Top 3 Franchise Financing Options
Investing in a franchise is an exciting way to really get started in business. You get the benefit of the brand and advertising efforts of the parent company while being able to say you’re the boss. You have many different options for franchise financing. Although the parent company may have some avenues, it’s worth your time to make sure you’re getting a good deal by exploring all the avenues open to you. Here are three other choices for franchise financing.
Banks and credit unions in your community generally look favorably on franchises, because of the track record and preconceived business model. However, the loan process through a bank can be quite tedious and lengthy. It can take a long time to get a decision, but you may want to work with a local business yourself.
SBA 7a Loans
The Small Business Association acts as a guarantor for loans to small businesses. There are some requirements and regulations concerning these loans, but they are open to franchise financing. The paperwork can be lengthy, but the franchise parent company probably has the business model and paperwork to help the process go smoother. The SBA levels the playing field by helping small business owners get better rates and terms on their loan, even though they don’t have the financial power of a larger organization.
Many new types of lenders are in the market to help businesses get started and keep going. These businesses began after the market collapse that happened a few years ago, when it became more difficult for business owners to get a loan with a bank. Long-term and short-term loans are available, and many loans can be processed quickly. It’s worth your time to see what types of franchise financing are available to you to see where you can save money.
Although one percentage point of interest does not seem like a lot in the overall scheme of things, when you calculate the math long term, especially on a business loan, you could be talking tens of thousands of dollars over your lifetime. Friends and family may be willing to invest, but that opens the door to “silent” partners who may not really be silent if you seem to be struggling. Use the business options available to you to get your franchise financed and feel confident in what you’re doing. Take steps to financial freedom with the right partners who will help you succeed with the right resources.