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The exciting part of what we do is work with you helping you find the right franchise business that meets your goals and helps you to either leave your job, grow your empire or even to create a legacy for your family. That’s the fun part. The heavy lifting comes in when we work with you on ways to help you fund the purchase.
The Small Business Administration has made a few significant changes to their Standard Operating Procedures, effective 1/1/2017.
Most franchise candidates are not accustomed to the financing terminology that most franchisors will typically discuss in an introductory call. I will identify the most common terms for your review.
You’ve found the perfect franchise, done your due diligence, and are now driven to make your dream of being a franchise owner come to life. However, the process of turning that dream into a reality isn’t always cut-and-dried. Before you can sign any franchise agreement, you will need to have the money in place for financing the franchise.
The old saying, “If you have to ask the price, then you can’t afford it” doesn’t necessarily always apply when it comes to deciding whether or not to buy a franchise.
Naturally, while we all have some type of limit to our financial resources, don’t let the cost of investing in a franchise drive you away on the first look. In fact, certain types of franchise acquisitions can range from as low as a few thousand dollars, depending upon the industry.
If you are going to buy a franchise you are most likely going to need to borrow money. You will want to clean up your finances before applying for a loan because being turned down for credit can make future loans more difficult to obtain.
The costs of buying a franchise should be disclosed on a required form called a Franchise Disclosure Document, or FDD, for short. Every franchiser is required to present a potential franchisee with this document and it is required to be written in plain English.
If you are considering buying a franchise and you are looking into SBA Loans, you’ll first want to see if the franchise has any issues in its franchise agreement (Agreement) that would cause you to be ineligible for SBA financing.
The purpose of the SBA Franchise Registry is to simplify the process involved in helping franchisees to get the lending that they need. The purpose of this registry is to allow lenders and franchises to come together to deliver the financing necessary for franchisees.
When a franchise is listed with this SBA registry, then lenders simply have to check off a…
Back in 2008 we blogged about the trending lending solutions of peer-to-peer groups such as Prosper.com and Finanz.com – (see blog here.) As an update, here is information on an additional resource.
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