Floating A Loan? Don’t Float Alone! Funding Your Canadian Franchise Via Franchising Lenders For Funding Success!

Franchisee Funding For Canadian Entrepreneurs


Information on buying a franchise in Canada . How to overcome loan funding in Canada for your new business . Who are the lenders for your Canadian franchising funding strategy.





We recently caught an article on U.S. banking from one of our favorite U.S. websites ' Banking Connects ‘. The essence of the piece was that U.S. banks were awash in funds, but entrepreneurs were somewhat ' floating alone' in help on floating that loan!

So, let's try and ' Canadianize' that comment a bit with respect to a franchise loan in Canada, with emphasis on how to successfully loosen the purse strings of those franchise lenders for your funding needs.

Two critical components of success in franchising funding are your overall ' package ' of information, including a business plan and cash flow document. as well as owner capital .For non financial types those two fairly basic elements are still daunting though. The good news is that for very modest prices a number of solid sources to you can recommend assistance or even complete the package on your behalf. The cost by the way? Reasonable!

And now on to owner capital. If there’s one constant question we get from clients its ' How much money do we have to put into the business '.
Naturally we have the perfect answer that never seems acceptable at the outset: ' It depends ‘.

That's because the amount of money you put into the business is dictated by several areas of planning that must all come together.

They are as follows: In certain instances some Canadian or U.S. franchisors doing business in Canada might even strongly dictate how much money you have to put down. We suggest that they might be doing this by experience, knowing that past history has told them what an effective owner equity component is to their franchising system.

Funding of your franchise loan might come from a couple different sources, either an independent commercial finance firm that specializes in this type of lending, or, more commonly, the Government Small Business Loan. This requires a permanent capital amount from you in the 10% range.

Clients are always happy to hear from us that, on balance, acquiring a proven franchise is actually a favorable lending practice in Canada, if only for the fact that it removes some of the 'start up ' risk associated with opening any new business.

With the current 2012 economy on the horizon it's safe to say that entrepreneur and self employment options are clearly on the rise, given downsizing in many other aspects of the Canadian economy.

So, floating that loan! Some of the most accessible and competitive rates from Canadian lenders come via the BIL/CSBF program that more often than not perfectly suits a franchise funding need. The program is classically tailored to meet small business needs (isn’t that what a franchise is?) via great rates, limited personal guarantees, and longer amortizations, typically in the 5-7 year range.

We understand that rates for U.S. franchisees that are non bank in nature are often in the low teens these days in the U.S. . The Canadian program we've referenced has rates at least 50% lower if that U.S. comment is true.

Don't feel as a Canadian would be franchisee that you have to ' float alone' to float that (franchise) loan. Funds are available if you have a plan, some good business background in your chosen industry, and a decent measure of your own funds to commit to the venture. Speak to a trusted, credible and experienced Canadian business financing advisor today.






Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com


Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :


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

What’s The Cost And Return on Franchise Financing In Canada.? Franchising Loans & ROI Explained

What’s The Cost And Return on Franchise Financing In Canada.? Franchising Loans & ROI Explained


Information on franchise financing in Canada. How to factor the cost and return on investment of franchising finance loans into your business acquisition .



When we talk to clients about their concerns of getting franchise financing in Canada they also want to focus on whether the cost to finance that franchise is in effect a good ' return on investment ', in relation to both their own personal investment in the business as well as ongoing returns on that equity based on the ongoing profits of the business and the risk involved in this type of business, i.e. franchising!

The amount of capital you need to raise relative to your franchise loan varies in Canada. Factors that are critical here are the amount of capital that in some cases your franchisor might insist you put into the business. Another key factor is of course the amount of funding you are able to raise based upon your own personal financial situation, one factor of which is your personal credit rating. Clearly the majority of franchises in Canada are regarded as ' small business' so it makes sense that the banks and other firms that participate in franchise financing are focusing on you personally as well as your overall business prospects.

Canadian chartered banks, contrary to popular opinion, do participate in franchise financing in Canada. In fact in our opinion you could call them the major lender to the industry. But what many clients don’t understand when looking for franchise financing in Canada is that the bank lending in the franchising industry is done under the auspices of the Government Small Busines Loan, which is perfect suited to the type of financing you probably need.

So how much do franchises cost. We can safely say that they range in price for very nominal amounts such as 10k or so for a small service based franchise to millions of dollars for such large brand names... think ' golden arches' as an example .

Cost factors of your franchise vary with respect to how well your franchisor is doing in Canada, or perhaps it’s often the case of a franchisor in the U.S. who wishes to expand or introduce their presence in Canada.


We mentioned the government small business loan as a prime source of financing for the cost of your franchising proposal. This loan actually maxis out at $ 350,000.00 but in our experience that amount finances a huge amount of the franchise opportunities in Canada. They are great loans because they offer sensible maturities of 5-7 years, solid interest rates and nominal fees attached to the overall financing. The initial franchise fee itself is not financeable under the program, so typically our clients fund that portion themselves, which of course counts as their overall equity,


It's important to start sourcing your financing for your new franchise early on in the process. The bottom line, it’s never too late to start looking at your financing options available, including our aforementioned SBL loan.

So where does the capital come from relative to your own investment in the business.

Typically we see these funds coming from a clients own personal savings. That might also come from a severance situation based on the clients exit from ' corporate life ‘. In some cases you may choose to collapse savings, registered, or otherwise.

We encourage customers to understand the concept of financial leverage when it comes to R O I, or return on investment. Measure risk against reward; ensure you can withdraw a reasonable amount as a salary from the business, based on your financial projections.

And that ROI! Compute and analyze it just as you would any investment, such as a stock. Let’s say something costs 100% and you earn a 6% dividend. That’s generally a reasonable amount. So if you sell that investment 12 months latter your ROI is 6%. Think of that stock as being your business and the dividend being your business profits. Measure risk and reward and factor in the time and commitment you need to make into the business.

Franchising financing in Canada can be as difficult or easy as you make it. Speak to a trusted, credible and experienced Canadian business financing advisor who is expert in financing the cost of your franchising. And here's to your great, hopefully, Return on Investment!


ABOUT THE AUTHOR - STAN PROKOP

7 PARK AVENUE FINANCIAL

CANADIAN BUSINESS FINANCING



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

Don’t Fall For Wrong Info On Getting A Canadian Franchise Business Loan - Get The Bank Franchising Finance You Need

Accept No Substitutes For Real Info On Franchise Financing In Canada



Information on how to get a franchise business loan . Franchising finance with and without the bank . Finance Your Entrepreneurial dream today




Misinformation. It's everywhere it seems. That’s why we think there's some room for some solid information around a franchise business loan in Canada, with, and without the franchising bank finance you are probably looking for.

The whole issue of ' the bank ' is probably where a lot of the mystery, apprehension and misinformation lie when it comes to franchising finance in the Canadian marketplace.

When you understand how the banks participate in franchise finance and your loan in particular things get a lot clearer. We think if we lined up ten business people and entrepreneurs and asked them if they thought banks would finance their franchise... well we hesitate to guess their answers, or coments.

The reality though, approached under the right circumstances and program the fact that you are purchasing a proven business model is actually very appealing to the bank - Again, under the right program.

So where do things go wrong? One of them when we talk to clients is simply the fact that they are incorrectly assuming that the financing they are looking for will be a loan for 100% of the purchase price. We only wish!

The reality is that you must be prepared to inject certain funds; we'll call it an equity or owner investment, into your business. Under the right franchise finance program that permanent injection can be as low as 10%. Naturally certain other ratios around liquidity and debt have to make sense.

Remember also that the right mix of debt, i.e. what you owe, and equity, i.e. what you put in is the classic success story for any business financing. It's all about the right blend. You don’t want to drain all your personal resources, that’s for sure - at the same time you want to be in a position to pay yourself and your franchising finance loan and show a reasonable profit also.

We keep referring to a ' program' Specifically its the government BIL program which is administered by the banks but underwritten, or ' guaranteed' substantially by the government , to your lender, the bank!

Clients often ask us if they can get franchising assistance from a finance point of view from their franchisor. We're skeptical that happens a lot, and if it is it’s certainly in a limited fashion - so don’t hang your hopes on that dream too much!


Does being prepared make sense to you in business? It sure has to us! That’s why a very simple basic package that covers info on yourself, your new proposed business, some financial projections and other misc data make a franchise business loan happen a lot faster.

What about the financing costs for that loan ?The truth be told ( and we did promise you the truth ) is the BIL program has the best rates in Canada for any start up business, which is more or less what your new franchise is . Rates are in the 3% over prime range, and other enhancements to the overall credit package of the program are very
attractive to you, the business borrower.

Your own business background and personal credit rating play a key part of any franchise financing decision. Be prepared to demonstrate paying your taxes on time, having good payments with your creditors, etc. Typically you won’t be asked to put up additional personal collateral such as homes, savings, etc. But again, that's if you have presented your overall picture properly.

We often supplement client financing with equipment leasing on certain assets when that makes sense - that might include P.O.S. systems, computers, etc.

Want to make sure you are getting the real scoop on franchise finance in Canada. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in this area; thereby enhancing your business success potential.




Stan Prokop - founder of 7 Park Avenue Financial -


http://www.7parkavenuefinancial.com



Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing .Info re: Canadian business financing & contact details :



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

Don’t Risk Losing Out On Franchise Financing Loans - Info For Canadian Franchisees Re: Franchising Loan Success

You’ve Got An Important Decision To Make - So Get Informed On franchise finance in Canada

Information on Canadian franchise financing . What types of loans are available , who is lending , and is there one franchising loan strategy that makes the most sense .




The reality of owning your own franchise business should not be over shadowed by the risk of not obtaining the right, and full amount, of franchise financing you need for a franchising loan. So let’s examine the right, and wrong way, of franchise loans and lending in the current environment.

The right amount of financing you need for your acquisition is often a somewhat stressful time in the total process of buying a business in this segment of Canadian business ownership.

Commercial lending financing does exist in the Canadian environment, it’s a situation of knowing what’s available, and then, of course, executing on completing the financing. Sounds simple, but many Canadian would be entrepreneurs often find themselves challenged by the whole franchise financing journey... and in reality it’s a process, not a journey.

In a perfect world you are looking for a franchise loan that has low or at least acceptable interest rates, nominal fees associated with the transaction, and has the right term or maturity that suits your payback plans and general cash flow situation.

But, does such a loan exist? It actually does, and you'd be surprised where you might find it. Many clients tell us they have spoken to the Canadian bank with whom they typically have had a long term relationship, only to find that little information has been forthcoming as to how they might be able to successfully finance their new business venture .

Naturally any bank that finds you willing to personally pledge and collateralize your home, savings, etc is very anxious to have your business and approve that loan, but it mixing your personal assets with your business venture the optimal solution. We find it rarely makes sense to follow that strategy, buy hey... that’s just us.

In Canada the financing options of franchise lending and loans is available, but somewhat less limited than in the U.S. . . . One or two large firms dominate the major franchise financing opportunities in Canada - these firms focus on the largest name brands and larger transactions that in many cases can range up to several million dollars in total financing required.

But what about the hundreds, even thousands of franchise loans that are required for purchases in the 100-500k range. Who finances those, and if they are financeable does the financing come with those low rates and great terms and structures we spoke of previously?

Actually the Canadian BIL/CSBF loan program addresses that question pretty perfectly. It finances your franchise on terms that compete with the big boys. And we're always rooting for the little guy!

The BIL program assists business purchasers such as yourself to effectively finance the franchise you wish to purchase. Rarely will your franchisor be able to assist you with financing so your ability to prepare a solid 'package' of info and position the package from a solid financial point of view is critical. Other financial solutions such as specialized equipment and asset financing can also round out your financial solution.

Bottom line, franchise financing should not be a risky or stressful time for the completion of your business acquisition. Speak to a trusted, credible and experienced Canadian business financing advisor who can help you complete franchise financing with lending that makes sense... today.

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

Going It Alone In Canadian Franchise Loan Financing ? Business Franchising Loans

Don’t listen to them. Many will of course tell you it might be dangerous to ' go it alone ' when you are looking for franchising financing loans.

Can you actually get a business franchise loan without any outside help? Its certainly , possible , and we'll share some advice, tips, strategies and info around your potential do it yourself strategy - but we'll also demonstrate why some professional assistance along the way will ensure the success you are looking for in your franchise business acquisition .

There are of course some real potential pitfalls along the way on your road to franchising success. You want to be sure of course, to the extent that you can be, that your business will be profitable. But all business is of course a risk, whether it’s General Motors or your vision of your own service or restaurant business as an example. It is critical to make the most of the opportunities you have to examine profit potential. Those profits by the way are of course what pay back those franchise finance loans!

Along the way on your franchise journey you have numerous methods of determining financial success. A good start is looking closely at your franchisors prospectus and information, - even though that info might be for ' average ‘ franchisees it gives you a good sense of profit potential versus risk .

Don’t forget of course that your risk is that you are no only borrowing funds for the franchise but that your own personal equity injection into the business is a key part of the overall franchise financing package you will eventually come up with . So work to minimize the risk of franchise business failure.

Get your costs in order and understood. That’s some of the best advice we can provide. We advise clients to look at the total picture, which includes soft costs and hard costs, some of which can be financed, not all. Typically we recommend your owner equity be used to cover those ' soft costs' such as the franchise fee, etc.

Try also to match revenues with expenses - it might make perfect sense to lease some of those ' hard assets ' in the franchise to match the economic benefits you will receive from those assets with the useful economic life of the asset. Want a simple explanation of that? Example: If you're starting a restaurant and a large fridge or cooler is, say 75,000.00 doesn’t it make sense to finance that at say 2k per month on a lease as opposed to using valuable equity and working capital and paying cash. We think so. Wouldn’t you?

So how are franchises actually financing in Canada. We focus on a total package that might include a franchise term loan, a working capital loan, and the appropriate amount of external financing through a financial vehicle such as an equipment lease. Here's the big surprise in Canadian franchise loan financing - simply that the majority of franchises are financed with the government loan program called the BIL / CSBF program. By the way, it has incredible rates, terms, structures, and a limited personal guarantee. What more could you ask for.

So, in summary, is it possible to go it alone in Canadian business franchising financing? It is, but a better solution might be to work with a trusted, credible and experienced Canadian business finance advisor who will craft your package according to financial available and your particular situation and needs. Going it alone, but with a suitable partner when needed is a good thing sometimes!



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/franchise_loan_financing_franchising_business.html