Baffled By Franchise Loans In Canada? Beating Franchisee Financing Challenges

Uncomplicate Canadian Franchise Financing


Information on franchise loans in Canada. How can the entrepreneur take the mystery out of franchisee financing and funding for their business acquisition from the franchisor or resale .


Safe to say that many potential franchisees considering the purchase of their business are somewhat baffled by some key issues which ultimately could affect the success of their business purchase.

Basic things, such as have they chosen the right franchise that suits their skills, interests, have they investigated the basics of franchisee financing in Canada, and do they have the resources and time and information to properly complete the purchase . In some cases their funding might involve the purchase of an existing business in the franchise model, i.e. a sale from a current franchisee, In that case their question is ' are their franchise loans to cover off the purchase of a resale franchise ' and how do they differ from a new unit purchase?

All are key issues that warrant special consideration. We are often amused because we see clients at both ends of the extreme; some thing that franchising is rife with pitfalls and risk and simply a bit too complicated, while at the other end of the spectrum there are those that seem to consider the whole process somewhat of a ' cake walk ' and arent really prepared to focus on issues that will make or break their success.

Does it make sense to align yourself with a Canadian or a U.S. franchisor? There's probably no absolute answer on that one, but we will offer up that all things being equal you will find that no matter on what side of the border your franchisor is domiciled key areas such as their current success, prospects, financial stability, and management team and support all are key to your success - So focus on those issues .

It may be surprising to know that one of the current challenges in the industry is the fact that it's difficult for a franchise owner to expand and grow additional units in his or her mini empire. However when this can be achieved as an entrepreneur you now have the ability to expand your success with a minimum of capital, leveraging your ability to increases profits and value in your enterprise.

Franchisee's need to be in a position to properly address the financial benefits of their purchase. Their ability to realistically assess the total profit potential of their purchase, as well as the ability to maintain an income and lifestyle they desire are key. This is best achieved by proper financial planning via a business plan and growth analysis of the business. This can be prepared by the franchisee or with the aid of their accountant, advisor, etc. The worst thing any potential purchasor can do is not address the financial risk and return on investment in a business purchase - that of course goes for purchasing a franchise or any business for that matter.

In Canada franchise loans can be accomplished in several ways. You have the option of dealing with a specialized franchise finance firm, but their assistance may be limited to franchise systems you personally are not interested in, or perhaps don't have financial strength to participate in. Franchises these days range in size from a few thousand dollars to several million, and everything in between. Focus on matching your personal financial commitment to the franchise and aligning it with the total investment you need to consummate your purchase.

Thousands of Canadian entrepreneurs choose the Government BIL loan program to complete their franchisee financing goals. Key benefits are a modest investment of your personal funds, and very acceptable rates, terms and structures when it comes to your personal guarantee, ability to repay without penalty, etc. Investigation of this program is highly recommended.

Purchasing a resale franchise if a very viable strategy. Franchise loans and funding for this type of purchase are also available, but the process is a bit different, simply because you're purchasing an existing business. Key elements of a resale purchase are validation of existing financials, valuation of assets already in the business, and a financing that covers off an asset sale as opposed to a share sale.

With the proper assistance Canadian entrepreneurs should not be' baffled' with either the selection of a franchise or the financing of it. Speak to a trusted, credible and experienced Canadian business financing advisor to get the right objective advice and assistance you need.




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_loans_franchising_financing_funding.html

Zero To Sixty In Canadian Business Financing . ABL Asset Based Lending Is A Trend You Can’t Not Consider

Financial Flexibility In A True Business Finance Solution


Information on abl asset based lending in Canada . Why this type of business financing credit facility is growing in popularity .



Zero to 60... It’s a popular connotation of getting their quickly. So how can a business financing vehicle that was in the ' old days ' considered alternative suddenly be popular and mainstream , and even more so, get your company to your goal .. quickly? That's what we maintain ABL asset based lending does for Canadian business owners and financial managers looking for an alternative business line of credit facility.

One reason you can get to that goal quickly is that there is only one primary requirement for qualification under this type of facility, and that's ' asset ' strength. These assets are monetized, or collateralized if you will, allowing you to turn their total market values into a revolving credit facility.

Even though in the majority of cases ABL financing is more expensive than what we term the ' traditional' bank loan they are of course lower than the cost of equity, which most owners wish to avoid as they grow their business to a higher valuation. Oh, and by the way, on larger higher quality transaction a true asset based line of credit from a bona fide asset based lending firm can actually be equal to or cheaper than, in financing cost, than your Canadian chartered bank facility .

Valuation of your business assets (receivables, inventory, equipment, real estate, etc) is the key driver in the liquidity solution. Very typical margin rates on assets include 90% of your A/R; anywhere form 30-70% of inventory, and market values of real estate and unencumbered fixed assets.

A couple points quickly emerge around the benefits of this type of financing. One is very simple. A quicker approval, because the focus isn’t necessarily on the financial covenants and ratios or overall credit quality of your business, instead it always comes back to asset availability.

Another point is flexibility. We see this lot. And it all comes down to the fact that there is a good chance that your business is different from many other businesses and in a different type of industry. We quite often see that a tremendous amount of flexibility can be applied, via ABL asset based lending, to your particular circumstances. Some of those circumstances might be seasonality of your revenues and cash flows, etc.

As asset based lending in Canada matures (in general terms it's relatively new) there is simply going to be more choices, competitive costs, etc from the providers of this service. Surprisingly in some cases Canada's banks in fact recognize this trend and many have ABL solutions that to a certain degree ' compete ' with their more traditional commercial borrowing facilities. In Canada we're even getting back to the point where business liquidity is getting back to normal and we can almost make the statement that there is more capital than transactions. From the borrowers perspective that's a good thing.

It's important to think of this type of business financing as a revolving line of credit, it’s not a loan per se, and adds no debt to your balance sheet. So if you have those assets, and can't obtain traditional credit, use our ' zero to 60' approach for quick access to business credit.

Speak to a trusted, credible and experienced Canadian business financing advisor on a financing alternative that is achievable for your firm, no matter what your particular circumstances are.





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/business_financing_abl_asset_based_lending.html

Inigo Montoya’s Guide to Cash Flow Financing . The Business Working Capital Loan demystified !

New Rules For Working Capital Finance In Canada

Information on the concept of cash flow in business financing in Canada . What type of working capital loan does the Canadian business owner need .



Have we got a story for you! Actually it's not even a story, it’s a fairy tale. A fairy tale? Truth to be told it’s actually been told already - we talking about the movie ' THE PRINCESS BRIDE ' which some might associate for kids, but it's actually on a few different levels.

A character in the movie is Inigo Montoya . So, Inigo Montoya? The Princess Bride? Oh, yes and cash flow financing! What in the heck could they have to do with each other? Let's explain.

In the movie our friend Inigo is known for always saying ' I do not think it means what you think it means ‘. That's our premise today on ' cash flow. With apologies to Inigo Montoya.


Business cash flow financing. We hear that a lot, clients want to talk to us about it a lot, and most of all, we hear about it in an inconceivable number of ways. Cash flow and its sister, working capital can be used in very direct ways or obscure ways. The offerings that bring about cash flow financing solutions are both direct and indirect.


A good bottom line for us to focus on is that cash flow is a crucial way of determining your company’s health. So that is why it’s a good way to get a handle on processes around cash flow in your company, our terminology (here we go again with Inigo) as well as what internal and external ' players' can affect your cash flow performance...

As we said, cash flow, as well as profit are what most people would agree are the two most important measurements to determine if Canadian business owners and financial managers are winning. The reality is though that while you might look at those two measurements over, say, a yearly period they are quite different and have different uses or meanings to you, the business owner or manager.

Suffice to say that when you are looking at operational issues and challenges the focus is often more clearly on cash flow and working capital as opposed to profit. Ironically we find that when we talk to people about their stock investments in individual firms they talk about profit more than cash flow... we'll never figure that one out.

Should you be surprised when you are doing well, (from a profit perspective meaning of course expenses were less than sales) that you are out, or short of cash? Naturally if you could immediate ' cash flow ' or monetize all that revenue you wouldn’t be in this position, right.

The three elements of your cash flow statement are financing, investment and operations. They affect cash flow in different ways. Challenges arise when you find you can't invest what you need in your business or that you need to take on more debt.

So, cash flow. As we said, there isn't a day when we don't hear about a different meaning or interpretation of the term. In a way they are all correct, it’s about managing your cash inflows, budgeting your cash flow, granting credit to clients,

Are their solutions to your working capital loan or monetization challenges in Canada? You bet there are. They include turning that revenue and those receivables and inventory into business working capital, either via a loan or direct monetization. Solutions include receivable finance, inventory financing, sale leaseback finance , asset based lending, confidential invoice finance, tax credit monetization, and a working capital term loan.

Speak to a trusted, credible and experienced Canadian business financing advisor for solutions that make sense to you. With apologies to our good friend Inigo Montoya!






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/business_cash_flow_financing_loan_working_capital.html

A Big Fat Overview To Canadian Computer, Telecommunications And Software Lease Finance

Add Tangible Financial Value To Your Tech Asset Needs


Information on lease finance solutions around computer, software, and telecommunications equipment in Canada .





A big, fat overview..? Ok, we guess another term is simply called an ‘ introduction to ‘ and today it’s all about lease finance around the acquisition of computer, telecommunications and software purchases your firm requires.



Long term strategies around the acquisition of these types of tech assets are important, whether your firm is in the SME sector of perhaps on of Canada’s top 100 firms. It’s all about the issue around buying the most with what you got, as no one will disagree that tech assets are expensive. And when you have a combination of purchase power plus the financial benefits around the flexibilities that come with lease financing.



One of the key areas where tech assets such as computer and telecom equipment differentiates itself is that fact that savvy business owners and financial managers will view these sort of assets from a viewpoint of ‘lifespan’. In effect you are looking at these assets from a ‘ cradle to grave ‘ outlook – and that’s a smart thing.



We’re making the assumption you have chosen the software or telecom assets you require- now it’s a case of making those budgets work. Quite often your firm is in project mode, as you are in the position of contemplating technologies newest kid on the block, ‘ Cloud Computing ‘, or simply upgrading hardware and software licenses.



The eternal basics of lease finance apply totally to tech assets. When you are successful in obtaining the proper rates and structures on a transaction you have at the same time enhanced your overall working capital position, in effect conserving cash.



We spoke of the ‘ eternal’ benefits of technology leasing, one of those being upgrades to existing assets and projects. Can you think of another asset class that has as much importance tied to is as the ability to change, upgrade, refresh, etc. Quite frankly, we can’t.



Business financing has been a huge challenge for most firms over the last few years – a lot of those challenges are behind us and you’re now in a position to invest in growth assets such as IT investments that maintain your competitiveness.



In computer, telecom and software financing the key issues you need to focus on are documentation, the legals and terms around certain areas, and price structures.



Software is a growing area of lease financing in Canada. Typically we’re talking about application software, not internal software you may be developing or having a third party develop for you. Issues that you might have to address are source code, rights to use, etc. Thousands of firms finance software in combination with their other hardware and telecom needs.



Typical terms for leasing of such assets are 3 years, which is driven primarily from aspect of ‘ useful life ‘ of most tech assets. However all sorts of terms and amortizations can be structured that utilize a combination focus on your budget, the assets useful life, etc.



If your firm requires assistance on deciding whether you should buy or lease these asset classes, and if you want to mitigate the risks associated with technology financing consider speaking to a trusted, credible and experienced Canadian business financing advisor who can assist you with structures that makes sense 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 9 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/computer_telecommunications_software_lease_finance.html

Unclear On Accounts Receivable Finance ? A/R Financing Companies Will Turn Your Business Around.

Looking For A Canadian cash flow solution?



Information on financing companies in Canada offering accounts receivable finance .Does a factoring / invoice discounting program work for you ?


The proverbial ' turnaround '. Typically we think of if as a reversal in fortune, whether in sports, life, or in our case today, ' Business'! More and more Canadian business owners that are looking for a turnaround in their cash flow and working capital are considering accounts receivable finance from financing companies in Canada to effect that turnaround.

But is that a sensible solution? It certainly is with the right circumstances and the right information. Otherwise consider it somewhat of a deadly minefield of misinformation and dealing with the wrong parties. And at a time when the Canadian business financing environment is at (or close to!) it's tightest it makes sense to have the right information at hand.

So it starts at the river, where the cash flows (or isn’t flowing!) That's lack of flow is absolutely the right time to contemplate an A/R receivable finance strategy. Simply speaking it's a tool that can be used by business of all size, from start up to major corporation. Financing companies in Canada sometimes do not do a great job of even explaining things properly, or even advertising them in a manner that makes it clear what the solution involves. So don't get confused when you hear terms like invoice discounting, confidential A/R financing, factoring, etc. Essentially they are all the same, simple as that.

Cash flow tends to slow down when your business or the economy, or both slow down. So it’s at that time when you're probably most creatively challenged to come up with working capital solutions.

Is bank financing for the start up or existing SME (small medium enterprise) extinct? We won't weigh into that debate, but safe to say that that if your firm is not a very solid citizen in good standing with the bank... well let's just leave it at that!

As we have intimated half the battle in accounts receivable finance is just understanding the solution, and knowing how to choose the right financing companies to implement that solution. First of all it comes down to understanding the benefits, and the mechanics of the A/R finance strategy.

There are essentially two key offerings in the Canadian marketplace, the traditional one that's been around before the Dead Sea was sick and a newer, and in our belief preferred solution to that same problem. The traditional solution has you receiving anywhere from 70-90% of your a/r via an immediate advance on the invoice, as soon as you generate it, or at anytime thereafter, as long as the invoice is less than 90 days old. When that invoice is collected by the finance companies that offer this traditional solution you get the remaining amount back immediately, less a financing charge which typically is in the 2-3% per month range assuming a collection period of 30 days.

The alternative is a confidential invoice financing solution, allowing you to bill and collect your own receivables, while at the same time receiving the cash advances as you generate sales/invoices. It's the confidentiality of this type of offering, i.e. no notification to any of your clients or other creditors that we feel is appealing to the Canadian business owner or financial manager.

So the benefits of either of the above strategy now become immediately clear - you're in positive cash flow , suppliers can now be paid, payrolls and government remittances can be made, and , oh yes, you can grow your business again.

So depending on which solution you choose the bottom line is that your turnaround is in motion! Speak to a trusted, credible and experienced Canadian business financing advisor who can work with you to implement the solid cash flow solutions you need... 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/financing_companies_accounts_receivable_finance.html

Alternative Financing From Canadian Business Lenders . Special Loan Takeouts Or Growth Challenges ?

Special Loan Status At Your Bank ? Why And What Next?


Information on alternative financing choices for Canadian business owners in a ‘ special loan ‘ environment . What happened and what lenders can assist you now ?

We're fairly sure that most Canadian business owners and financial managers don't equate Canadian business financing with ' shopping ', although truth be told we do hear the term ' shop around ' quite a bit when talking to clients about alternative financing via bank or non-bank ( mostly non-bank!) lenders .

Unfortunately many of these firms are forced by necessity to do their shopping because they find themselves in the ' Special loan ' section of the bank, due to any number of events that have triggered a default situation. The bottom line, turnaround financing is required.

Let's examine some aspects of alternative finance solutions in Canada, as well as a re - focus on key issues within that damaged bank relationship.

It's no real secret that bank rates for commercial business financing are at all time lows .Even bank fees associated with business lines of credits are not all that unreasonable .

A ‘special loan ' scenario unfortunately seems to often tied to ' personalities ‘, i.e. the human side of business. Clients sometimes feel that Canadian banks or their own banker specifically does not ' understand ' their business. In fairness to Canadian bankers they are sometimes just challenging a client and should often be viewed as a ' sounding board ‘for challenges your business might face

A real challenge that drives many Canadian borrowers to alternative financing is the fact that the Canadian banking industry has a limited number of players, unlike the U.S. which as different tiers of commercial and business banking, with hundreds if not thousands of individual players.

Those Canadian business people that have ' been around ' (I guess that’s us also!) know that industries and even specific firms fall out of favor at certain times. We've met numerous clients of the years that have felt that their commercial bank has been almost looking for a reason to end the relationship. With all due fairness to there being two sides of the story who cannot commiserate with the Canadian firms who suddenly find their total future and destiny in the hands of a third party.

Probably the best advice we can give a client is to choose a banker that is relationship oriented and had internal credibility within her or his bank. Our belief - all banks are the same; all bankers are not the same.

So if that banking relationship is in fact over, what are the alternatives? The good news is ' there are a lot!) . Using our ' shopping analogy ' there's some decent choices. They include non regulated asset based finance firms, equipment lessors who specialize in sale leaseback and refinancing of assets, and subsets of asset finance which include receivable financing ( factoring ) , inventory financing, and combinations there of .

More esoteric solutions such as purchase order finance and tax credit monetization are also readily available. Firms that are either on the verge of entry into a ' special loan ' category, or who find themselves there already have ample room to re-exit under the right conditions.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with achieve refinancing 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 . 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/alternative_financing_lenders_special_loan.html

Wondered How The Canada SBL Government Business Loan Works?

Get The Advantage You Demand & Deserve In Canadian Business Financing

Information on the Canadian government business loan – aka the ‘SBL ‘ program . Understanding the program is your key to success


Although the majority of Canadian business owners and financial managers have heard of or have some knowledge of the ' SBL ' , aka the government business loan most do not fully comprehend how this financing program works.

Although the word ' government ' is sprinkled liberally through all the jargon and conversations we hear about the program the reality is that you have essentially no direct involvement with any government personnel or the perceived bureaucracy that we as Canadian business owners associate with the program.

We're going to assume you're taking that as good knows, although we've got nothing against the good folks in Ottawa.... (When they are doing things properly!)

Industry Canada is the department that sponsors, administers, and to some extent markets the program. They are committed to getting businesses like yours capital, via Canadian chartered banks, that you need to grow and operate your business.

The government in effect guarantees your lender. Since the inception of the program Billions of dollars have been funded under the program.

In general terms the program is designed to help your business secure equipment, land, and leasehold financing for long term needs. Unfortunately many business owners in Canada misinterpret the SBL government business loan as a potential cash or working capital loan. That is 100% not the case; it finances assets and real estate.

When you fully understand the program you comprehend that your local lender, predominately Canada's chartered banks are the ones that actually spur financing growth under the SBL. So if you have a need tor debt that falls under the program parameters you fund your transaction locally.

Understanding the lending parameters of the program is key to your success in completing the financing in a timely manner. Oh, and by the way the program has a lending cap of $ 350,000 ($500,000.00 on real estate), which we think takes the ' small ' out of the small business government loan. That's not chump change!

The essential loan parameters of the program are as follows - 5-7 year amortizations are typical, giving you ample time and low monthly payments. Rates are 3% over Canadian prime, and a small admin fee is assessed by the government as part of the application. (You can often have this admin fee financed as part of your transaction!)

Banks in Canada of course typically evaluate loans on the basis of personal credit, income and collateral. Under the SBL you do in fact need a respectable personal credit history, but even if your firm is a start up with no historical cash flow info available you are still 100% eligible for the financing. Here's where a slick business plan or executive summary comes into play quite nicely - simply demonstrate how future cash flows will repay the loan.

The government guarantee is for the majority of the loan and can only be invoked if your business defaults on the loan, so the risk is jointly shared by the bank and the government, but mostly by the government.

Understanding how the SBL government business loan works is key to a successful financing. And by the way, getting approval is half the battle, you also need to have an understanding of how the loan is administered, so that’s worth some time investment also.

Speak to a trusted, credible and experienced Canadian business financing advisor on ensuring you understand the process, due diligence and financing of this program which will finance billions of dollars this year for your competitors, and hopefully 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/sbl_government_business_loan.html