Tips for Franchise Financing
Starting a business from scratch can be a daunting task which is why so many people decide instead of open a franchise. A franchise gives you the chance to use an existing brand and products to open a new store. You get the benefit of backing from a company that has seen success and who has already ironed out all the difficult trials of starting a new business. You often get a built-in customer base along with plenty of support from the corporate office. However, starting a franchise still requires a large initial capital investment. For this, you will need to find franchise financing. Here are some tips to help you do that.
Try the SBA
The SBA offers many different loan options. They can be used for franchise finance, too. The SBA helps make it easier to get a loan because they guarantee it, which means that if you default they guarantee they will pay a certain amount of the loan back to the bank. This reduces the risk of the loan. You should look into the SBA loan options to see if you can qualify and give that a shot, especially if you are having trouble getting a traditional loan.
Never Give Up
The chances are pretty good that you will get a few rejections. However, you can’t let this bring you down. You have to keep trying. Try different avenues, different lenders and different options. Keep at it until you finally get that yes. If you give up too soon, you will likely miss out on that one lender that is willing to take a chance on you.
Look for Expedited Approval Options
When you get franchise financing through an SBA loan, there may be the chance to get your application expedited. There are some franchises that are part of a group that is pre-approved so loan applications for opening those franchises are pushed through much more quickly. This means you get your financing faster and get your store opened in a shorter period of time.
Learn About Lenders
It is important that you learn a little about your possible lenders. This will help you to understand who will be most likely to approve your loan. You should also look into the requirements for approval and find out what documentation you need. This will help you to be prepared before you ever approach the lender and start filling out your application. You will also be able to have all the documentation that you need to help speed things up.
In addition, knowing more about the lender can help you to make that personal connection that can be a boost for your application. This is especially true if you are already doing business with the lender. Already having an account with the lender can go a long ways toward helping you get an approval.
When it comes to getting franchise financing, you may have to jump through some hoops. It isn’t the quickest process either. However, with some careful planning and checking of all your options, you should be able to find your way to a financing option that will help you to get your business started.