Canadian Franchisee Financing & Getting The Right Finance For A Franchise - Possible In Today’s Economy? Here’s how!

In The Minutes It Takes to Read This You’ll Understand Franchisee Funding & Loans In Canada


Is financing or the lack of knowledge of who to turn to holding you back on completing your dream or vision of finance for a franchise you have chosen? The ' how to ' in franchisee financing in Canada is not as hard as you might think. Let's examine a solid ' battle plan ' and the ' lay of the land ' in franchisee finance with respect to opportunities in the Canadian franchise industry.

The amount of capital you need when you consider how to finance a franchise can often seem formidable. The amount you are able to finance will come from debt (your loan) and your own individual equity into the business... classically known as your ' down payment '. We quite frankly can’t remember when we have not heard the question from any client ' how much do I have to put in ‘. More about that one later.

We caution clients also to think of the financing over the intermediate and long term. By that we mean that yes, you have to have solid funding to acquire the franchise but at the same time start to think also of how any working capital needs might be solved after you have acquired the business .

But first things first, right? So back to our main point today, which is ‘In today’s tough business climate?
Is it still possible to attain the amount of franchisee financing you need?’ We hate to put on our lawyers hat and offer up the answer ' it depends ' but quite frankly we're fairly bullish on the ability for any Canadian business entrepreneur to acquire financing for a franchise.

The key elements of ' successful ' franchisee financing revolving around a small handful of key elements - they are as follows - a reasonable down payment aka ' equity investment ' by yourself as owner. Secondly, the financing must be well documented - this should be a bus. Plan or summary highlighting you yourself, your proposed acquisition, info on the franchisor, industry stats, and a financial plan that makes sense. Only one financial plan makes sense for your lender - the one that shows them how they will be repaid!

The business plan or a significant executive summary outlining what we have just discussed should not be a daunting task. While we recognize that many clients don’t have the experience, tools, (or simply the desire) to prepare such a document it in fact can be prepared efficiently and for a very low/reasonable cost... we would not recommend paying more than 1k or less for a plan that meets and exceeds expectations. Also, be prepared to provide some input into the plan, as no one should know the business and it’s potential more than you.

In Canada franchises in the 350-400k range are financing via 4 main methods. Thousands of businesses utilize the well known BIL/CSBF loan that quite frankly provides, in our opinion, the best rates, terms and structures for small to medium sized franchisees.

Additional financing comes from one or two specialty firms that tend to work only with established larger franchisors with requirements often approaching 1 Million or more per transaction. Also, is it possible just to get ' a loan ' from a Canadian bank to acquire the franchise? We would offer up that it is, if you have significant collateral to pledge, very strong net worth, and a pristine credit bureau record. We don’t see that type of transaction happening a lot, and certainly the idea of collapsing or collateralizing outside investments has all sorts of personal and financial implications.

Your ability to finance any hard assets via equpment financing can often nicely complement or round out a financing package. Again, it’s a case of making the numbers work and ensuring that you have taken some time to analyze the total financing picture. When we sit down with clients we tend to break down the financing into key areas such as ' soft costs ‘(for example your franchisee fee) equipment, leaseholds, and working capital. By identifying a source for all these you have the ability to cobble together a plan that works.

Bottom line, it’s very possible to get a solid franchisee financing package in place to complete your dream acquisition. Common sense attributes such as being prepared and doing your homework go a long way. Consider also talking tow or working with a trusted, credible and experienced Canadian business financing advisor who can help you navigate the franchise finance roadmap to entrepreneurial success.



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 .Info re: Canadian business financing & contact details :

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

Why Canadian ABL Asset Based Line Of Credit Clients Win ! Commercial Revolving Non Bank Facilities Work

What’s Different About Asset Based Lending Line Of Credit Capital ?


Information on the commercial revolving capital facility known as the ABL asset based line of credit . What are the advantages and differences of this facility to a bank business line of credit .


If you speak to Vince Lombardi or Charlie Sheen winning is apparently everything. We're not sure that applies in business all the time, but we think we can prove to Canadian business owners and financial managers that an ABL asset based line of credit is as close to the perfect ' winning ' commercial revolving credit facility that you can obtain. Here's why.

An ABL firm is a business to business lender - yes we know that Canadian chartered banks are also that... but they are operating under a totally different set of rules. That is why small, medium and even the largest firms in Canada utilized asset based lines of credit for working capital and cash flow financing.

The essence of an ABL is the financing, to the maximum amount possible, of your receivables and inventory. Medium and larger firms can actually include a healthy component of fixed assets and real estate into that mix.

The extra financing capability that your firm receives from an asset based line of revolving credit (versus the traditional bank facility) gives you choices. What are those choices? Mostly good things - expanding your business... acquiring a competitor or peer, working thru a turnaround scenario. or simply restructuring to get your firm where it needs to be.

But can't we get the same sort of opportunity via a Chartered bank in Canada? ask clients. In fact we agree that commercial credit and lending in Canada via our chartered banks is in fact on the rise, all recent stats back up that statement. However, 2 simple issues come to mind when we talk over these financing challenges with clients - Would you in fact be approved for a facility via a traditional commercial revolving line of credit... and, as germane, would your company get all the financing it needs.

The hard core reality is that many firms we meet actually find themselves out of favor at the bank, they are either ' capped ' to a pre set limit , or find themselves in the very ' unspecial ' feeling that comes from finding yourself in Special Loans . (Trust us on that, special is taken out of context in this financial term in Canada!)

We do agree with clients that in many cases, when all things are equal, bank facilities might seem cheaper from a short term commercial line of credit.

Actually, in numerous instances an ABL asset based line of credit can actually be cheaper than the bank, roughly the same in pricing, or in a lot of instances more expensive financing... but... and its a big but... you have to weigh the fact that ABL delivers more borrowing power allowing you to enjoy discounts with suppliers and to purchase more effectively.

Any commercial or revolving line of credit that allows you not to have to give up ownership percentage is in fact always cheaper than the reality of looking to equity financing, a partner, merger, etc.

In ABL financing your higher borrowing capability comes with only two requirements essentially, you have to have the assets to borrow against, and you must have reasonable financing and reporting controls to validate the significant amounts you are now borrowing.

If you want to explore ABL asset based lines of credit as a solid alternative to funding your company, either temporarily, or permanently speak to a credible, trusted and experienced Canadian business financing advisor who will work with you on an ABL relationship that makes sense.



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 .Info re: Canadian business financing & contact details :

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

Time Runs Out In Business Financing – Working Capital Management Analysis & Strategies

If you're like most Canadian business owners you're somewhat skeptical of either the press or perhaps the agenda's of financial institutions you deal with or borrow from .

Yesterday we got one of those newsletters from a bank - the content was mixed... We’re quoting here : ‘Automotive industry rebounds .... Business confidence down... business barometer mix down sharply...business credit trending up ...'

Talk about some mixed signals... and how do we interpret those type of messages in our own business situation and needs when it comes to working capital management and the analysis of that all important business life blood... cash flow?

How you manage your working capital, and how you borrow for it are one of the most important aspects of running and small and medium sized business in Canada. Simply things like billing and collecting your A/R promptly and matching those payables outflows make or break any business.

What are the factors that affect your need for cash flow and what are some analysis and financing techniques to accelerate working capital management. That’s effectively called the cash flow cycle. Did you know for example that many larger firms actually manage their growth, they use simple formula's that any small and medium sized business owner and financial manager can use to determine how fast they can grow based on their operating profits and their ability to manage receivables and inventories without over borrowing . Frankly, you should be doing what the big boys do also, and it’s not as hard as you think.

The three things that affect your need for working capital are your profits, how fast you collect from your customers, and the ability to control operating costs and overheads as you grow. The big corporations call this formula - the ' Sustainable Growth Rate ' - as a business owner you need to accept that growth can often mean running out of cash.

So how do business owners ' accelerate ' working capital management strategies to optimize growth. First, as we said they can use some basic formulas to determine how fast they can growth without outside financing. When outside financing is required a number of options are available - probably more than you thought.

They include receivable financing, working capital facilities that are non bank in nature and combine inventory and a/r financing , and true asset based lending which monetizes on a daily needs basis our current and fixed assets .

External cash flow can also be provided by lesser known, but very viable vehicles such as purchase order financing, securitization and even the financing of any SR&ED tax credits if you're in the manufacturing or tech space. Capital can also be conserved by effect lease financing strategies that finance assets you need on a short term or long term basis.

So, we've been told business is about a bottom line. What's ours today? Pretty simple. Use tools to measure your cash flow needs, plan for growth with working capital management and analysis in mind, and take advantage or cash flow techniques that are traditional and non traditional in nature . Speak to a trusted, credible and experienced Canadian business financing advisor on what it takes to implement strategies that work for your firm.




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 .Info re: Canadian business financing & contact details :

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

Discover Business Software Financing Options For Canadian Systems & Projects

No secret that in today's competitive environment any advantage business has over the competition is valuable - that’s an understatement. So, if you accept that software of all types’ runs grows and operates your business, doesn’t it make sense that you are up to speed on business software financing options for your systems? We think it does, so let’s explore what you might not know about software finance lease and loans in Canada.

The reality that comes as a surprise to many clients is simply the fact that technology can be leased. In today’s terms that covers hardware systems (servers, pc's, laptops) as well as software (our subject today) and the new leasing asset on the block: solar, wind and cleantech assets.

There are some key issues that differentiate software financing in Canada. Issues that you have to consider and take into account are the types of leases offered in business software financing options, the doc's that come with that lease, and probably of prime importance to our clients, how these leases are priced .

Software itself is a broad term, we refer to software you are developing (yes it can be financed) as well as the applications you purchase. Many transactions in Canada are software only leases and loans. A present surprise to our clients is often the fact that the actual software licenses can be financed also (remember, you use the software, you dont own it).

Many great technology financing occur when you utilize the concept of ' bundling ' - that is to say you acquire hardware and then bundle in numerous soft costs, including software to achieve a blending pricing and maximum financing of your transaction .

In technology finance when it comes to hardware you should often consider an operating lease for the hardware component of your transaction. The software and other soft costs (training, licenses, maintenance, install, etc) are financed at what the industry terms as ' full pay out ‘. By combining the
rates on both parts of the transactions you achieve a blended rate which makes your overall business software financing attractive from the lease and loan perspective .

Let’s use a quick example to illustrate -

You buy a 100K server and related ' hardware ' and agree to finance it a 3 year term. Additionally you require, and acquire 50k of software. What would the monthly payment be on this transaction?

We maintain it could well be in the 4.1k range per month on a 36 month term. That interest rate works out to about 1% or less, because the operating lease subsidizes the software financing.


Want this and other advice on proper tech financing and business software financing options on your systems and technology assets. Speak to a credible, experienced and trusted Canadian business financing advisor with software and tech finance experience. Options you thought you never had will become available, immediately.





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 .Info re: Canadian business financing & contact details :


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

Instant Financing Access To Canadian Equipment Leasing Company Solutions !

Canadian construction, heavy equipment , transportation , and medical lease financing that works for your firm, today!

You're in for a pleasant surprise if you think it’s impossible to quickly and properly access financing via an equipment leasing company in Canada.

But what does it exactly take to be in a position to know what firms offer what type of financing , who and where are they, and what you need to know to ensure you have access to the proper rates, terms and structures that your Canadian firm deserves . Let’s update you on the current lease ' landscape' in Canada, because it's a whole brave new world out there!

Some of our clients seem to find this tough to believe, but there are lessors out there who are very interested in getting your lease finance business. Therefore you need to know who they are and what type of financing they provide based on the asset type that you're financing. We're going to show you one simply, easy solution shortly that will take care of that quite efficiently.

In Canada banks have traditionally exited and entered the leasing market on a number of occasions over the last number of years. Currently in the 2011 environment you can safely say ' they are in! '

Bank leasing is done through separate divisions and companies of the bank, with the major benefit being their very low cost of funds (after all they are the bank, right?!). Challenges to access bank leasing are simply that the credit quality they are looking for must be quite strong, so if your transaction needs to be structured, i.e. due to your firm’s financial health, then bank leasing might not be for you. Also, two types of leases dominate the Canadian marketplace, capital and operating, and the banks don’t offer operating leases , so if you need a ' lease to use ' ( as opposed to a ' lease to own' ) don’t waste a lot of time talking to a bank lease co in Canada .

Your 2nd best bet, bar none (We’ll share the absolute best bet shortly!) are independent lease companies in Canada. They are non bank in nature, are extremely motivated to get your business, and come in all shapes, sizes, and ownership (many firms are doing business in Canada but U.S. based).

The top characteristics of independent lease Co’s in Canada are they are flexible when it comes to structuring a transaction that makes sense for them... and your company! And you'll find often that when you bank can't, your equipment leasing company can in fact provide the financing you need.

The other segment of equipment leasing in Canada you need to be aware of and maximize are the ' captive ' firms. Captive? as in prisoner? Not exactly. Well perhaps, because captive denotes they are a prisoner to their parent company, meaning that many large corporations set up their own leasing and finance firm to lease their own products. I guess in business it’s known as the double, whammy! They make money on the product, and the financing. Think GMAC as an example as it relates to General Motors.

So, minor problem. How do you as a business owner wade through tens and hundreds of lease companies with respect to where they are, who they are, how they do business, what asset type they prefer to finance, and what credit quality they demand ? !! Want an instant solution and access to an equipment leasing company for your financing needs.

The solution is to seek and work with a trusted, credible and experienced Canadian business financing advisor who knows and has access to the entire lease landscape in Canada. The benefits? Save time, get prompt approvals, and get the best rate, term and structure for the asset you are financing. As the guy says on TV ' we urge you to act at once’!





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 .Info re: Canadian business financing & contact details :

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

Best Rates In Transportation & Rental Leasing In Commercial Trucking In Canada

Is it possible for business owners, financial managers, or owner operators themselves to ensure they have the best rates in transportation and rental leasing in Canada? Commercial trucking continues to be a large part of equipment leasing and financing in Canada: Lets examine some key issues around rates, structures and approvals for maximum flexibility and success.


Asset value plays a huge part of the relationship to winning from the viewpoint of a quick approval and a rate, term and structure you can live with. In many cases the Canadian marketplace does not offer as robust and offering as in the U.S. There we find there are all sorts of financial offerings around transportation leasing - these include full payout capital leases, operating leases, ' Trac ' Leases, etc.

We can safely say in Canada that the majority of leases are full payout capital leases - that is to say ' lease to own '. Typically your lessor will be on the ownership title, leasing the vehicle to you as the lessee

In Canada, or anywhere for that matter, the asset value plays a key role, as we said, in both lease approval and structuring. The bottom line - transportation assets depreciate in value and determining the value at the end of any lease term early in your transaction negotiations is difficult. This is compounded when you are acquiring used transport and rental assets, which play a huge role in the lease financing industry.

Physical condition therefore plays a key role in the financing decision, and in some cases an appraisal might be required. So, as ironic as it seems, some key factors in your final credit decision and approval might well include mileage, tires, safety checks, and maintenance stats. You therefore need to understand as an owner operator or commercial fleet manager that these factors may well affect your payment and play a key role in your lease vs. buy decision.

Some of the high level points of interest you should focus on to understand how pricing is determine in commercial truck financing are the manufacturer and model, the expected useful life ( again, either new or used ) as well as the ability to finance any soft costs associated with your transaction .

Working with a specialized expert in transportation is key to achieving a prompt approval that makes sense in terms of your financial obligation. Not all lessors in Canada have the capability to service and finance transportation rental & leasing that you require in commercial trucking.

A combination of knowledge, financing services that suit trucking, and value added advice are key. Speak to a trusted, credible and experienced Canadian business financing advisor to assist you in achieving and approval and rates that make sense in commercial transport finance 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 .Info re: Canadian business financing & contact details :


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

Get The Lowest & Best Accounts Receivable Financing Loan Rates In Canada – Factoring Demystified!

We wish. If only pricing and ' rates ' around accounts receivable financing loan rates were more easy to understand, and not so confusingly (is that a word?) presented to clients look for a/r financing, commonly know as factoring. We're quite sure that thousands more Canadian business owners and financial managers would look at this unique for of business financing quite differently.

So if it’s not for the industry itself to explain how things work... you guessed it, it’s up to us!

You're looking at accounts receivable financing because of the value you perceive in both growing, and yes surviving from an operational and growth perspective. Using growth as an example the financial reality is that as your firm does grow you require a greater investment in inventory and accounts receivable.

That investment hampers cash flow and working capital, unless you have discovered a way to get your clients to pay your firm before you have to pay your suppliers and employees. Most of our clients haven’t yet found that magic formula, so factoring has become one of several solutions.

In the majority of cases A/R finance is going to be more expensive than traditional financing you could obtain through a Canadian chartered bank. But no matter what pricing you achieve in Canadian A/R finance you can still offset this cost via supplier discounts you can now take, as well as the reality that you can now compete on equal footing with all your competitors. Bottom l line, you're financed to grow!

But let’s get back to pricing and rates, which is why you came today! In order to be able to afford and use effectively accounts receivable financing factoring you must be in a postion to have solid, at a minimum reasonable gross margins. This can be achieved financially of course via pricing well to your clients, and having respectable overheads.

So what are the key factors that you need to wrestle down when trying understanding factoring pricing?

First of all you need to understand the advance rate. That’s the amount of funds you receive on your invoice that's able to be provided to you immediately after you generate a sale. Typically you want to enjoy the maximum advance rate, which is 90% more often than not. Advances rates less than that are not advisable in our opining, and affect your overall pricing in a negative manner. So don’t ask the question ' whats my rate?’ make that instead whats my advance rate?

In accounts receivable loan financing its all about the discount fee. To most clients that that’s what they think the ' interest rate ' is on the deal. The reality , and this is difficult to understand , is that in factoring financing there is not interest rate, because the transaction is a ' sale ' of your a/r between you and your finance partner . Your receivables are ' bought ' at a discount that discount effectively being your carrying cost on the transaction.

We talked about the advance rate on your financing being an optimal 90%. But what about that 10% holdback? Ensure you get that holdback back when your client pays, immediately. That’s the facility you want to strive for, as the reserve plus the advance rate can significantly impact your overall financing cost in A/R finance.

We're the first to agree with clients that factoring pricing can be complex. One of the reasons is quite simple; the firms that offer it to you make it complex. If you take the time to understand how this financing works, and is priced we're quite certain the benefits will appeal much more clearly to your firm .

Want clarity and simplicity on your accounts receivable financing loan rates. Speak to an expert... seek a trusted credible and experienced Canadian business financing advisor who can assist you in making the right decision s in A/R finance.




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 .Info re: Canadian business financing & contact details :
http://www.7
parkavenuefinancial.com/accounts_receivable_financing_loan_rates_factoring.html