Feeling Out Of Control On Franchise Business Loans ?Franchising Finance Canada

OVERVIEW – Information on critical elements of franchise business loans in Canada. Franchising finance in Canada requires specialized focus and knowledge Franchising Finance Canada

Franchise business loans
in Canada can easily give the Canadian franchisee that ‘ out of control ‘ feeling when financing is needed. So when it comes to franchising finance where does one go to, who can you count on for assistance? Let’s dig in.

Top industry experts tell us that over 30% of those folks considering purchasing a business in this industry rarely consider at the outset the financing and cost of the business!

Even more so of a predicament is that the average franchisee considers ‘ the bank ‘ as the logical (only?) source of capital for their business purchase. The reality? It’s that very few franchises are financed by banks in a direct manner. Many are financing in an ‘ indirect’ manner, more about that one a bit later.

So who then is doing the financing in this industry? Unlike our counterparts in the U.S. financing solutions for purchase of a franchise hardly abound, but the good news is that that are still available – you just have to know the lay of the land.

Certain specialty franchise financing firms have major programs in place for specific franchisors. More often than not these are ‘ tier 1’ type names for major brands with strong brand recognition. If your business purchase does not fall into that category you’re immediate challenged?

We spoke of an ‘ indirect ‘ manner to finance your franchise via a bank. That is achieved under the CSBF program that is sponsored /administered by INDUSTRY CANADA, a branch of the Cdn government. Commonly called the ‘ SBL ‘ Small business loan this program is run by the banks but the majority of the loan is ‘ guaranteed ‘ by the government.

While we think it’s a great program for franchising loans our problem with the SBL loan is that each bank has their own twist and interpretation on the requirements. So it’s incumbent on the franchisee to ensure they have the knowledge, or the help of an advisor, to maximize success in financing approval under this program.

Going it alone in business is never a great feeling, especially in start up or business purchase mode, so don’t forget to draw on the experience of your contacts with a lawyer, accountant, a business advisor, etc. It’s their skill and expertise that will change losing to winning.

Financing can also be significantly complemented via equipment financing, working capital term loans, working capital credit lines, etc.

Don’t forget also that an existing franchise can also be financing in much the same method as a start up/turn key scenario. In some cases it reduces risk as you have access to financial statements, asset lists, etc of the existing owner. Naturally the approval of the franchisor is also required.

So, bottom line? You don’t have to settle for less when you’ve got some knowledge and experience behind you. Eliminate that ‘ out of control’ feeling in financing a franchise – seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you in your franchising finance needs.

Author: Stan Prokop7 Park Avenue Financial :


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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