Unlocking Franchise Financing Secrets In Canada Franchising Loans In Canada
OVERVIEW – Information on franchising loans in Canada . What franchise financing strategies are available to the prospective franchisee


Franchising loans in Canada, properly obtained and constructed, help guarantee entrepreneurial success for prospective franchisees. We’re going to unlock some of those ‘ secrets’ to help ensure that success story. Let’s dig in.

We can categorically say, notwithstanding the tremendous growth in franchising in Canada, that there’s no ‘ easy money ‘ on the table when it comes to this type of loan or finance solution. In fact, we can safely say that many of the requirements of any business loan apply to almost all franchise scenarios.

So it becomes a question of leverage ( the amount of debt ) the franchisee can take on, the collateral value of assets being financed ( equipment, leaseholds, real estate, rolling stock ) as well as the business experience of the owner .

Often overlooked, or simply forgotten, is the franchisee’s ability to misgauge the working capital and growth financing that might be needed post acquisition. While in some cases it might be assumed your business will lose money in the early stages it clearly makes sense to focus on cash flow and profitability from day one.

We meet with many franchisees who are interested in, or in the process of acquiring an existing franchise. Getting past the fact that the franchisor itself must approve this type of sale it’s absolutely critical to determine what levels of success (or distress) that business was experiencing pre purchase. This necessitates a strong look at existing financials, personnel, and market conditions re location, industry growth, etc.

While it might seem logical that Canadian chartered banks are the predominant financier of franchises in Canada this might actually not be the case. While the banks do in fact align themselves with the big names in the business those franchises are often, for the obvious reasons, more expensive and require much more capital investment and personal financial commitment.

The reality in Canadian franchise financing? It’s that most operations are financed by a small handful of specialty lenders, as well as those borrowers to choose to opt for the Government Small Business Loan (aka the ‘ SBL ‘). Other forms of supplementary financing are also utilized and available to borrowers – they include equipment lessors, term lenders for working capital loans, merchant advance cash flow financiers, and loans secured by personal assets of the franchisee, the latter not recommended.

If you’re looking to be successful and wanting to navigate the tips and tricks of the franchise finance maze in Canada seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you on the journey to entrepreneurial success.

Author: Stan Prokop – 7 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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