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Prepared For Your Franchise Finance Strategy? You Are Now!
Information on franchise loans in Canada, Franchise financing can be a challenge for the entrepreneur . Here's strategies for franchising loans that work
Franchise financing loans can help you address your entrepreneurial vision of owning a franchise in Canada. The ability to own your own business and generate profits and wealth is of course appealing to all.
Picking your franchise in some ways is half the battle, as you probably have been focused on purchasing a new or existing franchise that matches your skills, interest, and experience. The other half of the battle and some say the harder one (we would agree) is arranging franchise financing loans that make sense for your business and your own personal situation.
As we point out to clients, whether entrepreneurs are starting a major manufacturing company that might employ hundreds, or a pizza shop with a staff of three two considerations come to mind, always - they are debt and equity. We're of course referring to how much you will put into the business, and how much business credit for a franchise loan can be accessed.
So are there some great secrets and tips we can share with yourself as a prospective entrepreneur - there sure are.
First tip/secret # 1 is simply to investigate carefully the financial requirements that your franchisor requires. These must be addressed in a solid and dedicated manner. If you don’t understand the requirements how can you address them? So ensure you understand the amount of financing the franchisor recommends. Is that all? Definitely not, that’s where our previous concept of planning was mentioned. Make sure you consider two other aspects of the business financing; they are working capital for daily operations, and some sort of plan for long term growth or expansion.
It's probably not written in stone somewhere, but we have always felt that clients aligning themselves with a major brand that has a larger number of multiple units have a strong chance of financing success. Of course that isn’t always the case, as some new concepts in a number of industries continue to be introduced all the time, but it sure helps if the lender is enamored by the franchisors brand and success.
Another great tip and secret is simply that as opposed to spending all the time on the business itself when you are discussing financing, rather also focus on your own personal financial situation and experience. This is absolutely one of the most important criteria that banks pay attention to - namely how have you run your personal affairs, and at the same time do you have the type of business of management experience.
Some franchisees think because they don’t have very direct experience it might hinder their financing - the reality is by properly positioning your skills in a general sense, i.e. previous sales experience, customer service, etc you can capitalize on general business skills required to run any business .
You may not like to hear the news, but the reality is that you do in these times need a sizeable personal investment into the business, aka your owner equity. Those typical ranges between 30-50% depending on the size and nature of your franchise. In some cases you might be in fact buying an existing franchise from another franchisee who wishes for some reason to 'move on.
Let’s share probably our greatest secret in financing your franchise
- the government of Canada. Many clients are surprised to hear that a government program known as the CSBF / BIL program is the largest financier of franchises in Canada. Its underwritten, structured, and supported by the government and offers great rates, terms and structures for amounts up to 350,000.00 - that amount was increased from 250k in previous years.
A final secret - experts are preferred - Speak to a trusted, credible and experienced Canadian business financing advisor on how you can efficiently and successful gain knowledge on franchise financing loans for your new business.
7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
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 .
Stan has had a successful career with some of the world’s largest and most successful corporations.
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 finance executive 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
