How to Get Financing to Fund a Franchise

One of the best things about starting up a franchise business is the security of being involved with a brand which already has at least some level of recognition, which means you don’t have to invest a lot of time and effort in establishing your brand. However, all other aspects of starting up a new business will still be present, and that means you will need to pay a franchise fee, and you will be responsible for a number of other startup costs. You’ll also need to have a good business plan, some solid positive cash flow, and some financing lined up to increase your chances of success. Here are some ways you can acquire the financing necessary to start up your own franchise business.

Smart Biz

This program is made available through the SBA, although it differs from a conventional SBA loan in that it is all transacted online. You can secure an SBA loan up to an amount of $5 million through this program, and it is made available for businesses which have been operational for at least two years, have good personal credit, and can demonstrate a positive cash flow. Like traditional SBA loans, money is not issued by the company itself, but the service actually matches borrowers with preferred lenders in the program.

On Deck

This program caters to new franchises, and it can put as much is $250,000 in your hands on a short-term loan basis, or you can secure a line of credit with a ceiling of $100,000. Although the program is not specifically set up for franchise owners, it’s a very viable possibility for small business owners who don’t qualify for bank loans or other funding options. Typically a loan can be arranged very quickly, and the borrower requirements are far less stringent than you will encounter when applying for an SBA loan or a traditional bank loan. The downside of using the service will be that you will undoubtedly have higher interest rates, as well as higher fees associated with the loans.

Credibly

If you are a potential franchise owner who has bad credit, you might still be able to obtain the financing you need through Credibly. This organization provides a number of funding options, for instance through merchant cash advances, medium-term loans, and short-term loans. You can secure a maximum of $400,000 through this program, but you might have to pay as much as a 15% rate in order to secure the loan.

Thinking of purchasing a franchise business? 

Many new businessmen consider buying a franchise because of their stability and lower risk. If you’re considering the purchase of a franchise business, contact us at Commercial Capital Finance, so we can discuss some financing options with you.