Is franchise financing in Canada viewed as an excepted and positive method of acquiring a business? The facts certainly point to that. The Canadian franchise association has hundreds of franchisor members, and most financial institutions that participate in franchise finance advertise aggressively on their support of this type of Canadian business financing.
Once you have made that decision and chosen your franchise type you want to be in a position to spend the minimum amount of time in securing financing for your business, while at the same time doing it right. That's when you need to understand the basics of a complete package that will virtually guarantee you success and full approval for the funding you need.
Are there some pitfalls along the way? There sure can be. Time and time again we meet with clients who either have little or no experience in the business they are getting into, and coupled with that, don't have any financial support or cushion that allows them to properly finance a franchise without full depleting their personal financial resources.
We all read about companies that fail because they have too much debt and are unable to meet loan obligations - that's the pitfall you want to avoid in franchise finance. The reality is, and this is a surprise to many clients... that you dont want to borrow 100% of the funds you need, but at the same time you dont want to cash in your RRSP savings or fully mortgage your house either. The optimal blend of debt and equity in your franchise tends to be 2 or 3: 1. By that we simply mean that for every dollar you put into your new business you should plan to have only 2 or 3 dollars of debt. And quite frankly that applies to most businesses in corporate life.
You absolutely need a business plan for your franchise, as franchise financing companies and banks want to ensure that you have properly thought out how the business will generate sales, and hopefully profits.
The pitfall we see many times in client plans is that their plan is very marketing oriented, and in reality all the lender wants to see is some financial logic that will demonstrate how the franchise loan will be repaid .
Lenders call that debt service, and you want to be able to demonstrate that you will have cash flow coverage that allows you to both run the business and repay your franchise loan.
We’ve put together a comparison guide that covers over 40 of the top call center software options, providing details on pricing, features, support, and integrations. If you want to save time and still make a great investment, this guide is a must read. more
It was a painstaking process, but to help B2B companies start 2017 off on the right foot, we recently compiled a comparative list of the top 43 small to midsize business phone vendors. more
A good VoIP provider will offer additional benefits as well, but many first-time buyers find assessing each option to be difficult. Nevertheless, this is an important step in the buying process because a substandard provider can easily waste both your time and money. more