YOU’RE LOOKING FOR FRANCHISING LOAN ASSISTANCE!
GUIDE TO BEST FINANCING OPTIONS IN FRANCHISING IN CANADA
You've arrived at the right address! Welcome to 7 Park Avenue Financial
Financing & Cash flow are the biggest issues facing business today.
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs
EMAIL - sprokop@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8
When it comes to exploiting franchising opportunities that appeal to the entrepreneur, a franchise loan search in Canada can be a daunting search. In fact, top experts tell us that the industry as a whole recognizes the fact that access to the right amount of loans and financing is ' top of mind' for new and existing franchisees. Let's provide a bit of a ' backstage pass ‘into critical aspects of this challenge. Let's dig in.
DO FRANCHISORS PROVIDE FINANCING TO BUY A FRANCHISE
Franchisees in Canada have access to numerous services provided by their franchisor and other members of their ' team.' However, actual loan financing tends not to be one of them.
WHAT ARE THE SERVICES OF A FRANCHISOR IN SELECTING YOUR FRANCHISE BUSINESS PURCHASE
Almost all franchisors provide a portfolio of services around location, training, business development, and other franchise survival aspects. Is anything missing in all that assistance - Most often it’s financing!
It comes down to some pretty simple basics - knowing who finances franchises, understanding how they are financed, and knowing if you qualify for the capital you need to acquire, operate, and grow the business.
Think of it as basically matching your profile to the right amount of capital - simple as that.
WHAT ARE THE KEY BASICS OF FUNDING A FRANCHISE
So what are those key basics that the franchisee, he or she, must have under their belt? They include:
Understanding term debt and operating capital needs for both acquisition and ongoing operations
WHAT AMOUNT OF BUSINESS CAPITAL DO YOU NEED TO FINANCE A FRANCHISE
Knowing the amount of capital that you need to invest as an equity investment that satisfies the franchisor, your lender, and the capital structure and ongoing needs of the business (Too many franchisees we work with underestimate long term needs for credit facilities and asset replenishment)
WHAT IS THE IMPORTANCE OF A BUSINESS PLAN IN FINANCING YOUR FRANCHISE
If you are approved for a franchise loan, is there a clear understanding as to how the loan will be repaid out of cash flow and profits (The cash flow in your business plan must be realistic and allow for contingencies) 7 Park Avenue Financial is a business plan expert and our business plans meet and exceed commercial lender and bank requirements?
The ability to assess how much personal collateral/guarantees are required
HOW TO FINANCE A FRANCHISE BUSINESS IN CANADA
In Canada, franchise loans are made by a small handful of specialty lenders and the often-used Governmentt Small Business Loan ( SBL), which has evolved into being perfectly suited for acquiring a franchise. Interest rates by specialty lenders and the SBL loan are very reasonable, in our opinion and misc. set up fees or processing fees are ultra reasonable in the scheme of things.
In general, the franchise fee which is the key part of a franchise agreement is typically paid by the new franchisee directly and is not financed. When it comes to financing solutions and an attractive interest rate the Government guaranteed loan program is a solid choice for funding your new business, or any business for that matter. Franchise owners can choose to purchase a new franchise or an existing one when contemplating their purchase and your finance options will vary greatly based on the type of franchise, amount of business capital you need, etc.
The forms of finance you undertake come under 3 categories:
Assets
Leaseholds
Operating Capital
SUPPLEMENTARY FRANCHISEE FINANCING
You need the right mix of financing to successfully attain all three. Numerous external financiers such as equipment lessors and working capital lenders (term and operating) round out the financing of franchise opportunities. Franchisees should ensure they have a good personal credit score when considering buying a franchise.
CONCLUSION
The most clarity to your financing needs will come out of your business plan, including info on yourself, aka the ' franchisee,' the industry, the business model, and solid financial projections that provide a road map the right financing.
To ensure you're ready for a franchise loan when opportunity knocks in this industry, seek out and speak to a trusted, credible and experienced Canadian franchise business financing advisor who can assist you with your loan needs.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
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