Thinking of getting a franchise? A franchise can be an excellent business opportunity for the right market, region, or entrepreneur, offering a wide group of individuals the chance to be their own boss and experience the flexibility that comes with it. A franchise requires a healthy cash flow to survive; what will you do about your franchise financing?
Getting financing for a franchise includes these tips:
For franchise financing, you will likely look at a business loan. Franchises are typically able to obtain funds from banks that are backed by the Small Business Association. The approval period may be lengthy so it can be less than ideal to attempt traditional business loans with banks or credit unions locally.
Be careful who you borrow from when you look for Short-term loans to finance your franchise. These often have higher fees and interest rates than more conventional types of financing but can be a convenient solution in a pinch. If your credit rating is below 600, your rates can increase accordingly.
Another option is to work with an online lender that specializes and embraces franchise financing for entrepreneurs. Often these lenders are open to both new and established franchises offering startup loans as well as other types of loans to keep your franchise afloat and fiscally healthy.
Franchise owners with an established track record and strong credit may opt for installment loans that offer up to five-year terms for their franchise financing. Typically, you will need to have a franchise that has been operating for at least two years and a credit score of 620 or higher. The funding is often quick with low rates and minimal fees or surcharges.
If your credit is patchy or if you are in a hurry for financing, an online loan is likely your best bet to get money for your franchise. Groups offer small business loans up to $5 million for commercial real estate investments and up to $350,000 for debt refinancing and/or business capital. Some online lenders may only work with established franchises and require two years of operation to garner a loan.
When looking for franchise financing, many entrepreneurs may seek out alternative methods to get the cash they need- including some of these sources. The most lenient lenders are often those online, providing a fast response to applicants often with same-day deposits for qualified borrowers. Want to learn more about financing your franchise? Speak with the industry experts at Aspen Commercial Lending today.
If you are genuinely considering owning a franchise, you might want to take a look at this book first. Remember, luck is when preparation meets opportunity.