YOU ARE LOOKING FOR FRANCHISE FINANCING !
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
Suite 301
Oakville, Ontario
L6J 7J8
Franchise Financing & Franchise Finance Companies In Canada
Isn't the scary part of getting a proper franchise finance loan in place the fact that you've already spent a ton of time and probably some money in addressing your project? That of course means you have probably covered off already key issues such as researching franchise trends, choosing the franchisor with which you wish to become aligned, checking out industry trends and competition... and on it goes.
So with all that good staff work behind you, it must seem daunting to know that getting franchising financing might still be your biggest obstacle. Not necessarily though, so let's discuss.
KEY ISSUES ON BUYING A FRANCHISE
If you are focused and can address 4 or 5 issues surrounding your potential purchase and financing you are going to have a lot less of a challenge than you think.
THE DOWN PAYMENT EQUITY COMPONENT OF YOUR TRANSACTION
The first key issue is that of ownership equity, aka the proverbial ' down payment '. Every client we talk to seems to want to know the minimum amount of capital they can put into the transaction. Surprisingly though we even see the other extreme where some business entrepreneurs are prepared to risk it all and pay cash for their franchise - often collapsing savings or taking mortgages on their homes.
THE BUSINESS CAPITAL STRUCTURE OF YOUR FRANCHISE - HOW MUCH DEBT / HOW MUCH OWNER EQUITY
So our key point on that issue - if we had to summarize we would say that somewhere between a low down payment and a 100% cash purchase is probably what you want to be focusing on. You're never going to be successful with 100% debt, and the reality is that no financing is in fact available on the ' OPM ' concept - i.e. 100% other peoples money! Over the years we met franchisees who have told a sad tale of losing it all, personally, after their business failed and they had pledged all personal assets.
THE CANADA SMALL BUSINESS FINANCING LOAN IS A GREAT SOLUTION FOR FINANCING YOUR FRANCHISE
We would add that the Canadian government business loan, aka the BIL/CSBF program, requires that you provide only a limited guarantee of 25% of your entire borrowings. That as well as good rates and flexible terms make it a prime candidate to research when you are looking for a financing facility for your transaction.
YOUR BUSINESS PLAN SHOULD ADDRESS ONGOING DAY TO DAY FUNDING OF YOUR FRANCHISE
Another key issue that we always focus on is the concept of doing a bit more planning around how the financing will work after you have closed your transaction. So a proper business plan and cash flow that you'll need should also stay focused on how the business will address wages, how much salary you will draw, covering the franchise royalty fees in your agreement with your franchisor. At 7 Park Avenue Financial we prepare business plans for our clients that meet and exceed their requirements and our plans are priced very reasonably. Typical royalty fees we see seem to be in the 6-8% range, sometimes more and can take a significant chunk of your profits and cash flow.
One of the ways that you can address ongoing working capital, other than wrestling with your spreadsheets.. is to discuss carefully with the franchisor and other current franchisees as to the ongoing capital and expansion requirements of your business.
Many business owners start with a modest drawing of salaries when they start a business. A franchise scenario, at the end of the day, is still a start-up. Yes, it's a proven business model with a good chance of guaranteed revenues, but at the end of the day it's as close to a start-up as you can get, so budget accordingly for your personal needs relatives to a salary, living expenses, etc.
CONCLUSION
Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in addressing the key issues of franchise finance success in Canada.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
7 Park Avenue Financial/Copyright/2020/Rights Reserved
