|
A popular way to get into business for yourself is by becoming a franchisee. With a business model in place and dedicated stock already selected, getting on board with a franchised business is a great opportunity. There are also many to choose from, from restaurants and coffee shops to retails stores, you can get your foot in the door with almost any type of business. The only road block to realizing this goal is that in order to become a franchisee, you need to invest in the business yourself, often a hefty amount. Some people work tirelessly to save up the necessary funds, while others commit to combination of personal and franchise financing. Franchise financing means you are getting a loan for the sole purpose of financing your franchise operation. While this may appear to be a difficult thing to obtain, there are businesses out there that dedicate themselves to securing this funding for their clients, or assisting them by putting them in contact with the right opportunities. Some of these franchise financing opportunities may include Private Equity Funds, the Small Business Administration Loan Program, and traditional debt instruments. What else can you do? Talking to friends and family about investing in your business opportunity is a good way to secure franchise financing and capital. If you are becoming a franchisee of a well-known and highly successful chain, your friends and family will feel comfortable investing (if they can) because they trust their money will come back to them in time. One way to pitch this idea is to ask for small loans, as opposed to an investment. People will be more open to the prospect knowing they will be paid back, than they may be if the money is an investment with promises of partial ownership (which doesn’t work well with multiple small investors). The banks Banks are always an option, but perhaps not the best one. Depending on the state of your credit and what you currently hold for assets, the bank may or may not be interested in fully, or partially, providing the franchise financing you need. Banks are very careful and risk-analysis will play a large part in their decision making, as will the current state of the economy. Government Programs and Grants Look into what the government has to offer that may apply to franchise financing. The SBA Loan Program is a good place to start, but it’s not necessarily the only place to look. Do your due diligence and review any and all government programs that may assist you in reaching your goal. Community Support Look within your own community. Community Leagues, your church or place of worship, and other community-centric organizations may have funds or grants in place to help members of their community excel. If you are planning to open the franchised business within the community, this may be a very fertile area of franchise financing resources. Don’t think that in order to finance your franchise dream that you have to work for twenty years to save up that much money, which can sometimes total hundreds of thousands of dollars, depending on the franchise. Franchise financing is available if you look in the right places, and contact the right organizations to help you out. RBZ LLP is one of the largest Los Angeles based public accounting firms serving a wide range of industries including franchising by providing franchise financing ( www.rbz.com/the-firm/niches/fsg/ ), accounting and reporting services which are backed with expertise and specialization. For tips on financing your franchise, visit Entrepreneur.com.
Related Articles -
Franchise, Financing,
| 
