YOU’RE LOOKING FOR FRANCHISE LOAN 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
Loans for franchises in Canada have the ability to make entrepreneurship a true success story in Canadian business - being unsuccessful brings the opposite. Let's dig in.
HOW CAN YOU ACHIEVE SUCCESS IN FRANCHISING
A franchise loan in Canada achieved properly and under the right circumstances gives the franchisee the ability to acquire and grow a small business into a larger successful business. Unfortunately, there is no ' instruction manual ' on getting franchise financing done right, so we'll share some sound strategies and info on ensuring you're a part of the Canadian franchise success story.
You might be buying a new franchise or an existing one from a franchisee that is selling with permission from the franchisor on the franchise purchase - it's always a good idea to investigate thoroughly why an existing franchisee is selling!
WHY DO FRANCHISES FAIL?
While there are always different factors why a franchise might fail - i.e. lack of management, experience, a poor choice for franchisor or location, etc, it's a pretty sure thing that financing done properly is also at the heart of franchise success.
HOW MUCH FUNDING DO YOU NEED FOR YOUR FRANCHISE
Not having the right amount of funding will always be a setback for the new franchisee - most will agree it sets up a recipe for guaranteed failure. That undercapitalization comes from a couple of key mistakes made by the new franchisee:
Inability to truly understand their operating costs
Poor startup estimates
No backup plan if additional equity is required
Lack of working capital after the franchise is acquired.
Poor planning for future investments required in assets, working capital, renovations, etc.
Note that franchisors do not offer financing, so the borrower needs to understand the options available. Franchisors collect franchise fees; they don't fund their franchises in their network.
THE CANADIAN FRANCHISE FINANCING OPTIONS ARE LIMITED COMPARED TO U.S. OPTIONS
There is no easy money when it comes to franchise loans in Canada. While the U.S. market has a substantial number of other financing options, the Canadian franchisee must choose from a small handful of finance options - therefore re-enforcing the need to do things right.
WHO ARE THE FRANCHISE LENDERS IN CANADA
Those franchise options? They include specialty franchise funding from the one or two players in Canada offering this financing, the Government Small Business Loan, and a combination of commercial finance solutions via equipment financing, leasehold finance, merchant cash flow advances and specialty lenders in franchising. Government guaranteed loans in Canada are similar to U.S. ' SBA loans ' you may have heard of. It's a solid financing option for buying a franchise in Canada.
Borrowers in need of franchise finance are always looking for good interest rates on business loans. The interest rate on the Government loan is desirable and benchmarked against Canadian prime rates.
In some cases, franchise owners might have to consider real estate as part of their purchase, and different types of small business loans or mortgages can accommodate that.
WHAT AMOUNT OF DEBT CAN YOUR FRANCHISE CARRY?
Whether it’s a franchise loan or any other type of business financing, leverage, i.e. the right amount of debt, is key to business success. Typical satisfactory debt to equity ratios for franchise financing are in the 2:1 OR 3:1 range, meaning simply that the owner should have at least a half or a third of the total capital committed personally.
YOUR PERSONAL EQUITY COMPONENT / DOWN PAYMENT IN BUYING A FRANCHISE BUSINESS
Those funds typically come from savings, but we always encourage franchisees to never over-commit personal capital and not collapse registered investments or take on collateral mortgages on personal property. Bottom line - don't mix your personal and business finances in the wrong manner. A good credit score and personal credit history are always required. Bottom line? Make sure personal finances are in order.
Repayment terms and financing solutions available will be based on your cash flow.
The franchise fee as part of your franchise agreement is usually paid directly and is not financed.
Ensure you have a business plan and a strong application of key requirements. 7 Park Avenue Financial business plans meet and exceed bank and commercial lender requirements.
CONCLUSION
Small businesses such as franchises will vary greatly based on their funding needs. If you're looking to be a ' SUCCESS STORY ' in Canadian franchise financing when it comes to a franchise loan, seek out and speak to 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can help that ' miracle needed ' process along.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
7 Park Avenue Financial/Copyright/2021/Rights Reserved
