

We view getting a successful franchise financing loan as the ' hard aspect' of getting your franchising dream in place. Their is a ' soft' component to all this of course ; for example presenting yourself professionally, demonstrating your experience, and ensuring you have a crisp and complete proposal in place.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with franchisee financing in this exciting industry component of the Canadian economy.





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_loan_franchising_franchisee.html

Floating A Loan? Don’t Float Alone! Funding Your Canadian Franchise Via Franchising Lenders For Funding Success!

Franchisee Funding For Canadian Entrepreneurs


Information on buying a franchise in Canada . How to overcome loan funding in Canada for your new business . Who are the lenders for your Canadian franchising funding strategy.





We recently caught an article on U.S. banking from one of our favorite U.S. websites ' Banking Connects ‘. The essence of the piece was that U.S. banks were awash in funds, but entrepreneurs were somewhat ' floating alone' in help on floating that loan!

So, let's try and ' Canadianize' that comment a bit with respect to a franchise loan in Canada, with emphasis on how to successfully loosen the purse strings of those franchise lenders for your funding needs.

Two critical components of success in franchising funding are your overall ' package ' of information, including a business plan and cash flow document. as well as owner capital .For non financial types those two fairly basic elements are still daunting though. The good news is that for very modest prices a number of solid sources to you can recommend assistance or even complete the package on your behalf. The cost by the way? Reasonable!

And now on to owner capital. If there’s one constant question we get from clients its ' How much money do we have to put into the business '.
Naturally we have the perfect answer that never seems acceptable at the outset: ' It depends ‘.

That's because the amount of money you put into the business is dictated by several areas of planning that must all come together.

They are as follows: In certain instances some Canadian or U.S. franchisors doing business in Canada might even strongly dictate how much money you have to put down. We suggest that they might be doing this by experience, knowing that past history has told them what an effective owner equity component is to their franchising system.

Funding of your franchise loan might come from a couple different sources, either an independent commercial finance firm that specializes in this type of lending, or, more commonly, the Government Small Business Loan. This requires a permanent capital amount from you in the 10% range.

Clients are always happy to hear from us that, on balance, acquiring a proven franchise is actually a favorable lending practice in Canada, if only for the fact that it removes some of the 'start up ' risk associated with opening any new business.

With the current 2012 economy on the horizon it's safe to say that entrepreneur and self employment options are clearly on the rise, given downsizing in many other aspects of the Canadian economy.

So, floating that loan! Some of the most accessible and competitive rates from Canadian lenders come via the BIL/CSBF program that more often than not perfectly suits a franchise funding need. The program is classically tailored to meet small business needs (isn’t that what a franchise is?) via great rates, limited personal guarantees, and longer amortizations, typically in the 5-7 year range.

We understand that rates for U.S. franchisees that are non bank in nature are often in the low teens these days in the U.S. . The Canadian program we've referenced has rates at least 50% lower if that U.S. comment is true.

Don't feel as a Canadian would be franchisee that you have to ' float alone' to float that (franchise) loan. Funds are available if you have a plan, some good business background in your chosen industry, and a decent measure of your own funds to commit to the venture. Speak to a trusted, credible and experienced Canadian business financing advisor today.






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_loan_lenders_franchising_funding.html

What’s The Cost And Return on Franchise Financing In Canada.? Franchising Loans & ROI Explained

What’s The Cost And Return on Franchise Financing In Canada.? Franchising Loans & ROI Explained


Information on franchise financing in Canada. How to factor the cost and return on investment of franchising finance loans into your business acquisition .



When we talk to clients about their concerns of getting franchise financing in Canada they also want to focus on whether the cost to finance that franchise is in effect a good ' return on investment ', in relation to both their own personal investment in the business as well as ongoing returns on that equity based on the ongoing profits of the business and the risk involved in this type of business, i.e. franchising!

The amount of capital you need to raise relative to your franchise loan varies in Canada. Factors that are critical here are the amount of capital that in some cases your franchisor might insist you put into the business. Another key factor is of course the amount of funding you are able to raise based upon your own personal financial situation, one factor of which is your personal credit rating. Clearly the majority of franchises in Canada are regarded as ' small business' so it makes sense that the banks and other firms that participate in franchise financing are focusing on you personally as well as your overall business prospects.

Canadian chartered banks, contrary to popular opinion, do participate in franchise financing in Canada. In fact in our opinion you could call them the major lender to the industry. But what many clients don’t understand when looking for franchise financing in Canada is that the bank lending in the franchising industry is done under the auspices of the Government Small Busines Loan, which is perfect suited to the type of financing you probably need.

So how much do franchises cost. We can safely say that they range in price for very nominal amounts such as 10k or so for a small service based franchise to millions of dollars for such large brand names... think ' golden arches' as an example .

Cost factors of your franchise vary with respect to how well your franchisor is doing in Canada, or perhaps it’s often the case of a franchisor in the U.S. who wishes to expand or introduce their presence in Canada.


We mentioned the government small business loan as a prime source of financing for the cost of your franchising proposal. This loan actually maxis out at $ 350,000.00 but in our experience that amount finances a huge amount of the franchise opportunities in Canada. They are great loans because they offer sensible maturities of 5-7 years, solid interest rates and nominal fees attached to the overall financing. The initial franchise fee itself is not financeable under the program, so typically our clients fund that portion themselves, which of course counts as their overall equity,


It's important to start sourcing your financing for your new franchise early on in the process. The bottom line, it’s never too late to start looking at your financing options available, including our aforementioned SBL loan.

So where does the capital come from relative to your own investment in the business.

Typically we see these funds coming from a clients own personal savings. That might also come from a severance situation based on the clients exit from ' corporate life ‘. In some cases you may choose to collapse savings, registered, or otherwise.

We encourage customers to understand the concept of financial leverage when it comes to R O I, or return on investment. Measure risk against reward; ensure you can withdraw a reasonable amount as a salary from the business, based on your financial projections.

And that ROI! Compute and analyze it just as you would any investment, such as a stock. Let’s say something costs 100% and you earn a 6% dividend. That’s generally a reasonable amount. So if you sell that investment 12 months latter your ROI is 6%. Think of that stock as being your business and the dividend being your business profits. Measure risk and reward and factor in the time and commitment you need to make into the business.

Franchising financing in Canada can be as difficult or easy as you make it. Speak to a trusted, credible and experienced Canadian business financing advisor who is expert in financing the cost of your franchising. And here's to your great, hopefully, Return on Investment!


ABOUT THE AUTHOR - STAN PROKOP

7 PARK AVENUE FINANCIAL

CANADIAN BUSINESS FINANCING



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

Don’t Fall For Wrong Info On Getting A Canadian Franchise Business Loan - Get The Bank Franchising Finance You Need

Accept No Substitutes For Real Info On Franchise Financing In Canada



Information on how to get a franchise business loan . Franchising finance with and without the bank . Finance Your Entrepreneurial dream today




Misinformation. It's everywhere it seems. That’s why we think there's some room for some solid information around a franchise business loan in Canada, with, and without the franchising bank finance you are probably looking for.

The whole issue of ' the bank ' is probably where a lot of the mystery, apprehension and misinformation lie when it comes to franchising finance in the Canadian marketplace.

When you understand how the banks participate in franchise finance and your loan in particular things get a lot clearer. We think if we lined up ten business people and entrepreneurs and asked them if they thought banks would finance their franchise... well we hesitate to guess their answers, or coments.

The reality though, approached under the right circumstances and program the fact that you are purchasing a proven business model is actually very appealing to the bank - Again, under the right program.

So where do things go wrong? One of them when we talk to clients is simply the fact that they are incorrectly assuming that the financing they are looking for will be a loan for 100% of the purchase price. We only wish!

The reality is that you must be prepared to inject certain funds; we'll call it an equity or owner investment, into your business. Under the right franchise finance program that permanent injection can be as low as 10%. Naturally certain other ratios around liquidity and debt have to make sense.

Remember also that the right mix of debt, i.e. what you owe, and equity, i.e. what you put in is the classic success story for any business financing. It's all about the right blend. You don’t want to drain all your personal resources, that’s for sure - at the same time you want to be in a position to pay yourself and your franchising finance loan and show a reasonable profit also.

We keep referring to a ' program' Specifically its the government BIL program which is administered by the banks but underwritten, or ' guaranteed' substantially by the government , to your lender, the bank!

Clients often ask us if they can get franchising assistance from a finance point of view from their franchisor. We're skeptical that happens a lot, and if it is it’s certainly in a limited fashion - so don’t hang your hopes on that dream too much!


Does being prepared make sense to you in business? It sure has to us! That’s why a very simple basic package that covers info on yourself, your new proposed business, some financial projections and other misc data make a franchise business loan happen a lot faster.

What about the financing costs for that loan ?The truth be told ( and we did promise you the truth ) is the BIL program has the best rates in Canada for any start up business, which is more or less what your new franchise is . Rates are in the 3% over prime range, and other enhancements to the overall credit package of the program are very
attractive to you, the business borrower.

Your own business background and personal credit rating play a key part of any franchise financing decision. Be prepared to demonstrate paying your taxes on time, having good payments with your creditors, etc. Typically you won’t be asked to put up additional personal collateral such as homes, savings, etc. But again, that's if you have presented your overall picture properly.

We often supplement client financing with equipment leasing on certain assets when that makes sense - that might include P.O.S. systems, computers, etc.

Want to make sure you are getting the real scoop on franchise finance in Canada. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in this area; thereby enhancing your business success potential.




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_business_loan_bank_finance_franchising.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

Going It Alone In Canadian Franchise Loan Financing ? Business Franchising Loans

Don’t listen to them. Many will of course tell you it might be dangerous to ' go it alone ' when you are looking for franchising financing loans.

Can you actually get a business franchise loan without any outside help? Its certainly , possible , and we'll share some advice, tips, strategies and info around your potential do it yourself strategy - but we'll also demonstrate why some professional assistance along the way will ensure the success you are looking for in your franchise business acquisition .

There are of course some real potential pitfalls along the way on your road to franchising success. You want to be sure of course, to the extent that you can be, that your business will be profitable. But all business is of course a risk, whether it’s General Motors or your vision of your own service or restaurant business as an example. It is critical to make the most of the opportunities you have to examine profit potential. Those profits by the way are of course what pay back those franchise finance loans!

Along the way on your franchise journey you have numerous methods of determining financial success. A good start is looking closely at your franchisors prospectus and information, - even though that info might be for ' average ‘ franchisees it gives you a good sense of profit potential versus risk .

Don’t forget of course that your risk is that you are no only borrowing funds for the franchise but that your own personal equity injection into the business is a key part of the overall franchise financing package you will eventually come up with . So work to minimize the risk of franchise business failure.

Get your costs in order and understood. That’s some of the best advice we can provide. We advise clients to look at the total picture, which includes soft costs and hard costs, some of which can be financed, not all. Typically we recommend your owner equity be used to cover those ' soft costs' such as the franchise fee, etc.

Try also to match revenues with expenses - it might make perfect sense to lease some of those ' hard assets ' in the franchise to match the economic benefits you will receive from those assets with the useful economic life of the asset. Want a simple explanation of that? Example: If you're starting a restaurant and a large fridge or cooler is, say 75,000.00 doesn’t it make sense to finance that at say 2k per month on a lease as opposed to using valuable equity and working capital and paying cash. We think so. Wouldn’t you?

So how are franchises actually financing in Canada. We focus on a total package that might include a franchise term loan, a working capital loan, and the appropriate amount of external financing through a financial vehicle such as an equipment lease. Here's the big surprise in Canadian franchise loan financing - simply that the majority of franchises are financed with the government loan program called the BIL / CSBF program. By the way, it has incredible rates, terms, structures, and a limited personal guarantee. What more could you ask for.

So, in summary, is it possible to go it alone in Canadian business franchising financing? It is, but a better solution might be to work with a trusted, credible and experienced Canadian business finance advisor who will craft your package according to financial available and your particular situation and needs. Going it alone, but with a suitable partner when needed is a good thing sometimes!



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_loan_financing_franchising_business.html