Franchising Loan Franchise Funding Loans 7 Park Avenue Financial

YOUR COMPANY IS LOOKING FOR  BUSINESS FINANCE SOLUTIONS!

HOW TO FUND A FRANCHISE

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?

CONTACT:

7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769
Email = sprokop@7parkavenuefinancial.com

FINANCING YOUR FRANCHISE

Franchising loan needs in Canada present a unique challenge for those entrepreneurs/business owners who require franchise funding loans to jump-start their franchise acquisition. What are then the ingredients to the solution you need to acquire a business in this huge segment of the Canadian economy? Let's dig in.

Whether it's a large franchise or a smaller one some appropriate level of both personal investment and initial financing is required. Franchise loans are a very special segment of Canadian business financing. Although many franchisees are in fact experienced business people and have strong backgrounds in running a business it should be no secret that funding such acquisition is always going to be somewhat of a challenge. 

FRANCHISE FINANCING OPTIONS

The players that finance franchises in Canada are limited to a small handful of participants - they include

Banks

Specialized Franchise Finance firms

Asset-based lenders

In truth, many franchises are in fact also financed by friends and family and the collateralizing of personal assets under such vehicles as home equity loans, collapsed savings, etc. Suffice to say that it should be the preference of all franchisees to secure the appropriate balance of personal equity and external debt. 100% owner personal financing of course doesn’t guarantee franchise success and also places personal assets at risk.

We mentioned Cdn chartered banks as a possible provider of franchise loans. In truth the banks focus on two areas of loans - one is utilizing the Govt of Canada Guaranteed Small Business Loan program - the other is their alliances with certain larger well known Cdn and U.S. franchisors (think golden arches as an example!).  While those alliances don't necessarily fully guarantee loan approval there is certainly a high level of approvals given the brand success of certain well known and proven names. These loans come with the lowest interest rate for a franchise startup loan.

Note also that in many cases franchises can become a partnership with 2 or more individuals. Let's just say in our experience in meeting clients who have entered into partnerships to purchase a franchise that we hope each party understands the strengths and character of their proposed partner!  On the positive side having a partner you can work with also makes the personal investment requirement of buying and financing a franchise much more accessible - typically anywhere from 30-50% of the cost of the business tends to be financed by owners.

We would also add that recent changes to the Govt Small Business Loan, aka the ' SBL ‘, increased the loan amount available to 1 Million dollars.

REQUIREMENTS FOR A FRANCHISE LOAN

What are banks and franchise specialty lenders looking for when it comes to loan and funding requirements for franchisees?  The criteria frankly aren’t much more difficult than any other business loan:

Business experience

Reasonable personal credit history

A realistic business plan and cash flow forecast that reflects reasonable growth and profit projections

If you're focused on business success in the CANADIAN franchise industry seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you. Problem solved!

Stan Prokop