Getting into the franchise business is becoming a popular form of business ownership. Being a franchisee is one of the most stable and lucrative ways to become a business owner today. Of course, becoming a franchisee means that you will need to be able to afford the upfront costs. Below are some of the smartest ways to afford a franchise on a limited budget.
First Things First
Before deciding on a franchise financing option, you will need to determine the costs of buying your franchise and to determine your financial condition. Once you understand what you need and what you have, you can then go forward with choosing how you will afford a franchise.
Most franchisors offer financing loans. You can work with your franchisor to set up a loan with a long-term, reliable lender that suits your needs. This option is one of the most stable ways to finance a franchise purchase. Another name for this method is franchisor assistance.
Another relatively stable financing option is to get a loan through the Small Business Administration. If you are purchasing a well-known, well-financed franchise, you will have a favorable loan wherever you go. The SBA also has ties to many lenders and can help you find the right one.
Traditional Bank Loan
You can also find assistance through a traditional bank loan. While many lenders are out there, the bank is also a standard go-to resource for loans. Naturally, you will need a good credit score and collateral. Banks also tend to be more likely to give you a loan if the franchise is well-established.
Investors and Partners
Another way to stay safe in the buying process is to share the cost with several business partners or investors. Business partners and investors may have expertise that can contribute to the franchise’s success. The downside of this method is that franchisees will not be able to receive the full harvest from the business. On the other hand, diversification is always a good idea.
It is also possible to take a loan on just one aspect of the franchise costs, the equipment. Your franchise could need commercial ranges, a fleet of trucks, or milkshake makers. The equipment needed can range greatly. One can find a lender who specializes in equipment loans.
Buy With Atlantic Business Brokerage, Inc.
At Atlantic Business Brokerage, our mission is quite simple; we help sellers sell businesses, and buyers buy businesses! Over the past 30 years, ABBI has facilitated the sale of countless commercial properties, businesses, and franchised locations. With our unparalleled knowledge of the business purchase and sale industry and our network of contacts, we offer services to both buyers and sellers that no other brokerage firm can match. Contact us to discuss your business buying and selling goals today at 410-561-9800 or Toll-Free at 800-279-7569. Email us at [email protected], and follow us online on Facebook and LinkedIn.