For many entrepreneurs, owning a business is a lifelong dream. Many people are able to make this dream come to life for themselves, but even more are kept from achieving their goal of business ownership for one reason or another.
One of the biggest deterrents for those wanting to operate a franchise is having limited funds or a lack of funds altogether.
Luckily, there are many ways to purchase a franchise, even if you are in an less-than-desirable financial situation. Below are three popular methods for securing funding to purchase a franchise.
Working With a Partner
If you are not in the best financial situation for purchasing a franchise but have a friend or family member who is, you may consider partnering with that person to fund your franchise. You should make sure that you are partnering with someone you not only trust but someone you work well with.
Because he or she will be a partial owner, this means that your partner will be able to make decisions regarding the business. You can work with a lawyer to create all the necessary paperwork to legitimize your partnership.
Using Franchisor Financing
Check with the franchisor of the franchise you are interested in. Franchisor-financing is a common option that benefits both parties. You should know that before you receive funding from your franchisor, you will need to ensure that you meet that specific franchise’s requirements.
It’s also important to know that not every franchise offers the same amount of money. While one franchise may offer a qualified franchisee $50,000, another franchise may offer more or less than that amount. You should find a franchise that can meet your financial needs.
Taking Out a Loan
There are several loan options available to franchisees who are looking for help with funding. While a traditional loan from a bank is always an option, it may be difficult to obtain if you do not have good credit.
This is where Small Business Administration loans can be helpful. It’s easier to qualify for these loans, and the amount of time you have to repay the loan is much longer.
These are just two examples of possible loans, but there are more you can research and choose from.
If you are ready to start your career as a franchisee, get in touch today to get started with a free consultation!