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Want To Buy A Franchise? Need A Loan ? Here’s Your GPS to Loans for Franchises in Canada!

Guest post by: Stan Prokop

Article Overview: Information on the proper method of obtaining a franchise loan in Canada . Loans for franchises are significantly different than regular business loans. Use this information as a roadmap and guide to franchising success when you buy a franchised business.

Want To Buy A Franchise? Need A Loan ? Here’s Your GPS to Loans for Franchises in Canada!

So... you want to buy a franchise. Why then our analogy to a GPS system? Simply because that type of gadget these days provides you with a roadmap for not getting lost, and from our perspective getting a franchise loan is the last place where you want to be lost and not knowing your position . Make sense? We think so.



Loans for franchises in Canada can be a combination of an exhilarating process and a frustrating one - the former referring to being approve and the latter referencing our conversations with clients who have been frustrated by the process.



Let share some solid ' roadmap' type information on ensuring you minimize the time and risk when you buy a franchise and consider a franchise loan. The reality is that in many ways we could make a case that ownership via a franchise business is actually significantly less risky that other types of businesses which are viewed as 'start up ' in nature.



The challenge becomes knowing which institutions and programs will make your franchise investment happen. It's a common fact that a large majority of business funding requests by entrepreneurs fail simply because they are poorly presented. So knowing how you can easily pre qualify yourself, and putting together a basic package that presents yourself and your new business in the best manner is well, worth its weight in ' money ‘!.



In Canada franchises can be financed from a turnkey point of view, or in some cases you may wish to acquire a franchise from an existing franchisee in the system you are looking at. It's ironic, but one of the lesser know but larger challenges in the Canadian landscape is the ability of current franchisee's to add additional units to their first location .



So is it possible to pre qualify yourself? We assure clients that a large part of that process can be done by themselves. They must demonstrate some level of either specific industry or general business experience, while also showing the lender that they have run their personal lives from a financial perspective in a manner that reflects solid stewardship. That means having a solid credit bureau score (650 tends to be the magic number) and it certainly helps to have assets such as a home, savings, etc.



We don’t suggest or recommend to clients that they leverage all or a very large amount of assets when considering loans for franchises. But certainly anywhere from 10-50% of a purchase price typically needs to be covered off by the franchisee. That’s your ' owner equity '.



You establish the amount of financing you need by putting together a fundamental business plan around your opening balance sheet. That will reflect your own cash investment, funds you have spent already, and what is needed to get you to a turnkey grand opening! That typically is equipment, leaseholds, perhaps real estate, etc.



In Canada franchise loan financing is generally done via an independent commercial finance company or the bank. But when we say the bank we are actually referring to the CSBF program which has provided thousands of franchise loans at terms typically enjoyed by established businesses.



So is there a guaranteed GPS roadmap to a business franchise loan. Never 100% but you can get very close to that by pre qualifying yourself realistically, putting together a solid package, and ensuring you know who finances loans for franchises in Canada. Speak to a trusted, credible and experienced Canadian business financing advisor for access to your roadmap for financing success.

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Article Tags: buy, franchise loan, loans for franchises



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New Small Business Topic - Hello everyone, I'm on the lookout for new topics to add to my site. We just launched a Franchising section and are planning Human Resources section. Do you have any thoughts for a new section? Here's a list of what we currently have: Angel Investors Branding Bank Loans Business Coaching Business Plan Franchises (New) Insurance Legal Marketing Public Relations Sales Small Biz Loans Venture Capital
how much for a franchise fee? - Dear Colleague There is no easy answer to this question. Things to consider: [list=] The sizeof the Franchise Clent base Expected Turnover Intellectual Property costs (recoup) Number of Franchises Number of employees Original Set up costs Franchise admin costs An example: A franchise that I was involved in setting was to a simple "lawn mowing/home repair" franchise. The Franchise included national/local advertising - preparation of client lists - general admin - central accounting etc The Franchise involved 300-500 clients - and an annual turnover of about $300,000 . The annual franchise fee was $30,000. Hope that this gives you some idea Take care Ian[/list]
franchisebrief.com good clean design - I actually really like the design - it's clean and not busy. The information is easy to find. You mentioned you didn't want to monetize from the site thru the use of adwords but what about JV'ing with all or most of the Franchises you are referring people to. Is that possible in the Franchise industry?
canada resources - I used to have a connection to a franchise consultant in Canada at "Franchise Officer" in Toronto. I wish I could remember his name ( but I can check my files at the office tomorrow). Anyway, he had a lot of connections to banks in Canada. He may know of them and may be able to offer some feedback. If you are looking for a business loan, Canada has similar business loan programs to that of the USA's Small Business Administration (SBA). I think its SLBS in Cananda, and I probably have the list of it's lenders in my office also. Do you think either can be helpful? If so, I can get back to you with this information tomorrow. Let me know!
Top performing Franchise Loans - Evan, There are over 120 Franchises listed by the SBA with 0% Loan Failure from 10-1-00 to 9-30-05 these companies have at leat 10 loans disbursed. A number of the companies are Hotel/Motel Franchises so I listed them separately. Since all the ones listed have 0% loan failure I listed them descending by # of loans disbursed. Top 20 (by # loans Disbursed) 0% SBA Loan Failure (does not include hotels/motels) 1 21425--CULVER'S FROZEN CUSTARD 85 2 66910--PRIMROSE SCHOOL (DAYCARE) 76 3 14467--CARTRIDGE WORLD STORES 54 4 68021--QUIZNO'S SUBS 41 5 06560--AUNTIE ANN'S (SOFT PRETZELS) 40 6 29912--FIREHOUSE SUBS 35 7 31154--FOOT SOLUTIONS 35 8 52707--MEDICAP PHARMACY 35 9 09802--BEN & JERRY'S ICE CREAM 33 10 67759--COMFORT SUITES 33 11 70150--RITTER'S FROZEN CUSTARD 32 12 05650--ARBY'S 31 13 65160--PLATO'S CLOSET 31 14 67417--PUMP IT UP 30 15 69149--REMAX 30 16 71456--SALAD WORKS, INC. 30 17 76282--SONIC DRIVE-IN 27 18 84725--UNION 76 OIL 27 19 17049--CHRISTIAN BROTHERS AUTOMOTIVE 26 20 78950--SUNOCO SERVICE STATION 26 Top 10 0% SBA Loan Failure Hotel/Motels 1 10275--BEST WESTERN INN 104 2 67750--COMFORT INN 98 3 38605--HOLIDAY INN EXPRESS 87 4 36680--HAMPTON INNS 57 5 53165--MICROTEL 33 6 75385--SLEEP INN MOTEL 26 7 04160--AMERIHOST INN 18 8 69134--RED ROOF INN 13 9 17230--CLARION INN & SUITES 11 10 20715--COUNTRY INN 11


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