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.

The franchise industry, like all businesses, was not immune to the economic crisis of 2008 and the ensuing credit crunch. But the vital signs of a recovery are there. According to the International Franchise Association (IFA), many of the country’s business sectors currently starting to show growth mirror those sectors expected to be the leading drivers of employment in franchising this year. These include food service, health care, hospitality and construction—all sectors with a high concentration of franchise businesses.
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!
Fees and costs. Origination, underwriting and early repayment fees are typical costs that you could see. If a lender provides an APR, it includes the interest rate plus any upfront fees. Early repayment can be a conditional fee and is not reflected in the APR, so it’s a good idea to carefully read through the terms of your offer before accepting it. Learn more about business loan costs.
He holds a FINRA Series 79 license (M&A investment banking), and a California real estate broker's license. He has sold businesses of his own as well as other people's businesses. Prior to law school Dana was assistant pastor at Calvary Foursquare Church in Hemet, California, and associate pastor at Cathedral of the Valley in Escondido, California. He was the vice principal of Escondido Christian School, and dean of Cathedral Bible College, where he also taught philosophy and theology.
To find out the best ways for new business owners to secure loans, I consulted with experts who have a wide range of experience with funding businesses including Jared Hecht, CEO of the online lending website Fundera, David J. Hall from the Small Business Association, Hal Shelton who is a SCORE mentor and author of The Secrets to Writing a Successful Business Plan (Summit Valley Press 2014) and Larry Conley, Senior Vice President and Specialty Finance National Manager for Chase bank.
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Franchise fee: Most companies charge an upfront fee to start a franchise, paid in a lump sum or installments. The amount varies by company, but it’s typically tens of thousands of dollars and usually is not refundable once a franchisee is accepted. For example, Jamba Juice charges $25,000 per store, and Hilton Worldwide charges $75,000 to start a 150-room Hilton Garden Inn.
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.
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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.
One noticeable trend in most businesses of all kinds today is technology. Workers and business owners cannot deny how it has influenced and advanced the world of commerce. In particular, technology has made it easier for franchises as they need sophisticated systems to manage the complexity of their trade. By their size, even the smaller franchises require this approach. Thus the most significant concept observed among franchises is software that is not installed on a computer, but instead consists of the web. The point of this approach is to take all the software programs usually equipped with a company’s personal computers and move them to the internet. There, they are presented in a single and secured environment accessible from any Internet-connected device, be it a tablet, computer, or phone. Examples of this development can be found with software solutions such as Nextstep Systems, Hello Scheduling, VST Inc, and Steller Restaurant Solutions to name a few. Still, internationalization of franchises continues to be a strong trend within the industry. Many countries are always willing to pay large amounts of money to use western trademarks along with the training and knowledge that come with the territory.  Over 400 franchises are operating internationally, proving to be a thriving option. Furthermore, the Franchise Trade Commission also facilitates business deals for American companies abroad confirming the demand for an American disposition.

Many traditional lenders provide funding to franchisees, so this should be a top-line option for those looking for a loan. Each lender will have different eligibility requirements and loan products so examine documents in detail before signing on the dotted line. You will need a good credit rating, a solid application package, a down payment and some form of collateral.

Hashtag – The right hashtags can provide a boost to the visuals on Instagram. Be creative when it comes to hashtags. Try to come up with something that your followers would want to share. It’s best to avoid using just the name of your business as a hashtag. Instead, consider using a word or a phrase that captures your brand. Sprout Social lists some examples of how some big brands have successfully used hashtags.
Fundation offers an 18-month line of credit in addition to 1 – 4-year installment loans. The time from application to funding generally takes between 2 and 7 days. All in all, Fundation is a smart choice for established businesses that don’t want to wait months to get a franchise loan approval. Read our Fundation review to find out why we rate this alternative franchise lender 5/5 stars.
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.
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.
Despite these indicators, financing remains a problem for potential franchise owners.  According to Entrepreneur magazine (January 2013), there’s still an 18 percent lending shortfall in the franchising industry. In a bid to boost franchise ownership, many franchisors are taking matters into their own hands and offering financing programs of their own. Meineke, The UPS Store, Gold’s Gym, Masasge Envy and Instant Imprints are just a few examples of franchisors now offering financing to qualifying first-time and multi-store franchise owners.
Often times, a franchisee looking to open their first franchise will fit nicely into a Small Business Administration (SBA) loan product. SBA loans are made by banks or other participating lenders - not the government. SBA loans allow the lenders to extend credit to borrowers, who they may not be able to lend on a conventional basis, by taking advantage of a guarantee that the SBA provides to the lender in the event of default. There are a few different options, but the Flagship SBA 7a product gives the bank a 75% guarantee if your loan defaults - so that the money that the bank lends to you is not entirely at risk. SBA loans are typically priced at Wall Street Journal Prime + 1 to 2.75%, for terms of 7 to 25 years, depending on the use of funds.
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Balboa Capital works with franchisees in the quick service restaurant, fast casual dining, hospitality, and fitness industries. Helping you get the best financing solution is our primary goal, but we never forget the importance of excellent customer service. Your experienced Balboa Capital franchise financing manager will work closely with you and is committed to your success. Once we earn your business, you will see why we are fully accredited by the Better Business Bureau (BBB).
We designed this workshop to help you, a new business owner, understand and meet your federal tax obligations. This workshop is constructed so that the first three lessons... What You Need to Know about Federal Taxes and Your New Business, What You Need to Know about Schedule C and Other Small Business Taxes and Tax Forms; And How to File and Pay Your Taxes Electronically are for everyone, no matter what kind of business you have or whether you have employees.
Overcoming this problem is easier than it used to be, thanks to the plethora of marketing opportunities on the internet. Many of them, of course, are free or low cost, but don’t forget that your time is also an investment. So don’t make the mistake of signing up for every social media site out there and letting your valuable time dribble away in tweets and status updates.

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.
There are infinite sources of financing available to help you launch the franchise of your dreams. However, operating a franchise with no reserves and blinding yourself to unexpected business problems can lead to disaster. A good rule to remember: Never invest more than 75 percent of your cash reserves. If you have $10,000, invest $7,500. If you have $25,000, invest $18,750.
When you get a HELOC your personal home will be used as collateral. This means that if you fail to make payments in the future then you could lose your home. That is the risk that comes with the benefits of receiving access to low interest rate funds as you need them. With a HELOC you can borrow up to 80-90% of your home equity with an APR as low as 3%. You must have a credit score of at least 650 to qualify.

Fees and costs. Origination, underwriting and early repayment fees are typical costs that you could see. If a lender provides an APR, it includes the interest rate plus any upfront fees. Early repayment can be a conditional fee and is not reflected in the APR, so it’s a good idea to carefully read through the terms of your offer before accepting it. Learn more about business loan costs.

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.
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.
To ensure success for both entrepreneurs and investors, Plum Alley requires businesses that crowdfund to secure at least 30 percent of their goal during a one-week “private” campaign before opening the crowdfunding to the public. This ensures investors that the business already has some financing, making it more likely they will reach their goal since research indicates that businesses who get 30 percent of their funding goal within the first 48 hours of crowdfunding have the most success.
In his courses, Drew merges the theory taught in a traditional classroom setting with more than three decades of experience, providing a real-world marketing and innovation experience. Drew's earned three prestigious teaching awards and is honored to have been a guest lecturer at Columbia University, Yale University, the Wharton School of the University of Pennsylvania, the University of Michigan, the University of Chicago, the Kellogg School of Management at Northwestern University, and Duke University.

A franchise gives you the opportunity to have your own business with the safety net of a proven business model. However, the costs of starting and running a franchise can be substantial. The two best financing options to start your franchise are Rollovers for Business Startups and SBA loans. If you’re not sure where to begin you should reach out to your franchisor for help in the process because they should have experience with your specific franchise.
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.

Franchisees who are operating a franchise location typically have their pick of financing options. We think the streamlined SBA loan from SmartBiz is the best option for those looking for up to $350K in working capital. With low SBA rates and 10-year repayment terms, these loans do not squeeze cash flow. Plus, SmartBiz has drastically reduced SBA loan funding times. Prequalifying online takes just a few minutes and they get loans funded in as little as 2 weeks.


The International Franchise Association maintains a directory of franchises that are approved by the SBA to receive SBA funding. Each franchisor in the directory is required to submit a Franchise Disclosure Document (FDD) with information about its company to the SBA for approval. Working with a company that is pre-approved by the SBA will expenditure the process of obtaining an SBA loan for your franchise.

The franchise industry, like all businesses, was not immune to the economic crisis of 2008 and the ensuing credit crunch. But the vital signs of a recovery are there. According to the International Franchise Association (IFA), many of the country’s business sectors currently starting to show growth mirror those sectors expected to be the leading drivers of employment in franchising this year. These include food service, health care, hospitality and construction—all sectors with a high concentration of franchise businesses.
The second part of the balance sheet is liabilities. Follow the same steps. List your current bills, all your charges, your home mortgage, auto loans, finance company loans and so on. Subtract your liabilities from your assets. Once you've worked up this sheet, take a good look at your credit rating. There are three common ingredients that all potential lenders look for in a credit rating: stability, income and track record.
We love this lender for their sterling reputation, excellent customer support, and reasonable terms and rates. But again, you’ll need to already have an established franchise to qualify, as well as good credit. This loan also takes longer to apply for (and receive) compared to most other online franchise loans, and it can potentially take a couple months for the money to come through. You’ll need to submit all the documentation you’d need to get a traditional SBA loan, and it will be helpful if your franchise is already listed in the SBA Franchise Directory. Even though there are a few more hoops to jump through than with other alternative lenders, SmartBiz is still one of the quickest ways for a franchisee to get an SBA loan.
Your first option is to change your business model to demand fewer needs as listed above. For example, if you were planning on starting a company as a consultant or freelancer, you could reduce your “employee” expenses by being the sole employee at the start. Unless you need office space, you can work from home. You can even do your homework to find cheaper sources of supplies, or cut out entire product lines that are too expensive to produce at the outset.

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