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

Dear Abby : What Do I Need To Know About An Asset Based Revolving Credit Facility And ABL Loan? Signed: Anxious

ABL loans Are Great Solutions For Canadian Credit Facilities




Information on why the Asset based revolving credit facility known as an ABL loan provides cash flow advantages to Canadian companies looking for a business line of credit.



Dear Anxious - A great question and now for some hopefully great answers on the subject of an asset based revolving credit facility for your company.

No doubt you have heard about the relatively newest form of business financing in Canada .What you may not understand is simply how an ' ABL ' loan is different from comparative offerings, such as the traditional chartered bank line of credit.

While is has many similarities to its competitors in daily utilization, the benefit of the facility tend to be significantly more enhanced for firms such as yours.

Typical borrowing facilities of this type are secured by two key assets, your receivables and inventory. Your goal when you enter into such a facility is clearly to optimize working capital around whats available today, and what you might need in the future. That’s where an ABL loan comes in. By giving your asset based lender the security around those two assets you create a borrowing margin immediately available to yourself.

We know you're asking yourself ' so whats so different about that ‘... ‘Haven’t you just described what a bank line of credit facility is?’? The true merit of the asset based revolving credit facility is twofold, if we're going to keep things simple.

First of all the advance rates or the amounts you borrow can be significantly more than in other more conservative facilities. It is certainly no unusual to achieve an 85-90% advance rate on your eligible receivable, those under 90 days. And when it comes to inventory, don’t get us started ; because once its clearly understood what type of inventory you carry, what the general turnover is, and how you capture and track this asset you can usually borrow anywhere from 30- 70% against your inventory line .

The other key benefit is the absence of a lot of those ratio and covenant restrictions imposed by traditional financing, including the de-focus on areas such as your personal guarantees.

Let’s keep things simple. If you weren’t getting any significant inventory margining before, and were getting standard 75% a/r advance we can safely say that many companies can increase their borrowing capacity by anywhere from 50-100% on day one .. Via their ABL loan facility.

We keep using the term ' ABL LOAN ‘, but the reality is that your company is taking on zero additional debt in a true asset based line of credit scenario . You are simply ' monetizing ' assets for liquidity. Your facility goes up and down everyday, in the true business cycle as you buy inventory, reduce payables, generate sales, and of course collect them. It’s as simple as that.

So, who is eligible for this type of business borrowing? As we said, we like to keep it simple, so the reality is that any business requiring a working capital line of credit in excess of 250k is in fact eligible. And, get this, you can be public, private, doing well, financially challenged, or even in bankruptcy proceedings. We think we can safely say that ABL financing doesn’t discriminate - if you have assets your eligible in some form for this great new trend in Canadian business financing!

Well that’s it ‘Anxious’. Want more info? Consider speaking to a trusted, credible and experienced Canadian business financing advisor on the merits and differences in asset based revolving credit facilities 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 . 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/asset_based_revolving_credit_facility_abl_loan_.html

Avoid Costly Mistakes In Financing Working Capital – Finance Solutions For A Canadian Business Cash Flow Loan

Best Choices For Cash Flow Financing In Canada




Information on working capital financing solutions in Canada. Loan or Monetization business finance solutions that can work for you.







It's a mine field out there! And some of the decisions you make around financing working capital can be beneficial, or costly! depending on the business finance loan or arrangement you ultimately choose. And whats probably worse is making that type of decision without knowing all your options.

When we meet with clients we often find we are talking about all sorts of unique situations - perhaps the company has expanded too quickly. In some cases interest expenses on long term debts and leases and equipment loans are severely eating into profits. It's of course a vicious cycle and one difficult to get out of - with those liquidity challenges around financing working capital leading to some serious problems.

The signs are usually quite clear - in hindsight, not when you're in the thick of the weeds. We often think of how easy it sometimes probably is for folks to write those ‘business cases' in MBA classes about what went wrong and why. Probably would have been a bit more difficult for them if they were like you, in the thick of it.

So what are some of those danger signs in cash flow financing and business working capital loan scenarios? Those warning signs are often called ' overtrading ‘. Symptoms include very strong growth in sales, dwindling profits, lack of knowledge around short term and long term financing options, no cash flow budges, high leverage ( that’s too much debt by the way !) and slow moving or other inventory issues . Talk about a plethora of problems!


Working capital loans are in fact available in Canada. They are limited, but available. A pure working capital loan is most commonly a term loan, for cash, with fixed repayments and terms of typically three to five years. To get this loan you need to demonstrate historical and future cash flow. Many of the problems we pointed out above in overtrading don’t really often make your firm a candidate for this type of financing. Larger companies are in the same position - these loans are then called mezzanine loans or sub debt type financings. Bottom line, those same cash flow qualifications.

There are some methods of enhancing your working capital that many of the clients we talk to don’t think about. Simply negotiating better terms with favored suppliers is a good one. Also, earlier we spoke of Canadian business owners who knew they had a problem but weren’t aware of possible solutions.

One of those solutions is a working capital facility that monetizes your inventory and receivables. These facilities, a sub set of asset based lending are more expensive usually than bank financing but boy do they solve the problem. Other alternatives are bridge loans on existing equipment, aka the infamous ' sale lease back '.

Never also forget the fundamentals - i.e. a good cash flow plan, solid inventory management, etc.

We'll never know why but every business owner seems to think their situation is unique. Sometimes it is, but more often than not these are classic business finance challenges faced by all. Speak to a trusted, credible and experienced Canadian business financing advisor on the problem, and more importantly, the solutions!





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/financing_working_capital_loan_business_finance.html

Which Of The 3 Equipment Lease Rates Would You Choose ? Canadian Capital & Operating Lease Payments Explained!

Canadian Equipment Lease Rates – the truth!


Information on equipment lease rates in Canada . How are lease payments calculated on both capital and operating lease scenarios . Which type of transaction has the best payment structure for your firm?



OK. Quick test. Here we go. Let’s test your knowledge about equipment lease rates, payments... as they appear to be, and how those payments look in capital and operating leases in Canada.

Let’s assume you have a $ 150,000 transaction - you are looking for a 4 year lease term, and you are being offered three lease payment choices. Those choices are:

$3637.00
$3108.00
$3373.00


So, now the test. Are you ready. Which payment do you choose? The answer. All three transactions are essentially the same! Its just that the type of lease you choose and how Canadian equipment lease finance companies show you that payment is really where you can save, ( or by the way , lose) thousands of dollars . Let’s explain.



First of all, threes a huge difference in the types of leases being offered to Canadian business owners and financial managers in Canada. We're actually quite lucky because the U.S. leasing industry is populated by all sorts of leases, the names even make our eyes roll, and we think we're somewhat of an expert. They include Trac leases, synthetic lease, non leveraged lease, etc.

But, we're Canadians, eh?! So we keep it simple, and for the most part you only have to choose between two types of leases in Canada, capital and operating. Its the equipment lease finance industry in Canada that sometimes tries to make even these two scenarios complicated - its our job to keep clients decisions simple, and, oh yes, understandable !

Once you have a handle on the two types of leases, and some of the ' games ' albeit legitimate that lessor tend to play you should consider yourself fully armed with respect to getting leasing payment and equipment lease rates for those two basic scenarios ; capital, which is ' lease to own', and operating, which we call ' lease to use'!

When you enter into a capital lease you have made the decision to own an asset at the end of a typically longer lease term. In Canada that is anywhere from 2-7 years, although the most typical lease terms are three years and 5 years.

Operating leases on the other hand tend to be 2-3 year terms, and the reason why is that some of the technical and accounting calculations needed to make an equipment finance lease work from an operating perspective require the calculations to be on a shorter term. But that’s ok, because its assets in an operating lease that tend to be upgraded, returned, remarketed by you or the lessor, etc.

We encourage clients to think of their lease financing needs in terms of both financial reasons and operating policy reasons. All sorts of issues come to mind when you are leasing assets in Canada, not the least of which is getting approved! Other issues such as budgets, payment flexibility also come to mind.

Oh, and back to our opening question, which would you choose again. The first calculation is a standard lease with no obligation at the end of the 48mo term. The 2nd transaction is a slick trick, and actually useful financial strategy, which is providing you with a purchase option at end of term. You can pay or extend typically. And the final is an operating lease, same asset and term, but with a 15% residual investment by the lessor.

A bottom line? As always, speak to a trusted, credible and experienced Canadian business financing advisor who can help you wade thru the myriad of equipment lease rates and structure in a common sense manner that benefits your company.





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/equipment_lease_rates_capital_operating_payments.html

Want Some Business Financing Privacy ? Canadian Confidential Receivables Financing Is An Alternative To Commercial Finance Factoring Funding

Grow Your Business and Cash Flow With This Unique Innovative cash flow solution !


Information on a Canadian business financing strategy known as confidential receivables financing and why this alternative to commercial finance factoring is a welcome surprise to businesses seeking growth funding.




We hear a lot these days about ' privacy’ and confidentiality in business these days. Well, here's a twist on that.

How would you like to be the firm that has a confidential receivables financing facility in place when all your competitors and other firms are using traditional commercial finance factoring funding for their cash flow/working capital? Sounds interesting, right?

The hard reality these days it that financing receivables has emerged as an ' in fashion' alternative to traditional financing that is often unavailable to thousands of medium and smaller businesses in Canada . (Oh and by the way, larger corporations use a subset of this financing also!)

We're often amazed at how long some firms continue to use commercial finance factoring. There are all sorts of reasons why. One not so obvious one is that Canadian banks will often calculate interest on your firm’s entire line of approved credit, even if you are only using part of it. Seem a bit unfair don’t you think? Receivables financing strategy is the ultimate in ' paying for what you only use '.

We admit that’s one smaller point in why factoring agreements are in place by thousands of firms in Canada. The reality is that the total flexibility of this business financing solution is in fact what most businesses are interested in .If we had to be pinned down and identify one main reason why firms factor receivables it might just well be that you credit facility grows as you sales grow . So, bottom line, no more annual reviews or bulge crises when things don’t work out on a temporary basis. It’s the end of ' fighting fires' in cash flow and working capital.

Financing receivables is a subset of asset based lending in Canada. Your firm sells its A/R either on a one time or ongoing basis. A hefty advance, usually 90% range, is made against that most valuable of current assets, your customer accounts. You have just generated instant cash flow. Once your client pays that ' holdback' of 10% or so is refunded, less financing costs, to you, the client.

Those financing costs in Canada average anywhere from 1-3% a month, and quite frankly that middle range, i.e. 2% is a typical fee for each invoice based on a standard industry credit term of 30 days. Factors that affect your rate are size of your portfolio, your general overall financial condition, and the quality and size of your A/R and client base.

So, that privacy issue. What's that all about ask clients. Well, our preference is for you to consider a confidential receivables financing alternative. Under this type of facility you bill and collect your own receivables, the bottom line your financing arrangements are known only to you and your receivable finance partner.

What an advantage! Simply because thousands of other firms, including your competitors who utilize commercial finance factoring have to go through a somewhat intrusive process of have traditional factor firms notify clients and are involved in collecting your accounts.

So, bottom line? If you don’t mind the whole world knowing about how you finance your firms business then consider a traditional commercial finance factoring strategy.

If on the alternative you want all the benefits, the same cost by the way, and want to run your own business from a cash flow and working capital standpoint... well, you know what to do! Speak to a trusted credible and experienced Canadian business financing advisor on how confidential financing of receivables can work for you!




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/financing_receivables_commercial_finance_factoring.html

Finance and Equipment Lease Options for Canadian IT And Medical Hardware And Software

Technology and IT Leasing Benefits for Companies and Institutions in Canada

Information on the growth and benefits of financing and equipment lease options for medical and IT ( information technology) hardware and software assets for corporations and other healthcare institutions.




Although the prospects for Canadian medical/healthcare and IT (Information technology) asset acquisition has never been stronger the hard reality is that the finance needs for these assets is even more pronounced. Simply speaking, companies and institutions want financing options for these assets.

It's all about affordable and managing budgets for many firms, including of course hospitals, clinics, etc. At the same time there is a need to look at both flexible financing, and solutions that lend themselves to upgrade and replacement. The bottom line? That’s where equipment lease financing comes in.

So what's driving all these asset acquisition and financing needs in healthcare and IT in Canada? It seems to be a function of both increased electronic medial records growth of course, as well as the simple fact that newer equipment technologies are emerging all the time.

Government grants and lease accounting incentives also spur the growth of finance for medical and it equipment lease options. And as many users are happy to hear, software, particularly application software, can be financed also.

It's all about being creative when it comes to financing tech assets, software, medical assets, etc, and that’s been a mainstay or key benefit of equipment lease finance in Canada.

Very simple things like interest rate subsidies by vendors, structured payments to reflect the reality of budgets, or seasonality in revenues and cash flow have been a fundamental part of lease financing in Canada for almost forever!

Many medical and equipment and software acquisition needs revolve around projects, aka project financing. So flexible vendor payment scenarios and the ability to match cash outflows with project timelines is critical. More often than not it’s a case of managing that up front cost when cash outflows versus benefits need to be tied together in a common sense manner.

Predictable cash flow and benefits is what Canadian equipment lease financing is all about .And a dose (pardon the pun!) of creativity in IT leasing and medical equipment financing sure helps!

Healthcare and IT budgets are huge in Canada and the lease finance options helps business owners, financial managers and public institutions to address those projects in a manner that makes sense. Its time for the folks that manage those budgets to ensure they have a strong level of awareness of the financing options and flexibility that comes around a solid it equipment lease for both hardware and software.

Saving working capital and allowing companies and other institutions to acquire assets they nee, as well as the upgrade flexibility inherent in asset financing is what it’s all about. Many companies in both the IT and Healthcare sector choose operating leases as a way to manager these acquisitions. The combination of flexibility at end of term, upgrade options, and the generally lower payments that come with a ' lease to use ' transaction are valuable.

Everyone benefits from a properly structured operating lease, as the aftermarket for medial and IT assets in Canada is huge. This aftermarket drives the creativity available in lease finance transactions. Residual values for IT and medical equipment are generally excellent, as are the aftermarket activity for purchase and re-financing of these assets.

Speak to an experienced, credible and trusted Canadian business financing advisor who can help you structure and obtain the best finance options available for medical, IT, and software assets.




ABOUT THE AUTHOR : STAN PROKOP

7 PARK AVENUE FINANCIAL

CANADIAN BUSINESS FINANCING!


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

Are You Eligible? Canadian Government Small Business Loan Qualifications – SBL Financing Is The Funding You’re Looking For !

Curious About SBL Government Financing Loans?



Information on the government small business loan ( SBL ) financing program in Canada . Start Up ? In Business ? Here’s how to qualify for this great funding program .



It's actually not that complicated. The Government Small business loan financing program makes funding for your new or established Canadian company accessible and on terms that even larger more established firms simply can’t often achieve.

Funding under the SBL program obviously has a long term gain for Canada as the 7000+ firms that use the program every year create jobs, pay taxes, etc.

Clients sitting down with us only want to know one thing. Are they eligible?! Eligibility for small business loan financing therefore allows them to reap the financial benefits of the program.

So, eligibility. Its a simple case of knowing how the loan guaranty program works , what options are available from a structure viewpoint, and what exactly does the program finance ?

Great questions. Let’s get some answers going! The government small business loan financing option was developed for businesses just like yours. You can either be a start up, or an established firm already in business, with the one caveat being that your revenues must be under 5 Million dollars annually.

Because you may not be eligible for financing at a Canadian chartered bank doesn’t mean you aren’t qualified to receive the SBL loan. That’s because the government guarantee on the loan, by its nature, allows the bank to now provide you with the financing you need for your business.

So when actually are you eligible ?The answer is ' all the time' as the program has been in place for years and allows you to obtain financing for real estate, equipment and capital assets, including software, and even leasehold improvements to your business facility . Many restaurants and franchises use the program for the initial funding of their transaction.

So whets with the guarantee? As we referenced it’s the federal government that guarantees the funding to your chartered bank or other financial institution that participates in the program. That’s one of the big misconceptions, because the same bank that couldn’t provide you with ' traditional' financing because you were a start up, didn’t have enough collateral, etc is the entity that both provides and administers the loan. Talk about irony.

Restrictions on the use of loan proceeds is actually one of the continually misunderstood aspects of the government small business loan. You cannot use the loan for working capital or things such as inventory ; it must be used for our three aforementioned categories - real estate, assets, including software, and leaseholds.

The general terms of the program are as follows, a very limited personal guarantee, 5-7 year term amortizations, and rates at approximately 3% over the Canadian prime rate of interest. By the way that’s a fabulous rate for a start up, wouldn’t you agree, if in fact you are utilizing the program for a new business? It’s also important that the owners of the business have a decent personal credit history, as validated by their personal credit score at the credit bureau.


How can you quickly determine your eligibility without wasting time, monies and resources? Its simple, speak to a trusted, credible and experienced Canadian business financing advisor who can quickly steer you through eligibility and yes, approval!


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/government_small_business_loan_financing_funding.html