YOU’RE LOOKING FOR FRANCHISE FINANCING ASSISTANCE !
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?
CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs
EMAIL - sprokop@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
When Franchise business loan financing works in Canada it's easy to see why the franchisee and entrepreneur feel like they just got all the benefits of a private school education. We won't weigh in on the benefits of private versus public education of course; we will say though that if you have the right financial advice, info, and industry expertise contacts you're well ahead of the pack when considering investing in a franchise Let's dig in.
WHAT TYPE OF FINANCING IS REQUIRED TO PURCHASE A FRANCHISE ?
Key to understanding franchising finance needs is the ability to obtain the right type of term loan, credit line, or other type of financing that 's related to a franchise - for example equipment financing.
THE PERSONAL EQUITY / DOWN PAYMENT COMPONENT
A lot of those types of borrowing facilities also relate to the amount of personal equity, the proverbial ' down payment ' that comes from your own financial resources. In fact a lot of the up front charges related to a franchise acquisition can generally not be financed - they might include things like franchise fees them, incorporation costs, etc.
DON'T UNDERESTIMATE THE FUNDING YOU NEED - DON'T FORGET WORKING CAPITAL
Many clients we work with initially under estimate the total amount of financing they need for their purchase from the franchisor. A lot of that pain and embarrassment can be avoided by clear up front discussions with your franchisor as to the total amount of capital required to facilitate a successful acquisition, allowing you also to run and grow the business. A good example here might be a credit line if your business in fact needs one. Business such as the hospitality industry often operate on just a cash basis, which necessitates less working capital.
BUYING AN EXISTING FRANCHISE
In some cases the franchisee might be considering the re-purchase of an existing franchise versus a new ' turn key ' sale. Many franchisors will work with you on that as they are happy to support another new business purchase.The franchise agreement should hopefully allow you to sell your franchise with approval of the franchisor.That's a whole different other 'kettle of fish' - as you're dealing with the owner of an already existing franchise. Key here it to determine the right valuation of the business, as well as clearly uncovering the motivations of the seller who now wants to sell the business. While there are some 100% legitimate reasons for selling, it’s also evident that many franchisees realize they can obtain the sales and profit potential they had hoped. Bottom line you don't want to be purchasing a franchise that is somewhat in ' death spiral ' mode.
YOU NEED A BUSINESS PLAN AND CASH FLOW PROJECTION
A well crafted business plan, prepared by yourself, your franchisor, or an experienced Canadian business financing advisor will allow you to see all the inflows and outflows of cash from day one .7 Park Avenue Financial business plans meet and exceed the requirements of banks and commercial lenders and are prepared at a reasonable cost.
It's a great tool for any business, but for the franchisee it's critically important as they must achieve certain revenue milestones to meet royalty fees, payments on a term loan, etc. Just having a sensible sales and cash flow forecast prepared allows you to see when you're reaching breakeven and profit goals you have set.
Don't forget to check out the Canada small business financing program, which is the government guaranteed loan program from Industry Canada - its a very popular way to fund a franchise. The interest rate on the loan is very competitive. Your credit score for small business loans in Canada is important and a general guideline is a score of 650 from the credit bureau. It's a good idea to check your score in advance of applying for any business loan. The Government BIL/CSBF program is available from banks and other financial institutions. Rates on commercial loans will vary greatly depending on your overall credit profile and the type and amount of financing required.
CONCLUSION
Seek out and speak to a trusted, credible and experienced Canadian business financing/franchising advisor who can assist you with your own version of ' private school' info when it comes to successful franchising success.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
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