Buying a franchise is never an easy undertaking. It requires you to have a significant amount of money available to you. There are a few options at your fingertips if you need franchise financing.
Franchisors
You may be able to the franchisor that you want to buy into. Sell yourself to them well enough and you may even find that they waive the normal fee fr franchising. They can do this on their own, or in conjunction with a large bank of their choice.
Finance Companies Designed For Franchisors
There are companies out there that do nothing but help new franchise owners open their locations. They do this by matching you with a lender they think you will work well with. However, they could also decide to spend their own money to help you open.
B2B Companies
B2B companies may also be willing to help you with franchise financing if you are willing to give them access to your clients’ invoices. This can be one of the best ways to secure the loan that you need in order to purchase your franchise.
A Traditional Loan
You can always try to get a traditional loan to enable your franchise financing. Credit unions and banks may be willing to lend you the money you need. They may even be more likely to lend you money than to lend it to someone trying to launch their own business. Depending on the bank that you choose, you may or may not need to put up collateral in order to get a traditional loan.
How To Choose Collateral
By assessing your own assets, you can determine what you will use as collateral if you do need it. The higher your level of collateral is the more likely you are to be approved for a traditional loan. Examples of assets you can offer include home equity, equipment, stocks, property, business inventory, or even a cash deposit. Just keep in mind that if you can’t pay back the loan, the bank can seize whatever you put up as collateral.
For more information on franchise financing, please contact Spearing Capital & Consulting, Inc.