6 Ways to Get Franchise Financing
Owning a franchise is a key part of the American dream. It is a popular business approach that thousands of aspiring entrepreneurs embrace every year. Franchising is a proven business model with plenty of room for growth for the wise owner who finds the right franchise concept for him or her and takes the necessary steps to operate it well. However, like starting any business, it takes funding to be a franchise owner including an initial franchise fee and start-up costs like staffing, inventory, and equipment costs.
Here Are Six Ways To Get Franchise Financing:
- Some franchisors assist new franchisees by waiving the initial franchise fee. Some franchisors also partner with lenders including commercial banks and private lenders to help a franchisee secure capital.
- There are dedicated franchise financing companies that specialize in this industry. They either lend directly or find lenders for the new franchise owner.
- Traditional term loans can be obtained from commercial banks or credit unions, based on the lender’s underwriting and lending policies.
- The Small Business Administration offers loans for new businesses. The most common of these is the SBA 7(a) loan which can be accessed by applying through a commercial bank or credit union.
- Seek funding through an online lender or loan aggregation service such as SmartBiz, Lendio, or Fudera.
- Fund the franchise personally via an online personal loan, a home equity loan, or a Rollovers As Business Startups (ROBS) plan.
How To Get Approved for Franchise Financing
- First, write a strong business plan complete with solid financial projections.
- Second, know what funds you will need for what specific purposes.
- Third, examine your own credit history and be able to document your net worth and prove a solid background.
- Fourth, apply to multiple lenders.
- Seek Expert Funding Assistance
Contact Evolt Capital, based in Chicago, IL for fast, innovative, and customized financing solutions. We provide working capital and other business loans that help people to embrace new opportunities and achieve long-term success.