Franchise Financing Options for your Business
Getting involved in a franchise can be a serious decision, which you’ve likely already been warned about by friends, family, fellow franchisees and even the parent company.
The company is likely to have high standards for anyone who wants to use its name, brand, procedures, products and any proprietary information. Potential franchisees are often required to come up with a significant chunk of capital themselves, or at least the ability to produce it if needed.
Franchise financing is recommended at any state of an operation, from someone who needs to put up funds to get everything up and running, to someone who already operating who may need the security of additional funds occasionally.
There are a variety of lenders who specialize in helping franchise owners. They’re familiar with the different expenses that can come up, including equipment, vehicles, and other needs. They may also understand the different structural needs.
Some franchise financing options can include:
These can help pay for machinery and other apparatus to make the businesses efficient right from the start. Because these items can be essential, franchise financing can be provided even if an applicant has weak credit. In this case, there may be a higher interest rate or the lender may require a larger down payment.
Franchise owners have the same discussions that personal car owners have. Should they pay more for something new and likely more reliable or pay a little less for something older that may need a little work? The answer depends on a lot of things including the price, loan terms, vehicle condition and if you have someone able to repair it if needed.
Alternative loan sources
While it’s easy to go to banks or the Small Business Administration first because of their reputation and people’s familiarity with them, they often include quite a lot of restrictions especially for people in riskier types of endeavors or with less stellar credit. Instead, consider other lending sources that may have higher percentages but are more likely to approve your plan.
For more information about franchise financing options, contact Ironhorse.