The ‘ Big Reveal’ On Franchise Financing Options In Canada
OVERVIEW – Information on how Canadian entrepreneurs can address franchising opportunities via the proper type of franchise business loan in Canada

 


Franchising opportunities
in Canada require… you guessed it… a franchise business loan of some sorts. Easy to say, somewhat harder to finalize. Let’s examine some key points and lessons we’ve shared with franchisees in their search for ‘ the big reveal’ around achievable franchise finance success. Let’s dig in.

The type of franchise you select, i.e. ‘ the opportunity’ part of your vision will often dictate the type and amount of financing you need. Depending on the nature of your chosen franchise you will need capital for one or all of the following –

Franchise fees

Equipment

Leasehold Improvements

Working Capital / Royalty fees

For the majority of clients we work with they typically incorporate the actual franchise fee as part of their own capital /equity investment in the business – in effect its part of that ‘ down payment ‘.

Most franchisors, often based primarily on their own experience have a strong sense of the total amt. of capital needed to be successful. With the amount of disclosure franchisors are required to make these days the benefits to the franchisee are clear – so doing your homework in investigating the potential financial success of your business is key.

Repayment for equipment and leasehold needs will typically come from the ongoing cash flow in your franchise. You of course know that, but the goal is to prove that to your lender/lenders. In Canada those lenders are either specialty franchise lenders, banks via 2 types of specifically tailored programs, and misc asset and working capital firms in the general category of leasing companies or working capital providers.

Your ability to prove repayment for your loans will come from your business plan and cash flow forecast. It’s an investment of time (with minimal cost) that will prove to your lender/lenders your ability to repay term and operating debt.

Most franchisees most certainly are not accountants, but spending some time understanding some basics around cash flow, break even, and contingencies is a highly recommended pursuit. Advice in this area can easily come from your accountant, business advisor, even other franchisees you may choose to meet and talk to.

In the majority of franchise financing in Canada very little outside collateral is required. The franchise reputation, your business plan, your initial equity investment will more often than not carry you to reasonable chances of success. Lenders will though want to know how you have run your personal finances (credit bureau scores, net worth statements, etc) – lenders can be forgiven for treating most franchises as start up businesses with the risk that comes with any start up.

If you’re looking for the ‘ big reveal’ on the truth around basic franchise financing 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 in making the entrepreneurial dream a financeable
reality.

Author: Stan Prokop – founder of 7 Park Avenue Financial

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies, specializing in working capital, cash flow, and asset based financing. In business 10 years – has completed in excess of $90 Million of financing for Canadian corporations. Core competencies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details:

CONTACT:

Greg LaBella
7 Park Avenue Financial
Off.   905 829 2653

Cell   905 302 4171
greg@7parkavenuefinancial.com