Franchising provides the ideal opportunity to get into entrepreneurship. It has the flexibility and independence of being a small business while proving the support and infrastructure of a big corporation. While getting started in franchising requires a hefty investment to cover fees, setup, training, ongoing royalties and advertising, there are ways to build the capital you need to invest in your dream franchise opportunity.
Because it is their franchise, they know the ins and outs of the business and are able to offer a tailored solution for the situation. Financing with the franchisor is often a one-stop-shop, including everything from equipment to additional training and rental space.
Commercial Bank Loans
With a traditional loan. they give you all of the cash upfront and you would repay the loan (with interest) in monthly installments for a set period of time. Commercial bank loans require a business plan and your personal credit history for approval.
SBA Loans are often the most desirable option for financing because borrowers are able to get very low rates and longer repayment terms since the Small Business Administration guarantees a portion of the loan. The process for qualifying for an SBA is long, with lengthy requirements and strict guidelines.
The good news: They’re quick. The bad news: They’re expensive and have very stringent requirements and shorter repayment terms.
You can always join a crowdfunding site, that ensures your investment and money as well as verifies your business opportunity, and promotes the website yourself to raise funds. Although it’s not commonly done, crowdfunding has proven to be a successful way to raise money for business ventures.
Family & Friends
Believe it or not, this is still a very common method. When borrowing or receiving money, be sure to write up specific agreements and terms so there is no confusion about repayment. Set clear expectations and deadlines so your relatives and friends know when to expect the business to be up and running and how long after they can expect repayment. No business is worth ruining personal relationships over.