How to Finance a Franchise – Your Options and Risk

Entrepreneurs who wish to purchase a new or existing franchise are always asking us ‘What are my Financing Options?”. The ability to choose the right financing option (in reality it is the right mix of financing options) is one of the most important aspects of your entry into the purchase and running of a successful franchise in Canada.

It is of course very rare that a franchise can be purchased for all cash, as the amounts involved can be very significant. And in fact, as we will demonstrate, in many cases that would actually be the wrong thing to do. Even the largest and most successful corporations in the world take on debt, there is good debt and bad debt of course (as consumers we now that also. By utilizing the right mix of debt and your own equity you can properly ‘leverage’ the business for greater rewards and returns.

We will use a quick and somewhat blatant and unrealistic example just to illustrate our point. Let’s say that you wish to purchase a franchise for 250,000.00, which is certainly not an uncommon amount. You have the option of paying cash for it (lets pretend!), or you can put 10,000.00$ down and borrow the rest. At the end of one year your franchise nets 20,000.00 in net income, let’s assume. If you had only put in 10,000.00$ of your own money you have generated a 200% return on equity. Even Warren Buffet would be jealous of you. However, had you put in 250,000.00$ of our own money you can clearly see you have many years to go before you get a positive return on your significant initial investment.

So whats our bottom line – it’s simply that debt and the right amount of leverage can be a good thing, and it’s an excellent way to measure the potential returns in any business, including your investment into a Canadian franchise.

Let’s return to our core topic, financing your franchise. The reality is that are several options in Canada to finance your purchase. Those options can relate to either a new or existing franchise – both are quite financeable. One of the main reasons you might wish to consider purchasing an existing franchise is that in some cases the track record and the assets in the business might present an easier case for financeability.

Franchise financing in Canada is absolutely a specialized type of financing. When we sit down with clients to evaluate their options d and focus on the quickest and best way to achieve franchise financing success we can summarize your financing options in the following manner –

-Government Small Business Loan – (By far the most common and popular)

-Your own personal equity or down payment (typically from 10-50%)

– Equipment and asset financing

– Working Capital Term Loan

– Operating facility for ongoing requirements

– VTB – (Vendor take back) – in some cases the franchisor or the seller of the current franchise will waive full payment and agree on a final pre agreed upon payment to be made at some point in the future

Whether you consider yourself financially astute, or if you are concerned and worried that you don’t know enough about financing in general, it is strong recommended you align yourself with a trusted, credible and experienced advisor in franchise financing. Understanding your options, picking your options, and executing on those options within your timelines is the key to franchise financing success.

Grants for Small Businesses Women

Nowadays even though more and more women are getting into different types of businesses, they still find difficulty in arranging for finances for their businesses. Grants for small businesses women are really helpful for all businesswomen. The economic recession that hit the world in the later part of 2008 has left almost every person in financial crunch. The government is concerned with overall development of people and especially concerned with the development of women. The administration is trying to help women come forward and face the situation and for that they are providing moral and financial boost up through grants.

Any woman, who wants to start a new business or expand the existing one or simply wants to run her business smoothly, she can apply for the relevant grants. There are different grants for different purposes and so the first and the most important thing is to find out the most suitable grants from the list available. The best place to look for grants is the government website and here you will get complete information regarding any grant you want to apply. This is a time taking job but it is worth all the efforts when you will receive the money and you will be able to accomplish your business needs with this free financial aid.

The most remarkable and attractive feature of grants for small businesses women is that it is free money and you do not have to repay it. Starting a business is a stressful time and so you should apply for the grants. This grant money will help you fulfill any of your business requirements. You have to keep in mind few points so that you have maximum chances of getting approved for the grant money.

Prepare a solid business plan when you are trying to apply for government grant money. Make sure your business plan includes the details about the money you have requested from the government and also about how your business will be beneficial for the community. Your business plan should be impressive and persuasive when you apply for grants for small businesses women.

Timeline: Your Personal Success Tracker

You might hear the word success and think of: Fame, Glory, Power, and Control. These are great attributes, however they drape quietly over what we really long for, which is success. Fame, Glory, and Power etc. are all individual characteristics that one may desire while another may not. Success is a Universal desire, it has no boundaries, no requirements, and no limitations, though sometimes it can feel like there are lifelong membership fees. This feeling alone may cause many people to give up on their dreams, and their finances.

Well don’t give up just yet, controlling your living is a lot easier than you think. Two important ways to stay on top of your situation are to 1. Recognize and Repair early and 2. Break down your financial structure, and focus on one section at a time. The reason for doing this is so you’re in control, after all the only one who knows your success rate is you. My acronym for success is Something Under Certain Circumstances Enticing Self Satisfaction. That’s all it is, self satisfaction, i also refer to this as financial freedom. One way to show yourself where you stand on financial freedom is by using the Timeline.

Imagine your whole life as if it were dots on a line graph, lets say 10 years back. One line is for your checking account, one for savings, one for expenses, one for your IRA/401K, and then one for anything else you do such as a diet. You will come up with many new lines as time goes on and remember that these are just the fundamentals. Review the following section and try to vision your lines and see where you stand on self satisfaction.

Identify, Assess, Resolve

As you read these, try to apply them to your situation.

Line 1- Checking: From 10 years ago to now this line should be constantly changing, yet always above the expenses on the graph. Line 2- Expenses: This will also be a rapid wave yet the object is to keep it under the checking and savings. Line 3- Savings: Should always be increasing, yet you get to choose the rate Line 4- IRA/401K: Steady consistent increase, towards the bottom of your Timeline in the early years yet working its way to the top. Once you start using this tool monthly, or even weekly, you can identify problems fast while fixing them is easy.

These are just the fundamentals, there are truly so many ways you can use this tool to help you through life. A great way is to demonstrate this to your child. Being financially secure in a way they understand can open up unlimited doors later on in life.

I hope this helps you and your family and any friends that would benefit from the reading.

Beinecke Scholarship

The students, who want to pursue education in the field of arts, social sciences and humanities and find it difficult to arrange finances for their college education, can apply for Beinecke scholarship. This scholarship program is open for all college junior students. The award money that is provided to the student is $2,000 before matriculating in graduate school and when they are attending the graduate school they receive $30,000. This fund has to be used within the five years of undergraduate course. There is nomination needed for the student and every year there are 100 nominations and 18 new scholarships are awarded each year.

To apply for this scholarship, the student must be accepted at any accredited university. This scholarship is open for all college junior students and there are some qualifying factors as well as requirements that the applicant has to fulfill.

Requirements for Beinecke scholarship

The students should be

Ø A U. S citizen

Ø Having high academic record, preferably with GPA 3.9 and above

Ø Having evidence for financial need

The student must be having financial need and that he or she has to prove. If you have been receiving any kind of financial aid that was need based before this or during your undergraduate course, you can produce the evidence. If you have been receiving any merit based scholarship before this, you can produce a letter from your financial aid officer about how much need based financial aid you would require in the absence of the amount you are receiving right now.

If you are a student and meet all the requirements, you can fill the application form.Along with a duly filled application form you will have to submit a financial data statement that the financial aid officer of your institute should complete certifying that you qualify for a need based financial aid. You will need three letters of recommendation, your official transcript, and current resume of at least 2 pages and personal statement of at least 1000 words. When producing the personal statement forBeinecke scholarship, you should describe your background, interests, your plans after graduation and your career objectives as well.

Is There a Future in Finance as a Career?

There was a time when career counsellors made it to a point telling to all young people that a career in finance was the best for them. The markets were booming, and positions in finance companies were easily available. Business schools had student vying with each other to take up the courses which would enable them to make a career in finance. It was not only the finance market that captivated some students. The economy was so strong, that those who are graduated in finance course were unsuccessful when they opted for financial market or investment bank jobs; they went for alternative careers in industry and commerce jobs that involve accounting. The government also offered middle level jobs in finance, and the overall scenario was very bright.

The economy went into a tail spin.

With the economy in a state of recession, the scope in the financial markets had decreased, and those who are graduates in finance, who thought they had secure jobs in investment banks, were facing the possibility of a pink slip. These banks took the worst hit in the financial market turmoil. It followed almost naturally, that accounting jobs in commerce and industry started shrinking as companies cut costs to keep afloat. At this stage only those who opted for public sector jobs seems reasonably secure, but you’ll never know for how long such a situation would last. The severe downturn in the economy could also affect some jobs.

So just what is the future for such financial sector employment?

It is flying in the face of logic, but in spite of the economic recession, finance jobs still have a reasonably a bright future. Most economists agree that the recession in its present form will not last for a long time. They predict it will last for just a short or medium term. This means that if you are in the finance sector of the economy, have a heart, the outlook will become brighter. So if you have lost your job, this may be only a temporary phase, as better times are coming.

The governments all over the world were coming up with various packages to stimulate the economy. So this means that the huge money going into the various sectors chose for stimuli, will need finance graduates to manage the money. It goes without a saying that the only people with a real brilliant and proven record would land these jobs.

All companies which have been affected by the current economic crisis will give their best to survive as best as they can. They would strategize their survival tactics by hiring financial experts to guide their ship through the less troubled waters. The present gloomy state of affairs is mainly due to financial problems, so they will look for financial experts to tackle the financial woes. They may not state their intentions in such clear terms, but will definitely engage people who are well acquainted with commerce and accounting jobs and ask them to concentrate completely on the cost and revenue aspects of financial operations. This could help the companies get through all the turbulence and crises successfully.

Throughout the recent history, any downturns in the economy have always been followed by a boom. Just wait patiently for the good times to show up once again.

Commercial Business Finance in the U.K

With all of the financial turmoil around the world, did you know that getting commercial business financing for a UK business is getting easier than ever? This financing is specifically meant for UK businesses. These loans are meant for business and commercial organizations in the UK. Whether you want to start a new business or build on an already existing business, commercial business financing loans are geared for you.

These commercial business-financing deals come either secured or unsecured. Secured means that collateral must be used. Collateral can be a home, car, or some other real estate. Unsecured loans do not need any collateral. Financing is usually for amounts between $5,000 to $100,000 and the repayment time goes from 3 to 25 years in length.

When looking at commercial business financing loans you need to decide between fixed or variable rates. Fixed rates mean that the interest rate stays the same and the borrower pays the same amount of money every month during the repayment period. Variable rates change at certain points during the duration of the loan, and that new interest rate will reflect the rates in the market.

When applying for a loan, whether it is secured or not, you need to give some documentation. Here is a list of what you need:

-UK borrowers need to fill out a simple loan request that states the type of loan they wish to take and how much money they are looking to borrow.

-If this is a new business there needs to be a good business plan written up. Make sure the business plan covers all the vitals, including financial projections.

-When looking for a loan to expand a business, a summary of the business profile and financial statements need to be made available.

The final decision as to whether or not a loan is offered will take between 1 to 4 business days. It is common for borrowers to be asked to give more financial or background information. If help is needed in getting all the information together and securing the loan, a loan broker can be hired. The UK is full of loan brokers that help with anything that potential borrowers need to get done. There are many loan brokers available, so people should make sure to do research and get the best possible broker available.

When people are looking to finance their business for start up or expansion, commercial business financing loans are providing a great vehicle to get this accomplished. They are made available all over the UK and are changing the face of business.