How to Choose the Right Financing Option to Meet Your Goals
If you've decided that franchise or business ownership is in your future but you don't have enough available cash, or liquid capital as it is often called, now is a great time to explore your financing options. Learn more about the various types of financing that are available
to you. Once you've learned about the wide variety of financing programs that are available
and decided which type of financing best fits your goals and your lifestyle, you can easily
receive additional information from various lenders by filling out the short form below. Feel
free to request information on multiple types of financing.
Some Franchisors Offer Their Own Financing Programs
Some franchisors offer their own in-house financing programs, or they have partnerships
with a particular lending company. The lending company is familiar with their concept and
convinced of the validity of the brand, therefore it may be easier to gain funding from a
partner company. If a franchisor doesn't offer financing and borrowing the money from
friends and family is not an option, you can explore the vast range of financing options
- Traditional Financing
You can get a loan from many banks. You must have a good credit rating,
some liquidcapital available, and a strong business plan, as banks tend to
be conservative in who they award business loans to. With that said, bank
interest rates tend to be competitive. Some franchisors will help you prepare
your business plan so it reads well and is convincing.
- SBA-Backed Financing
The Small Business Administration (SBA) offers SBA-backed loans. These
extremely popular business loans can be obtained by many individuals who
do not qualify for traditional financing options.
- Investing Your Retirement Funds in a Business
There are several innovative companies that will roll your 401K or other
retirement plan into a business loan. There are no penalties associated
with this type of retirement fund conversion. This type of loan enables
you to invest in a business without mortgaging your home or using your
property as collateral.
- Home Equity or 2nd Mortgages
If you feel comfortable and confident in your decision to purchase a business
and own enough of your home to take out a home equity line of credit or
second mortgage, this option can be a simple way to obtain the necessary
cash to finance a business. You will not need a business plan to obtain this
type of finding.
- Other Sources of Non-Traditional Financing
With the popularity of business ownership increasing, there are more and
more financing options available to meet your needs and preferences. For
example, with solid credit, you may be able to obtain a business loan
almost instantly and online. Additionally, there aresmaller private lenders
and brokers that can work with you if you'd like more personalized service.