Financing Franchise – 5 important elements to consider!
When you first decide to go to a franchise business, you might be excited, eager to go, and excited about the prospect of having your own business. Quick forward a few weeks, or months, and your franchising financing issue will raise the bad head, reduce your enthusiasm.
To make your franchising financing financing a little easier (and remember – finance is finance) Here are some important factors, instructions and tips you might want to consider.
1. Talk to the franchisor
It might sound strange at first, but consider this: this might be the first time you face franchising financing prospects, right? The franchise owners have dealt with hundreds, if not thousands of franchise offers. Which means, every question you have, might have appeared before!
Every lender, both in franchise or ordinary business, will see the opportunity itself. If you have chosen franchise with a reputation that is less steady, it means they will have a higher risk. Lenders don’t like risk! So make sure you have chosen solid and leading franchises, with a stable history, good returns, and a great trail record!
3. Your personal history
Another thing to remember is that even if the franchise of your choice offers unmatched returns, the track record doesn’t fail, and everything you like lenders to be heard, if your personal credit history is not scratched, they will turn around. You are sad! Take the time to investigate your credit history before you even approach the lender!
Ah, the curse of every potential business owner. Guarantee is your money. What you put in your business. Do not have? Chances are you won’t feel easy to find funds at that time! Most lenders need a ten percent contribution for business by the owner, and usually more – between twenty-five and fifty percent.
This means you need money. So you need to find out where to get it, if you don’t have it. Whether you can borrow from friends or family members, take the second mortgage in your home, or find another way, but you will need something to put in the agreement.
5. Semi automatic finance
If you meet all these requirements – you buy an established franchise, profitable, your credit history as clean as a whistle, and you have a lump of cash stored under the mattress, the best idea is talking to the franchise again.
Often, they have gone through financing financing many times, that they have an agreement governed by one (or more) of financial homes. This means you can get your franchise financed, go up and run, with a minimal headache. They may also be able to give you a better deal, thank you for all the leverage.
So, if you look into a franchisee, it looks like you have your job for you! But it can be done, because millions of global franchises have been proven – so go there and do it!