Owning a franchise is one way to bypass many of the usual uncertainties of owning a small business that would normally accrue to a startup company. When you don’t have to go through the difficulties of establishing a business, because it has already been established, you’re already way ahead of the game. However, you’ll still need funding to get your franchise going, and one of the best vehicles for that is acquiring an SBA loan. Here’s how you can use your SBA loan to get your franchise off the ground.
Why You Need a Loan
The first expense you will encounter when you’re considering a franchise acquisition, is the fee charged by franchisors. These fees can be anywhere from $20,000-$50,000, and if you purchase a master franchise, it can even be as much as $100,000. You’ll also have to pay a fixed royalty fee, or a percentage of your gross sales as a royalty fee each month. On top of all that, you’ll have startup expenses and ongoing expenses that have to be paid, so you’ll need a considerable amount of cash on hand, just to get your franchise up and running.
How Your SBA Loan Can Be Used
Typically, business owners who embark on launching a franchise will use their SBA loans to cover the same kinds of expenses which normal businesses incur during operation. This means that you can purchase supplies needed to run the business, develop marketing campaigns to reach out to your intended audience, train your employees on how you want your business run, and cover all the normal expenses which a business encounters in its daily operations.
Looking for an SBA loan?
At Aspen Commercial Lending, we work with the SBA to supply the financial needs of many of our customers, and we can help you too. Contact us today if you’re in the market for an SBA loan, and we can get started on a structured loan that will work for your business.