Canadian Franchising - Key Components Of A Successful Loan For A New Or Existing Franchise

Financing A Franchise In Canada

Information on successful components of a franchise loan for a new or existing business in Canadian franchising .



Canadian franchising. Got your act together? The act we're referring to of course is your ability to successfully secure a franchise loan for a new or existing franchise in Canada.

Let's focus in on some critical components of what to do and with whom!

It's not as hard as you think to turn one of the most successful business models (franchising) into a successful financial solution for the acquisition of your business. Naturally you have the option of building or inventing your own business model in any industry but surely utilizing a proven method success already in place has significant appeal.

And the financing for your franchise can be focused on any number of industries where the franchise model is prevalent. You ability to be able to generates profits while duplicating the franchisors success is not limited to geographic issues , and , more importantly , the need to invest large amounts of capital when in fact you don't have to under the franchise model .

Many clients we talk to are looking at either acquiring an existing franchise as opposed to a new unit. There are advantages to both and we are pretty sure based on experience that neither, new or existing offer any superior advantage.

But our subject is of course focused on the financing re: your franchise loan .of that new or excising business. The one positive thing when you are considering a resale by an existing current franchisee is of course that you have access to financial performance of the existing owner.

That typically includes several years of financial statements and a proper disclosure of assets in the business. If the owner still has debt outstanding in the business that debt, in the form of bank loans or equipment leases or working capital loans, must be addressed in the context of your purchase and refinancing.

In the case of a franchise which has hard assets and leaseholds, (as opposed to a service business) an appraisal of those assets at fair market value is both recommended and in fact probably required.

We also point out to clients early in the process that they structure their purchase as an asset sale as opposed to a share sale , as share sales are exceptionally difficult to finance other than on an all cash basis - and then of course its not a financing per se, its a ' cash sale ' . A cash sale may or may not be the right thing to do. Too much equity certainly lowers your overall return on investment and ties up your personal assets, quite often permanently.

Don't forget also to address employee issues with respect to financing liability of any severance, termination scenarios, etc.

If you finance your Canadian franchising purchase via a government SBL loan (the preferred solution for many franchisees) an appraisal of an existing franchise is certainly required. If in fact a new or turnkey unit is under consideration you require a detailed business plan focusing on your experience, the industry in which you're going to participate, and a proper financial forecast that ' cash flows ' in a positive nature in order to retire the debt satisfactorily .

Other things you should focus on in your plan are customer profiles, competition analysis, etc.

Having a formal or informal network of business advisors, lawyer, accountant, and banker certainly helps.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who has the ability to turn your Canadian franchising dream into a success franchise loan resolution for a new or existing franchise.








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/canadian_franchising_franchise_loan_new.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

Understanding The Canadian Government Business Loan - Federal SBL Loans Work For New & Existing Businesses

The Canada Small Business Loan Program – Yours To Discover!

Information on the government business loan program in Canada. How the federal SBL financing program loans for your new and existing business makes you eligible for $ 350,000.00 in financing for your new or existing business.





As some , certainly not all ( that’s why we're here) Canadian business owners know the federal government has a long standing and very successful business financing program , aka the ' government business loan '. It’s a federal program in Canada, sponsored by INDUSTRY CANADA, and it is probably suited for your new or existing small (New or under 5,000,000.00$ in revenue) business capital needs.

There's just one problem we’ve perceived over the years. Simply that understanding how the program works, and how you get approved seems to be a mystery to a lot of the clients we meet looking for this type of financing.

Let’s examine some of the key underpinnings of the program, focusing on what this great financing program does, and, more importantly, how you get approved.

First of all, talk about a great partner for your loan. Have you ever needed a co signer? Here's one for you, the government of Canada! We heard their credit is excellent! What we mean of course, when we speak to clients about the program is that the government guarantees the majority of your loan to the bank that underwrites and administers your financing. Talk about a good deal. And you thought you might have to ask your brother in law!

Naturally it goes without saying that this incents the banks and some other institutions that offer the loan to provide your firm with financing that you might not otherwise be able to achieve in a normal traditional financing request.

So we all agree it’s a challenging business financing environment out there. So how can government business loans help your firm?

First of all they finance only 3 things, and that always seems to be a mystery to clients who think the program is a cash or working capital loan. It is not! The three items that the program finances are equipment, leasehold improvements, and real estate. Under the equipment category many of our clients choose to also finance software, which is allowed under the program. And by the way, that’s application software, not software you are going to develop yourself.


So how does a business owner navigate, successfully, the program? We assure clients that you can almost assuredly guarantee yourself approval by following a very specific course of action. There are numerous conditions that can negatively affect your chances of approval, and if you know them you can avoid them.

It’s quite frankly all about your proposal, how it’s presented, to whom its presented, and ensuring you have the basics covered. Those basics are as follows - a minimum 10% equity investment in the financing, reasonable personal credit, a business finance plan that clearly identifies you, your business, and some financial projections that make sense relative to the loan amount you are requesting.

So, the bottom line, you can make understanding the Canadian government small business loan complicated, or easy. We're for easy, so if you want some practical direction in getting a small business loan up to 350,000.00 in place speak to a trusted, credible and experienced Canadian business financing advisor on the positive expectation of an SBL loan approval.



ABOUT THE AUTHOR : STAN PROKOP

7 PARK AVENUE FINANCIAL

Canadian Business Financing !

We finance the little guy ! P.S. We finance the big guys too!


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

Heard About Canadian Government Business Loans? Why Lending Under The SBL Loan Is Right For Your New Or Existing Business.

Don’t Forget to Check Out The Gov’t Small Business Loan Program

Information on the ‘ SBL ‘ loan , and why government business loans are the perfect financing and lending vehicle for new or existing businesses in Canada.




Small is big... in fact it’s huge! We’re talking about small business in Canada, and as most business owners know the large majority of all businesses in Canada are in fact ' small '. Small is relative of course. But when as a whole they represent a huge portion of employment and commercial sales it’s about time we acknowledged it.

Government business loans are one way in which our key business segment, the SME sector is in fact acknowledged. Its lending specially constructed for the small business owner; a loan new or existing business that makes sense, and in fact has attractive terms.

The simple reason why the government SBL loan should be so attractive to yourself as a business owner is simply that boy is it hard to get the financing you need, in case you haven’t found that out already.

Yes many alternative finance choices have become more popular... financing such as receivable finance, P.O. finance, tax credit monetization, bridge loans on equipment, etc.. but without a doubt the ' big kahuna' of small business finance is still traditional government business loans.

Even though Canadian banks can, we feel, quite legitimately be called conservative lenders the hard fact is that the financing they put through the government SBL lending loans is actually guaranteed in large part by the Federal government.

To its credit INDUSTRY CANADA, the department that administers the program has stayed to the program. Through recent economic recessions, market turmoil, etc the program has remain unchanged. Unchanged? Well not truly correct, because in fact the program got better!

During the 2008-2009 financial worldwide debacle Canada actually increased the loan amount under the program by $ 100,000... going from 250k to 350k. And the personal guarantee that you are required to make under the program remained the same, only 25%. Try and get any other business financing without a 100% guarantee backed by you personally... its simply not available.

But it’s still a tough environment out there; you need knowledge on which bank to deal with (the banks administer and fund the program under the government rules and guidelines). Additionally you need ' BOY SCOUT EXPERTISE “ ... by that we mean the motto ' BE PREPARED' never sounded better as applicable to ensuring government new business loans are achieved in a timely manner, securing the funding you need.

Simply speaking, knowing the rules, and putting some basic common sense strategies toward those rules allow you to get approved, as well as receiving the loan you need via our vehicle, the SBL loans in Canada.

You can greatly improve your chances of getting a government business loan, aka the ' SBL ‘. Knowing what conditions will in fact not allow you to get the loan is valuable information.

Speak to a trusted, credible and experienced Canadian business financing advisor on getting a proposal and package in place that virtually guarantees you approval under the program if you have covered off some very basic pre-requisites. Government business loans may be the perfect solution to the financing you need - check the program out!



ABOUT THE AUTHOR - STAN PROKOP

7 PARK AVENUE FINANCIAL

CANADIAN BUSINESS FINANCING !


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