Business loans. For larger investments, it may be time for a term loan. Like a mortgage or personal loan, term loans come with fixed interest rates and monthly payments over a period of years. Unlike a line of credit, a business loan will provide you with a large sum of cash upfront. These loans can be ideal for expanding your space or funding other large investments.
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!
Never start a business as a “sole proprietorship,” which can result in your personal assets being at risk for the debts and liabilities of the business. You will almost always want to start the business as an S corporation (giving you favorable flow through tax treatment), a C corporation (which is what most venture capital investors expect to see), or a limited liability company (LLC). None of those are particularly expensive or difficult to set up. My personal preference is to start the business as an S corporation, which can then easily be converted to a C corporation as you bring in investors and issue multiple classes of stock.
Before you can get a traditional bank loan, you need to have collateral, generally in the form of your house although other assets including land, cars, watercraft, motorcycles and equipment that has a title of ownership can be used as collateral. Understand the risk involved with your business venture before you put up collateral–the bank will take your house, car or whatever else you put down if you default on your loan. Make sure you have an accurate assessment of what your collateral is worth before you apply for a loan so you don’t wind up unpleasantly surprised when your bank assumes it’s worth today’s market value, not the value that it was when you bought it. If you don’t have an asset to use as collateral or are uncomfortable with the idea, then you’ll want to seek out a source other than a bank for your business lending needs.
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).
To become an officially recognized business entity, you must register with the government. Corporations will need an "articles of incorporation" document, which includes your business name, business purpose, corporate structure, stock details and other information about your company. Otherwise, you will just need to register your business name, which can be your legal name, a fictitious "Doing Business As" name (if you are the sole proprietor), or the name you've come up with for your company. You may also want to take steps to trademark your business name for extra legal protection.
Bio – Your bio should describe your business and display your brand personality. You should also use the 150 characters to explain what users can expect from your Instagram profile. Try using emojis and hashtags in your bio to add personality and for users to find your brand. See how Target makes use of emojis and hashtags to highlight its competition.
Since there is no collateral for the SBA Express working capital loan, how do they determine who qualifies? Credit is a primary factor when lending working capital without collateral. Generally, you should have less than $15,000 in credit card debt, 10% of the loan amount as cash on hand and be able to show a 10% cash injection into your business. Like a mortgage, these can not be borrowed funds, however gifts from family is usually acceptable. Lastly, you need to show “comparable credit” comparable to the amount you wish to borrow. Typically, anyone with a mortgage past or present would qualify. Some exceptions are made for military veterans.
Brad has spent more than twelve years working at the crossroads of business development, marketing, and social media. He was featured in Entrepreneur Magazine as a young entrepreneur, launching his first successful business at the age of 15. Up until joining lynda.com as an online marketing manager in 2012, he honed his skills working as a consultant alongside brands large and small, including LegalZoom, Clear Channel, eSolar, Dickies, and Urban Outfitters. He has also served as an advisor to multiple startups, providing marketing direction and strategic advice.
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.
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You should approach small-business-loan shopping just as you would shopping for a car, says Suzanne Darden, a business consultant at the Alabama Small Business Development Center. Once you determine which type of lender and financing vehicle are right for you, compare two or three similar options based on annual percentage rate (total borrowing cost) and terms. Of the loans you qualify for, choose the one with the lowest APR, as long as you are able to handle the loan’s regular payments.