Is it really possible to get “creative” when considering franchising business credit financing for you a new Canadian role as an entrepreneur in franchise financing? There are some tried and trusted principles that we use in the credit franchise area, but a bit of creativity has never harmed anyone we believe in!
If you haven’t wondered how to finance your new business in the franchise industry, we think it’s probably a little too late in some way, because the ability to finance your business properly we think it has much to do with the ultimate growth and success of your business. In Canada, there are very concentrated sources of loans to the franchise financing area – it is of course a trick to know what they are and, more importantly, how you can effectively navigate the labyrinth.
The reality is that if you have some industry experience in your new business and the right financial plan, you are much more likely to be able to finance your business properly.
So who can you turn to in terms of creativity and franchise funding? Customers are amazed when we tell them that the most creative partner in franchise financing in Canada is nobody other than the Canadian government! How can this be possible? Simply because the programme guaranteed by the government and managed by the banks cannot be more creative than this one.
The programme is a loan programme “BIL” and provides funding of up to 350,000. Are the conditions onerous? Difficult! The essence of the programme is a 5-7 year term loan, with high interest rates, limited personal guarantees and a few other elements of flexibility. If it is not creative, we do not know what it is!
Of course, all creativity in a business loan of this type for the franchise financing scenario should not depend only on one lender – the other lender is someone you know well. You are the same. This is simply because, when you look at total franchise financing in Canada, the two components are simply debt (the funds you borrowed) and equity, or the money you put into yourself. These equity funds, i.e. your commitment to business, typically come from savings, the proverbial support of friends and family and the investments or securities that you have at your disposal.
Coming back to our key theme of creativity, our BIL loan program mentioned above covers only some aspects of the franchise financing scenario. You can extend this loan with flexible financing of equipment that has low prepayments and extended terms of amortization, as well as, in some cases, working capital of a term loan.
We never forget to remind customers that the franchise financing plan is a two-stage process of taking over a business and making sure they have the capital and resources to run and develop a new business.
To sum up, you can be creative when you are looking for information on how franchise finance works. You need knowledge of the sources of finance that are available, that specialize in the franchise industry, and help you to implement the right financial plan. Talk to a trusted, reliable and experienced tempest financial advisor who can help you maximize your creativity!