Already on ArticleSlash?

Forgot your password? Sign Up

How to Finance a Franchise

 


Visitors: 181

Once the decision to invest in a franchise is taken, unless the entrepreneur has access to his own funds, the options to find capital to fund his venture is one of the key areas that will decide on the success of his franchise.

Financing a franchise will have to be decided even before the entrepreneur will open his doors for business.

As franchising is a highly individual business, most entrepreneurs’ look to raise capital by refinancing their homes or taking a home-equity loan. It is hardest to get start-up financing or raise a sub-$100,000 loan, as banks do not have much of a profit margin. Usually a personal net worth has to be larger than the loan required, which makes it somewhat difficult.

For financing your franchise in the USA, qualified entrepreneurs can borrow up to $2 million in seed capital through a loan guaranteed by the U. S. Small Business Administration (SBA). While the SBA does not make loans, it only guarantees 85% of a business loan once the documentation is complete.

It’s best for the yet- to- become franchisee to look at a franchisor that has strong banking relationship with a lending institution. As the success of funding a single franchisee often rubs off on the ones that follow.

Banks or lending institutions look at a strong credit history, which reflects the record of the entrepreneur in borrowing capital and paying back the installments on time.

While loans available for financing your franchise is available, it needs to be supported by a good credit history and some portion of the start-up capital put in by the prospective franchisee.

William Brister - http://www.franchiselife.tv - All you need to know about franchising.

(302)

Article Source:


 
Rate this Article: 
 
Cheap Car Finance - Tips For Low Cost Finance
Rated 4 / 5
based on 5 votes
ArticleSlash

Related Articles:

Franchise Marketing - Simple Ways to Advertise For Your Franchise

by: Samantha Mccartney (August 24, 2008) 
(Business/Franchising)

Franchise Regulations and Franchise Churning - You Decide

by: L. Winslow (July 27, 2007) 
(Business/Franchising)

Franchise Help Wanted - In Need of Qualified Franchise Attorney

by: Oscar Twain (April 17, 2007) 
(Business)

Franchise Exhibitions - The Best Way to Evaluate a Franchise Opportunity?

by: Nazir Daud (June 19, 2007) 
(Business/Franchising)

Fitness Franchise? Think Before Giving Away Your Profits To A Fitness Franchise .

by: David J Hallett (February 26, 2007) 
(Business)

Income Tax Franchise - Why to Get a Tax Franchise

by: Sara Pinto (December 24, 2010) 
(Shopping and Product Reviews/Collectible Jewelry)

Finance Your Automobiles With Automobile Loans Finance Company at Current Auto ..

by: Ishir Pro (July 09, 2008) 
(Finance/Auto Loans)

Secured Loan Finance - Finance Your Range Of Expense

by: Johns Tiel (May 04, 2008) 
(Finance/Loans)

Get Best Online Finance Homework From Experts in the Finance Subject

by: Ryan Swayar (October 19, 2015) 
(Reference and Education/College University)

Cheap Car Finance - Tips For Low Cost Finance

by: Simon Taufel (February 28, 2008) 
(Finance/Loans)