For many budding entrepreneurs, owning a franchise business is the dream. It’s an opportunity to get in on the ground floor of an exciting new enterprise, with all the benefits of expanding your reach and online presence. We suppose you are here because that dream is rapidly becoming a reality, and a great franchise opportunity is knocking at your door. But now, how do you get funding for a franchise business?
Well, it’s a daunting question, and it’s why many people decide not to pursue a business of their own in the first place. However, you are in the right place at the right time. With easy business funding like flexiadvance and many others, this article will show you exactly how you can easily access funding for your franchise business.
Determine How Much of the Cost You Can Cover Yourself
We won’t focus too heavily on this section; however, using a portion of your own capital is a great way to show potential investors that you are seriously committed to the long-term venture. Knowing that some of your hard-earned money is going into your franchise business can also give you the drive and confidence every entrepreneur needs to get the business ball rolling.
Assess Your Credit History
Before even considering getting a business loan, you should check to see if you have the best possible credit score. If not, it’s time to do some homework and make some changes. In addition to affecting interest rates, good or bad credit will impact how much money lenders are willing to lend you based on the amount of risk they think they’re taking with their investment in your franchise business.
Funding For a Franchise Business: Different Options
Traditional Bank Loan
Traditional bank loans are the most common way to fund a franchise. These loans typically come with fixed interest rates and terms that last for five years or more. They’re easy to get but aren’t as flexible as other options.
SBA 7(a) Loan
The SBA 7(a) Loan is a government-backed loan program that provides heavy-handed financing. The SBA guarantees up to 85% of the loan amount, which means you only have to put up 15% of your own money as collateral. You can apply for this type of loan through an SBA-approved lender such as a bank or credit union.
However, it is essential to note that these loans have strict credit requirements, so make sure that your credit history is as clean as a whistle before applying.
Home Equity Loans
Home equity loans allow homeowners to borrow against their home’s value without selling it or taking out another mortgage from a bank or lender. This type of loan has low-interest rates and flexible repayment options, making them very attractive for funding a franchise business. However, the downside is that if you default on the loan, you could lose your home.
Fund Your Franchise with Flexiadvance
The ultimate stopgap solution for quick and easy funding for a franchise business. Payflex and Merchant Capital have partnered to offer the ideal capital solution for anyone looking to start a business. Whether you need capital for stock purchases, marketing, renovations or equipment, flexiadvance can provide all the flexibility you need.
If you are looking to learn more about it, have a look at the Merchant Capital page on Payflex’s website; alternatively, strike the iron while it’s hot and follow our online, fixed-cost process:
- Apply through the Payflex portal.
- Receive a mail from flexiadvance in your inbox.
- Tailor the product to your franchise business needs.
- Sign the contract with your digital signature.
- Receive your funding within 24 hours.
Conclusion
So there you have it: following the tips above and opting for a capital solution that is tailored to your franchise needs will be sure to steer you on a good course. Unfortunately, there’s no one “best” way to get a loan approved for your franchise startup. Every entrepreneur has a unique background, as well as varying levels of experience and industry recognition. One way that works for one company might not be effective for you, but more often than not, you will find success getting funding if you do enough research and are prepared. So we hope that this article has helped prepare you and enlightened you about some new and convenient ways of funding your franchise business. If you are interested, here is another detailed article on the different types of loans for small businesses.
