How The Right Franchise Financing Will Successfully Solve Your Franchise Cost Challenge!

You have selected, or are selecting a Canadian franchise. You’re down to those two last seemingly minor questions – how much does the franchise cost, and what franchise financing is available! Pardon our questions, but those are hardly minor points.

Franchise opportunities in Canada seem unlimited these days as the industry continues to grow and grow. A huge portion of the Canadian economy is services by franchisors and their franchisees in Canada.

There is no one method that serves all you’re financing needs for your new proposed business. However several tried and true methods of financing are utilized successfully everyday in Canada; let’s explore some of those methods and hopefully provide you with tips, strategies and tactics to successfully complete you business acquisition. In most cases you will be buying, or building a franchise with your franchisor partner, in some instances you are negotiating with an existing franchisee to purchase their business. Both of these scenarios are financed differently.

In the case of purchasing an existing franchise a more formulaic approach is available to you. The basic process involves negotiating a fair price around the business, validating the financial statements of the owner, and, more often than not, obtaining an appraisal of any of the hard assets and leaseholds of the business. The appraisal value is a key point in your overall financing strategy. We also caution business clients to take some time to ‘ normalize’ the financial statements of the existing business. This is what even sophisticated financial analysts do when they are looking at a merger or acquisition type scenario. The process simply involves taking a look at all the costs and expenses and eliminating those that might not be relevant as you move the new business forward.

Quick example on the above: Previous owner is taking 80,000.00 out in salary; you feel you can continue with a 50k salary – that obviously allows you to put 30k of profit and cash flow back into your business assumptions. You might well want to utilize the services of a trusted, credible and experienced financial advisor who can assist you in this area if you are a non- financial type!

The most common method of financing a franchise in Canada, existing or new, is a BIL.Great says our clients, now what is that?! It’s the technical name for the Canadian governments Small Business Financing program, and it provides up to 350k in financing for your business. Sounds great, right?

The challenge our clients face is typically understanding the criteria of the program, how it works, what information and back up is required to process a financing, and what other types of financing might compliment this proven and popular strategy. (We have found equipment financing or leasing to be a great add on complement to the government loan strategy)

Franchise financing around the franchise cost should not be viewed as coming from your franchisor, they are in the business of building their empire, not financing yours! That is a common misconception among clients.

However, in the case of purchasing an existing franchise you may well want to negotiate at least a nominal (or greater if you can!) vendor take back to compliment the overall financing. It’s a great strategy that motivates you and the current franchisee to work together to continue the success of the business.

Our final point and tip around franchise cost is clearly to assess what your own investment will be in the business. Typically franchise lenders are looking to get a very reasonable owner equity or down payment on the transaction, which is of course relative to the size of the business you are buying or starting.

Speak to a trusted Canadian business financing advisor to ensure you have a clear strategy and a solid plan to finance your entrepreneurial vision.

Getting A Business Financing Loan

Business financing loans are a line of credit which help people who are in business. There are different kinds of business financing loans that are offered to different lenders either to raise funds or loan capital to your business in order to expand your company.

Although there are many ways also to finance your business and one should have sufficient cash flow within the existing business you have so that the lender will be able to finance the growth of your company by its own means or you can turn to a bank or other financial institutions that can provide different variety of loans.

Having a business financing loan is not as easy since they have some criteria or financing programs where in you meet the following criteria such as:

  • Your business must have commercial customers
  • Your business must be established and must have consumers or customers.
  • They don’t finance on real estate projects

Some of the business financing programs:

  • Business are available of every size
  • Easy to obtain
  • Have many advantages over conventional business loans
  • Can be set up in a few days

There are some business financial loans that don’t require you to have a good personal credit or showing countless financial statements since their financing program or loan allows being flexible to help your business grow but before looking for a business financing loan, you need to know how business loans work and used.

You can see that there are many sources of financing loans that are geared to types of businesses but the sources have certain criteria for investment and loan but that depend to the area which they participate.

These are some of the areas of Business Financing Loan:

  • Commercial Property
  • Start-up Financing for business
  • Loans for Government
  • Purchase Order Advances
  • Leasing Equipment
  • Commercial Financing
  • Invoice Factoring
  • Asset Sales Leaseback
  • Investment Banking
  • Angel Investor s which is known as informal investor
  • Venture Capital known as Private Equity Capital

But private money business financing loan is different since it includes equity loan, hard money as well as private money loans. They limit only to small business investment companies, private investors, business angels, ventures capital firms and commercial lenders.

The loans have two types for you to choose when in regards of terms in payment. There is the short term and as well as long term which suits your budget and you will notice also that there are lots of commercial lenders, business loan brokers and business financing companies had gone out of business due to global crisis and many people were having loans anywhere and everywhere in order to survive.

If you need financing for your business, you need to plan and study hard of it since financial institutions requires business plan that includes detailed start up cost, marketing plans, monthly expenses, projected profit, etc. Remember that having a business one should do hard work, passion, and determination and have dedicated workers who desired to have the business of their boss grow with success.

So If you think that your business is doing good and need some additional capital for expansion, then you need to plan for that and think it over to have a successful business.

Finance Your SRED Credit – Financing a SR and ED Claim Is Easy Via a Tax Credit Bridge Loan

Of the many questions clients ask around the SR&ED (SRED) program in Canada a typical one, actually two, is ‘ can we finance and our SRED claim… and how is financing SR&ED grants done?’

Let’s work through a short SRED loan primer and cover off the basics, allowing you to better understand the potential benefits of financing your SRED refundable credit, and, more importantly determining if it makes sense to finance that claim.

SRED calim percentages actually vary by provinces, because they are a combo grant that is administered and funded by both your province and Ottawa. While percentages of the amounts you receive might vary a bit between provinces for the purposes of our discussion we’ll speak in general terms, because we are pretty sure you aren’t going to move your company location to increase your non repayable SRED credit!.

SRED claims vary but in general they do not go much more than over a million dollars. You have the ability to finance your claim if it’s eligible. We will also mention that if your company is perfectly willing to wait for your cheque that’s a good thing also, it just seems to us that if you can put non repayable tax credits to work to generate additional revenue and profits, well… that is a good consideration of financing our SRED refundable credit.

A key to financing your claim is the quality of your claim. Three types of preparers are out in the marketplace – your company itself can prepare the claim, your accountant can, or you can use an expert, otherwise known in the industry as a SRED consultant. Theoretically all three parties could prepare a claim that is financeable, but the reality is that your SRED finance firm leans more preferably to the utilization of a SRED consultant. That’s simply because expertise in an area such as an R&D overview submission seems to make the most sense.

The government pays out billions of dollars each year to firms such as yours – so filing a claim, and considering the financing of that claim can be a key part of your overall company cash flow.

If your claim is a first time claim, and is less than straight forward there is a strong possibility based on current SRED trends that you could wait close to a year for your refund. So the question then becomes, could your firm utilize effectively a SRED loan as a bridge type financing for additional cash flow and working capital.

If you are answering in the affirmative then it’s simply a case of working with a trusted, credible and experienced Canadian business financing advisor to fast track a SRED financing. Typical SR&ED loans take a couple weeks or so to process; it’s a basic business application, with your SRED refundable credit collateralized. Advances on your claim are in the 70% range and are typically structured as no payments, with the final 30% due your firm, less financing charges, at the time of final disbursement from Ottawa and your province.

A short summary of our shared info is very simple – if you qualify for SRED then clearly use the program – if you don’t you are missing out. Want to wait a year for your money… great, keep us posted, the cheque is in the mail. Want additional working capital and cash flow today out of your non repayable SRED credit, then consider the SRED loan financing program today. It’s as simple as that.

Accounting and Finance Career Preparation Programs

A love of numbers can lead to a lucrative career in various fields. Students that have an interest in numbers may find an accounting program is right for them. Accredited programs can be pursued through several degree and concentration areas.

Completing a degree program in accounting prepares students to step into various careers that involve accounting and finance. Students learn to work with businesses, organizations, individuals, and government groups on their finances. Accounting programs are available to students at the associate’s, bachelor’s, master’s, and doctorate’s degree level. Student’s career goals will determine which degree program to complete. Other possible accounting and finance career preparation programs can include:

  • Accounting Technology
  • Bookkeeping
  • Corporate Financing
  • Finance and Banking

Several concentration areas like accounting technology, for example, lead to an associate’s degree. Students that want to complete a higher level degree program can continue education inside a graduate accounting program. Corporate finance also awards undergraduate degrees unless students advance their training inside a finance degree program. To complete the right program students should research the industry’s requirements for the careers they are interested in obtaining.

An associate’s degree in accounting examines several key areas of the field at a fundamental level. Accounting, finance, and acquisitions are some main areas covered. The goal of a program is to prepare students to analyze the financial status of a person or group and be able to create documents. Students learn the Generally Accepted Accounting Principles procedures, which helps the transition into the profession. Students can enter careers as general accountants, budget analysts, and loan officers.

To gain the best career options in accounting and finance students should complete graduate degree training. Schooling covers the foundations of accounting more in-depth. Students study risk management, assurance, financial management, taxation, and much more. Master’s degree programs train students to understand business and taxation. Through subjects like advanced auditing, corporate taxation, and financial research students are able to step into multiple careers. Students can enter careers in both the private and government divisions of the industry with a master’s degree. Students that want to enter positions as professors typically complete training at the doctoral level. Tax research and finance analysis are some course topics examined. Possible career options for students that have a graduate degree include risk assessors, corporate executives, financial managers, and auditors.

Students that pursue another area of accounting and finance such as corporate finance will find education to be highly focused. Students that complete a bachelor’s degree program will explore financial reporting, international market, and personal investments. Students learn to work with businesses by providing help with cost management, investment, and market regulation. Upon graduation students can become investment bankers, fraud investigators, stockbrokers, and more. Advanced careers will have to be pursued with a graduate degree in finance.

Accredited accounting and finance degree programs give students several career opportunities. Students can enter their desired careers when education is matched correctly with their professional goals. Full accreditation is awarded to quality programs by agencies like the Accrediting Council for Independent Colleges and Schools ( http://www.acics.org/ ). Enroll in a college or university to begin the educational training required to enter this career field.

DISCLAIMER: Above is a GENERIC OUTLINE and may or may not depict precise methods, courses and/or focuses related to ANY ONE specific school(s) that may or may not be advertised at PETAP.org.

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