Borrowers have multiple options for SBA-backed loans, including microloans with a six-year repayment term to allow new businesses to borrow up to $50,000; 7(a) loans that allow companies to borrow up to $5 million; and 504 loans, available for up to $5.5 million for smaller businesses with a net income under $5 million and a net worth below $15 million. 
The primary disadvantage of Stock Option Plans for the company is the possible dilution of other shareholders’ equity when employees exercise their stock options. For employees, the main disadvantage of stock options in a private company—compared to cash bonuses or greater compensation—is the lack of liquidity. Until the company creates a public market for its stock or is acquired, the options will not be the equivalent of cash benefits. And, if the company does not grow bigger and its stock does not become more valuable, the options may ultimately prove worthless.
Mid Prime franchise loans are a great tool for small business owners who are unable to get bank rate working capital, but don’t want to pay exorbitant rates that a small business owner would get from a business cash advance. Alternative loans are private, non-bank loans and have much fewer credit and documentation requirements than a bank would require. Additionally, an alternative loan will fund within days, as opposed to months.

A franchise is a business that sell the rights to use its logo, name and model to individual entrepreneurs or a group of individuals working in partnership. Franchisees are required to make an initial upfront payment to begin the business, and are typically expected to pay ongoing royalty payments to continue to use the business’s branding and benefit from its brand-wide marketing efforts.
Tom's roles have included time as a writer, editor, journalist, videographer, presenter, educator, web designer, layout artist, and public relations executive. Since 2006, he's freelanced for publications and private clients including the Association for Computing Machinery (ACM), the Institute of Electrical and Electronics Engineers (IEEE), Apple, Nature.com, and the San Francisco Chronicle. A frequent traveler, he moved from his native US to the Netherlands in 2016. Connect with him at http://tomgeller.com.
For most business experts and established entrepreneurs, buying an existing franchise through franchise loans presents a lot of advantages not present if you opt to start your business from scratch. Purchasing a franchise, especially a popular one, enables you to start with a large and solid client base, a crucial element during the initial stages of a business venture. Another obvious benefit is that building up the brand does not take much effort in contrast to promoting a new business name.
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.
For most business experts and established entrepreneurs, buying an existing franchise through franchise loans presents a lot of advantages not present if you opt to start your business from scratch. Purchasing a franchise, especially a popular one, enables you to start with a large and solid client base, a crucial element during the initial stages of a business venture. Another obvious benefit is that building up the brand does not take much effort in contrast to promoting a new business name.
The staff at Key Commercial Capital was wonderful. They made sure to explain all our options in detail and were always interested in the best for us. They verified our documents before submitting for approval to ensure everything was in order and that the application and closing process was as smooth as possible. They were also very responsive and available at all times. I will certainly be back on the next opportunity.
“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.”
Also make sure you have a structured process for setting measurable objectives, reviewing your progress, and adjusting the objectives or setting new ones. A good way is to keep a simple monthly checklist of the most important items. All of this should be driven by your overall business plan (you do have a business plan, don’t you?), and you should use the data you collect to help you keep the plan constantly updated.
Bank of America can work with you to design a special lending program to help you grow and better manage your business. This alliance enables us to provide customized financing solutions, based on a thorough understanding of your particular business model. Plus, you’ll have access to an underwriter who understands your business. We offer a variety of program options including:
At some point nearly every franchise will seek a loan or working capital. Knowing your franchise financing options can be the difference between thousands of dollars saved or lost. If you are a franchise business owner seeking financing and need help understanding the options, please reach-out to one of our funding specialists and we’ll help you navigate the process.

Rent and rent escalations. Some landlords will give free rent for the first month or two of a lease. Fixed rent over longer-term leases is relatively rare. Sometimes landlords insist on annual increases based on the percentage increases in the Consumer Price Index (CPI). If your landlord insists on rent escalations, try to arrange for a CPI rent increase that does not kick in for at least the first two years of the term. Then, try to get a cap on the amount of each year’s increase. If you have to live with a rent escalation clause, try to negotiate a predetermined fixed increase; for example, a rent of $5,000 a month the first year that would only increase to $5,200 a month the second year and $5,400 a month the third year.
Also make sure you have a structured process for setting measurable objectives, reviewing your progress, and adjusting the objectives or setting new ones. A good way is to keep a simple monthly checklist of the most important items. All of this should be driven by your overall business plan (you do have a business plan, don’t you?), and you should use the data you collect to help you keep the plan constantly updated.
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.
Using a stock loan (securities-based financing) allows a potential franchisee to leverage the value of their stocks without giving up ownership of the stocks. Securities based financing allows potential small business owners to get fast, affordable funding, while also having the ability to keep all the upside of keeping their stocks (dividends and stock price growth). Funding usually comes in the form of a line of credit backed by the stocks’ value.
The staff at Key Commercial Capital was wonderful. They made sure to explain all our options in detail and were always interested in the best for us. They verified our documents before submitting for approval to ensure everything was in order and that the application and closing process was as smooth as possible. They were also very responsive and available at all times. I will certainly be back on the next opportunity.
If it does not exist, create it. If you have an idea-ideas or skills, think of how to use your ideas or skills to create a business and to put it out there to see what it can attract and what you can create. Many successful businesses started with an idea and that idea has become a success “from one person business to global corporations”. Failure is an attempt at success, if you don’t give up and modify each attempt, then each attempt can become a success.

If your DSCR is less than one, you have negative cash flow because company income isn't enough to repay debt. Getting a loan will be difficult. Typically, lenders want to see at least a 1.35 DSCR, which would mean that if your organization's annual net operating income is $70,000, you wouldn't want to borrow more than around $51,800. However, the higher your DSCR, the better your chances of being approved for a loan on favorable terms. 

Part of the reason we spent a full day researching and figuring out location has to do with what it will cost you to start. If you’re working from home and not seeing clients, you may find your startup costs are limited to marketing, stationery, any supplies, and legal. If not, you’re going to need enough to set aside for at least the first months rent and utilities of the new space, including all the amenities to outfit your new office.


The purpose of these checks is to make sure that the applicant will fit into the company’s culture and to ensure that they have been truthful and accurate in their resume and employment application. However, the process is carefully regulated by the federal government (through the Fair Credit Reporting Act) and the laws of many states; failure to follow the highly technical process can lead to class action lawsuits. Consider consulting legal counsel and, for general information, see the EEOC’s Background Checks: What Employers Need to Know.
Keep in mind that your ability to negotiate an office lease is dependent on how much leverage you have. Do your homework. Are other companies vying for the same space? Has the space been vacant for a long time? Factors such as these may mean the difference between you calling the shots, or a landlord insisting on onerous terms throughout the lease process.
Consider using a tenant broker. A good tenant broker can be invaluable and will represent your company’s best interests. He or she will educate you on the current market; locate spaces that meet your stated parameters; arrange tours and accompany you to view these available spaces; and then prepare offer letters and negotiate with landlords for all spaces that work best for your company.
If you have a newer franchise or need capital ASAP, OnDeck (see our review) is one of the easiest and quickest ways to get a short-term loan or line of credit. Though OnDeck isn’t specifically geared toward franchise owners, it’s a viable online loan option for any type of small business owner that doesn’t qualify for a bank loan or doesn’t want to wait months to receive loan funds. OnDeck also recently partnered with the Franchise Council of Australia in an effort to better serve the global franchise market (fun fact: Australia actually has more franchise outlets per capita than America).
Your second option invokes the idea of a “warmup” period for your business. Instead of going straight into full-fledged business mode, you’ll start with just the basics. You might launch a blog and one niche service, reducing your scope, your audience and your profit, in order to get a head-start. If you can start as a self-employed individual, you'll avoid some of the biggest initial costs (and enjoy a simpler tax situation, too). A payment processing company, such as Due, can be a big help when you are struggling to invoice and follow up professionally.
Franchise business loans typically come with more attractive terms than you are likely to find for any other type of start-up business loan. This is because lenders consider the financial stability, business model, and previous success of the franchise parent company when reviewing a loan application. Banks and alternative lenders are finding franchises to be an increasingly attractive investment. In 2011, the SBA reported approval of $1.5 billion in 7(a) loans for franchises, up from approximately $826 million the previous fiscal year. The 7(a) loan-guarantee program is the SBA's most popular loan program.
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.
I am looking into opening a truck parts supplies shop/ body shop repairs/painting. I currently own one semi truck and use it for hauling agricultural products. my credit score is in the 600’s. Would I qualify for some type of loan? The local banks in my area have not qualified my for a small business loan, while others with worst credit than I get approved. The town I live in is small, so it’s like you have to know someone to get approved. If you know what I’m saying.
When you do a ROBS, you basically sponsor a retirement plan under your franchise, rollover funds from your personal retirement plan to the company retirement plan, and use those funds to buy shares of stock in your business. The sale of stock creates the capital needed to start or buy a new franchise or recapitalize an existing franchise. Read our in-depth guide on ROBS to learn more about how it works.
Loans backed by the Small Business Administration (SBA) are a favorite of franchisees, since they tend to have higher limits and lower rates than commercial loans. However, SBA loans come with strict requirements, including the need to prove that you don’t have the ability to obtain a loan from traditional lenders. Partner institutions disburse and administer the loans with SBA approval and application requirements tend to be quite extensive.
He is a nationally recognized speaker and blogger on the topics of leadership, communications, decision-making, problem solving, and other critical business skills. An honor graduate from West Point, Mike served in the US Army as a combat arms officer. Before founding his own company, he was an assistant professor at Duke University, a consultant at McKinsey & Company, and an executive at Capital One and Scotts Miracle-Gro. He is the author of One Piece of Paper: The Simple Approach to Powerful, Personal Leadership (www.onepieceofpaper.com), Lead Inside the Box: How Smart Leaders Guide Their Teams to Exceptional Results (www.leadinsidethebox.com), and The Elegant Pitch: Create a Compelling Recommendation, Build Broad Support, and Get it Approved (www.elegantpitch.com). Mike's blog and the programs he teaches can be found at www.thoughtleadersllc.com.
By the end of this lesson, you will be able to manage all of your downloaded banking transactions. You will also understand how to enter basic banking transactions manually. Finally, you will be able to use the reconcile tool to ensure that the transactions on your bank statement match up with what has been entered into QuickBooks. This will result in up-to-date financial statements.
None of the information displayed on www.applepiecapital.com (the “Website”) constitutes an offer to provide investment advice. The offering of securities is being conducted pursuant to an exemption from registration under the Securities Act of 1933, as amended. There shall be no offer or sale of any securities without the delivery of confidential offering materials and related documents. ApplePie Capital does not (1) advise on the merits or advisability of a particular investment or transaction, or (2) assist in the determination of fair value of any security or investment, or (3) provide legal, tax or transactional advisory services.

If you're thinking about starting a business, you likely already have an idea of what you want to sell, or at least the market you want to enter. Do a quick search for existing companies in your chosen industry. Learn what current brand leaders are doing, and figure out how you can do it better. If you think your business can deliver something other companies don't (or deliver the same thing, but faster and cheaper), you've got a solid idea and are ready to create a business plan.

Guidant is our recommended ROBS provider. Guidant has helped over 10,000 businesses and facilitated over $3 billion in small business financing since 2003. They are also the only ROBS firm we know of which guarantees access to outside independent counsel during the ROBS setup process, which can help you objectively evaluate if ROBS is a good decision for the franchise you are buying.


What You Need to Finance – Depending on what franchise you’re planning to buy, you may need to buy equipment, hire employees, purchase commercial real estate, and more. Craig Morgan, a managing attorney at Providence Law, says that some franchises, such as a car dealership, requires the purchase of commercial real estate. The things that you need to get started will affect what type of financing option is best for you.

1. You can do it because others are doing it. Think the country is dominated by big businesses run by people with MBAs? Wrong. 99 percent of businesses in the US are small businesses, and they employ 80 percent of the population! You don’t need any “special” training to run a business. You just need an idea, the desire to learn and adapt, and the ability to take action!
SBA loans of five- to six-year maturities can provide short-term working capital and equipment. Real-estate loans can run for 20 years or more. About 10% of all SBA loans go to franchisees, with the size running between $250,000 and $500,000, and maximum of $2 million. Most of that money is for franchise entry fees, improvements or working capital. Borrowers must be creditworthy, typically must contribute some equity, and are expected to repay the SBA loan out of the franchise’s cash flow.
Lenders prefer financial statements that have been audited by a certified public accountant (CPA). But many small businesses don’t want to incur the costs of an audit, so one alternative is to have the financial statements “reviewed” by a CPA (which is cheaper and faster). However, some lenders may not require either audited or reviewed statements.
When starting out, your product or service has to be at least good if not great. It must be differentiated in some meaningful and important way from the offerings of your competition‎. Everything else follows from this key principle. Don’t drag your feet on getting your product out to market, since early customer feedback is one of the best ways to help improve your product. Of course, you want a “minimum viable product” (MVP) to begin with, but even that product should be good and differentiated from the competition. Having a “beta” test product works for many startups as they work the bugs out from user reactions. As Sheryl Sandberg, COO of Facebook has said, “Done is better than perfect.”
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.
And don’t forget that unlike their independently-owned competitors, franchise owners don’t get to choose when to schedule expenses or which suppliers to work with. Their business model might have been passed down by the franchisor but it’s up to the franchise owner to figure out how to grow the business without endangering profits or failing to cover mandatory expenses.

He has been on the full-time faculty at Rice University, the University of Arizona, and the Hong Kong University of Science and Technology (HKUST). He has also been an Executive MBA lecturer at HKUST, SKOLKOVO (Moscow School of Management), China Europe International Business School (CEIBS), the University of Illinois (US), and INSEAD (Singapore and Paris). Professor Kay Stice has received awards for high-quality teaching at Arizona, Rice, and Brigham Young University, and he was twice selected as one of the top ten lecturers at HKUST.
Getting money in advance of doing any business is called “mobilization capital.” This means you are looking for capital to help start a business and don’t have customers yet. This is also known as unsecured lending and is typically very difficult to secure. Your best bet in these situations is to try and raise seed capital investment aka friends and family investors. If your hot idea is really as good as you think, you should be able to find friends to join up and start up a company.
The first step in applying for a franchise loan is making sure you are well-prepared before you connect with a lender. This means that you should have identified the franchise you wish to pursue, and should have your supporting documents and loan package organized and available when you engage with lenders. The goal is to make a solid first impression to show that you are prepared and will successfully put the lender's money to good use and can be trusted to repay the loan. Accessing capital to start your business is perhaps the most difficult step in the start-up process. An online service like BoeFly.com, (we specialize in franchise finance - see what franchise brands have to say about BoeFly) or working with a financial adviser can help prepare you to address any deficiencies within your loan package. Loan brokers will typically cost you a $2000 packaging fee or more, and they may charge the lender a fee of 1-2% of the loan amount, which may come back to you as a hidden cost in the closing costs or in increased interest rates. In contrast, BoeFly has several plans available starting at just $249 to help fully guide you through the process of building a professional, lender ready package and connect you with over 5,000 lenders.
Being that each franchise launch means the business doesn’t have existing/trailing revenue, opening a franchise business is essentially opening a startup business. As with startups, the small business lending options are limited — but available. Other franchises are existing entities and are looking for capital to help with operating expenses and other working capital options. Here are the main options:

Often, banks that aren't willing to work with you based on your financial profile become more amenable if you suggest working with an SBA loan guarantee; these loans are guaranteed up to 90 percent by the SBA. Small businesses simply submit a loan application to the lender for initial review, and if the lender finds the application acceptable, it forwards the application and its credit analysis to the nearest SBA office. After SBA approval, the lender closes the loan and disburses the funds; the borrower makes loan payments to the lender.
- Let's talk a little bit about the future. At some point your business is going to near the final stages of being a small business and start to evolve into a medium, or even a large-sized business. The question is: who is going to lead this business at that point? Before we talked about the org chart and the difference between the founder and the president. Odds are, you have been filling both roles. The founder is the visionary, and the president is the person who makes the business run. But, when it comes time to transition into that medium-sized business, really it's time for you exit one or both of these positions. Why is that? Well, you have learned certain skills that have helped you succeed as a small business owner, but, a different set of skills is required for a large or medium-sized business, and there are people out there who have those skills. They have that expertise, and it's much better to hire someone else, rather than you put this burden on yourself. I've often seen…
Get matched with a mentor who has experience building a business by visiting SCORE.org. SCORE is dedicated to helping small businesses develop and thrive through mentorship and training programs. SCORE mentors can help small business owners write a business plan, determine the type of lending they need, figure out the best bank(s) to approach for a loan and prepare to meet with a loan officer.
Dave Crenshaw is the master of building productive leaders. He has appeared in Time magazine, USA Today, Fast Company, and the BBC News. His courses on LinkedIn Learning have received millions of views. He has written four books and counting, including The Myth of Multitasking: How "Doing It All" Gets Nothing Done, which was published in six languages and is a time management bestseller. As an author, speaker, and online instructor, Dave has transformed hundreds of thousands of business leaders worldwide. Find out more at DaveCrenshaw.com.
“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.”
We’ve touched on a lot of different topics, of course, and I’ve linked to more tutorials so that you can dig into the details in each area. I’d encourage you to read some of those tutorials to go deeper into the key subjects, and to subscribe to our newsletter (there’s a form down in the footer) to stay up to date with the latest business tutorials published here. We've got plenty more on the way!
It turns out, he thought the process of starting a business was really complicated. "I don't want to go through all that stuff," he said, "unless I'm absolutely sure my idea is perfect." Like a lot of would-be entrepreneurs, he was stalling because he was intimidated by the apparent complexity of the administrative and legal tasks involved in starting a business.
Terms of Service and Privacy Policy. If you are a company that conducts its business on the internet, it is important to have a terms of service agreement that limits what users can or cannot do on your website and with the information on your site. Closely related is your Privacy Policy, which sets forth what privacy protections are available to your users. The new European GDPR rules may also need to be addressed.

There is no one right answer to the question of how equity should be divided among a company’s co-founders. But everyone involved should discuss this issue and come to an agreement up front to avoid misunderstandings later on. If you are the original founder and brains behind the idea, a good argument can be made for more than 50% ownership. The split should take into account the following:


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.


Are you thinking about starting a small business, freelancing, or turning a hobby into a full-time job? Or perhaps you're already running your own business and need some inspiration to take it to the next level. Each week, join small business coach Dave Crenshaw for two short lessons that reveal the secrets of running a successful small business. This series covers topics such as getting started, writing a business plan, determining your most valuable product or service, hiring people, managing processes, documenting systems, bootstrapping, seeking funding, accounting, controlling costs and profit margins, marketing, creating culture, and more.
Small Business Administration (SBA) loans. SBA 7(a) loans have longer repayment terms and lower down-payments than most conventional bank loans, and can be used for the purchase of owner-occupied real estate, business acquisition, equipment, or working capital. Wells Fargo also offers the SBA 504 program for larger, fixed asset purchases or construction.
×