Sunday, May 9, 2010

Franchise Business Financing

Franchise Business Financing – Canadian solutions
May 7th, 2010 | Author: Stacey Smith
Franchise Business Financing – if you ask a Canadian entrepreneur and prospective franchisee what kind of financing him or she is looking for they would normally simply indicate they want their financing approved, they don’t really focus on what type of financing is achievable in the Canadian marketplace.

Franchise Financing in Canada does not come with unlimited options with respect to strategies, amounts, and different rates, terms, and structures. When we meet with prospective franchisees looking for financing we discuss both traditional and some non – traditional methods of financing their new venture.

Naturally most business owners prefer ‘ debt financing ‘ or borrowed funds, as the preferred financing solution – taking in partners or outside equity , angel investors, etc has all sorts of complications – the bottom line is that non debt alternatives force the entrepreneur to give up substantial equity and control, both of which are too valuable in early stages of building a business . So that brings us back to – How are franchises financed in Canada. The main financier of franchises in Canada, and its probably a surprise to most people, is the Canadian government. The federal government underwrites the CSBF loan program that the vast majority of franchisees utilize to compliment their own investment. We can’t over emphasize that the business community, i.e. banks, lenders, etc look to yourself as the franchisee to put some level of your own investment into the business.

When full financing has not been able to be achieved by the CSBF loan then our firm has been successful in putting together working capital term loans, lease asset financing, etc, to round out the financing package.
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