Let Franchise Financing Be Your Success Story In Entrepreneurship

OVERVIEW – Information on loans for franchises in Canada . What are the key elements of franchise loan success for the new or existing franchisee


Loans for franchises in Canada have the ability to make entrepreneurship a true success story in Canadian business – being unsuccessful brings the opposite. Let’s dig in.

A franchise loan in Canada, achieved properly and under the right circumstances gives the franchisee the ability to acquire and grow a small business into a larger successful business. Unfortunately there is no ‘ instruction manual ‘ on getting franchise financing done right , so we’ll share some sound strategies and info on ensuring you’re a part of the Canadian franchise success story .

While there are always different factors why a franchise might fail – i.e. lack of management, experience, a poor choice for franchisor or location , etc its a pretty sure thing that financing done properly is also at the heart of franchise success.

Not having the right amount funding will always be a setback for the new franchisee – most will agree it sets up a recipe for guaranteed failure. That undercapitalization comes from a couple of key mistakes made by the new franchisee:

Inability to truly understand their operating costs

Poor start up estimates

No back up plan if additional equity is required

Lack of working capital after the franchise is acquired

Poor planning for future investments required in assets, working capital, renovations, etc

There is no easy money when it comes to franchise loans in Canada. While the U.S. market has a substantial number of other financing options the Canadian franchisee must choose from a small handful of finance options – therefore re-enforcing the need to do things right.

Those franchise options? They include specialty franchise funding from the one or two players in Canada offering this financing, the Govt Small Business Loan , and a combination of commercial finance solutions via equipment financing, leasehold finance, merchant cash flow advances,

Whether it’s a franchise loan or any other type of business financing leverage, i.e. the right amount of debt is key to business success. Typical satisfactory debt to equity ratios for franchise financing are in the 2:1 OR 3:1 range, meaning simply that the owner should have at least a half or a third of the total capital committed personally .

Those funds typically come from savings, but we always encourage franchisees to never over commit personal capital and not to collapse registered investments or take on collateral mortgages on personal property. Bottom line – don’t mix your personal and business finances in the wrong manner.

If you’re looking to be a ‘ SUCCESS STORY ‘ in Canadian franchise financing when it comes to a franchise loan seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can help that ‘ miracle needed ‘ process along .

Author: Stan Prokop 7 Park Avenue Financial : Franchise Loan http://www.7parkavenuefinancial.com
Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 – Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :


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