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Funding Your Franchise Dreams!

Aug 19, 2008
So you were tired of working for someone else and you have decided that you want to run your own business. However you know that only a small percent of businesses make it past a few years, so you have decided to start a franchise. This way you will work for a major company that has already established successful practices, procedures, and systems but you will be your own boss, and run the business. You have made a very good choice. Franchising is a great way to have your own business and be successful. But, now you are wondering how you will finance this big decision you have made. It's ok; many others are thinking the same thing. Hopefully you will gain a few helpful suggestions for financing your franchise dream!

Let's start by taking into account how much this franchise will cost. This figure is totally dependent on the type of franchise you decide to take on. Factors to consider would be location, size, and what kind of expenses come in hand with your business. A franchise could cost you between 250,000 and 6 million dollars! It all depends on your choice franchise. A franchisee fee is usually required as well. You will need supplies and equipment as well for your business. So once you figure out the cost of how much this franchise will cost you, you need to find out how to pay for it.

The first thing to figure out is if your franchisor offers any kind of options for you to take advantage of. Since they have already established partnerships with other businesses and have fully running franchises they may be of great assistance to you. Some franchisors may offer a type of financing through them or have a connection with a financial lender that may work well with you to get you the money you need. Also they may have agreements with equipment companies that will lease to you or help you finance equipment at a lower cost. This would help a great deal since you need the necessary equipment and it can become quite costly.

If the franchisor does not offer the above options or if you would like to check different routes there are alternatives. The best option is the one that give you the most of what you need and that requires the least amount of collateral, best interest rate or that has the best repayment option for you.

So, you may choose to try to get funding for your franchise from a bank. This is an option available, however the banks may shy away a little with the mention of a new business since it can be risky for them. Also they will ask for collateral which may be your home, bonds, stocks or IRA's. Just remember that if your franchise is for some reason unsuccessful you will lose what you use as collateral. Don't gamble too much. The Small Business Administration may help you get a secured government loan. This is another option similar to getting direct funding from a bank.

Presenting your case for needing the funding for you future franchise can be tough but can also be a big deciding factor in whether you receive financing from a bank. There are companies that specialize in helping people present their case to the bank. This can be an additional option that you may choose to increase your chances of approval.

Start looking for the best option to finance your franchise dreams now!
About the Author
For more information on an automotive franchise, visit auto body franchise and start your path to business ownership.
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