It's now possible to reach people (customers, clients, subscribers, etc.) based on shared ideals and values. Microbusinesses of one sort or another have been around since the beginning of commerce, but the ease of connecting with people is a new phenomenon. Also, a large percentage of the population is being comfortable with making purchases online. These things create a perfect storm of economic convergence. It's never been easier.
Your eligibility. Each franchisor has its own set of requirements for you to meet, and from there you’ll need to meet the criteria any lenders have. Confirm eligibility with the providers you’re interested in to see whether you meet their minimum standards. If not, you have the option of learning what you can change to make the cut. And keep exploring your other providers.

Now that you have completed our QuickBooks Online tutorials, you should be convinced that you don’t have to be a certified public accountant or have an accounting background to learn how to use QuickBooks. You should also know that QuickBooks is a much better solution than using a Microsoft Excel spreadsheet to keep track of your income and expenses.
Personal Assets – Getting a traditional loan for a franchise can be difficult. The more personal resources you can bring to the table, such as retirement funds and personal savings, the easier it will be to buy a franchise. If you’re planning to get a bank loan or an SBA loan, then you at a minimum need a 10-20% down payment and some collateral (if the franchise involves the purchase of real estate, that can be used as collateral).
The Louisiana Secretary of State, Louisiana Department of Revenue, and Louisiana Workforce Commission are working to make it easy for you to manage your Louisiana business filings and tax account registrations from one location―the Louisiana geauxBIZ portal. geauxBIZ can help you find resources to help plan, make key financial decisions, and complete legal activities necessary to start your business. You can also use geauxBIZ to produce a list of possible federal, state and local licenses and permits required for your business, to reserve your new business name, and to complete your new business filing. If you want to do business in Louisiana, visit geauxBIZ to get started!

In most cases, franchise owners provide technical support, equipment, and other necessary materials to their franchisees. Also, fellow franchisees can merge and share best practices, business approaches, and marketing strategies to colleagues whose business acumen and management skills are still developing. Simply put, there are a lot of good reasons why starting a business by buying a franchise will be a success.


One of their loan programs is the SBA 8(a) business development program. According to their website, SBA’s 8(a) business development program is specifically dedicated to providing business assistance to entrepreneurs who are members of a socially and/or economically disadvantaged minority group who need help accessing mainstream economic capital. This program is divided into two sections and requires a nine-year commitment. The first four years are dedicated to development, and the remaining five years are a transition stage.
Starting a small business doesn't have to require a lot of money, but it will involve some initial investment as well as the ability to cover ongoing expenses before you are turning a profit. Put together a spreadsheet that estimates the one-time startup costs for your business (licenses and permits, equipment, legal fees, insurance, branding, market research, inventory, trademarking, grand opening events, property leases, etc.), as well as what you anticipate you will need to keep your business running for at least 12 months (rent, utilities, marketing and advertising, production, supplies, travel expenses, employee salaries, your own salary, etc.).
An important step in forming a new business is to determine the type of business structure that you will use. There are several business structures to choose from, including sole proprietorship, partnership, corporation, limited liability company and limited liability partnership. Each has advantages and disadvantages as well as tax consequences of which you should be aware. You must decide which of these structures best suits your business objectives and needs. The Secretary of State cannot advise you on choosing a business structure. For help in making this decision, you may wish to consult a tax practitioner, accountant or attorney. 
Traditional loan: Banks and credit unions are a source of financing for all businesses, including franchises. New franchise owners are 15% more likely than other new business owners to use a commercial bank loan, according to the SBA. Lenders are more likely to finance franchises of an established brand that has proved successful in a variety of markets. However, you’ll still be subjected to the bank’s underwriting standards and lending policies, meaning it will review your net worth and credit history. You also may need to put up collateral, regardless of the brand you’re associated with.
Alternative business lenders are comprising a growing part of the financing industry as bank loans become increasingly hard to get. Franchise owners benefit from alternative franchise loans, which have less-strict borrower qualifications than traditional business or SBA loans, and also put the funds in your account a lot faster. Generally, alternative loans have higher rates than bank loans, but they represent an important source of capital to many small business owners, including franchise owners, who would not otherwise qualify for financing. Moreover, some of the best online lenders offer rates that are on par with big banks.
Loans are made by StreetShares investors, who bid on loans for companies. The more appealing your business idea is to investors, the better your loan options. It only takes a few minutes to see if you qualify for a loan. Once you are approved, your loan will get bid on by competing investors. The competition process lasts from one to four days, and then it takes another day or two for the money to get deposited into your account. In total, the process of getting a loan through StreetShares takes about a week.
The lender will want to know how much funding you are seeking and how the loan proceeds will be used. Will the loan be for equipment or capital expenditures? Expansion or hiring? Increase in inventory? Enhanced sales and marketing efforts? New research and development of technology? New product development? Expansion into new facilities or territories?
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I’d like to call your attention to a series of video tutorials I did not that long ago as a donation to this community. They are all here and I’d like you to be aware of them. They are organized into modules, 2-10 minutes each. You can pick and choose and jump around, or run through them in the original order. They are here as a resource for you. (Note: the text in bold here highlights links to the videos)

Though the fastest growing entrepreneurs were entering this business model are Millennials. Franchising at a rate that cannot be ignored; the latest Census data shows that 66% of Millennials are interested in entrepreneurship, nearly making up 30% of all entrepreneurs are between 20-24 years old, and over 25% are self-employed. Additionally, they launch 160,000 start-ups each month motivating the IFA (International Franchise Association) to start the NextGen Franchise initiative that recognizes and supports young entrepreneurs.  The IFA is going as far as reaching out to this generation while their still in school, introducing them to the benefits and possibilities of franchising offered through education, scholarship, and leadership. Another age group making up a large part of the market are the baby boomers and seniors. More services being developed are quality of life/wellness products, patient advocacy, non-medical home care, and respite care. And lastly, there are an increase in businesses interested in kids and child enrichment that is thriving and showing no signs of slowing down. Each has displayed an interest in getting kids moving, reading, thinking, and believing in themselves. These businesses have provided a sense of accomplishment and community within a supportive environment. Therefore, a trend of development centered around fitness, sports, music, art, STEM (science, technology, engineering, and math), tutoring, and child care have grown immensely. However, with the trends centering around technology, the food industry, and the distinct influence of individual age groups, franchising is proving to be a flourishing industry with a positive future.
Make sure you do your research before diving into any franchise brand by checking out the International Franchise Association or the SBA Franchise Directory. Read a franchise disclosure document carefully before signing any franchise agreement, and be sure you’re ready to commit a relationship with the franchise brand of your choice. Happy applying and best of luck buying a franchise!
As you consider financing options, make sure you get the best deal overall for your business. This means you'll need to compare interest rates, repayment terms, origination costs, and whether pre-payment penalties apply. By looking at the total cost of the loan, as well as whether monthly payments are affordable, you can secure financing that works for your organization. 

The lender will want to know how much funding you are seeking and how the loan proceeds will be used. Will the loan be for equipment or capital expenditures? Expansion or hiring? Increase in inventory? Enhanced sales and marketing efforts? New research and development of technology? New product development? Expansion into new facilities or territories?


Venture capitalists tend to start investing at $1,000,000, and they prefer to invest in high-growth and high-risk businesses. High-growth investment means the venture capital investor would see a return in 3-7 years by selling the company or going public. Venture capitalists tend to require a large amount of equity in your business, including a position on the board of directors.
To get a good estimate of costs, the first thing we recommend doing is asking the franchisor for their Franchise Disclosure Document (FDD) early on in the process. It’s a good idea to have an accountant and lawyer review the FDD with you before you sign any paperwork or hand over any money. A franchisor is legally required to give you the FDD at least 14 days before you buy a franchise.
We have successfully provided franchise loans and restaurant financing to such recognizable and far-reaching brands (but not limited to) as Subway, CiCi’s Pizza, Meineke Car Care Center, Golden Crust, Golden Corral, Firehouse Subs, Kentucky Fried Chicken, Domino’s Pizza, IHOP, Burger King, Jack in the Box and Quizno’s, to name a few! Let’s continue the success story that your long hours and hard work have brought about and take your business to the next level!
According to Meme Moy, a spokesperson for FRANData, about 2,000 franchises are currently on the Registry. When a franchise is on the Registry, lenders can see its historical loan performance. About 55 % of lenders only lend to franchises that are on the franchise registry, so this an important step in choosing a franchise. By choosing a franchise that is on the Registry, you can get better and faster access to SBA funding. To check if your franchise is on the Registry, click here.
There are sources of startup money that may not be as obvious to franchisees that can be helpful. Using equity from a home loan or a 401(k) plan, can provide a kick-start to your business if conventional sources of financing are not available. However, those products may not be optimal over the long run when compared to loan products specifically geared to funding a small businesses.

Trademarks. A trademark right protects the symbolic value of a word, name, symbol, or device that the trademark owner uses to identify or distinguish its goods from those of others. Some well-known trademarks include the Coca-Cola trademark, American Express trademark, and IBM trademark. You obtain rights to a trademark by actually using the mark in commerce. You don’t need to register the mark to get rights to it, but federal registration does offer some advantages. You register a mark with the U.S. Patent and Trademark Office.
We are often asked by franchise owners, “What do I need to qualify for franchise financing with Balboa Capital?” Well, they couldn’t be more happier with the answer to that question. If your franchise has been operating for at least one year, and it generates $300,000 or more in annual revenue, the chances are pretty good that you will qualify. We will just need to review your credit to make a decision.
Startups should also understand that the venture process can be very time consuming—just getting a meeting with a principal of a VC firm can take weeks; followed up with more meetings and conversations; followed by a presentation to all of the partners of the venture capital fund; followed by the issuance and negotiation of a term sheet, with continued due diligence; and finally the drafting and negotiation by lawyers on both sides of numerous legal documents to evidence the investment.
A well-thought-out business plan can make the difference between having your loan application accepted or rejected. A complete business plan should always include an intimate, technical study of the business you plan to go into; accurate pro formas, projections and cost analyses; estimates of working capital; an indication of your "people skills"; and a suitable marketing plan. It should also include certified statements of your net worth and several credit references.
Think about your daily routine, you might stop at a coffee shop in the morning, perhaps you workout at the gym in the afternoon or go for dinner with friends in the evening. Every place that you visit, and every business you connect with during that day, exists because of an idea and an entrepreneur.  Whether that entrepreneur comes from a family of business owners, or is starting out on their own with no previous experience, running their business requires a set of key skills.  But what are the skills you need and how do you acquire them?
You should specifically start your search for a lender that has experience funding franchises. Some major banks such as Bank of America, HSBC, and PNC have specific programs targeting franchisees. Smaller institutions specialize in franchising in specific industries, such as restaurant franchise funding from Oak Street Capital, and hotel funding from Access Point Financial.
5. Social Media: Depending on your type of business, you will want a social media presence. LinkedIn, with more than 380 million members, is regarded as the business site for connecting with other businesspeople and offers excellent posting features for articles and blogs. Facebook is more of a social friends site than a business-focused site, but it’s also an excellent tool for “getting your word out” to your friends and customers. Both Linkedin and Facebook allow you to set up a commercial page for your new business.
The franchisor: Some franchisors help finance new franchises by waiving fees or partnering with lenders to help franchisees get loans. If a company offers funding, it’s usually listed on its website and in Section 10 of the Franchise Disclosure Document. Compare the terms of the franchisor’s financing with other options to find the best source of funding.

Having liquid assets, valuable collateral and a good credit rating will go a long way to helping you get a franchise loan. According to The Wall Street Journal, most banks will be looking for around one-fifth or 20% of franchise startup costs to come from the owner before considering lending options, and without a good credit score, most lenders won't feel comfortable extending a loan even if the proposed franchise is known for long-standing success.

StreetShares is dedicated to helping U.S. military veteran entrepreneurs get funding for their small business ventures, which is why it is a good place to look if you want to start a small business and you’re a veteran. It’s free to see if you qualify for a loan, which is offered in terms of three months to three years, for up to $100,000. Businesses must be at least one-year-old or have at least $100,000 in revenue to qualify. You also must be a U.S. citizen and have decent credit.
Outside of the typical startup costs, there are different costs that are unique to franchise businesses. First is the franchise fee, an upfront fee to the franchisor for the right to use the company’s branding and model. It can be paid in a lump sum or in installments, and varies widely by industry and company. It will likely to be at least $10,000 – sometimes substantially higher – and is typically nonrefundable. Franchisors are also likely to charge recurring royalty and marketing fees – usually arranged as a percentage of sales at the franchisee’s store – usually 4 to 8 percent for royalties and 2 to 4 percent for marketing.
After you register your business, you may need to get an employer identification number (EIN) from the IRS. While this is not required for sole proprietorships with no employees, you may want to apply for one anyway to keep your personal and business taxes separate, or simply to save yourself the trouble later on if you decide to hire someone else. The IRS has provided a checklist to determine whether you will require an EIN to run your business. If you do need an EIN, you can register online for free.
Tenant improvements. Your new space may need some improvements or alterations (a new paint job, new carpeting, a reconfiguration of the space). Which party will pay for these improvements depends on how tight the commercial office space market is in your city. Most form leases stipulate that the tenant can’t make any alterations or improvements without the landlord’s consent. Ask for a clause that says you can make alterations or improvements with the landlord’s consent, and that the consent won’t be unreasonably withheld, delayed, or conditioned. Often, you are able to negotiate a “tenant improvement allowance,” which is an agreed-upon sum of money that the landlord will provide for the improvements and alterations you would like to make.
You can also use assets such as stocks, bonds, and mutual funds to secure a loan as long as they're not part of a qualified plan like an IRA profit-sharing plan. Also, if you are over age 59 and have a lot of money tied up in an IRA, you could use it for part of your financing requirements. Although you'll have to pay taxes on the amount used, not to mention suffer the loss of income from interest, it can be a good financing tool.
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Franchises are consistently vulnerable to cash flow issues thanks to the many mandatory expenses they face all throughout the year. On top of operational expenses and growth-related investments, franchises must obey the fee guidelines of their parent company, or “Franchisor.” Royalty and advertising fees are deducted from weekly or monthly sales. Some franchise owners must pay for new employees to undergo special training programs. Certain upgrades might be required for specific dates, and the national marketing campaigns that come from the aforementioned deduction must usually be supplemented by local advertising.
Offering medium-term installment loans with repayment periods as long as 5 years, Funding Circle is a lending partner for established franchisees with a strong credit history. Specifically, you’ll need to be a franchisee with a business at least two years old and have a credit score of at least 620. For qualified applicants, Funding Circle has the advantages of offering faster funding than a bank loan would, as well as offering relatively low rates and fees.
Equipment loans. If you’re specifically looking for cash to fund the purchase of new equipment – including vehicles, manufacturing or production machinery, farming equipment, or other necessary equipment – then an equipment loan or leasing program may be what you need. Like business loans, equipment loans offer fixed interest rates and payment plans over a period of time.
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