How to get funding for your franchise

Considering becoming a franchisee? If so, you’re probably wondering how you’ll come up with the funding to start your franchise. There are actually several ways to come up with financing. We’ll discuss some of the options in this blog, so stay tuned.

Some franchise parent companies will actually offer financing through them. This can make it much easier to get the funding you need. If they work directly with lenders, you can often get a better price and faster approval.

Now, if you can’t get funding through the parent company, which isn’t unusual, there are still several options. Many banks and credit unions will offer loans for starting a franchisee. You’ll need a good credit score.

A Small Business Association (SBA) loan can be a great option for financing. Find out if the franchise you’re considering purchasing is in the SBA directory. If so, it can help you access more options for lending from them. Their interest rates are often better than a typical bank loan. And overall, their terms tend to be better too.

A personal loan is another option you might consider. Like most loans, you’ll need to have good credit. Keep in mind, that it can put you at a greater risk because if you fail to make repayments, then it can hurt your credit rating. You may also be prohibited from borrowing in the future.

You can also explore other lenders as well if you’re struggling to get approval from one of the aforementioned options. While alternative options may allow you to get approval quicker, they may also have higher interest rates, so keep that in mind.

There are a few other ways you can bring in some funding as well. You may want to consider approaching family members and friends, doing crowdfunding, looking for investors, or partnering up with others.

• If you decide to reach out to loved ones, tread carefully. There’s a reason they say, “Don’t go into business with family.” Make sure to choose family members and friends you can work with and not jeopardize the relationship with.
• Crowdfunding is the action of raising money online from many people willing to help fund the project. Those who invest this way will often get some type of benefit from crowdfunding, such as early access to what you’re offering or additional perks. You can also look for investors in other ways, outside of crowdfunding.
• Partnering up with someone to purchase a franchise can be a benefit financially because you share the expenses. However, make sure it’s a partner that you can trust, count on, and work well with.

These are just a few of the funding options available for those looking to franchise. There are a few other options to consider. However, no matter what route you decide to go, keep in mind, that many lenders will expect you to be able to put around 10 to 30% down. You may find that utilizing a few different avenues for funding will provide the best option for you.

If you’d like to learn more about franchising, we invite you to reach out to us. We’d be happy to answer questions and discuss available opportunities. Visit our website at: http://franlogistics.com/.