Franchise Financing: How to Fund your Business
Setting up a franchise has as many expenses as any other business would. The franchisor has to pay an upfront fee is also known as the franchising fee. Obtaining a working capital to finance the franchise fees including the advertising and royalty fees can be quite a challenge. Here below are a few suggestions to help you through:-
1. Franchise financiers
Some companies exclusively deal with franchise financing through connecting you lenders or lending the money directly to the borrower. This is one of the most viable options as the process is less tedious and upfront. In most cases, such companies need no collateral, a factor that greatly favors first-time franchise investors.
2. The franchisor
Most franchisors nowadays offer impressive franchise financing options to assist upcoming and existing franchisees set up and expand their businesses. Besides offering discounted franchising fees, equipment offers, as well as lending recommendations, can be availed. Most of the companies offering this also partner with lending institutions that offer loans with minimal interests. Due diligence and comparing the franchisor’s terms and other financing options is vital.
3. Commercial banks
Banks can offer a lump sum of money to get your franchise investment up and running. You are then required to repay the loan and the interests incurred within a given time frame. Though the repayment terms might be longer and interests are reasonable, a near perfect credit score is expected as well as loan collateral.
Should you be in need of franchise financing, look into your credit score as lenders require proof of your reliability to pay. Financial statements such as balance sheet and income statements are a common requirement. A business plan in which revenue projections, costing analysis, estimated operating capital and a comprehensive marketing plan are also a requirement.
Once the franchise is up and running, contact The Finance Marketing Group for the best marketing solutions. Through us, market recognition and visibility are ascertained.
