Canadian Lenders In Franchise Finance – Lending & Funding Options For Franchisee Financing

Wouldn't it be great to know that after you made one of the largest decisions in your business life - (buying a franchise business) that you had some solid options and tips around acquiring the business?

Let examine the current state ( we always work in the real world ) of franchise finance in Canada - who are the lenders in franchising and what funding and lending options might work best for you .

Many clients that approach us seem automatically skeptical that franchise finance can be easily achieved in the current Canadian business environment. No doubt they can be forgiven as its been a couple tough years with respect to the financial implosion (2008-2009), recession, etc. So boy do their eyes light up when we assure them that franchise finance financing funding is still available, and the lending criteria and solutions are not as demanding as they might think.

On the other hand though, what part of business is not a ' cake walk ' .Almost none, right. Therefore your ability to be prepared is critical.

We can generally put the idea of being prepared into two categories - having a strong proposal, and ensuring also that you are prepared to keep up your half of the bargain with your funding partner. Whats that part of the bargain? It's your equity investment of down payment into the business, the balance coming from your franchise finance loan funding.

Think about it... in many ways it is probably actually more easy to secure business franchise funding than any other normal start up since you have the benefit of a ' brand ' and ' reputation' backing you .. I.e. the Franchisor.

We encourage all clients to start assessing their financing options way in advance of their franchise final decision. While you may think that you have to tap into major savings or home equity, or collapse RRSP's, the reality is that you need to come up with anywhere from 30-40% , generally speaking , of your desired loan amount.

Unfortunately, and we run into this almost all the time, many franchisees don’t have a sense of how the franchise funding lenders assess their personal credit history. It's more simply than you think. The entire personal credit history of everyone in Canada comes down to a numerical score at the credit bureau. The magic number you need is 650 (or more!). You can easily check your score yourself.

Next steps generally revolve around assessing your financing options. For some of the larger franchise chains one or two well known independent finance companies can handle all your franchising needs from a lending / loan viewpoint. But, here’s the kicker, the majority of franchises in Canada are funded by the Government BIL program .It is absolutely the best deal in Canadian business, flexible rates, terms and structures, low personal guarantees, ability to prepay without penalty... bottom line it couldnt get any better .

Naturally you want to expedite your transaction. That is done by ensuring you have a crisp business plan and financial forecast in place - highlighting your business experiences, profit and cash flow potential, and info on the success of your franchisor as your new partner in Canadian business. You simply want to focus on one thing, showing your ability to repay the franchise loan.

Supplemental financing can also be achieved quite creatively if you have the right assistance - that might come in the form of a merchant advance loan against future sales, equipment leasing, or a straight unsecured working capital term loan.

So the good news is you have some great options in franchise finance and financing your new business. It’s up to you to assess those options, be prepared to present your plan. Want some great assistance? Consider working with a trusted credible and experienced Canadian business financing advisor in franchise finance funding.





Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

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

Power Your Business Financing with Canadian ABL Services – Why Asset Based Lending Works

It's always about the bank. Well ... not always... It seems that Canadian business financing continues to evolve and Canadian ABL services via asset based financing credit facilities are slowly getting to the top of the popularity pile.

Why does this type of financing work well and why is it becoming the accepted alternative to traditional Canadian chartered bank financing? We think we know why.

Although it might seem that the Canadian business and economic environment changes quickly these days we maintain that for the last two or 3 years the one thing that hasn’t changed is the ability for Canadian business owners and financial managers to get ' traditional ' financing from those great folks at the bank.

Skepticism and bank regulations in Canada seem to eliminate more and more qualified business borrower’s everyday. So it’s a struggle and if you are a small or medium sized firm in Canada the ability to grow or change your business is difficult.

Enter ABL lending in the Canadian marketplace. This type (we call it non-bank) of revolving credit facility is the new ' band aid ' for almost any size business, filling the void between traditional financing.

So why an asset is based lending facility able to work for your firm when a bank facility might not even is attainable. We guess it’s about risk and reward, in that for the same or higher cost almost any decent sized business has the ability to qualify for ABL services and financing.

The other side of the coin is also that the whole approval process is often quicker, in that there is only one key agenda item to review - your assets. Typically these assets are receivables; inventory and equipment, with real estate a borrowing possibility also, included right in your asset based lending facility.

We speak of the ' power ' of ABL. The true power lies simply in the fact that the assets we mentioned that are used as collateral are margined significantly higher than in the manner that a bank would margin those same assets. So it isn’t your financial statements strength that has the power - it’s those ' assets ' within the financials!

The broad appeal of asset based lending also lies in the fact that it’s flexible, that the other side of our ABL power equation. Your firm doesn’t necessarily have to be profitable (it helps ... but not required) and even if you face current financial challenges and setbacks you are still eligible. Even special loans clients can use ABL to escape from the restrictive claws of a special loans environment.

So whats our bottom line - it simply that if the Canadian banking environment continues to be unable to serve the demands of fast growing or challenged business... well... ABL financing services will step in and nicely fill that gap.

Ultimately it still might be your business goal to obtain a ' traditional ' facility. That’s ok of course. In the meantime thought consider the true power of asset based lines of credit as a funding option that will meet all your financing needs... today! Speak to a trusted, credible and experienced Canadian business financing advisor to eliminate that uphill financing battle you've been facing.



Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.parkavenuefinancial.com/abl_lending_financing_canadian_services_asset.html

Unique Canadian Cash Flow Financing & Working Capital Loans - Finance Options

The Gap. That was the essence of a recent business story in Canada's national business newspaper regarding business financing optimism in Canadian business.At the core of business finance is financing working capital, generating cash flow and being aware of loans and finance solutions that make sense for your firm from a cost and benefits manner.

The incredible part of the May 2011 article was that although Canadian business owners and financial managers were more optimistic about their business these days, dramatically so, but 70% of respondents said that access to ' cash ‘ and capital was still a challenge . Wow. do we ever envy that other 30% who seems to have all the cash flow and working capital financing they need!

There are some unique working capital loans and strategies that work for you, it’s simply a matter of understanding what your current needs are, assessing your financial position, and most importantly, understanding your financial alternatives.
When we think of financing working capital you need to focus on the following, receivables and inventory, other assets, as well as your ability to re structure and re organize your firm if in fact that’s required .

In many cases a simple re financing of existing, owned assets is a unique strategy that often makes sense. This can be done via a sale leaseback strategy, or, not as commonly used, a short or intermediate bridge loan of refinanced assets such as equipment, real estate, etc.

At the core of looking at either traditional or more alternative or unique cash flow and finance solutions is simply to understand the cost and benefits of these strategies. Those costs vary with your overall credit quality and can range from a point or two over prime to 1-2% per month, depending on your current financial position.

Many business owners wrestle with how to simply understand working capital, which allows them to then determine their needs. Unfortunately the text book or your accountant doesn’t do a great job of that... in that they tell us go to the balance sheet, subtract current liabilities from current assets, and that’s supposedly your magic number. We wish!

So we tell clients to look at some very rudimentary but useful tools and allow them to assess their cash flow and loans strategies. One is simply the metrics of the operating cycle - understanding how fast you collect your receivables, how your inventory turns, and the average number of days you take to pay your key payables. Simply tally up the total amount of days in your A/R and inventory and you will find you can’t finance that excess just by stalling suppliers/payables.

The shortfall brings us to those solutions you are looking for. You could finance all your working capital if you paid your suppliers every half year or so, but they won't really buy into that plan!

In Canada the traditional solutions for working capital are bank lines of credit - the only caveat being you have got to have decent financial strength, profitability, good owner credit and assets, etc.

Failing bank financing in Canada you have the ability to access just receivable financing - our favorite facility is called C I D - a method in which you receive cash for your receivables immediately, and bill and collect under your own control.

Other more robust solutions are what we term working capital facilities or asset based loans. These finance loans (they are not loans per se) combine your receivables, inventory and fixed assets into one revolving line of credit. The more sophisticated a facility you utilize brings you maximum margining of your assets.

Alternatively a more esoteric candidate on the horizon is purchase order financing and contract financing - your suppliers are paid by the lender. It’s more costly, but boy does it work to allow you to generate sales you may never have been able to entertain on your own.

So whats our bottom line - we guess it’s simply don't despair! Understanding your operating cycle, assessing the amount of capital you need, and then weighing those needs against the best solution, traditional or alternative, is clearly your recommended route.

More info? Questions ? Ready to begin? Simply seek the services of a trusted, credible and experienced Canadian business financing advisor who can provide you with cash flow finance solutions that make sense.



Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.parkavenuefinancial.com/cash_flow_financing_working_capital_loans_finance.html

Best Tips On Good Lease Rates , Pricing and Leasing Options in Canada

Is it possible to feel that you are getting the best lease rates and pricing with respect to equipment financing options you are considering? We think your leasing and asset financing prowess can be substantially increased with just some key basics under your belt.

Let's examine the key issues Canadian business owners and financial managers must consider in lease financing sourcing. Being well armed up front with some of those industry secrets will help you achieve those attractive rates, terms and structures we have been talking about, Just knowing some of those subtle industry differences ( dare we call them tricks ? !) can save you thousands of dollars on any asset acquisition .

Many clients tell us they receive a lease of financing quote and don't necessarily understand whether or not the financing offer is in fact competitive. All things being equal we're going to assume your firm has good credit quality. But don’t despair if you don’t because the one good thing about leasing options in Canada is that it's available for all firms, regardless of overall credit quality or financial challenges.

So a couple of key basics, here we go: First you need to understand how leasing pricing is derived. The key elements of any finance quote are: term of the lease, interest rate, present value, payment, and your end of term option. Remember also that when you know any 4 of those key elements you can always figure the last one out. We would point out that it helps to have a true ' financial calculator ' to derive exact pricing.

We cringe when we hear the phrase ' whats my rate ' from clients... simply because that isn’t always the aspect you should be focusing on in equipment financing. Want to know what leasing rates are in Canada - They range from 4 3/4% to 24% or more per annum in the current environment. In fact lease rates got a lot better in 2011 as the economy approved and Canadian leasing companies got their act in gear again.

One of the best tips we can give you is to do some real basic lease vs. buy analysis on your transaction. This of course assumes you are in a position to purchase the asset outright, because quite frankly most clients are looking at leasing options simply to conserve cash and working capital.

And oh yes, try not to view leasing as a commodity, when it facts it’s a specialized form of financing that allows you to acquire assets and finance them over their useful economic life. Think in terms of the asset you are acquiring, how it will affect your profitability, and don’t forget balance sheet and tax issues that lease financing can positively impact.

Here's a challenge. Do you think we could better any lease rate you could achieve on your own by say, 10%?! A quick way to do that is by letting us offer you an operating lease, which can significantly lower your payments, but still give you that financial flexibility. You can acquire assets without beefing up your balance sheet with debt - which is desirable for many business owners, particulary when it comes to assets that have a technological life cycle.

Remember also that by making a down payment or providing a security deposit, both of which may or may not be required also drives that pricing down.

So do we have a bottom line on the sometimes confusing aspects of lease rates, feeling you're getting a good price, and ensuring you know your leasing options when it comes to type of lease, etc? We think it simply investing some time and gathering knowledge on how the lease industry in Canada works, how it prices different leasing options.

Want a faster way to get the best deal. Simply speak to a trusted, credible and experienced Canadian business financing advisor who can ensure the reasons you are financing those assets are being back by the best and competitive pricing.

Your Choice - Right Way / Wrong way ? Canadian Accounts Receivable Financing & Business Factoring

Avoiding the wrong way to do something in business is always desirable, who wouldn’t agree on that?

So when it comes to business financing and in particular accounts receivable financing and business factoring lets examine how doing things the right way will save you time , money , and in general give you a strong sense of comfort that you have made the right business financing decision .

Canadian business owners and financial managers who have chosen a/r financing as a cash flow strategy need to understand where they can go wrong, and take that other path! You do that by making the right business finance decisions in three areas - understanding how accounts receivable pricing works, ensuring you have the best facility in place , and finally, by default , feeling confident you have picked the best business factoring partner .

Let's dig in therefore! There is no business financing that is more misunderstood that A/R factoring. And it’s actually not hard to get the basics under your belt. The concept of time and cost is critical in factor pricing. When you sell your receivables and receive cash the same day you understand of course that the longer that receivable is uncollected... well your financing costs are going up.

We recommend C I D as the most preferred type of accounts receivable financing. It's the most logical Canadian solution, or the ' right way ‘. C I D is ' confidential invoice discounting ' - it’s your version of ' mind your own business’! Under confidential invoice discounting you bill and collect your own receivables. Unlike your competitors who use this type of financing - where their clients are put on notice that your competitor has chose to finance their receivables via a non bank solution. But, remember of course that in business factoring never has ' time means money ' been so important, so even though you are billing and collecting your own receivables focus on operational collection policies that allow you to maximize cash flow and lower financing costs .

The ' right way ' around this type of business financing should focus on picking your best partner firm that suits your overall needs. The facility you pick, and the partner that finances it for your company will make or break your success in this type of Canadian business finance.

The landscape in Canada is littered with many firms who are non Canadian, charge too much, disguise their inherent financing fee with all sorts of small administrative charges that add up, and finally, as we noted, insist that they are between you and your customer with respect to collections.

So is there a simple route to taking the right way when it comes to A/R finance. Consider a simple , safe solution by simply seeking a trusted Canadian business financing advisor - someone who understands the business factoring landscape, will recommend and put you in the right facility, and ensure that the cash flow and working capital benefits associated with this type of financing are focused solely on your firm.



Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.parkavenuefinancial.com/accounts_receivable_financing_factoring_business.html

An Unequaled Equipment Leasing & Commercial Financing Option - Your Best Canadian Deal

Can we be honest with ourselves, as Canadian business owners and financial managers and all agree that when it comes to equipment leasing and financing of commercial assets we are all looking for the best deal?

It's just human nature, but the reality is that the thousands of dollars you can save in real money by obtaining a lease approval at great rates, terms and structures also keeps us competitive and ahead of the game .

Let's examine some of those methods used to fast track you to the best options available -including probably our most important tip, which is where to go to and who to talk to when looking for the best equipment leasing and financing . More on that later.

Cost savings, as well as cash flow and working capital savings. That's the essence of Canadian equipment leasing and financing we think.

Leasing has been around a lot time, some maintain thousands of years, but a couple of factors have brought it pretty well to the top of Canadian business financing these days. One reason is simply that with the recession formally over (we read it in the newspaper, must be true) that thousands of companies are again looking to expand and grow again, finally!

Also another reason is that new industries have sprung up that are tailor made for lease finance, and those industries (energy, solar, etc) are poster boys for solid lease finance strategies. Commercial lease financing adapts perfectly to technologies that change and need to be upgraded. Most business owners know you have two lease finance options, capital leasing and operating leasing. Structuring your transaction around an operating lease gives you flexibility on your ability to upgrade, return, or extend the transaction at the end of term.

When it comes to a ' pure dollar ' or ' financial' analysis of equipment leasing most Canadian business owners quickly realize that to make a project financially feasible the benefits of the asset or project have to match the cash flows . And financing your transaction via a commercial lease with fixed monthly payments matched to the economic benefits of your asset clearly does that.

Your company’s ability to conserve cash flow and working capital allows you to put that new found capital into what really counts, i.e. inventory, staffing, new systems, etc.

There isn’t a day these days when a client asks ‘Can such and such an asset be leased ' - and we think you know already our answer to that one - that almost any asset can be leased, even intangibles such as software. More often than not , depending on your overall credit quality lease financing is a 100% financing scenario - on occasion , if your lease has to be structured it might require a down payment .

So who is providing lease financing in Canada and how can you get this unequaled business flexibility in commercial finance. The reality of the Canadian market is that its very fragmented, made up of captive firms within large mfg companies, as well as independent finance firms that are both U.S. and Canadian owned.

Rates vary with asset and credit quality, and the hard reality of your transaction is that it has to fit the particular, let’s call it a ' credit box ' of the firm you are dealing with. Even some of the banks have full fledged lease companies , although the credit criteria is significantly higher as you can imagine - i.e. great rate, but significant qualifications required on your part .

So how do you wade through the mass of firms and financial offerings in the Canadian marketplace .Would that take hundreds of hours, which you don’t have. The answer, speak to a trusted, credible and experienced Canadian business financing and leasing advisor who can structure a transaction that meets your needs. Simple, fast, and allows you to benefit from those unequaled asset financing options. What are you waiting for!


Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

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

Why Canada Provides Film Production Tax Credits & SRED Tax Credits – Financing Film & SR ED Tax Credits

We don't care. How’s that for a short and concise answer as to why we think the government of Canada provides hundreds of millions of dollars in Canadian film and production tax credits, as well as the ' SRED ' (aka SR&ED) tax credit.

What we do care about is how clients can use those two great Canadian tax credits to maximize the value of their film, TV, and animation projects, or if we're referring to SRED itself, then their ability to recoup a huge amount of their research and development expenses.

Not to be so glib, but we don't think ours is to second guess or question why the government of Canada provide all this funding for these two unique non repayable tax credit grants .

In the case of the film TV and animation industry the government seems to be returning almost 25% of all the revenues that the industry spends in Canada - that’s of course a huge amount.

And the SR ED ( Scientific Research and Experimental Development ) program returns billions ( yes that’s billions with a capital B !) to privately owned Canadian firms who recoup up to 40% or more of their total r&d expenses in the form of non repayable cheques issued annually to firms such as yours, ( as well as your competitors ) .

Let's focus on the film production tax credits first a bit. There's no business more intriguing complete with stars, egos, and great stories such as the entertainment business - we're talking 3 critical aspects of that - film, televison, and animation - the latter becoming very popular . No business financing challenge is more daunting than putting together the finances for these productions.

That’s why the knowledge that Canadian productions or co - productions (isn’t Canada Hollywood North?) take advantage of the film tax credits that can fund up to 40% or more of your budget. Your ability to then monetize that credit, during, or after production) can make up for a huge amount of your working capital and cash flow needs, for this project (or your next one!).

Let's also pay due respect to the SRED (SR&ED) credit in Canada. This program is probably the largest tax credits provider in the country. Canadian firms get refunds, via a non repayable cheque for the advancement of their R&D processes and innovations.

We continually remind clients in both the Film area as well as SRED that their claims can be financed and monetized for instant cash flow and working capital. If you are not one to wait (who can in business) film production tax credits and sred credits can be financed in a variety of manners.

Whether you're in the film tv and animation industry, or your firm is a manufacturing , service or technology company in Canada take advantage of those tax credits . And if you're reading this in Hollywood, remember that we have just shown you a way to finance 30-50% of your project. You’re welcome by the way!

Want more info? Speak to a trusted, credible and experienced Canadian business financing advisor in the area of film tax credits and sr&Ed credits. Like us, don’t question the why of the program, focus on ' why not for us?!’



Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

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