Franchise Financing: Where to Start
When starting your own franchise, running a franchise, or investing as a franchisee, you’ll want to ensure that you have the finances required or access to available suppliers and support. You have many avenues to explore as a lot of banks have a team that specialises in franchising and can offer financial guidance and aid.
Franchises can be very expensive but are often less risky ventures than starting a business from scratch. You’ll need to think about what you need to fund including the initial franchise fee, the location, the equipment needed to set things up, supplies, how to keep the operation running, employees, and many other factors. Different banks can offer loans for up to 70% of the total investment depending on how established the franchise brand is and how well-put-together your business plan is. Some brands have already built a good relationship with banks so there is already trust there.
To be able to take out a loan there are key things to consider:
Research the different banks and providers to find the best one for you and your business needs
You need to work out how much you’ll want to borrow as well as create a repayment plan
You’ll need a solid business plan in order to present yourself as a credible franchise. This plan would include such things as your personal details, skills and experience, marketing strategies, how your business will operate, and your capital stake in the franchise.
You’ll need a good credit score to avoid being rejected
This list is not exhaustive but is a starting point to assess how best to access franchise financing support.