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Costs and Options for a Successful New York Franchise
If you arent sure whether you want to purchase a New York franchise or start up your own business from the ground up, it may be easier to go the way of the franchise. While each store is independently owned and operated, the establishments carry a name that is already well known to the public. Doing business this way is so successful because there is so much that is already included in the initial start up costs. In addition to a name that people already know, there are also existing marketing campaigns that have been in place and target market research. Chances are also pretty good that there is already a large fan base, too, or the company would surely not be in business long enough to become a franchise.
There are some different options that you have when it comes to financing your New York franchise. You may have good enough credit to get a conventional loan through a credit union or a bank, but many people may not have the needed credit. Not only that, but banks are very leery about lending out money to new small businesses. They almost never do, as a matter of fact. There are other options that may be better for you. Contact the Small Business Administration, which is an agency that is run by our federal government. They guarantee a percentage of their loans and lenders like this because the chances of them experiencing a loss are minimized. Not only that, but also they are willing to lend money in larger amounts for longer periods of time.
The SBA does have some criteria that must be met for a loan. It must be a business that generates less than $13.5 million in sales. It must be located in the United States or its territories. Not for profit agencies are not qualified. Be sure that you handle your business with the SBA in a professional manner, because they go through many, many applications each year. Be sure that you have your business plan in place before you meet with anyone about financing your project, whether it is the SBA, another government agency, or anyone else.
There are some disadvantages to getting an SBA loan. One of them is that the interest rate is set by the Treasury Department. This means that the rate is variable and not fixed. The interest rate is also higher than those that are offered by banks with conventional loans. One option for any lending institution is to see if someone will cosign for you. This will usually get you a bigger offer and may also lower the interest rate for the loan that you are offered. These are just a few of the financial considerations you must make if you are thinking of owning a New York franchise.
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