Financing Your Franchise
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In the current lending environment, financing franchise startups may be a challenge, but there are many financial and franchise advisors that live and work in the franchise funding evironment everyday with multiple options availabe for your startup. Despite what the national media oftens states, money is available. There are many institutions and private investors who haven't been affected by the housing market crunch, and they still want your business. The key to financing your small business franchise is to start sourcing financial options well in advance to the time you wish to buy. Previous to the housing market financial crunch, home-equity lines of credit were typically a simple and fast solution to finance franchise ventures. In the current financial climate, financing alternatives will be necessary. As with any requests for funding, a solid credit history and credit score greater that 700 will be vital to acquire successful financing. Review all traditional financing sources like you local banks and credit unions, ask around to various business contacts for recommendations, and also consider franchise funding specialists such as FranFund or Guidant.
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Most franchises will require large amounts of money to get started. There are typically research and exploratory costs involved in finding and narrowing down the preferred franchise. Additionally there are initial one-time fees to the franchise parent company, in addition to the multiple potential costs involved with getting the franchise open and operating it through the point you will turn a profit. In most cases, costs and payments are non-refundable and will not be paid back in the future, except through successful revenue. You would need to determine the financing source or sources where you will obtain the initial and ongoing costs for your small business franchise opportunity startup.