Wednesday, December 4, 2013

Franchise Finance Formula 102 : Why The Canada Small Business Financing rogram Wor!s "nd When #$ Doesn%$

Wha$%s &ood "nd 'o$ So &ood "bou$ Franchise Financing #n Canada : Franchisee%s "re eo(le Too )

*+,-+#,W . #n/orma$ion on $he (osi$i0e and nega$i0e as(ec$s o/ $he Canada small business /inancing (rogram as i$ rela$es $o /ranchise loan solu$ions The Canada small business /inancing (rogram , properly approached, is a great vehicle to complete the financing of a franchise in Canada. Knowing the limitations of the program, and how to accentuate the benefits become a classic win/win. It's as close to a proven ' formula '

as we can get, so let's dig in.

While franchising is as close to ' rampant ' as we can get these days many franchisees still view the whole purchase/ac uisition and of course financing with some fear and trepidation. It's essentially fear of the un!nown we suppose. While not specifically designed for the franchise industry the Canada small business financing program over the years has evolved into a ma"or lender in Canadian franchising. The program, commonly called the govt #$% &small business loan' loan is government underwritten and sponsored, but administered and managed via our Canadian chartered ban!s and a very small number of misc other financial institutions. It's not hard to see why ban!s flaunt their interest and e(pertise in franchise financing ) as their loans are in a large portion guaranteed by the government. Who wouldn*t want a piece of that action+, While some franchising loans might be made by ban!s to the largest and well !nown brands &thin! ' clown and a golden arch' outside the #$% program they are clearly not the ma"ority. While the re uisites for the program are certainly not onerous it is often what the program does not do that limits some franchisees from reaching financing success for their venture. -nd those prere uisites+ They include. -easonably clean (ersonal credi$ and /inancial his$ory o/ o1ner roo/ o/ acce($ance /rom $heir chosen /ranchisor remises lease co2$erminus 1i$h loan amor$i3a$ion Business (lan4cash /lo1 and managemen$ bio #urely everyone recogni/es that that type of information is standard within any type of business financing in Canada. #o where do things go awry+ -s we said it's !nowing when the program will not wor! from you. 0ere's where the limitations of the program need to be clearly understood. They are as follows. 2 The (rogram is no$ 1005 /inancing 2 $he o1ner mus$ ha0e a reasonable do1n (aymen$, a!a 6 e7ui$y com(onen$%

2 The SB8 loan is a $erm loan, no$ a cash loan, and no$ a re0ol0ing line o/ credi$ $y(e /acili$y 2 #$ is a $erm loan 1i$h e7ual /i9ed mon$hly (aymen$s, $y(ically s(read o0er a 32: year $erm $ha$ sui$s $he borro1ers 2 The loan only /inances e7ui(men$ and leasehold im(ro0emen$s 2 Tha$ means /ranchise /ees, 1or!ing ca(i$al needs, 2 The SB8 does no$ /inance in0en$ories, and i$ doesn$ (ro0ide /inancing /or $he ac$ual sign u( /ranchise /ees 2 The 8oan ca( is 3;0,000<00 so /ranchises re7uiring /inancing addi$ional $o $ha$ o/$en become (roblema$ic 1hen i$ comes $o $he SB8 If your franchise needs can*t be financed by a direct franchise commercial lender e(plore the Canada small business financing program. $ut beware, as we have noted, of what the program can... and can't do. 1or further clarity and probably faster approval see! out and spea! to a $rus$ed, credible and e9(erienced Canadian business Financing "d0isor 1i$h a $rac! record o/ success in the franchise area of the Canada small business financing program. #tan 2ro!op ) founder of 3 2ar! -venue 1inancial

h$$(:44111<:(ar!a0enue/inancial<com 4riginating business financing for Canadian companies , speciali/ing in wor!ing capital, cash flow, asset based financing . In business 56 years ) has completed in e(cess of 76 8illion 99 of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, wor!ing capital, e uipment finance, franchise finance and ta( credit financing. #n/o re: Canadian business /inancing = con$ac$ de$ails : : ar! "0enue Financial > Canadian Franchise Financing ,9(er$ise ?a0e " @ues$ion 4Commen$ *n *ur Blog *r Canadian Business Financing "l$erna$i0es A

C*'T"CT: 3 2ar! -venue 1inancial #outh #heridan :(ecutive Centre ;<56 #outh #heridan Way #uite =65 4a!ville, 4ntario %>? 3?7 Direc$ 8ine @ A5> =5< B3>< *//ice > <6B 7;< ;>B=

,mail @ spro!opC3par!avenuefinancial.com

6 Canadian Business Financing 1i$h $he in$elligen$ use o/ e9(erience 6

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