FRANCHISE FINANCING …

… has always been one of those areas of financing that has slipped through the cracks of the financial industry. Well this is starting to come to an end as there are more and more programs becoming available to us specifically for financing a franchise. Some of Canada’s financial institutions are getting political pressures to put Canadians to work therefore the banking industry must expand some of their programs to include New Businesses, particularly proven franchises.

Historically we have received financing for franchises from many different sources other than just going to one institution and getting a loan to start this new enterprise. These options are still available if the banks now offering financing for franchises do not supply enough capital in order to be properly financed. As with any new business it is really important to be properly financed from the start as it is easy to get behind the ‘eight ball’ and you start the downward cycle of always playing catch up. Once this process starts it is exceptionally hard to break this mold. We have seen business that have been around for more than 5 years that are still trying to play catch up because they do not have the proper financing package in place to be fully funded. When a business is not properly funded, the owner is forced to make decisions that he/she would not normally have to make because of cash flow or having to make payroll. The stress level of the person who is properly financed from the outset is much lower than if he is not properly financed. It is the properly financed person who really enjoys their decision to become an entrepreneur and will one of the few businesses that will ultimately succeed beyond the 2 year benchmark and then the 5 year benchmark.

So whether you are starting a new business or you are starting a franchise with a proven historical track record it is still no excuse not to have a well thought out business plan, as your franchise market conditions in Metro Halifax will differ from those in Greater Moncton as they will Woodstock, N.B. Some people often think that because they are purchasing a franchise the franchisor will finance them especially if the franchisee’s credit is less than perfect, but this is usually not the case. Most franchisors are in the business of setting up and supporting new franchisees and not financing them as well. Just remember that there are several ways to finance your new business or franchise and don’t totally rely on getting your funding from one source as you may need these other sources some time down the road. It is better to open these lines of communication now than to put your business on hold or miss a profitable opportunity while you go out and search for these other sources.

May your new Endeavors bring you personal fulfillment and profits in 2003 and beyond