“ApplePie Capital can accelerate the growth of franchisees because we start by spending time with the franchisee up front to assess their situation, and then identify the best financing options to reach their short and long term goals. Sometimes that will be SBA, and sometimes it will be other options that the local bank doesn’t offer. And unlike the local bank, ApplePie knows the brand metrics. We can underwrite the loan ourselves for our core product, or can educate our lender network on the brand so the franchisee doesn’t have to.”
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.
Some franchisors report being approached by financial brokers--historically more interested in big deals--to put together large pools of money using SBA and private funds. These funds would be available to franchisees through the franchisors like a trust fund. Groups of smaller banks with funds to invest would contribute to the fund from all over the country.
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.
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As you have done throughout the planning and startup process, consider analyzing your competitors and other companies. How are they selling themselves? How do they portray themselves? What do they say makes them unique? If you’re not sure, take a look at their advertising and marketing messages. This is generally where you’ll find the USP or variations of it.
At ApplePie Capital, we are committed to fair lending. We make our commercial credit products and services available to all qualified applicants on a consistent and fair basis. ApplePie Capital does not condone or tolerate discrimination against any applicant on any prohibited basis under the Equal Credit Opportunity Act or any applicable state or local law. Fair lending principles are integrated into our corporate policies, lending operations, staff training, marketing efforts, and third-party lending relationships.
Many franchise owners have likely avoided small business loans because they are busy enough already. When you open a new franchise, you must simultaneously take on the roles of recruiter, accountant, sales executive, and HR manager. But United Capital Source’s franchise business loans can be accessed in just a few business days, and you don’t have to play three rounds of phone tag just to have a question answered. With a merchant cash advance, payments are automatically deducted from sales and therefore require no manual action from the business owner. It is literally impossible to “miss” a payment.
Approximately 75 to 100 franchisors are offering or working on offering creative financing programs for start-up franchise owners or those looking to expand. Programs range from zero-percent financing for a limited-term, lower license fees, reduced royalties and minority stake ownership by franchisors in multi-unit outlets. Each brand has its own offering, so down payments and collateral requirements will vary.
Bank loan: You’ll need excellent business and personal credit to qualify for an SBA-backed bank loan. The U.S. Small Business Administration provides general small-business loans through banks with its 7(a) loan program. According to NerdWallet, the average SBA loan size is $371,000, although amounts can vary between $5,000 and $5 million. To qualify, you’ll need to provide:
Supporting both the operation and expansion of a growing small business often requires some additional financial support. Getting a small business loan or grant can help you bridge the gap when you need to make capital investments, increase your workforce, or move to a larger space. To help you decide which type of funding might be right for you, here are a few great small business-financing options:
ApplePie currently has partnerships with 42 franchises, such as 7 Eleven, Dunkin’ Donuts, Jimmy John’s Pizza, and Wetzel’s Pretzels. Other franchise brands can get loans through ApplePie, though the process might take a little longer. ApplePie offers loans for both new and existing franchises, including franchise startup loans, loans to purchase an existing franchise, franchise equipment loans, franchise refinancing loans, and more.
Microlenders are nonprofits that typically lend short-term loans of less than $35,000. The APR on these loans is typically higher than that of bank loans. The application may require a detailed business plan and financial statements, as well as a description of what the loan will be used for, making it a lengthy process. Also, the size of the loans is, by definition, “micro.” But these loans may work well for smaller companies or startups that can’t qualify for traditional bank loans, due to a limited operating history, poor personal credit or a lack of collateral.