Canadian Franchisee Loans & Business Funding – 4 Secrets To Financing A Franchise

The inside edge. You want it, we have it! Have we got some tips and secrets to share for you.

We're talking about financing your franchise - the successful completion of your entrepreneurial dream in Canada. As a franchisee you want to be aware of your options in loans and funding programs that are geared specifically to financing a start up business in the booming franchise industry.

We're going to discuss 4 key elements of a proven formula for franchise success. What are they? Simply speaking its ensuring you have a business plan that accurately resembles the financial aspects of your business. Number two is the types of emphasis that is put on your own personal background and credit history. Number 3 is the knowledge of franchise financing options in Canada , and number 4, ( often # 1 in your mind probably .) the amount of personal funds you have to commit or invest to get your business going and your franchisee funding approved .

Let's dig in! OPM. What is it? It's stands for other peoples money and its critical you understand that a franchise is composed of two elements with respect to your financing plan - debt ( what your borrow ) and equity ( what you put in ). Our key point here is simply that while there is no proper mix of what works for the combination of those two elements. No franchise is financed with 100% borrowed funds - conversely you don’t want to ' pay cash ' for your business and risk all, or a lot of everything you own (house, savings, etc) for a start up business such as a franchise.

We will also share with you that some of the very specialized franchisee loan program in Canada typically require a 30 - 40% owner equity, or down payment. That can be achieved in several different ways.

Should you tap into your retirement plans to fund your franchise? That’s not our call, but if you have capital outside your savings we would not recommend collapsing RRSP’s, or taking out home mortgages, etc for the purpose of financing and funding your franchise.

Clients often ask how their personal credit history affects their ability to get franchise financing. In general we can say it’s a key point in the whole approval process. Many Canadians aren’t aware that the entire credit history system in Canada is based on a simple score. You should have a score of at least 650 to be successful in traditional franchise finance. So check your score in advance. And by the way, higher is better!

The business plan is a key element of your whole package. Many clients don’t have experience or financial acumen to prepare a proper plan. Not a problem as you can seek a Canadian business financing advisor, or accountant, etc to prepare your plan. A good basic plan comes at a very reasonable cost.

The business plan is your ' total picture ‘of your franchise. Basic elements are yourself, your background and business or industry experience, info on your franchise, and some basic financial projections. Naturally the better recognized and successful your brand the more attractive your perceived chances of success are.

As a franchisee what loans and funding is available in Canada. As unbelievable as it may seem the government of Canada, via Industry Canada, is one of the largest players in your franchise success. A program called the BIL / CSBF program is hugely popular and finances mot franchises fewer than 350k in Canada. We strongly recommend you seek out and investigate this program, it’s probably the key to 95% our client’s success in financing a franchise with funding that comes with great rates, terms and structures and limited guarantees. Bottom line, check it out!

So there you have it, 4 key elements, and secrets if you will, to franchisee financing success. Summarized... a solid business plan, some good business or industry experience coupled with a reasonable personal credit history, a down payment that is aligned to your overall financing needs and personal situation, and , last but not least, knowledge of programs such as the BIL which are geared toward franchise finance success .

So now you know!

P.S. Good luck in your entrepreneurial dream, and going it alone is never good, so seek the services of a experienced , credible and trusted Canadian business financing advisor .



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 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

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

Financing Your Franchise in Canada - A Winning Formula For Funding Via Franchising Finance Loans

Looking for franchise financing ? The dictionary defines formula as ' a rule or method of doing something ‘. We'll let Charlie Sheen define his version of ' Winning ' for you... but in our case its identifying for new franchisees the best methods of obtaining franchise financing and finance loans for the funding of their new business . Let's get started!

Second challenge after picking your franchise - we are assuming you have already done that, is determining how you will finance it. The Canadian landscape differs significantly from that of the U.S. experience; although we can assure clients that the franchise industry as a whole in Canada is doing very well.

Many franchisees often are concerned about the need and requirement for ' collateral ‘on a franchise loan. That is partly because they view franchise finance in the same manner as they would view a traditional loan application. Wrong! The reality is that our formula calls for no collateral requirement.

The majority of franchises in Canada are funded in two manners; they are the true secret to the winning formula we are sharing. The first and most popular method is taking advantage, (properly, and we'll come back to the term properly) of a specialized government program known as the CSBF/BIL program. Subsidized and ' managed' by a department of government in Canada known as INDUSTRY CANADA the program is the driver behind our winning formula.

Why is the BIL/CSBF loan so appropriate for financing for franchise? Consider this, when you started reading our article you probably thought that you need outside collateral , a huge down payment, and potentially outside collateral to get your ' franchise loan '. Nothing is farther from the truth.

Many franchise experts claim you need persistence and creativity to get a franchise loan financed in Canada. We disagree, you just need an expert and some hard work around satisfying the requirements of the loan program we have identified.

Those requirements include some very common sense things such as a reasonable personal credit history, a positive personal net worth, and a business plan that outlines your experience and expectations of financial success for the franchise funding. This typically includes your estimate of sales, expenses, profits, and, oh yes, cash flow that will repay your loan.

We also point out to clients that there are some other mechanisms we can ' add on ' to the BIL loan to enhance the financial proposal. They are equpment financing or leasing in some cases where hard assets are being acquired, as well as potentially a vendor take back if you are buying an existing franchise from a current franchisee.

Our formula for franchise success could not be more simple - identify your franchise, work with a Canadian business financing expert to maximize your ability to close a BIL loan in a short amount of time. Your package will include your business plan, background experience, and a real focus on how the loan will be repaid. If you need add on financing to make your transaction work consider equipment financing for some assets in the business or a term working capital loan that might compliment the entire package.

Simple. Relatively speaking yes. Speak to a Canadian financing expert on creating a short timeline to your success via our winning formula.

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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 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

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

How To Finance A Franchise In Canada – Make Franchise Financing Work!

Is there a perfect, foolproof method on how to finance a franchise in Canada? Naturally there are no sure things in business, but financing a franchise has a 99% chance of success, if, and it’s a big if, you are prepared and have expert knowledge on how this type of business financing is done in Canada.

It’s not secret that franchise finance is hot! From the downsizing of companies in Canada and the U.S. to simple entrepreneur dreams thousands of would be ' business owners' are looking to explore the franchise dream for personal and business success.

Franchise financing pays off, as we said, if you are well prepared. You also have to be in a position to understand that the concept of OPM, or ' others peoples money ' doesn't work in any business, let alone a start up franchise. By that we simply mean that you have to have somewhat of an investment to make in the business. Those funds must be accessible and you have to be in a position to demonstrate the source of those funds.

Typically our clients make their equity deposits into a franchise business from savings, or friends and family type donations. In many cases they have either liquidated assets, i.e. savings, or perhaps collateralized their home via personal line of credit, etc. The bottom line is simply that you should generally be in a position to put 30-40% down as your own investment in the business.

You are now in a position of being able to find the remaining funds you need to both purchase, and of course run the business on an ongoing basis.

We will now show you have to finance that franchise. First of all, ensure you have a proper cost breakdown. That should be broken down into soft costs and hard costs. Soft costs are typically items such as the franchise fee, etc. The real hard costs are the assets and leaseholds and equipment you are purchasing, which should be broken into those three categories.

As much as clients hate to do it, you need a business plan that describes you, your experience, the business, its potential. When you address the key issue of how to finance a franchise you must demonstrate in the financial section how your loan or newly acquired debt will be repaid. If you don’t have experience in preparing such a plan an expert can prepare one fairly economically - we view it as a true investment in financing franchise businesses.

So who exactly is in the franchise financing business in Canada from a lender perspective? One guy is BILL. That's an attempt at humor, as the BIL program, formally known as the Business Improvement Loan program is by far the largest funder of franchise in Canada. That program, coupled with some specialty lending in the areas of equipment and working capital allow you an excellent chance to get your franchise financed.

In summary, when addressing how to finance a franchise in Canada know your costs, summarize your proposal in terms of yourself, the business, and its financial potential, and ensure you are in a position to present the transaction in a professional manner to an experienced franchise financing lender. Speak to a credible, experienced and trusted Canadian business financing advisor if you need assistance in your entrepreneurship financing goals in franchising.
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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 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

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