Franchise Financing: Options For New Business Owners

Buying a franchise is exciting, and can be a lucrative prospect for emerging entrepreneurs. Rather than starting from scratch, a franchise offers built-in branding, streamlined operations, and a support network to help owners avoid potential pitfalls and overcome obstacles. However, what many people do not discuss is franchise financing plans, and how to prepare for opening day.

Consulting The Parent Company For Franchise Financing

Franchise financing can come from the franchisor, but only in certain cases. Talk with your franchise representative, and go over the franchise agreement with your lawyer. Many larger franchises will offer some percentage of funding, requiring the franchisee to seek financing elsewhere. For those businesses that require franchise financing to come solely from the individual owner, there are a number of options available.

Equipment Leasing

Many franchises use proprietary equipment in their operations. However, purchasing equipment might be financially prohibitive to most emerging entrepreneurs. Leasing equipment is an affordable solution, which does not compromise credit ratings or place debt on the balance sheets. Additionally, leasing equipment for a franchise allows for trade-ins and upgrades due to wear and tear.

Commercial Real Estate Franchise Financing

Some franchises require property and construction to build thing to brand specifications. Most fast food franchises are all set up the same way. In the case of motels and hotel franchises, the layout may be unique, but the franchisor is not going to pay for the construction. There are a number of commercial real estate financing options for franchises, to provide franchisees with affordable solutions. Mezzanine financing, bridge loans, and ground-up construction loans are just a few of the commercial real estate financing options available to franchisees.

SBA Loans

Tried and true, SBA loans have become a mainstay for franchisees across all industries. Whether a franchise needs equipment, real estate, or simply working capital to purchase supplies and hire employees, SBA loans can cover most financial requirements. The trick is finding a “Preferred Financial Services” company. These lenders have the ability to fast track SBA loan requests, and provide very competitive terms and rates, compared to traditional lending channels.

Get The Franchise Financing You Need

Lavan Financial Group provides franchise financing solutions to emerging entrepreneurs, as well as those looking to expand their franchise operations. As a “Preferred Financial Services” company, we handle SBA loan requests in-house to expedite the disbursal of funds. Contact our offices today to learn more about the franchise financing options we have for you.