Financing Your Franchise
Owning a business is a dream that many Florida residents have. They are tired of dealing with bosses telling them how to run their lives. They are tired of doing meaningless work and having to put up with mean co-workers. As a business owner, you can hire who you want and work the hours you want.
However, starting your own business from scratch comes with a lot of risk. You don’t know if a business idea is going to be successful. And how do you market it? As a business owner, you have to wear a lot of hats. It can be very stressful.
The good news is that you can still run a business without the risk and stress. It’s called franchising and it means running a location of an existing business, like a fast food restaurant. These businesses are successful and there are already procedures in place for running them, so you just take over.
But still, you have to buy a franchise and it’s not cheap. The initial investment may be tens or even hundreds of thousands of dollars. How will you pay this expense? Here are some options.
Many franchises offer resources for their franchisees, such as financing programs. This is basically a loan with perks such as reduced rates and better terms and payments. There are also working capital loans to help with costs associated with payroll, inventory, and marketing. Franchises can also defer royalty fees, which can lower startup costs.
Small Business Association
The Small Business Administration (SBA) has a lot of resources for business owners. In terms of loans, it can offer low rates and flexible terms. Some loans for franchises include:
- Express Loan Program. This is a simplified loan program designed for small businesses. It offers loans up to $350,000.
- 7(a) Loan Program. This program offers loans up to $5 million to small businesses and can be used for purchasing a franchise.
- 504 Loan Program. The program serves as a loan guarantee program that can be used to finance the purchase of real estate, equipment, and working capital.
Some more options for loan and other sources of money include:
- This is the traditional form of business financing. However, to qualify for a bank loan, you need to have a good credit history as well as a strong business plan.
- Credit unions. Credit unions are nonprofit financial institutions owned by their members. Many offer small business loans.
- Venture capitalists. Venture capitalists serve as investors. They provide capital to early-stage companies that are poised for rapid growth.
Learn More About Franchising
Running a franchise can be a great way to become a business owner without too much effort and risk. Still, it takes money to make money, so how will you finance your franchise?
Discuss your concern with Orlando franchise lawyer B.F. Godfrey from Godfrey Legal. We will help you understand the pros and cons of franchising. Schedule a consultation by calling (407) 890-0023 or filling out the online form.