Going It Alone In Canadian Franchise Loan Financing? Business Franchising Loans

Don’t listen to them. Many will of course tell you it might be dangerous to ‘go it alone’ when you are looking for franchising financing loans.

Can you actually get a business franchise loan without any outside help? It’s certainly, possible, and we’ll share some advice, tips, strategies and info around your potential do it yourself strategy – but we’ll also demonstrate why some professional assistance along the way will ensure the success you are looking for in your franchise business acquisition.

There are of course some real potential pitfalls along the way on your road to franchising success. You want to be sure of course, to the extent that you can be, that your business will be profitable. But all business is of course a risk, whether it’s General Motors or your vision of your own service or restaurant business as an example. It is critical to make the most of the opportunities you have to examine profit potential. Those profits by the way are of course what pay back those franchise finance loans!

Along the way on your franchise journey you have numerous methods of determining financial success. A good start is looking closely at your franchisors prospectus and information – even though that info might be for ‘average’ franchisees it gives you a good sense of profit potential versus risk.

Don’t forget of course that your risk is that you are no only borrowing funds for the franchise but that your own personal equity injection into the business is a key part of the overall franchise financing package you will eventually come up with. So work to minimize the risk of franchise business failure.

Get your costs in order and understood. That’s some of the best advice we can provide. We advise clients to look at the total picture, which includes soft costs and hard costs, some of which can be financed, not all. Typically we recommend your owner equity be used to cover those ‘soft costs’ such as the franchise fee, etc.

Try also to match revenues with expenses – it might make perfect sense to lease some of those ‘hard assets ‘ in the franchise to match the economic benefits you will receive from those assets with the useful economic life of the asset. Want a simple explanation of that? Example: If you’re starting a restaurant and a large fridge or cooler is, say 75,000.00 doesn’t it make sense to finance that at say 2k per month on a lease as opposed to using valuable equity and working capital and paying cash. We think so. Wouldn’t you?

So how are franchises actually financing in Canada? We focus on a total package that might include a franchise term loan, a working capital loan, and the appropriate amount of external financing through a financial vehicle such as an equipment lease. Here’s the big surprise in Canadian franchise loan financing – simply that the majority of franchises are financed with the government loan program called the BIL / CSBF program. By the way, it has incredible rates, terms, structures, and a limited personal guarantee. What more could you ask for.

So, in summary, is it possible to go it alone in Canadian business franchising financing? It is, but a better solution might be to work with a trusted, credible and experienced Canadian business finance advisor who will craft your package according to financial available and your particular situation and needs. Going it alone, but with a suitable partner when needed is a good thing sometimes!

When to Refinance an Auto Loan

Finding a lender who will refinance an auto loan for you is not difficult. In fact, most finance companies make refinancing an easy process. However, before you rush out and sign your loan over to another lender, it is important to understand both the advantages and disadvantages of car loan refinancing so that you can be sure you will be gaining something from the process.

When you refinance an auto loan you are essentially taking out a new loan for the balance that you owe on your existing finance. This means that you will be starting a new loan term and, depending on the amount you owe on your current loan, it may mean that you will end up paying more for your vehicle in the long run.

However, this does not mean that there are not benefits to be gained when you refinance an auto loan. The majority of people who do refinance an auto loan do so in order to lower their monthly repayments. Many people have been able to successfully lower their monthly expenses by refinancing because they are able to take out a loan for a lower amount over a longer loan term since the loan term is renewed. The amount you can save on your repayments will depend on how much you have owing on your current loan, how long you have had your loan for and how long you wish to take your new loan over. If you are looking to reduce your repayments you can use an online loan calculator to work out your new repayments in order to determine whether it will benefit you to refinance an auto loan.

Another reason why people may want to refinance an auto loan is if they were forced to take their original finance out at a rather high interest rate. Rushed financial decisions or poor credit ratings can mean that people have been stuck with car loans that cost them a fortune in interest and they may be looking for ways to reduce the cost of their car loan through refinancing. If this is a position that you are in then it is important that you look at the figures carefully before making the decision to refinance an auto loan. Since refinancing does involve renewing your loan, it is important that you use an online loan calculator to work out how much interest you will be paying on your new loan and add this to the amount of interest you have paid already on your current loan. If the total amount of interest you will pay if you refinance an auto loan is less than what you will pay on your existing loan, then it will be to your advantage if you look into switching lenders.

In order to refinance an auto loan you will need to contact your existing lender to obtain a pay out figure on your existing loan. Use this figure to shop around for your new finance. You should aim to obtain at least 3 or 4 different quotes in order to ensure that you are getting your new loan at the best possible price.

The Pros and Cons of Getting a Bank Auto Loan

These days there are a large number of different types of lenders who offer car finance. While the big banks and financial institutions have always provided car loans, there are now an increasing number of private lenders who have entered to market. The increase in competition that this has led to in the auto loan industry has been great for customers and has seen some well priced finance packages being offered by many of the different types of lenders. However, the range of finance companies around has left many borrowers asking whether a car loan from a private lender is just as good as a bank auto loan.

There is no question that the majority of people taking out car finance will opt for a bank auto loan as opposed to going through a private lender. This does not necessarily mean that a bank auto loan is a better option, but there are many people who prefer to stick with who and what they know. One of the main advantages of taking out car finance through a bank is the security and assurance that these lenders provide. People who take out a bank auto loan can feel confident that they are obtaining their finance through a well established and reputable lender, which is a very important factor to consider when choosing a lender.

The big banks like to deal only with customers who are in a solid financial position, which is not necessarily a bad thing. There are some lenders out there who will approve finance for their customers that they really can’t afford and then charge excessive fees when their repayments fall behind. When you are approved for a bank auto loan you can often feel confident that your loan will be affordable for you.

The main disadvantage of a bank auto loan is that people with bad credit or first time borrowers who have not yet established a credit rating will generally find it difficult to be approved for one, and if they are they may find that they are charged very high interest rates. In these situations car loans through private lenders are often a better and cheaper option. Many of the private lenders in the industry offer specialized finance for those borrowers who are unable to get a bank auto loan. This is often because it is the only way these smaller lenders can compete with the larger financial institutions. Because private lenders are generally small companies, they do not need to make the massive profits that the big bank require to keep their shareholders happy. This means that these lenders can often provide specialized auto loans and lower rates.

Before you apply for a car loan it is important that you take the time to investigate the loan products and rates offered by a variety of different lenders. While a bank auto loan may be right for you, many people are finding very cheap finance through private lenders and for this reason these companies should definitely not be discounted from your search.