How easy it is to obtain financing for a franchise in Canada? The strategy you employ is important. If you are like most people, you want to succeed in as little time as it takes with a finance plan that works for you and the creditor.
Franchises were hit hard during the global downturn, but they are back with revenge, much more so than other comparable industries. So can you get a franchise loan, and if so, how?
The first step is to find a strong franchiser and form a partnership with them. By partnership it is meant that you become the franchisee or subcontractor in legal terms. You need to develop and offer a good financial package so that creditors and the franchiser will consider it worth the financing. What should this package or plan contain? The following components are required: an overview of your background and experience, of the business of your partner, and a plan on how to achieve a profit. The lender will also require information on how much cash you will have for the loan repayment. You have to come up with a plan about how you will generate it. Providing indicators that you will make a profit is not enough. The franchiser himself can support you in the process of getting the financing, but on a whole you are on your own. The franchiser is there mostly to give you know how for the fee they ask.
You have to calculate your starting costs, including the hard and soft costs. The franchise fee and other non-tangible assets are soft costs, for example.
First, you have to present the sum that you can contribute to the business. The minimum is 10 percent, the maximum - around 40 percent. In Canada, the BIL/CSBF program, a government-backed loan program, does the biggest portion of franchise financing. It is a good idea to apply under this program because it offers very lucrative market interest rates, 5-7 year loan return terms, and no penalty on early repayment. You will not be required to back up the loan amount with collateral or other personal assets and funds.
Regardless of the franchise loan you are applying for, a decent credit history will be a requirement.
In Canada, another prime lender with respect to franchise loans is TD Canada Trust. It offers a variety of financial services and products, efficient and fast services, and long branch hours. TD Canada Trust offers business loans with flexible terms of repayment, overdraft protection in the amount of up to $10,000 CAD, Business Lines of Credit, CSBFA loans up to $250,000, financial counselors with extensive franchise expertise and much, much more. CIBC is another financial establishment that offers franchise financing to businesses in the process of conversing their corporate stores into franchises and that have owner-run distribution systems. Applicants should present a strong balance sheet and have franchise requirements of more than $250,000.
Franchises were hit hard during the global downturn, but they are back with revenge, much more so than other comparable industries. So can you get a franchise loan, and if so, how?
The first step is to find a strong franchiser and form a partnership with them. By partnership it is meant that you become the franchisee or subcontractor in legal terms. You need to develop and offer a good financial package so that creditors and the franchiser will consider it worth the financing. What should this package or plan contain? The following components are required: an overview of your background and experience, of the business of your partner, and a plan on how to achieve a profit. The lender will also require information on how much cash you will have for the loan repayment. You have to come up with a plan about how you will generate it. Providing indicators that you will make a profit is not enough. The franchiser himself can support you in the process of getting the financing, but on a whole you are on your own. The franchiser is there mostly to give you know how for the fee they ask.
You have to calculate your starting costs, including the hard and soft costs. The franchise fee and other non-tangible assets are soft costs, for example.
First, you have to present the sum that you can contribute to the business. The minimum is 10 percent, the maximum - around 40 percent. In Canada, the BIL/CSBF program, a government-backed loan program, does the biggest portion of franchise financing. It is a good idea to apply under this program because it offers very lucrative market interest rates, 5-7 year loan return terms, and no penalty on early repayment. You will not be required to back up the loan amount with collateral or other personal assets and funds.
Regardless of the franchise loan you are applying for, a decent credit history will be a requirement.
In Canada, another prime lender with respect to franchise loans is TD Canada Trust. It offers a variety of financial services and products, efficient and fast services, and long branch hours. TD Canada Trust offers business loans with flexible terms of repayment, overdraft protection in the amount of up to $10,000 CAD, Business Lines of Credit, CSBFA loans up to $250,000, financial counselors with extensive franchise expertise and much, much more. CIBC is another financial establishment that offers franchise financing to businesses in the process of conversing their corporate stores into franchises and that have owner-run distribution systems. Applicants should present a strong balance sheet and have franchise requirements of more than $250,000.
0 comments:
Post a Comment