Loan For A Franchise Opportunity ? How Franchisee Financing Works In Canada

Canadian franchise Finance


OVERVIEW – Information on ways to successfully achieve a loan for a franchisee opportunity in Canada . Key elements of franchisee financing explained




Just when the entrepreneur comes out in you to be a franchisee in Canada a new challenge arises - how to get a loan for a franchise opportunity. At that point you have most likely made the decision that you are suited to be part of the franchise industry and have picked your industry and vertical - whether that is hospitality, a service industry, retail, etc.

That financing challenge must now fit into a budget that comprises your own equity in the transaction as well as how much money you can raise to complement the rest of the transaction. Certain things you can do properly will ultimately affect the outcome of your transaction.

The whole issue of down payment or owner equity is top of mind for most franchisees. You want to ensure you have the optimal amount of debt and equity, you don’t want to over borrow, and we’re also encouraging you, to the extent you can, to separate your personal finances from your newly incorporated business.

Awhile back we spoke with a franchisee who advised us that he had ' paid cash ' for his entire franchise. Unfortunately sales and profit objectives weren’t being met and his entire personal life vis a vis savings, credit history, etc was at risk. So that ' pride of ownership'

issue somewhat backfired on our client. Don't let that happen to you. Franchise loans and other financing you need for your venture translate, 99% of the time, into fixed monthly payments which must be met.

Ultimately you want your business plan and cash flow to reflect, and deliver on! The fact that your franchise will be able to meet its own financial obligations, as well as allow you to draw a salary and or bonus that meets your lifestyle needs.

Knowing how the bank or a franchise lender views your application gets you a great start on the road to a successful finance plan. You'll be judged on your overall character, the amount of money you have to put into the business, your business and or industry experience, and your overall past personal credit history.

The manner in which you ' sell' your financier on your franchise financing needs is reflected in your busines plan. The ability to sell your concept and background and experience, as well as business potential has to be reflected in your business plan and cash flow projections.

The issue of franchises being more risky or less risky is always a discussion point we have with both prospective franchisees as well as the finance community in general. Yes, you are of course buying into a proven business model and brand, but at the end of the day you are in many respects a new business start up.

That’s why many successful franchisees utilize the government BIL/CSBF loan to finance their business. It offers premium rates, flexible terms, a lower personal guarantee component, and can even be repaid without penalty.

Our final pearls of wisdom today?

Just the basics... spend time on the amount of funds you need, allow for reasonable time
frames to complete financing, plan for a realistic payback, and seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in complementing the financing you need to make your venture successful.

7 PARK AVENUE FINANCIAL
CANADIAN FRANCHISE FINANCING EXPERTISE



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 10 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/loan-for-a-franchise-opportunity-franchisee-canada.html


























Stan Prokop

Searching For Leasing Companies In Canada? 7 ( More) Key Steps To Find And Deal Successfully In Equipment Asset Finance

7 ( Count ‘ em !) Ways To Make Lease Finance Work For Your Company


OVERVIEW – Information on leasing companies in Canada . Key attributes in dealing successfully with the equipment asset finance firm





Dealing with leasing companies in Canada for your key asset finance needs. Want to maximize your return on this popular method of financing fixed assets in the Canadian marketplace. Or perhaps you simply want to find a lease company you can comfortably work with on a long term basis.

Previously we offered up 5 points on maximizing asset financing for your company. Those points / tips revolved around:

What can be financed?

Lease rates

Payments to your vendor/mfr for the asset

Delivery and Acceptance

Asset location


As the announcer on TV says ' But wait ... there’s more!

And if you act now we'll throw in ...'


Anyway, here are 7 other aspects to consider when utilizing a lease company for your financing needs.

First of all, focus in, or brush up on what type of lease you actually are looking for. Capital leases, i.e. lease to own, and Operating leases, i.e. lease to use are in fact that two main choices offered up to Canadian business owners. Each has its nuances when it comes to monthly payment calculations, implied interest rate, and how they affect your balance sheet and tax situation.

Secondly - determine what the term of the lease is that you require. Term, or amortization affects pricing of course, but other factors such as useful economic life and options at the end of your lease available to you are also critical.

Thirdly, believe it or not you have more flexibility around the timing of your monthly payments. Aside from monthly you also have the option of requesting quarter or even semi annual type payment structures. In certain cases if the asset isn’t going to be fully functional you might want to ask for a short ' interest only ' payment scenario as the asset gets up to full production speed.

Fourth - this one is important. It's your end of term options. They might include negotiating buying the asset at the end of term, upgrading it, returning it, or simply extending the lease for a few more months based on the particular use of the asset.

Our fifth point? Well it might seem a little bit mundane , but its about knowing how to address basis , lets call them documentation or paperwork issues around maintenance of the asset, servicing it, ensuring the asset is properly insured in your name and the name of your lessor, etc. And can it get anymore boring than taxes? In general you will pay the taxes as a combined amount on your monthly payment, i.e. it will be included. By the way when you create a loan transaction, as opposed to a lease those taxes can't be financed, so that’s one of the flexibilities of leasing equipment.

Point # 6 today? It's ensuring that any smaller transaction expenses, which can add up by the way, are identified in your lease offer. They might include admin fees, legal fees for collateralization, registration fees, etc.

Finally, point # 7. It’s simply that you should strive to ensure you are fully credit approved for equipment asset finance transaction, as final credit approval drives both your rate plus some other issues that we have spoken of. You might also want to ensure the actual rate of the lease and verify that with a proper financial calculator. There are only 5 drivers to a monthly payment - term, rate, monthly payment, value of the deal, and the end of term obligation. If you know 4 of those you can figure out the last one easily.

Successfully dealing with leasing companies in Canada can save you both time and dollars. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor, who can assist you with your key fixed asset financing needs.

7 PARK AVENUE FINANCIAL
CANADIAN EQUIPMENT FINANCE EXPERTISE


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 10 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/leasing-companies-key-equipment-asset-finance.html


7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653

Email = sprokop@7parkavenuefinancial.com















Stan Prokop

Working Capital And Business Cash Flow Problems?

Consequences of Inadequate Cash Flow And Growth Financing


OVERVIEW – Information on solutions for working capital and business cash flow problems for the Canadian business owner .




Business cash flow problems. Are there some consequences to working capital management and solutions? You bet there are, so let's recap what's important when it comes to this critical aspect of running, managing and growing your business.

Your ability to both manage working capital, as well as finance it will ultimately decide the long term success of your business. (A lot of small things happen along the way too!)

So how in fact can you exhibit good business working capital management and can you in fact measure that concept ? Look at the following points and ask yourself as a business owner or financial manager where you fit in -

Do you typically have enough cash on hand to cover your operating needs?

Are you in control when you look at the overall daily management of your accounts receivable?

Does the cost and flexibility of the financing you have in place reflect your overall needs?



It is safe to say that if you answer to any (or perhaps all?!) of the above you're either continually muddling through a cash crisis, or worse, the survival of your company is at risk.

So how does a firm actually ' run out of cash ' and what can you do to spot this as far in advance as possible? Believe it or not ' fast growth ‘, something the owner and entrepreneurs and managers dream of actually becomes a double edged sword relative to business cash flow problems.

That's because all that growth bulks up your balance sheet and you’re now carrying inventory, receivables, and new fixed assets all of which make you balance sheet rich and .. you guessed it... CASH FLOW POOR! To make matters worse , when sales in fact start to slow down at the same time inventory turns slow and a/r deteriorates you're as close to crisis mode as you ever will want to be .

A key point we make here also is that we're assuming all this growth is bringing you profits. If in fact it isn’t, i.e. higher costs then you're at the edge of your own version of the fiscal cliff

one more time. No business owner wants to be there!

So are we all doom and gloom today? Hopefully that's not how it's coming off. The reality is simple tools such as a cash flow budget and financing solutions such as:

Receivable financing
Asset based non bank credit lines
Commercial bank lines of credit from Canadian chartered banks
Tax credit monetization
Supply Chain Financing
Securitization
Unsecured cash flow loans

all can help you get to the working capital goal line. Oh and by the way that cash flow budget isn’t a sales forecast, it should properly reflect the timing of inflows and outflows to your capital.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in measuring and solving working capital and business cash flow problems.

7 PARK AVENUE FINANCIAL
CANADIAN WORKING CAPITAL AND CASH FLOW FINANCING EXPERTISE



Stan Prokop





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 10 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/working-capital-business-cash-flow-problems.html

Looking For Leasing Companies ? Here’s 5 Steps For Finding And Dealing Successfully With An Asset Finance Company

Here’s A Short Success Road Map to Asset Based Equipment Finance


OVERVIEW – Information on leasing companies in Canada . Knowing these tips will help you deal successfully with an asset finance company for your business financing needs.



When the Canadian business owner or financial manager maximizes the benefits of utilizing an asset finance company for their capital asset needs it clearly is a win. Here are some proven tips, steps and issues to consider and follow when dealing with leasing companies in Canada.

Point # 1 - While almost any asset, including some intangibles such as computer software can be financed it’s important to have a solid handle on being able to identify the manufacturer of the asset to your leasing company. You can waste a lot of time in finding out that in some cases the firm you are leasing from does not have an appetite for a particular industry .

Point # 2- The leasing rate and monthly payment are key drivers in your final monthly payment calculation. Providing a concise estimate of the actual cost of the asset helps the process move along in a much better fashion. That can often be achieved by simply providing a quote to your lessor.

Point # 3- You want to be able to be in a position to identify when payment must be made to your manufacturer or vendor. In certain cases there might be a staggered payment scenario. That situation will also be reflected in your monthly payment. If you have a legitimate vendor or manufacturer they typically can be paid even if they are outside of Canada, provided you and your leasing company agree on the terms and timing of the payment. Remember also that the majority of leases in Canada have what is known as a ' hell or high water' clause which simply stipulates that you are responsible for paying back, via your monthly payments, any amount that has been advanced to your vendors or mfr's.

Point # 4 - Delivery and acceptance are key aspects of any equipment financing lease in Canada. In certain cases if the delivery date is outside of a normal period of time your lease rate may need to be adjusted. Many Canadian business people don’t' understand leasing companies in Canada borrow and lock in funds also! As a result the timing of cash outlays is reflected in their profits.

Oh and by the way, interest rates go down as well as up, as they certainly have over the last several years. So you should have a clear understanding that you have a right to request the lease rate be lowered downward if in fact general market rates have fallen. It's a two way street, right?

Point # 5- Many Canadian lessees assume that the asset finance company is not necessarily concerned about the location of the assets they are financing. That's wrong, in that it's critical for the lessor to understand where your financed assets are located - they might be at head office, a branch, or even a job site of sorts. You also don't want to move the assets during the term of the lease without proper notification to the asset finance firm/lessor.

Ensuring you address our 5 points will help you in a number of ways; they will streamline your overall approval and funding process, and further enhance your longer term relationship with the right leasing companies you have chosen to work with.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in ensuring successful lease finance transactions while eliminating the risk of things going wrong.

7 PARK AVENUE FINANCIAL
CANADIAN EQUIPMENT FINANCING AND LEASE EXPERTISE


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 10 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/leasing-companies-asset-finance-company.html



7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653

Email = sprokop@7parkavenuefinancial.com























Stan Prokop

Financing Receivables. Here’s What You Didn’t Know About An Accounts Receivable Financing Company!

This Just In! A/R Finance just might work!



Information on financing receivables in Canada. What does the Canadian business owner and manager need to know when dealing with an accounts receivable financing and factoring company.




When Canadian business owners and managers utilize an accounts receivable financing company the focus is all on the dollar value and quality of your A/R. That's what is going to generate cash flow under this process - which simply is a transaction in which you immediately monetize your sales for cash, at a discount... the obvious benefit being the ability to generate cash flow and working capital for your company.

We will add a small technical point here, in that when we typically describe the process we always advise clients that invoice discounting monetizes your revenues as you generate them. That infers that you have to finance those sales all the time and immediately, and actually that’s not 100% correct. The reason? Simply that if you are working with the right firm you certainly can finance any amount of sales you need - it doesnt have to be all or nothing.

And about that ' timing ' issue. The reality is that you can finance those sales ' ANYTIME' after you make them. Quick example: You generate a 100k sale to one of your clients, and the client typically pays you in 60 days. (Notwithstanding your terms are 30 days!) . If you don’t need the cash right away but need it, for example around day 45 in this process, you can finance the invoice then. The benefit - Again its immediate cash when you need it and you are only paying for 15 days of financing! Talk about a win / win!

Invoice discounting, A/R Financing, Factoring, etc are all synonymous terms for the process we are describing today. Pricing always causes mass confusion

with clients. Can this confusion be avoided? We thing it can when you simply focus on and understand the three elements of A/R finance pricing - they are:

The advance rate/ hold back

The discount rate

Time to collect your accounts

When you have a solid grasp on those you've become somewhat of an immediate Receivables Financing expert.

Let's use a quick example, and let us use a 100k invoice as an example. There is no real dollar limit on these facilities, and for that matter invoice size, whether large or small, is not a concern either.

Anyway, you have just invoiced your sale and have 100k outstanding on an invoice. The Accounts receivable financing company will typically advance, at your request 90% of this amount. The 10% is a reserve or hold back that allows for anything going wrong, primarily uncollectibility. If your customer pays you in 60 days, as they typically did in our example you receive the 10% hold back, less financing costs which are typically 1.5-2% for a 30 day period.

If you are using traditional A/R financing companies the finance firm you are dealing with handles collections. That's not our recommended solution - as we prefer the confidential invoice financing strategy, allowing you to bill and collect your own accounts, with no notice to any client, supplier, other lender, etc. We do of course point out that when financing receivables your accounts receivable financing company partner must in fact have clear collateral of your receivables. Many clients we talk to think they can have a bank line and finance receivables via a commercial finance firm. They are wrong! It's one or the other.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in setting up the facility that works for your business when it comes to monetizing your sales revenues and cash flowing that balance sheet!

7 PARK AVENUE FINANCIAL
CANADIAN RECEIVABLES FINANCING EXPERTISE


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 10 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-accounts-receivable-company.html



7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653

Email = sprokop@7parkavenuefinancial.com
























Stan Prokop

Buying A Company? Who Can Help You With Financing To Buy A Business Or Make An Acquisition?

Canadian business acquisitions and merger financing


OVERVIEW – Information on buying and financing a company in Canada . When you buy a business or make an acquisition you need specialized assistance and expertise



If you are buying a company or a business in Canada your goal is of course to make an informed acquisition, pay a reasonable ' market' price and get the financing to need to make your deal work.

That might be an outright acquisition, or perhaps even a merger with a strategic partner or competitor.
The large corporations in Canada, public and otherwise have access to tons of talent and assistance in this area. But what about businesses in the SME sector, from a small business to a mid market type company?
If you’re looking to execute on a deal it might be very wise to consider the assistance of a Canadian business financing advisor to assist you in closing the deal, and in some cases even finding the deal.
Going it alone works, but boy can that be both time consuming, painful and expensive.

In what ways can a qualified intermediary or financing advisor help you? There are several key areas - they include:

Developing criteria for your final decision

Reviewing and assessing financial information that's available

Helping with pricing and valuation

Structuring a financing that makes sense based on assets, cash flow

Timing is always critical when it comes to arranging financing and making that acquisition. You need to ensure that who ever you are working with is proactive when it comes to timelines. The quality of a final financing package is critical and can significantly influence the parties who will finance your deal - which might be Canadian banks, independent commercial finance companies, or even perhaps a private equity group.

What can the business owner or manager expect to pay when it comes to a Success fee or work fees? In the SME sector we suggest a nominal but reasonable work fee and a Success fee in the 1-5% range depending on the complexity of the deal. In many cases the work fee or ' retainer' as many seem to prefer to call it can easily be negotiated to be deducted from the final Success fee.

Reasonable fees for an advisor or intermediary ensure he or she is incented to keep things moving when things get tough on a deal , and the quality of the person or firm you are dealing with will quickly demonstrate to you the amount of useful information and advice they can bring to a deal .

Also, it sure helps if you are working with someone who has a sense of the industry you are in. They tend to be on a first name basis with people and firms that can help you both acquire and finance your deal. That's important and has value.

Buying a company and arranging the appropriate financing to make your acquisition successful requires patience, proper documentation and disclosure, and some hand holding along the way. You may have found the right deal, but if proper and successful financing is not in place there is of course... NO DEAL! That’s when the right amount of debt, equity and financing expertise becomes critical.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can help you buy and finance that company or acquisition.

7 PARK AVENUE FINANCIAL
CANADIAN BUSINESS FINANCING ACQUISITION EXPERTISE


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 10 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/buying-company-financing-buy-business-acquisition.html





7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653

Email = sprokop@7parkavenuefinancial.com













Stan Prokop

Loan For A Franchise? Here’s How Franchising Finance Can Work For You

Buying A Franchise ? How To Finance That Smart Purchase!


OVERVIEW – Information on how Canadian franchisees can access a loan for a franchise . Franchising finance is a specialized form of finance .


Yes, you're looking for a loan for a franchise, but who in fact is lending for franchising finance in Canada and what are the criteria. Is there a way to ensure you have access to all aspects of franchisee loans? Some good questions - let's explore some even (hopefully!) better answers.

A few years ago as the Canadian franchise industry (and all businesses in general) recovered from the global financial crisis it probably was the worst time even to seek franchising loans. But the dust has settle, the Canadian economy seems to be firing on all cylinders, and the only question you as a franchisee want to know is ' where's my loan approval'?

While Canadian banks promote actively that they support franchises in Canada the reality is that quite often, in fact almost always! ... they don’t do this directly. That probably simply comes from the fact that in many aspects franchises are viewed as start up in nature - notwithstanding the proven business model and brand you as the franchisee have bought into. So that means from a fundamental finance point of view that there are no strong opening balance sheets, historical cash flows, and proof of profitability. In essence you're a start up... and start up financing is hard to find.

So how in fact do the banks finance franchises? The reality? They do it under the auspices of the BIL/CSBF loan program, which is a government guarantee to the bank for the majority of the loan.

There are of course other sources of franchise loans. They include specialized franchise finance organizations, private commercial finance firms, and to a certain extent equipment finance firms that will finance certain hard assets associated with your business.

The key aspect of getting approved for financing under the Govt loan program is your ability to find an experienced banker who is both familiar with the program and can help you identify the key requirements of the loan . Another method in which you can address this ' search issue ' is to seek out a trusted, credible and experienced Canadian business financing advisor who has the established relationships and knowledge to fast track approval success.

In the U.S., which has a similar program almost 25% of all loans made under their program are for franchises, and we think that's probably a similar, if not larger number in Canada. So if your competitors are getting franchising finance, why shouldn’t you... right?

If you are buying a master franchise or have multiple locations in mind various other options might in fact be available - for example assistance from a private equity group, etc. But the reality is that one individual franchise will never qualify for this type of financing participation.

The equity, or down payment component of a franchise loan is critical - It can be anywhere from 10-50% and it’s a fine line that has to be managed relative to the amount of personal funds you commit and where there will come from - i.e. collapsed savings, collateral mortgages on your home, etc, Remember the saying ' once you spend it, its gone! ‘which we caught recently.


The reasons you want to get a loan for a franchise are quite clear – owning a business, financial independence, etc. Accessing the right type of available finance for that entry into entrepreneurship is critical. Seek out and talk to an expert in franchising finance options.

7 PARK AVENUE FINANCIAL
CANADIAN FRANCHISE LOAN EXPERTISE






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 10 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/loan-for-a-franchise-franchising-finance.html





7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653

Email = sprokop@7parkavenuefinancial.com
















Stan Prokop