Franchise Financing Options
Advantages of franchises
Before choosing.a franchise, it’s helpful to know about franchise financing options. Did you know, it is possible to receive assistance in financing a new franchise through the franchisor? A franchisor will often make arrangements with a lending institution to lend money to a franchisee. Lending institutions find that such arrangements can be quite profitable and relatively safe because of the high success rate of franchise operations. The franchisee must still accept personal responsibility for the loan, but the franchisor’s involvement usually increases the likelihood that a loan will be approved.
Other franchise financing options
The opportunity to roll over your 401K retirement plan is another option for financing a business. With a 401K rollover, you can start your business without paying a penalty for early withdraw. There are several companies that specialize in assisting with rollovers so it is done legally.
Provided you own your home have built up equity in your home; another option is to utilize a home equity loan to fund your business. There are a few companies that specialize in no down payment loans. These loans are typically at much higher interest rates than conventional loans and should be used as a last resort.
The Small Business Administration (SBA) offers loans to small businesses. These loans are typically at lower interest rates and are guaranteed by the SBA, while the money is loaned through a financial institution. The loans can take longer to get because of the paperwork and approvals required.
Before purchasing any business, consider your financing options and how much you can afford. Check with an accountant and an attorney and complete due diligence before signing any agreement.
Looking for the perfect franchise fit?
Keep following my Blog for more insights into fantastic franchise options. Remember owning a business is about matching your skills with the right business that meets your personal and professional goals. My 6-step process will guide you to the right business and introduce you to opportunities
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Trish Benedik owner of Select Franchise Consulting will help narrow your options and find the franchise that is the right fit for you saving you time and frustration. Our consultation will help you make an informed decision. There are thousands of options in franchising, find the one that is a good fit for your business and lifestyle goals.
Disclosure: Select Franchise Consulting/Trish Benedik/T A Benedik, LLC does not guarantee the financial performance of any franchise, licensed affiliate, or business opportunity. The decision to purchase a franchise, licensed affiliate, or business opportunity must be based on the buyer’s independent research and analysis. Select Franchise Consulting/Trish Benedik/T A Benedik LLC is not liable for any representation made by a franchisor and/or a franchisors employee, affiliate, or associate with respect to real estate, financial, operations, or marketing performance of the business being acquired.