There are plenty of ideas that might just work for you and help you finance your franchise business. You are all set to run a franchise business; you have everything what it takes to run it, but you may still be wondering where to get the start-up funds. But, before you go ahead and start reviewing the different options, you are advised to first do the basic calculations and seek professionals like a business plan consultant.
Marketing is a strategic tool to develop every business (click this link now to know more). A strong marketing strategy is the need of the hour, without which a business cannot run successfully in the market. A franchising business is a twofold marketing strategy, in one way it boosts the sales of the parent company and in another way it also takes care of the franchised outlets. A franchisor is involved in the promotion of the brand at the national level while its franchisees at the local level, learn more using this link.
For example, you must have a clear picture about how much money you will need. Make sure you take all necessary factors into account while you are doing this calculation. Some of the important factors to consider here include advertising fees charged by the franchise, royalty payments to the franchisor, the franchise fee to open the business, and other such things according to this financial planner. Now, following is a brief rundown on some of the funding sources.
Financing Through The Franchisor
Though in most cases, franchisors are unlikely to finance your franchise business, you are still advised to talk to them about it. If you have a great business plan and you succeed in convincing the franchisor that you are going to take their business to the next level, the franchisor may consider assisting you with the funds. There are many franchisors who also provide financing; for example, 7 Eleven provides assistance with payroll, accounts receivable, and finance inventory. Subway even helps with the start-up costs. Other options like online trading platform France might be worth a try.
Utilize Your Good Credit
If you have an impressive credit history and a high FICO score, you may qualify for a loan from bank. Getting financing for a franchise business from a bank is usually not an easy option just on the basis of your business plan. So, if you do not have a good credit score, you may consider putting your home equity at work. With the assistance of a professional fractional CFO, you can get a home equity loan, which is a secured loan, where you have to put your home as collateral against the money borrowed. This can be a little risky, as you may end up losing your home in case your business fails and you do not make repay the loan in time. There is a great post to read here on how to utilize good credit.
SBA’s Franchise History
SBA stands for Small Business Administration. You can also contact them and request them to finance your franchise business. You can get the funds quite easily, especially if the franchise you are considering buying is registered with the SBA. What is a Company Limited by Guarantee? Rather than distribute profits to members, guarantee companies typically retain any surplus income for reinvestment or use it to promote the non-profit objectives of the business.
Third Party Financing
There are several companies out there (third parties) that may also be willing to offer financing assistance for you. Some most common names include Edlo Leasing, Banco Popular, Textron, GE Capital, and others. You may also like to contact a franchise broker to get more flooring franchise opportunities.
In case, nothing works for you, you should try and find out a venture capital investor. This credible investor similar to Andrew Defrancesco provides financing for your business and they get a share in the profit. This can turn out to be the most expensive option to finance your franchise business, but when you have no better alternatives, you may like to consider it.