We can relate to clients who are making a significant life change and personal financial investment to purchase a franchise. You have access to some funds but the challenge of financing their new venture properly seems somewhat daunting.
Is there financial assistance in completing a franchise properly? Absolutely, but you must be prepared in every sense of the word.
Step one is often simply to properly identify the total amount of borrowing you need. Unfortunately we meet with some franchisees that have completed a franchise closing, only to find they are quickly running out of working capital to run their business on an ongoing basis. So close, yet so far.
The costs to finance a franchise involve what we call the soft costs to set up your business; they typically include franchise fees and professional fees such as those for an accountant, lawyer, etc. In our experience it makes strong sense for the owner to finance those soft costs themselves, leaving the hard assets and working capital for the franchise loan itself.
Here's something that surprises clients, as it appears to be a contradiction in terms. Canadian business financing itself is a challenge, but franchise finance is not! That is because they are some excellent programs that focus specifically on financing a franchise business. If done properly, and don't quote us on this, it's almost a slam dunk! A huge and we mean huge portion of all franchises in Canada are financed by a guy named Bill.
So who is Bill? Actually we have spelled his name wrong, because B I L is the acronym for the Government federal loan program that typically finances most of the franchises in Canada.
So you thought franchise financing under the BIL might be difficult or onerous. If properly presented and prepared you have just been approved for , bar none, the best small business financing program in Canada - great terms of 5-7 years, limited personal guarantees, and, are you ready, great rates and structures on the financing itself.
Is financing a franchise business easy or hard? Our simple answer to clients on that is that if you are prepared its easy, if not, you are guaranteed to fail.
Key elements of being prepared a business plan and cash flow that demonstrates your experience, the business potential, and, what the lender wants to see, cash flow to show repayment of the debt.
OPM doesn't work in Canada almost anywhere in Canadian business financing. OPM is other peoples money, simply signifying that your own investment must be reasonable and shared with the loan investment to represent the full financing. To put is even more simply, you need a reasonable down payment. Franchisees with poor or derogatory personal credit histories need not apply in our opinion. Why? Because the lender views a franchise business in the context of how you have managed your own personal affairs.
Among all of the business software applications necessary for business operations, ERP is undoubtedly one of the most important. Making the wrong selection can have a disastrous impact on your accounting, manufacturing, and supply chain. With so much at stake, it is crucial to make a well-informed decision. more
Did you know that, according to Forbes, 86 percent of customers will pay more for a better customer experience? Customer satisfaction is always a worthy business pursuit, but to identify customer preferences and exceed expectations, you must keep pace with innovations in the technology your customers are using. more
Deciding which phone system is right for your business can be difficult. With our VoIP technology blueprint, discover the top 15 questions you should ask VoIP vendors before you make a buying decision. more