It?s appealing, we know that. It is the concept of owning your own business that is a proven brand and money maker. Franchise financing loans can help you address your entrepreneurial vision of owning a franchise in Canada. The ability to own your own business and generate profits and wealth is of course attractive to all.
Picking your franchise somewhat is half the battle, as you probably have been focused on purchasing a new or existing franchise that matches your talent, interest, and experience. Another half of the battle plus some the harder one (we?d agree) is arranging franchise financing loans that make sense for your business and your own personal situation.
Once we emphasize clients, whether entrepreneurs are starting a significant manufacturing company that might employ hundreds, or perhaps a pizza shop with a staff of three two considerations spring to mind, always ? they are debt and equity. We?re of course referring to how much you?ll put in the business, and how much business credit for any franchise loan could be accessed.
So are there some great secrets and tips we are able to tell yourself as a prospective entrepreneur ? there sure are.
First tip/secret # 1 is just to research carefully the financial requirements that the franchisor requires. These must be addressed in a solid and dedicated manner. If you do not understand the requirements how can you address them? So make sure you understand the amount of financing the franchisor recommends. Is that all? Definitely not, that?s where our previous concept of planning was mentioned. Be sure you consider two other aspects of the business financing; they are working capital for daily operations, and some kind of plan for long-term growth or expansion.
It?s probably not designed in stone somewhere, but we?ve always felt that clients aligning themselves having a major brand that has a larger number of multiple units have a strong chance of financing success. Of course that isn?t forever the situation, as some new concepts in a number of industries continue being introduced all the time, however it sure helps if the lender is enamored by the franchisors logo and success.
Another great tip and secret?s simply that instead of spending all the time on the business itself when you are discussing financing, rather also focus on your own personal financial situation and experience. This really is absolutely one of the most important criteria that banks pay attention to ? namely how perhaps you have run your individual affairs, and at the same time do you have the type of business of management experience.
Some franchisees think because they don?t have very direct go through it might hinder their financing ? the truth is by properly positioning your skills in a general sense, i.e. previous sales experience, customer service, etc you can take advantage of general business skills required to run any company.
You might not prefer to hear this news, but the reality is that you do in these times require a sizeable personal investment into the business, aka your owner equity. Those typical ranges between 30-50% depending on the size and nature of the franchise. In some cases you might be in fact buying a current franchise from another franchisee who wants for some reason to ?move on.
Let?s share probably our greatest secret in financing your franchise ? the government of Canada. Many clients are surprised to hear that the government program known as the CSBF / BIL program is the largest financier of franchises in Canada. Its underwritten, structured, and supported by the federal government and offers great rates, terms and structures for amounts as much as 350,000.00 ? that amount was increased from 250k in previous years.
A final secret ? experts are preferred ? Speak to a trusted, credible and experienced Canadian business financing advisor on how you can efficiently and successful gain knowledge on franchise financing loans for the start up business.
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Source: http://franchisingconsultant-s.com/2012/08/12/secret-of-franchise-financing-loans/
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