Investing in a franchise is a solid but large investment. Here are some franchise financing options to consider.
Options Abound
Opening a franchise requires a significant investment, including both initial fees and ongoing royalties. While the right franchise will pay off exponentially, many new business owners need assistance getting started.
Franchising provides both the independence and flexibility of being a small business owner with the support and brand awareness of a larger corporation. Ambitious and determined entrepreneurs who have the right mind for the industry may still need a bit of help funding a new enterprise. The good news is, there are multiple franchise financing options to get a new business up and running.
Commercial Bank Loans
One of the most common ways of financing a franchise is through a traditional term loan from a bank. Similar to the formula of a student or home loan, a bank loan provides an upfront lump sum that you then repay, with interest, in monthly installments over a set period.
A strong financial history and high credit score are essential in securing this type of financing, as they will affect both the amount you are allotted and the terms of your repayment.
Friends, Family, & Crowdfunding
One of the newer ways to finance an up-and-coming business endeavor is to reach out to loved ones and the public at large. With the right concept and franchisor, you may be surprised how many people are willing to lend or gift funds to support your business dream.
The challenge with this financing method lies in what is expected of you in the long run and how personal relationships may be affected if you fall short of your goals. It’s a wonderful thing to have personal contacts support your new business, but be sure to draft up contracts (whether legally binding or not) to address expectations and repayment plans as they apply.
SBA Loans
Of all the loans available for franchise financing, one of the most desirable options tends to be an SBA loan. Partially backed by the U.S. Small Business Administration, SBA loans are funded by intermediary lending partners.
SBA loans follow a similar pattern to bank and alternative lender loans, but SBAs reduce the risk to lenders by guaranteeing a portion of the loan amount — incentivizing them to offer more loans with lower interest rates and longer repayment periods than the former options.
With direct knowledge of franchise startup costs, the right franchise will be able to link prospective franchise owners with lenders suited to address their funding needs. For instance, Uni K Wax directs potential franchisees to reliable sources that have provided franchise financing options to other franchisees in the areas of equipment leasing, construction, and SBA loans on a regular basis.
Find Support With Uni K Wax
Financing can be found in many forms. Even if you lack the personal capital, the right franchisor will support you in rooting out and connecting with resources that will stand behind you in your new business endeavor.
Uni K Wax works closely with potential franchisees to support them through the financing process and find options that are tailor-made to fit each situation. After all, Uni K is fully invested in our franchisees’ success.
To learn more about franchising with Uni K Wax, request info.