Franchise Business Financing : Managing Headwinds In Your Franchising Finance Challenges As A Franchisee

The Best Of Times.. Or Worst Time To Finance A Franchise ?


OVERVIEW – Information on franchising finance in Canada . Franchise business financing requires a solid understanding of some key principles and facts



Franchise business financing in Canada requires solid basic knowledge around those ' headwinds '

that buffet the franchisee about when he or she is seeking a franchise solution. Without some expert help the franchisee potentially can fail in his efforts to successfully finance a business. Let's dig in.

The Canadian franchise sector as a whole couldn’t be more ' busy ' - in fact many maintain its ' hot '. A fairly solid economy, as well as the desire to become an entrepreneur of sorts makes franchising attractive. Corporate downsizing also tends to offer opportunities to experienced individuals who might otherwise view starting a business as too ' risky'.

Part of the problem we have seen in many cases revolves around the fact that some franchisors do not properly investigate or asses franchisee financial and business qualifications in their sometimes haste to ' sell ' a franchise. Remember always that franchisors ' sell' franchises, they don't ' finance' them - that’s simply not their business or best use of capital.

Does the quality or reputation make a difference in the ability to finance your franchise? While there is probably no ' bad ' list of franchisors available it's safe to say that many franchises have a reputation of being a bit more ' tried and true ' when it comes to business success. In Canada the franchisee has the option of dealing with a Canadian franchisor, or a chain that has U.S. or foreign ownership. In some cases you might be dealing with a ' MASTER FRANCHISE ' - someone or an entity that has purchased the rights to a geographical territory, such as... you guessed it... Canada.

We've observed that for whatever reason some franchise sectors tend to attract franchisees more than others - they include restaurants/hospitality , training, hair, fitness etc. It's incumbent on you the franchisee to demonstrate to your lender that you have both the right combination of passion and experience to start, run and grow a franchise.

So let's bore down into the actual financing of your franchise. That financing is achieved by either a specialty franchise lender ( they are extremely limited in Canada ) , a bank ( highly improbable ) , a bank via the SBL loan ( highly probable by the way !) , and a combination of assorted financing services such as leasing, merchant advances, working capital term loans, etc.

So, getting back to... the bank! While all our Canadian banks have franchise ' units' they are heavily focused on arrangements with only the most popular , large and successful chains .

Traditional financing for a start up is simply not available without the franchisee putting up as collateral significant personal collateral, aka the home, savings, etc. Typically that's not desirable for the franchisee! Simply speaking, you might find that the guy in the bank commercial on TV is not the lender you deal with in the branch!

We referred to the Canadian SBL loan above; it’s a solid way to finance your franchise if you meet some basic criteria. That includes a reasonable down payment, a decent business plan, good personal credit history, the loan only finances equipment and leaseholds, but more often than not that’s the bulk of the financing needed. Personal guarantees under the program are also limited, which is attractive.

Typically you want to have a ' team ' in place to ensure legal and financing issues are in place to help cement success. That might include your lawyer, an accountant, and... when it comes to financing a trusted, credible and experienced Canadian business Financing Advisor with a track record of success
. You'll be in better shape to navigate those business and financing headwinds.



Stan Prokop - 7 Park Avenue Financial :
http://www.7parkavenuefinancial.com
Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :

http://www.7parkavenuefinancial.com/franchise-business-financing-franchising-finance.html



Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:

7 Park Avenue Financial

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '

Stan Prokop

Equipment Loans And Leases : How Much Do You Know About Leasing Companies

Why Canadian Business Got Hooked On Leasing Business Equipment

OVERVIEW – Information on why leasing companies are almost always a solid bet when it comes to asset financing/refinancing . Recognizing the benefits of equipment loans and leases makes your business a winner




Equipment loans and leases in Canada, as offered by leasing companies and other commercial finance firms are at an all time high in popularity.

When the business owner/ financial manger understands why this is the case he or she can take advantage of benefits and advantages that are reserved for all. Its one time when following the crowd is a must! Let's dig in.


The acquisition of assets in business always comes down to several key decision points - the use and benefits of the asset and the cost and cash flow outflow ramifications. More and more the owner / manager is focusing on using an asset, not necessarily owning it. With all respect to those ' pride of ownership ' folks preserving cash flow is almost always king.

Equipment financing sometimes by necessity can get a little complex - more often than not it’s a simple process, but it’s critical to understand that some of the factors you must also consider in financing equipment include:

Tax ramifications

Accounting Treatment

Effects on your balance sheet / Debt load

Impact on credit line facilities

It's interesting to note that almost all the Canadian chartered banks today offer specialized leasing services via separate entities within the bank. Typically these transactions are reserved for bank clients, and those that have solid credit. Deal size is typically larger here also.

The balance of industry is covered off by independent Canadian commercial finance companies. These firms typically have set credit profiles they are looking for, as well as deal size and asset mix.

In Canada almost any asset can be financed. That includes technological needs also - such as computers, software, telecom equipment, etc

While the majority of the industry is focused on what is known as the ' Capital lease ‘, aka ' lease to own ' its important to know that another choice exists - that’s the ' Operating lease ' or ' lease to use ' so to speak.

Factors that business owners must take into account when considering leasing or the type of lease they will choose include -

Estimated life of the asset

The desire to own or return the asset

Leasing structure relative to rate, term,

Cash flow impact


Computer leases are probably the best way to describe the benefits of operating leases. That’s because the technology changes so quickly. Owners wish to often upgrade, replace or refresh, and assets can be efficiently returned with no obligation to buy.

Assets you own can also be leased by the way! That’s essentially called a sale leaseback, and allows you to keep assets in the business and take advantage of the equity in those assets. The process is relatively simple and includes ensuring the asset is lien free, has value (typically via an appraisal) and ensuring a proper lease or loan structure is in place. The lease can be in this case substituted for a ' bridge loan' of sorts.

Have we forgotten anything? Oh yes. If you business offers a product that can be leased you can benefit from offering a customer financing program. By partnering with the right firm you can offer all the benefits of equipment loans and leases to your clients. Key benefits include:

Immediate cash flow for the vendor

Removal of budget and price constraints in your products

Creating a strategic advantage via your client’s perception you offer a one stop solution


So, if 80% of Canadian business is ' HOOKED ' on solutions offered by leasing companies the choice seems pretty clear. Seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with your business financing needs.



Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN EQUIPMENT FINANCING AN LEASING EXPERTISE




Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:

7 Park Avenue Financial

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '

Stan Prokop

Filed Research And Development Credit On Hiatus ? Accelerate SR ED claims Via A SRED Financing

Looking To Side Step Waiting For Your SR&ED Claims ? Finance Them ! Here’s How


OVERVIEW – Information on SRED financing in Canada . Monetizing your SR&ED Research and Development Credit makes cash flow sense











SRED Financing in Canada is all about cash flowing/monetizing your SR&ED tax credit. It's not unusual for business owners and financial managers that access this program to get the feeling their claim is on somewhat of a ' hiatus ' after they have filed their claim. Can things be ' speeded up ' a bit? They can! Let's dig in.

While there might be some legitimate reasons for the actual time period from filing your claim to receiving your refund cheque from the government that’s little consolation to your business - a significant amount of time has lapsed since you've spent those funds, and you're looking for ' cash back' !

What are some of the reasons a claim is delayed or slowed down based on time to final approval and refund? They might include things such as the financial or technical audits done on your business and the claim. It might also simply be a ' backlog ' has occurred in volume of claims processing inside Canada Revenue Agency.

It should be no secret by now that there have been some major changes in the program. This includes a lot of scrutiny on those folks that prepare claims (aka ' SR&ED Consultants ‘) who created a feeding frenzy of sorts around the way they bill their fees on the processing of your claim. These fees typically were ' contingency fees ' meaning that the consultant bore the risk around the time and ultimate success of the claim, and for that charged a per cent age of final amount received.

SRED Financing allows for your research and development credit claim to be cash flowed, allowing you to purpose the funds for any general company purpose. This is even more critical to firms that are in development or pre revenue stages.

A handful of common sense strategies and enhance both the final approval of your claim, as well as it's financing. They include:

1. Ensuring you are taking advantage of your positive SR&ED history - while claims for first time filers can be financed it goes without saying a track record in previous years sure helps the cause and speed of your approval

2. Ensuring your claim addresses some of the key ' true requirements ' of a claim such as your firm’s efforts to address uncertainty, advancement in processes, etc

3. A copy of your SR ED claim is always a key part of the financing of the claim - remember that the claim itself is the key ' collateral ' for a SRED loan

The other parts or a SR&ED loan application are as basic as they can be - your financials , a list of any secured creditors , info on who prepared your claim, etc .

SR&ED loans are structured in a unique manner. They typically are set up as a loan with no payments made during the term. Funds are advanced at 70% loan to value - for instance a filed 200k claim would be eligible for a collateral loan of $140,000.00. Naturally when the claim is approved by CRA and funded you receive the balance of 30%, less financing costs.

Banks in Canada don't really finance a SR&ED loan. So if you want to ' side step ' the waiting line for cash flowing your R&D claim seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in monetizing your research and development credit .



Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN SR&ED TAX CREDIT FINANCING EXPERTISE



Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:

7 Park Avenue Financial

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '

Stan Prokop

Tech Financing Needs : What You Ought To Know About Technology Corporate Finance

Get Rid Of Technology Financing Challenges Once And For All

OVERVIEW – Information on technology corporate finance solutions in Canada. Consider these tech financing strategies to maximize ROI

Tech financing needs in Canada can be a combination of challenge (and a headache!) Canadian businesses in the SME and large corporate sector. Technology corporate finance solutions, no matter how small or large your company is, come in a variety of flavors and sizes. Let's dig in.

The start up or early phase company has difficulty in attracting any type of financing. So planning for tech solutions and upgrades is crucial and challenging. The reality, as harsh as it is in Canada is that owner equity provides the majority of early stage financing for operations and technology. The irony here is that many times the technology is what will drive higher and faster growth and profits.

Service based businesses, and those relying on ' IP ' (intellectual properly)

create even more of a problem for themselves, as much of the financing for the SME Commercial sector in Canada is ' asset based '. So from the owner/financial manager perspective they feel they are compelled to take financing at rates, structures and terms that are less than favorable.

It's no secret to Canadian business owners and entrepreneurs that it's difficult to pitch technology financing needs to our Canadian chartered banks. The reasons are pretty simple: Tech needs seem to quickly become obsolete, and even with prices of the majority of tech assets going down in price they still are a huge part of any firms ' CAPEX' budget.

So who are the ' sources of financing ' - those firms that can fill the tech financing gap you're faced with? As well, is there a better way to address rapid growth in technology changes and those ' life cycles'?

One way to secure financing for hardware, software, telecom equipment, etc is to take a look at the Government CSBF loan. Recent changes have appeared to make the program even more popular. Billions are borrowed every year under this program.

So is there a clear cut way to finance the acquisition of technologies? The obvious choice? LEASING! The reasons are pretty simple - along with typical tax and accounting advantages the owner/manager has the ability to match cash outflows with the ' estimated ' useful life of the asset.

And because many firms want to ' use ', not ' own' tech assets they also have the choice of opting for operating leases. These allow for maximum flexibility when it comes to upgrades, buying out, or simply extending.

Currently the industry as a whole prides itself of fast approvals, often within a day or so. And again, those assets that can be financed:

APPLICATION SOFTWARE
COMPUTERS
SERVERS
LAPTOPS/NOTEBOOKS/TABLETS
TELECOM EQUIPMENT
PHONE SYSTEMS

If you're looking to get the proverbial ' monkey off your back ' when it comes to financing tech needs seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you in ensuring you're ' up to speed' in tech corporate finance requirements.



Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN TECHNOLOGY FINANCING EXPERTISE





Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:

7 Park Avenue Financial

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '

Stan Prokop

Business Cash Flow Loans : Reversing the Working Capital Slowdown

Your Business Cash Flow Financing Nightmare Is Probably Not Just In Your Head

OVERVIEW – Information on business cash flow loans and asset monetization strategies for Canadian businesses. Working capital needs can be fulfilled in a variety of manners – here’s why and how
















Working capital shortages can almost always be reversed with the right asset monetization or business cash flow loans. It's no secret that challenge can easily become a nightmare

when not identified and properly addressed in a timely manner. Let's dig in.

Critical to implementing the right solution is the understanding of some key basics - they include:

Understanding your ' cash flow cycle’

Halting and managing cash outflows

Being able to accelerate cash receipts via proper credit and collection policies

Your company can improve overall business health with proper cash flow management and external and internal financing. We've mentioned above that ' cash flow cycle '. It's simply the ability to understand how a dollar flows through your company and how long it spends in inventory, A/R, etc.

But what solutions are in fact available to halt the oncoming of a cash flow crisis.

They typically include:

Bank lines of credit

Asset based non bank lines of credit (Known as ' ABL ' they are the alternative to Canadian chartered bank facilities

A/R financing (this comes in a variety of shapes and sizes)

Inventory finance

Working capital term loans (permanent injections of working capital)

Purchase order/Contract financing

Tax Credit Financing (SR&ED Tax credits)

These are the external financing solutions available to any firm that wants or needs to address avoiding a cash flow crisis. Internally though owners and financial managers can better monitor and accelerate cash via constantly assessing days sales outstanding, inventory turns, and payables days outstanding. Oh and don't forget expense mgmt!

A simple cash flow forecast can easily anticipate upcoming working capital and cash shortages. A simple trick - Constantly monitor the relationship between A/R and sales on a monthly basis, in the form of a ' ratio'. If that ratio is greater than one? Danger ahead! Simply speaking cash flow problems are upcoming as you are running out of cash.

Your company is either eligible for bank financing or it is not. Bank finance solutions in Canada are low cost, and flexible. In some cases your company might be eligible, but not in the amounts needed.

Short term shortages must be addressed by short term financing strategies, typically lines of credit, A/R financing, and inventory finance. Many businesses of a small to medium size are considering A/R finance these days. This tool turns everyday sales into everyday cash. Our recommendation is to consider CONFIDENTIAL RECEIVABLE FINANCING. While more expensive than bank lines it provides unlimited financing and allows you to bill and collect your A/R in a matter similar to bank credit facilities.

If you want to avoid the cash flow nightmare via proper business cash flow loans and asset monetization strategies seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your working capital needs.




Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN CAS FLOW BUSINESS LOANS EXPERTISE







Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:

7 Park Avenue Financial

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com





' Canadian Business Financing with the intelligent use of experience '

Stan Prokop

Franchise Loans Canada : Let The Sun Rise On Franchising Finance Success

Are You ‘ All In ‘ When It Comes To Franchising Finance in Canada You Don’t Have To Be !

OVERVIEW – Information on franchise loans in Canada . Franchising finance properly executed doesn’t have to be the financial personal commitment that some franchisees think it needs to be . Here is why


Franchising finance makes many would be ' entrepreneurs ' feel like they must be ' ALL IN ' when it comes to franchise loans in Canada. ‘ALL IN ' of course connotation major personal investments in their franchises. Does it have to be that way? Not necessarily! So let's dig in.

When it comes to financing a franchise in the current ' hot ' Canadian franchise market the clients we talk to seem to think that comes with significant personal investments, overdrafts on personal lines of credit, and complicated financing packages that inter mingle with their personal finances. Again, that’s what they think, but it’s not necessarily the case.

We must emphatically say that the would be franchisee would be entrepreneur must in fact contribute some capital to the business. It goes without saying there no ' free ride ' on ' OPM ' - i.e. 100% other people’s money.

In fact some of the amounts required to properly finance this type of business in fact are normally not financeable - those include the actual franchise fees themselves, brokerage or consultant fees, etc. These types of charges typically come out of the owner’s capital investment.

As a broad rule you should be prepared, depending on the overall situation, to put down anywhere from 10-50% of the total amount of financing required to kick start your venture.

Funding the balance of franchise loans in Canada is typically dependant on the size of the purchase, the quality of cash flow forecasts, and lenders interpretation of the viability of your franchisor as a whole. Not all franchisees might be aware that many franchisors are willing to let a franchise fail, knowing they can re-sell it to another potential viable franchisee. Here issues such as ' location/ location/location' and mgmt competence and experience are important.

Never forget that at the end of the day the actual repayment of the franchising loan, which typically is amortized over 5-7 years will in fact come from ongoing cash flows and profits. Since most franchisees tend to be 100% cash businesses that is important.

In Canada franchises are financed via a small handful of specialty finance lenders, the Govt SBL loan, and a combo of various other financing solutions that might inlcude equipment financing, merchant advances, working capital term loans, etc.

So our advice? You don't have to be ' all in ' thinking you have to pledge your personal assets in franchising finance. More important is the ability to seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your funding needs.


Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN FRANCHISING FINANCE EXPERTISE





Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT

7 Park Avenue Financial

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '

Stan Prokop

Lease Back Financing Tips : Sale And Leaseback Transactions Can Be A Winning Strategy

Sale Leaseback Financing Makes Seemingly Impossible .. Possible!

OVERVIEW – Information on the ‘ leaseback ‘. Sale and leaseback transactions, done properly, can be a solid cash flow tool . Here’s some key considerations







Sale and leaseback transactions are sometimes a truly perfect solution cash flow needs. In some ways it’s a ' perfect storm' of financing - your business gets to keep the asset in question (typically equipment or real estate) while at the same time employing its use and possession.

By the way, that could include your corporate jet - although we don't run into
a lot of those these days.


What are the fundamental reasons for choosing the lease back? It usually comes down to:

A need for access to capital that otherwise might not be available, or available the rate and structure the business owner/manager desires

It’s sometimes a more efficient and quicker process than starting the journey into looking for new debt solutions or having to consider ownership dilution from new equity sources. Alternately the owner/owners of the business are now required to put in additional personal funds

The ongoing need and use of the asset to operate and grow the business - otherwise the asset should probably simply be sold!

In certain cases, as we mentioned, rates and costs of financing might be more attractive under the sale/leaseback

Because of the nature of how the transaction is recorded the lease back, properly structured can enhance the overall ROI - ' return on investment’

As we noted any asset of the business can theoretically be sold and leased back. A typical solution is business real estate, i.e. the business operating premises. Even Canadian banks in recent years have shed their huge office towers under this effective strategy. - And they of course still inhabit the buildings.

The other asset category is business equipment, which, while depreciating still has valuable use to the business. That raises the point that it’s important to consider the financial and tax consequences of the leaseback - for example if the funds received are greater than the present value of the equipment a profit on the transaction might have to be reported.

When you enter into this financing strategy your choices are the same as with any other lease financing transaction. Simply speaking you can structure your deal as a capital ' lease to own' or an operating ' lease to use '. The operating lease might be perfect for things such as a technology transaction for computers and telecom equipt. for example.

And that corporate jet

we were talking about? All of a sudden is a perfect candidate for an operating lease!

We caution clients that it's always important at the start of considering such a transaction it’s important to fully understand the value of the equipment or asset being re financed. That residual value must be well understood in the context of your company's needs for the asset and the financing structure required.

Seek out a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you in putting together a winning strategy on refinancing business assets. The impossible just became possible.




Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN SALE AND LEASEBACK EXPERTISE








Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience '

Stan Prokop