YOU’RE LOOKING FOR FRANCHISE FINANCING HELP!
FINANCE A FRANCHISE THE RIGHT WAY!
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
Looking for some good Scuttlebutt on franchise financing in Canada? And who doesn't love the word ' SCUTTLEBUTT ' - It was the drinking fountain on ships... sailors hung around and shared rumours and gossip, ie Scuttlebutt!
While we are big fans of the term itself what’s more important is to dispel rumours and gossip around the reality of getting a franchise loan and the franchise business in Canada. The one thing we can assure clients is they need a solid business plan and financing package prior to starting the financing process.
SATISFYING LENDER LOAN REQUIREMENTS
While a lot of that information might come from your franchisor you’re basically preparing a financial overview of your new business. And from the lender's perspective, they simply want to know how loans they make to franchises will be repaid. Fair enough, right!?
WHAT COSTS ARE INVOLVED IN FINANCING A FRANCHISE
So what amount of funding is in fact required to purchase a franchise in Canada? There are several components to the project - they include the franchise fee, working capital, a loan for leaseholds and equipment or rolling stock, etc. In some cases, a franchisee might choose to acquire real estate as part of their transaction, which is typically facilitate as a separate financing business to the franchise itself.
It's important to note that both a new or existing franchise can be purchase - with existing franchises of course requiring the approval of the franchisor for business loans relating to the purchase/\.
FRANCHISE FINANCING LOANS ARE SOMEWHAT LIMITED IN CANADA COMPARED TO THE UNITED STATES
While all banks in Canada seem to have a lot of content on their websites about financing franchises directly the reality is that this is rarely done on the strength of your proposal alone. So when considering approaching a bank, either alone or with an experienced advisor you might just find that really only two avenues of success for your franchise loan :
External collateral
The Government SBL Loan
MORE AND MORE FRANCHISEES RELY ON THE GOVERNMENT OF CANADA SMALL BUSINESS LOAN FOR FUNDING
While the franchisee certainly has a right to offer up personal collateral, i.e. homes, savings, etc that is not the optimal way to finance a business. That is why thousands of business owners over the years have chosen the Government BIL loan to facilitate the financing of their new business. For financing needs fewer than 350k it’s a solid mechanism for getting you to the franchise goal line! Bar none we at 7 Park Avenue Financial believe this is the best financing program for new franchisees.
SPECIALTY FRANCHISE FINANCE
While specialty franchise financing does in fact exist in Canada it typically requires your franchisor to be part of a larger program which might not necessarily be the case. Oh, and by the way, lots of third-party commercial finance firms such as equipment finance companies can also assist you in portions of your financing.
3 ELEMENTS OF A FRANCHISE FINANCE STRATEGY
If we had to summarize a short road map of success in franchise loans in Canada it would be pretty simple:
Have a strong business plan/loan package
Be prepared to demonstrate good personal credit history and business experience
Be able t demonstrate that you can come up with a solid portion of equity in the business - no one is going to finance 100% of the project.
As a footnote to your loan package, you should ensure you can demonstrate a good personal credit score from the credit bureau as well as hopefully a reasonable net worth to fall back on.
CONCLUSION
So, if you want to plough through all the scuttlebutt around a franchise financing loan in Canada seek out and speak to a trusted, credible and experienced Canadian business financing advisor.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
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