YOU ARE BUYING A FRANCHISE – YOU WANT INFO AND SOLUTIONS FOR FRANCHISE LOANS!
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Financing & Cash flow are the biggest issues facing business today
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
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EMAIL - sprokop@7parkavenuefinancial.com
Franchise loans in Canada. When you're buying a new or existing business in this large segment of the economy should you be surprised to read our headline regarding financing approval? That depends of course... on whether you yourself have been approved, or declined!
WHAT IS THE RIGHT WAY TO FINANCE A FRANCHISE
There is, of course, some ' right ways ' to finance a business in the franchising industry. Top experts in the field can provide you with both the guidance to ensure your finance request is approved, as well as minimizing the time it takes to get to the goal line - that time often being the most frustrating part of your search to finance entrepreneurship.
We continually remind clients that they must focus on a total solution, that being both the turnkey financing of their project, as well as taking into consideration working capital and growth financing. Those latter two are sometimes forgotten, leading to disastrous consequences.
In Canada financing for franchise loans is provided by a small handful of resources - they include specialized finance companies, the government SBL loan, and third-party lease and finance companies.
Using any one or a combination of the above financing resources effectively puts you very quickly very close to the goal line when buying a business.
DO BANKS OFFER FRANCHISE LOANS - SPOILER ALERT = ' SOMETIMES'
Many new franchisees associate ' the bank ' as the source of their possible financing. They are thinking in terms of what we could call ' conventional financing ‘. So the question then is very simple. Do Canadian chartered banks in effect finance franchise loans? The answer is a resounding yes, couple with a resounding watch out.
While our bank system has the lowest rates in Canada, as well as generally flexible terms the reality is that a conventional loan of this type requires that you put up personal assets, quite often the equity in your home. That of course requires approval from your husband or wife, whom many franchisees tell us is more difficult than negotiating with a banker.
SEPARATE YOUR BUSINESS CREDIT NEEDS AND YOUR PERSONAL CREDIT
We further remind clients that they would do well to consider the concept of separating their personal life and finances from business finances - that is just common sense, and one of the many reasons you also consider incorporating your franchise into a separate legal entity. However, in fairness to our great and strong banking system in Canada almost all the banks have embraced the franchise industry and have some experts in their system who can address your needs. It's just finding out which branch they are located at!!
So what about the franchisee who can't or doesn't want to pledge all those personal assets (you have to have assets to pledge them apparently)? One solution is of course to partner with someone who can assist in relieving the total financial burden of the business. However, in our own experience, a lot of issues (mostly character and personal!) arise in partnership challenges of managing and owning a business. Going alone, while lonely is often the best solution.
CONCLUSION
In general, the potential Canadian franchisee requires a reasonably good personal credit history, as the franchise lender wants to know you manage your own personal finances in a manner that reflects how you will manage your business.
So, when you plan or system to successfully enter the franchise industry seek out and speak to a trusted, credible and experienced Canadian business financing expert for assistance with franchise loans in Canada. Your focus? Doing it right... and quickly.
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Stan Prokop
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