When considering a franchise finance business loan for your new Canadian role as an entrepreneur in franchise financing, is it actually possible to be “creative”? In the field of franchise lending, we adhere to a few tried-and-true guidelines, but we also believe that a little imagination never hurts anyone!
We believe that your ability to properly finance your business has a lot to do with its ultimate growth and success, so if you haven’t thought about how to finance your new franchise business, it’s probably too late in some ways. In Canada, there are specialized lending sources for franchise financing; the trick, of course, is to know what they are and, more importantly, how to successfully navigate the “maze.”
In reality, you have a much better chance of properly financing your new business if you have some industry knowledge and a sound financial strategy.
So, for franchise financing, who can you turn to for ideas and resources? When we inform our customers that the Canadian government is the most innovative partner in franchise financing, they are astonished. Simply because there is no way a government-backed program managed by banks could be more innovative than this.
The program is called the “BIL” loan program, and it gives you up to 350 thousand dollars to start your new business. Are the terms complicated? Hardly! The program’s main feature is a term loan for 5-7 years with low rates, few personal guarantees, and some flexibility. On the off chance that that isn’t imaginative then we don’t have the foggiest idea what is!
Naturally, you shouldn’t rely on just one lender for a business loan of this kind for your franchise finance situation; the other lender is someone you know well. Yourself. This is because the two components of a franchise’s total financing in Canada are simply debt, or money borrowed, and equity, or money invested by the franchisee. These equity funds, or your commitment to the company, typically come from savings, the support of your “friends and family,” investments, or collateral that you already have.
To return to our primary topic of creativity, our previously mentioned BIL loan program only covers a portion of a franchise finance scenario. You can add equipment financing with low down payments and longer amortization terms to that loan, as well as a working capital term loan in some cases.
We never forget to remind our clients that the franchise financing plan consists of two steps: getting the business and making sure they have enough money to run and grow it.
In conclusion, if you want information on how Canadian franchise finance works, you can be creative. You require assistance in implementing a sound financial plan and knowledge of the franchise industry-specific funding options. Talk to a Canadian business financing expert who you can rely on to help you get the most out of your creativity!
