How to finance your franchise

How to finance your franchise

plans to open first franchise or add a new location for its existing franchise? Unless you have enough money to pay in cash you will need to get financing. This is not an easy task, but if you employ the right strategy and creativity can dramatically improve your chances.

This is commonly known, especially in today's lending environment, as this process is challenging, especially for start up business. Many people even think that it's impossible to get financing, but the truth is that the money for qualified individuals. Personal credit score has become more important lately, and people with poor credit histories are more likely to be rejected.

time change and home equity loans are the primary source of financing are becoming harder to get a franchise, but there are still financial institutions and private lenders who are less connected to the housing market that has money to lend. It is now more important than ever to start analyzing financing options before anything else.

I list some of the alternatives below for you to help you finance your franchise.

for veterans who are currently in the army or in the vicinity of retirement the government has established a program called the Patriot Express Pilot Loan. The SBA will guarantee up to 85 percent of the loan. This means that exposure to risk for the lender only 15 percent and makes these loans more attractive to the lender. This program also has lower credit requirements than other programs, making it easier to get approved for these loans.

for an honorable discharge staff, U.S. Department of Veterans Affairs, Veterans Corporation and the U.S. Small Business Administration have joined forces and created the VetFran program. More than 300 companies participating in this program and offer significant discounts on fees and costs to show appreciation for the honorable service of our veterans.

How do you know which financing option is better, or even for you? If the veteran does not come into contact with a reputable loan / financing a franchise specialist. They can guide you through the process and explain the potential strategies that can be used to finance the effort.

When you are ready to continue, they will put together a loan package and follow the process from beginning to end. Their expertise and relationships in the industry are crucial in speeding up transactions. These companies typically do not charge upfront fees for their services, so your risk is limited to a small amount of time.

These companies usually have established relationships with lenders who specialize in one or more types of franchise financing. They can also offer SBA loans, conventional loans, merchant cash advance, accounts receivable financing, equipment leasing, etc., and usually can not tell you how many credits can be realistically available to you.

These companies provide loans for start-up, expansion, real estate, construction, partner buy-outs, refinance working capital or equipment, and can also consolidate your financing needs of franchisees and pack everything into one loan at a competitive price. Some of them even have a relationship with Angel and private equity investors.

for the franchise finance professionals often have established relationships with the most aggressive conventional and SBA lenders franchise and increase your chances of approval. They also negotiate the best terms for the loan and give you several options based on your particular situation.

Jurij Iofe, MBA

General Business Structured Solution

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