Starting a business is a huge decision that most individuals fear making because of the uncertainties surrounding the move, lack of information, or difficulty obtaining franchise financing. Whatever your reasons are, you should know that this is one of the most liberating decisions you will ever make. So, you have already made up your mind, done your research, and believe starting a franchise is the best option you have, yet finances are hard to come by. Your problem is not isolated, and this is a common dilemma for people seeking to start a franchise. Here are a few ways you can access franchise financing.
Friends and Relatives
Getting finances from friends and relatives is often the first option that comes to mind when seeking financial help. Talk to individuals who will be willing to support your venture and negotiate repayment terms with them. The benefit of this option is that you may get the funds with no interests nor stringent terms attached.
If you have a good credit score, the banks offer loans to individuals who have good business plans and ideas. Ensure that your financial profile is outstanding and that your business proposal and project are accurate and well thought through. You should also be willing to abide by the bank terms, repayment period, and interest rates.
There are times when your financial profile does not impress the banks to give you a loan. You can consider working through an SBA to get up to 90% guaranteed loans in these situations. Once a lender reviews and accepts an application by a business, it sends the analysis to the SBA, which closes and disburses the loan upon approval.
Franchisors offer debt financing to about 75% of the total amount required. The franchisors provide loans with simple interests, loans without due payments for the first year, and equipment financing, among other costs. Another benefit of this method of franchise financing is that they can link the franchisee and leasing companies for access to equipment.
This option of franchise financing uses your home as security for the loan. In case you fail to repay the loan, you can lose your home. Franchise financing does not have to be a challenging endeavor for anybody wishing to get into the business. After evaluating your current financial position and eligibility, you can consider using any of the above ways to get financing. If you wish to access any alternative funding solutions, kindly get in touch with us at Capital Funding Source, and we will be glad to be of service to you.