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It’s a road you want to go down successfully. We’re talking about your decision on buying a franchise in Canada, financing the franchise cost and being successful in the franchise store or business you have chosen.Clients always ask us if it’s ‘ risky ‘ to buy a franchise. Our answer is somewhat facetious, in that if a franchise fails, we prefer to have someone to blame – that’s you, the franchisor, or your franchise lender. It’s rarely the lender, leaving you and the franchisor.The reality is quite frankly the same as if you were acquiring any business, namely, Do your homework! And invest some time in solid due diligence. Make a good decision around who you are going to do business with.After selecting a franchise opportunity the challenge of financing the business becomes even more bewildering to some of our clients. Let’s share some solid tips, info and suggestions around the successful financing of your franchise cost.We often focus solely around your own financing challenge when buying a franchise; we should add that its just as important to spend some time on understanding the general financing situation around the partnership you are about to enter into with your franchisor. Disclosure documents these days are fairly heavily weighted towards you as the franchisee understanding that you are entering into business with, so we encourage all clients to take a strong look at your franchisors profitability, its financial management, and any items of public record that might hint or portend of future problems.Unfortunately many franchisees we talk to about franchise cost and how we will finance the franchise are under the misconception that there is 100% financing available for your new business. In Canada that is pretty well never the case, and you need to make a strong assessment of the maximum amount you can contribute to the venture from a personal equity basis. If you borrow too much and put too little in the financial folks call that being ‘ over leveraged’- therefore any little bumps in the economy or your ability to generate sales becomes a huge problem if you aren’t properly capitalized.And we already know you next question, which is ‘ how much do I have to put in ‘. We would prefer to give you a clear final answer on that one, such as xx %, but the reality is that your own investment is tied to a couple factors… the size of the financing you require, how you will finance it, and whether initial ratio analysis will show that you meet all qualifications.A ratio is just a ‘ relationship’ of numbers. The two key ratios that you need to focus on in franchise financing are debt to equity, and working capital. Typically you want to have only two times more debt than your personal investment in the business, and from a working capital point of view you want to ensure you have liquid assets to cover at a minimum short term payables.Do franchisors offer loan assistance – the answer is yes… and no. By that we mean simply that many franchisors have developed relationships with Canadian business financing advisors who assist franchisees in finalizing all aspects of the franchise cost financing – including business plan preparation, negotiations, sourcing debt, etc. You should rarely, if ever, expect the franchisor to supply direct loan financing assistance – they are selling franchises, not building a financial empire.In Canada typical methods of financing a franchise are a BIL loan, a working capital term loan, and equpment leasing and financing.Speak to a trusted, credible and experienced business financing advisor who will work with you to successfully finance your franchise store in a minimum amount of time with a maximum mount of success!

Regardless of whether you are looking to make a massive change or just a few small differences Vegan cooking can offer a large number of benefits, which helps to ensure that many people start picking up the habits.Aside from the reality that a Vegan lifestyle is much more green friendly than eating tons of meat it also has a huge benefit of being a much cheaper lifestyle. Because the majority of the foods that are eaten in a Vegan lifestyle can be grown at home it provides a substantial savings that you would not otherwise be able to realize if you were relying on purchasing the majority of your foods from a grocery store.By omitting meats from your diet you are not only doing your part to help the environment but with savings in the thousands of dollars possible each year it can be a huge benefit to look towards a Vegan lifestyle.Other concerns that are important is the ability to avoid chemical treated foods. Many Vegans opt to grow their own produce, which provides the huge benefit of allowing you to use your own home-grown organic foods. This makes them much cheaper for you, which again can significantly decrease your average grocery bill.It is still very important to realize that you might need to buy some food items from the store, however you will not need to worry about the items that you do need to purchase as much since the costs will be significantly lower and there are generally less likely to be subject to harmful chemicals.Many people opt to turn to a Vegan lifestyle due to the health benefits. It is a proven reality that people who consume large amounts of meat tend to weigh more. This is a reality that cannot be avoided especially due to the increasingly large number of people around the world who are becoming obese. By changing to a Vegan lifestyle, it is much easier to lose weight and find a much healthier lifestyle that will benefit your entire family. In order to really see the benefits of this it is necessary that you take some time to really devote to the Vegan lifestyle to see a real benefit.There are some studies lately that speculate that Vegan cooking has been linked to also help reduce the occurrence of diabetes as well. In order to really know if this is true for you it is important to talk to your doctor. Many people experience huge changes to their blood sugar levels by switching to a Vegan lifestyle, however many others also find that it is increasingly difficult to find a good method of changing their blood sugar levels to reduce the need for additional medication. If you are looking to reduce your blood sugar levels then it is important to talk to your doctor before making the adjustment.With any change you might be considering you should always take plenty of time to review your options. Most people find that the Vegan lifestyle is perfect for their needs without spending months of research however; you should still take at least a bit of time to ensure that this is the right lifestyle for you. If you are not interested in making a permanent change then you should consider making some small changes and working to tweak each of these changes to your exact lifestyle preference. You might need to make several changes, but you should be able to settle into a comfortable pattern and lifestyle quite quickly if you devote a bit of time and effort to the process.

Thinking about buying a fixer-upper, but worried about coming up with the money to pay for the construction costs? Or are you wanting to renovate your existing home but just don’t have the available time or money? If so, the FHA may have a program to solve your problems. The section 203(k) program administered by the FHA provides funds to prospective and current homeowners to make repairs and/or do renovation work. A 203(k) loan combines a home’s purchase price and cost of repairs into one FHA mortgage, with only a 3.5% down payment.A growing number of people are taking advantage of this program, a reflection of the large housing inventory caused, in large part, by foreclosures resulting from the recent economic turmoil. The FHA reports that the number of 203(k) loans taken out in 2008 nearly doubled from the previous year, with 2009 experiencing a 40% year over year increase. Potential homebuyers, attracted by relatively low market prices on foreclosed properties, are often left to contemplate how (and when!) they are going to be able to pay for the repairs once they purchase the house. This is not an uncommon scenario as foreclosed homes, which are often left abandoned, typically need extensive repairs. The 203(k) loan program solves this problem by enabling homebuyers to finance the construction work and start repairs on the home immediately after a loan closing. All residential properties, not just foreclosed homes, are potential candidates for the 203(k) loan program.What is the FHA 203(k) Program?
The FHA 203(k) program is a home rehabilitation and repair program, designed to revitalize neighborhoods and spur homeownership. It can be used by people who are looking to purchase a new home, or by existing homeowners wanting to do repair or renovation work on their current home. What consumers end up with is a single FHA insured mortgage – the loan amount consisting of the home’s purchase price (or current loan balance in the case of an existing homeowner) plus the estimated costs of the construction work.Normally, someone purchasing a home that is in need of repairs has to first obtain interim financing for the rehab repairs and then additional financing to purchase the home. In this scenario – once the repairs are complete the homeowner must then take out a new mortgage to combine the two loans. With the 203(k) program, on the other hand, a borrower need only obtain one mortgage, which covers the home purchase and the property rehab.The 203(k) program comes in two flavors; a standard version and a streamlined version. With the standard program, the construction costs must be at least $35,000. The maximum construction costs are limited only by the estimated “as-improved” value of the house (i.e., the value an appraiser estimates the property will be after repairs/renovations are completed). All FHA mortgages, with or without a 203(k) loan, are subject to mortgage loan limits. The mortgage amount can range from $271,050 to $729,750, dependent on where the home buyer resides. The total mortgage amount, which would include any cost of repairs, cannot exceed 110% of the “as-improved” home value. The streamlined 203(k) program is used for situations where the construction costs are under $35,000.To be eligible, properties must be one to four family structures that are at least one year old. Condominiums may qualify, though there are some added restrictions and limitations. Additionally, FHA allows “mixed use” properties (i.e., properties with both residential and commercial use) to be eligible for the program.A partial list of what you could use a 203(k) loan for include; replace a roof, add a room, remodel kitchen or bathroom, landscaping, update appliances, repair termite or water damage, update electrical and/or HVAC systems. It’s also important to keep in mind that the program requires certain repairs (if needed) to be made. These mandatory repairs deal specifically with bringing the energy efficiency of the property up to code.Con’s
The FHA 203(k) loan does not come without some added costs and other potentially negative factors. Consumers need to carefully weigh the pros and cons in order to decide if this program is right for them.o Homebuyer will incur fees up and beyond the normal mortgage closing costs. A supplemental origination fee – which is the greater of $350 or 1.5% of the portion of the mortgage that is being used for rehab purposes – is required. Additionally, a fee consultant (who is HUD approved) must visit the site prior to the appraisal to ensure compliance with program requirements. Expect to pay $100-$200 for this service.
o Takes longer time to close on mortgage loan – up to 4 weeks longs than a normal conventional mortgage
o Have to use an FHA approved lender. Though many such lenders exist- not all lenders will participate in the 203(k) program.
o Some lenders may prefer to deal with a home buyer who is able to pay cash for a home (versus someone using the 203(k) program) due to getting a quicker loan closing turnaround.
o Expect more paperwork than a normal conventional or FHA loanPro’s
o Access to funds needed to complete repairs and/or renovations
o Convenience – homebuyer does not have to find separate financing for construction, plus construction begins immediately after loan closing
o Speed of construction – the process of completing construction work is typically quicker than if the homeowner were to conduct renovations on their own
o The 3.5% down payment – conventional mortgages typically call for 10-20% down payments.
o Ability to finance up to six monthly mortgage payments.The 203(k) Loan Process Step by Step
The 203(k) process has more paperwork and steps than one would experience in a conventional mortgage process. The steps are as follows:
Borrower finds a home to purchase and repair/rehab (or seeks to repair/rehab current residence)
Borrower and their real estate agent completes a preliminary feasibility analysis to determine the extent of work required, along with an approximate estimate of the cost and expected market value of the home once all work is completed
Sales contract is executed
borrower selects and works with a FHA-approved lender
Borrower, contractor, and an FHA-approved consultant meet at the property to determine “required” vs. “desired” improvements
The fee consultant prepares the write-up
Home buyer enlists contractors to make bids – then selects a contractor
Lender gives the construction plan to FHA-approved appraiser to determine “as-improved” value
Lender determines maximum insurable mortgage amount for the property based on the “as-improved” property value
Loan is underwritten by lender- if approved lender issues a “firm commitment” and a loan closing is scheduled
Loan is closed. Funds are set aside in escrow accounts. The loan is FHA insured after loan closing
The work begins. Contractors are paid in draws as FHA fee consultant approves each phase of completed work. Homeowner has six months in which to complete the entire work
After work is completed – and the borrower states that all work has been completed to their satisfaction, a HUD inspector conducts a final inspection. If the inspection proves OK – the lender pays the remaining draw to the contractor. A final 10% may be held back for up to 35 days to ensure no liens are placed on the property
It should be apparent that the FHA 203(k) program offers a viable solution for some home buyers seeking funds for home repairs or renovation. Each individual needs to consider the pros and con’s and apply it to their own unique situation.