If you opt for the franchise business model, you should consider the following factors in terms of funding.
The investment in a franchise company has some aspects that you should consider.
First, you should check what the purchase price is at your disposal. Do this before contacting the bank you trust. Create a personal overview of your finances. Be prepared to the specification of the banker that you should apply a 20% share of your own funding amount. If you are in position to do so, your chances of getting a loan increase.
Preparation is the alpha and omega: The conversation with the Bank
Orient yourself at the creditor banks, because these finance numerous franchises. If you get in touch with the bank, you should be well prepared. The following documents are some that you should have in any case:
- An overview of your financial status,
- The tax returns of the past three years and
- Proof of your pension payments
Put yourself in the position of the banker at the interview:
They would like to enter the lowest possible risk in lending. In addition, the bankers should feel well in your presence, don't just talk about numbers, but show your character! Be also more realistic than optimistic in your projects. The choice of your franchise company plays a big role in lending, because this can help you, but also harm you: bankers prefer companies with a known brand name and a long history of success. So be especially careful when choosing.
SBA (Small Business Administration)
With an SBA loan, you can optimally finance your franchise projects. If you also opt for a company in the real estate industry, then the Federal Government supports you even with an advance. SBA loans are not easy to get, so please make sure you have a professional Bank with competent advice by your side. A great help to you could also be presented in online credit portals: the objective of this portal is to bring together prospective franchisor and franchisee.
Contacting the franchise company
Get help from the franchise company of your choice. The franchisor knows the process you have to go through and can help to make this as short and pleasant as possible.
Preparation is everything - if you opt for the franchise purchase, you should keep some documents ready.
Orient yourself in terms of franchise purchase with your franchise partner who will assist you with words and deeds.