You are quite brought with the idea of starting a franchise. You have conducted extensive research, hiring franchise lawyers and already have a business plan in place. The next thing is on your list fund franchise. Many Canadian franchises often find that franchising financing can be as testing as steps that precede.
You must, of course, understand how the Canadian franchise sector is regulated and the type of protection and disclosure clause that exists for franchisees and franchisors. In Ontario, these rights are listed under ‘Arthur Wishart Act’ and there are similar laws in places in other Canadian provinces. It will be a wise step to see the law that is appropriate in detail with the help of your franchise lawyer.
You might have several questions about Canadian franchise loans, some of them are handled below:
Q: Is it possible to buy a franchise business without formulating a business plan?
A: It is not recommended to enter into any business business without a business plan. Even if you are not involved personally in preparing it, it will make sense to participate in the input and processing. This can have the effect of increasing your awareness of practical and financial problems connected with the franchise that you propose.
Q: Is the assessment needed?
A: Yes, but assessment costs are certainly commensurate because it increases the trust of lenders in the project and also reduces your financial commitment calculated by franchising.
Q: What will be a typical interest in Canadian franchise loans?
A: At present interest rates are in the range of 5% to 6%, which is considered very good to start. Of course, your franchisor’s brand reputation and the depth of market penetration will also be calculated.
Q: Where can you use this loan and interest rate?
A: It is available through CSBF loans or BIL, also sometimes referred to as the Canadian government of small business loans. Most franchise businesses are financed through this road. Of course, you might want to consult with a reliable and trustworthy advisor who is experienced in franchise finance that will regulate this financing for your franchise business.
Q: Does CSBF loans are a single method available for franchise finance?
A: No, you have other options such as financial equipment to obtain fixed assets for franchises, loan term cash and of course, your own money can be invested in franchise. All business efforts are usually financed by debt or loan components, along with the contribution of the owner of equity.
Q: Is it possible to get a franchise loan without providing personal guarantees?
A: No. However, CSBF loans require personal guarantees of only 25%.
Q: Can the franchise business be financed without a down payment?
A: No, obviously no. Whether you start a small restaurant franchise or a large manufacturing unit, all Canadian lenders will check the financial contribution of the owner in the effort. As a franchisee, you must achieve a balance about how much investing in the franchise.