Canadian Franchisee Funding & Business Loans – In Over Your Head In Lenders & Finance ?

All of us in business are sometimes ‘ out of our element ‘ when we are required to create a ‘ win ‘ in an environment we sometimes don’t fully understand. So we forgive all clients who seem overwhelmed in the area of franchise finance lenders, funding for their new life as a franchisee, and getting business loans that… oh yes… hopefully make sense!

What we want to do now then is make what you perceived as a journey into a ‘ short trip “! By the time we have met you quite often you have made the decision to purchase a franchise in an industry either intrigues you, or, hopefully more so, one that you are sure you can be successful in.

Franchising today, in terms of total sales, is a mega portion of the economy – the numbers are staggering. Industries such as automotive, home improvements, business and consumer services, food, specialty and entertainment all have great franchise opportunities.

So whats harder, picking a franchise or trying to figure out who are the franchise finance lenders in Canada and whats the best method of franchisee funding? We’ll let you be the judge of that.

Start up or acquisition financing of a franchise in Canada does not have to be as formidable as it might seem. You need a plan, some expert help (much of which is free) and you should have a roadmap to succeed. We’ll boil down guaranteed success to 3 very simple issues.

The 3 issues that you should focus on or rationalize vis a vis your franchise finance funding are as follows : a reasonable personal credit record and net worth ( in relation to the size of your franchise investment ) , a basic but clear presentation or proposal ( aka ‘ business plan’ ‘ executive summary’) .. and finally, knowledge of who you are going to present it to for guaranteed success . Simple enough?

Your proposal or plan reflects how you present your business – the essence of the document is info on yourself, your franchisor, and your financial plan re sales / profits / cash flow, and info your industry sector. That’s not at all complicated, and with some able assistance that type of document can be prepared in days.

Let’s remember we’re talking about business loans, not a personal loan when it comes to franchise finance. Typical financings we see come in at the 350 – 500k range – naturally many franchisees select smaller businesses, some larger .

So, who are the franchise lenders in Canada? That seems a mystery to many clients for some good reasons. One of which the largest franchise financing program in Canada was probably never mean to be just that. We’re talking about the governments BIL/CSBF program. Thousands of successful Canadian entrepreneurs use the programs for rates, terms and structures that you could only think ‘ the big boys’ get in terms of attractive finance.

Alternatively one large specialty franchise lender in Canada has a significant presence. In many cases they are aligned on a program basis with your franchisor who might be participating in some manner on the financing.

Don’t forget also that many franchise business loans revolve around the purchase of a franchise business from an existing franchisee. In many cases that becomes a true business loan with a focus on what assets are being purchase, is the business profitable, what are the cash flows and future potential of that business.

Franchise finance funding can also be compliment ed by a working capital term loan, or working with a specialized equipment finance firm to acquire assets outside the main franchise loan . Additionally innovative merchant advance funding arrangements can help you with working capital and cash flow.

Bottom line. It’s of course that you shouldn’t feel overwhelmed or not in control of a key element of your franchise decision, the financing. You have alternatives, assistance in the form of an experienced Canadian business financing advisor you may wish to consult with… providing you with the knowledge you can be successful in approved funding and business loans for your new venture.