After all, small-business loans can help you get from A to B, providing vital capital to jumpstart your business expansion. Yet these loans are also notoriously difficult to get; and, should anything go south with your business, you may lose the collateral you put up for the loan. What's more, to qualify for most bank loans, your company will need to have been in business for at least one to two years and meet annual revenue requirements -- to name just some of the criteria required.
If you own the business entirely by yourself and plan to be responsible for all debts and obligations, you can register for a sole proprietorship. Be warned that this route can directly affect your personal credit. Alternatively, a partnership, as its name implies, means that two or more people are held personally liable as business owners. You don't have to go it alone if you can find a business partner with complimentary skills to your own.

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 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.

With one or more of these three options, you should be able to reduce your personal financial investment to almost nothing. You may have to make some other sacrifices, such as starting small, accommodating partners or taking on debt, but if you believe in your business idea, none of these losses should stand in your way. Capital is a major hurdle to overcome, but make no mistake -- it can be overcome. 
If you identify areas of weakness, you’ll need to make a plan for dealing with them. If you don’t have a head for figures, perhaps you could partner with someone who does. Or you could hire an accountant, or improve your own skills by checking out some of our super-simple accounting tutorials or doing other training. If you’re no good at designing websites, hire someone to do it for you.

Reviewing the brands franchise disclosure document (FDD), speaking with existing franchisees and financial professionals, in conjunction with support from the franchisor, will help you formulate your business plan and build financial projections. Outlining your management and marketing skills, past successes and future goals by including resumes for yourself, planned partners and other employees will allow all parties involved, from the franchisor to lenders, to understand the strengths of the ownership and management team. Personal credit history and financial strength will also play an important role in opening a franchise business.
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.

Personal loans are widely available, but if you’re trying to borrow for a small business, you’ll find that the process is more difficult. If you’re thinking of borrowing to start or grow your business, get started and get organized long before you fill out an application. Lenders want to be sure that they’ll get repaid, which means they’re looking for several criteria:
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. 
Branding, services, promotions, products, pricing, prints, blogs, advertising, research and social media -- all of this is marketing. With all the marketing options out there, it can be difficult for small businesses to know what to do. Marketing is a concentrated effort to do push your brand across a variety of platforms and hope that enough makes it through to your customer. Customers need to hear your message several times, so brand, brand, brand! Here are some simple steps to help you market your small business:
Then, in What You Need to Know When You Run Your Business Out of Your Home and How to Set Up a Retirement Plan for You and Your Employees, we'll discuss some information that may be relevant to you now-- or that may become relevant once your business has become established. The final four lessons... What You Need to Know about Federal Taxes when Hiring Employees or Independent Contractors, How to Manage Payroll so You Withhold the Correct Amount from Employees, How to Make Tax Deposits and File a Return to Report Your Payroll Taxes. And Hiring People Who Live in the U.S. but Who Aren't U.S. Citizens, ....are for those employers who already have, or who are thinking about hiring, employees. Because this is a virtual workshop, you can choose the lessons that apply to you.
4. Set up and claim your business online. Whether you get on board or not, information about your business is and will be on the internet. Wouldn’t you rather proactively control what people read or see about your business when they Google it? Do a search on different browsers to see what information you see about your company and then claim or create a listing for your business.

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.

One way to minimize the risks of opening a business is to invest in a franchise concept, rather than starting a stand-alone business. Up to 80% of new businesses have failed after five years, while franchises offer support, proven business practices, and a recognizable brand name to draw sales. Owning a franchise provides a proven business model to follow, while still offering the the benefits of owning a your own business.  Banks like financing franchise startups for the reasons stated above.

If you are a person with no credit rating, you will need to establish one before you will be able to get a small business loan.  Basically, you establish a credit rating by buying things on credit and paying back the money you owe. Your loan repayment history plays a big part in establishing your credit rating, but all your "credit" dealings make up the history that's used to determine your credit rating.
For entrepreneurs interested in starting a business, a franchise can be a great way to begin at an advantage. You’ll have a recognizable name and the support that comes from being part of a larger organization, while still enjoying the independence of being in charge. With a little research on the front end, you can avoid unpleasant surprises and ensure you’re prepared.
Franchise businesses serve as the backbone of the restaurant and retail industry. A successful franchise often starts as a small local business that catches the eye of savvy investors. Starbucks, McDonald’s, Walmart and Whole Foods are just a few of the many corporations that started as small mom-and-pop operations and were later franchised into nationwide networks.
Whereas working for someone else alleviates these responsibilities, the startup owner takes on all these stresses themselves. Not only that, every country has different laws, regulations and requirements to get your business up and running. So, even if you’ve started a business in one country, you’ve still got to do a pile of research to make sure you do it properly in another.
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.

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.
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. 
If you prefer a little more guidance as you search out a franchise opportunity, consider hiring a consultant to locate the perfect opportunity. Consultants gather information on your financial situation and preferences and give you a few options that fit. However, make sure you’re working with a reputable franchise consultant. Ask questions about franchisees they’ve successfully helped and contact those franchisees as references.
If you need financial assistance, a commercial loan through a bank is a good starting point, although these are often difficult to secure. If you are unable to take out a bank loan, you can apply for a small business loan through the Small Business Administration (SBA) or an alternative lender. [See related story: Best Alternative Small Business Loans]
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.
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.
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, we may receive compensation from our partners for featured placement of their products or services. We may also receive compensation if you click on certain links posted on our site.
After speaking with several Brokers to help with our SBA loan, Karen was the only one who took her time and explained in full detail what our best options would be. The process was so easy, in less than 48 hours after submitting the application to the Bank we had a firm approval and we we’re ready to close on the loan in less than 10 days. I worked in the Mortgage Industry for 20 years and I’m VERY impressed with the service Karen provided us. This couldn’t have been any easier!!!!!!!!
Fundation (see our review) is another high-quality alternative lender that provides capital to franchise businesses. Fundation has some of the lowest rates and fees you can find outside of a bank or credit union, offering up to $500,000 deposited in your account within a couple weeks after applying. However, the borrower requirements are more stringent than those for other some online lenders, as you’ll need good credit, one year’s time in business, and at least three full-time employees.
If you've always wanted to start your own business but have been afraid of the financial risk involved, opening a franchise might be the perfect solution for you. With a franchise, you get all of the independence, responsibility, and potential profit associated with owning your own business. Unlike starting a business from scratch, a franchise comes with a proven business model and a well-known brand, reducing your risk of failure dramatically. Lenders are well aware of the benefits associated with opening and operating a franchise and are more willing to approve franchise loans than a standard small business loan for a start-up.
I usually don’t provide referrals, but in this particular case it is definitely warranted. Karen jumped through hoops with multiple alternatives until we came up with a solution that provided what we needed. At one time i thought we were at a dead end, but learned that Karen continued to pound away until the right solution surfaced. If you need someone to assist up front with your SBA loan, Karen is a perfect choice.

Whitney Johnson is a leading thinker on driving innovation via personal disruption and cofounder of Clayton Christensen's investment firm. She is a regular contributor for Harvard Business Review and LinkedIn, and the author of Disrupt Yourself, which Publisher's Weekly called "superb, savvy, wise." Whitney also speaks and consults with Fortune 100 Companies. Recently, her work was recognized by the Thinkers50, which named her as a finalist for the 2013 Future Thinker Award. You can find her at whitneyjohnson.com.

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.

“My credit is very strong and I owned my house outright. So when I realized the SBA loan would take too long, I decided to go to my personal bank and apply for a HELOC. The whole process took less than two weeks, the interest rates were great, and I never looked back. I was even allowed to use the HELOC for my franchise fee, which other financing wouldn’t allow.”

In some instances the franchise itself will extend financing to you. Some companies, like 7- Eleven, actually build the store for new franchisees and lease the location to you, meaning you incur minimal startup costs and the transaction is handled directly between you and the franchisor. Others, like Subway may buy back locations from existing franchisees and then sell them to you as a new location, meaning you'll be handed an established store, sometimes with existing employees and inventory.
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!

For these reasons, many franchise owners are turning to the alternative lending space for better financing options. Online lenders are generally more lenient in their borrower requirements and they also offer a much faster time to funding than traditional bank loans, often depositing funds in your account within a week of receiving your application.
If you have all of the answers above, and are still unsure of what to do then we suggest working with your franchisor to find the best option for your new business. This can be the best place to start when searching for franchise financing, because they’re very experienced with where other franchises like yours have gotten their financing from.The franchisor also has a vested interest in you being able to purchase the franchise and will often provide some kind of help.
Broadly, there are two types of loans: secured and unsecured. There are dozens of types of loans depending on their nature, purpose, applicability, loan amount, interest and terms but they can all be classified as either secured or unsecured. Secured loans require collateral. It is a tangible asset that acts as the security. Unsecured loans don’t need such collateral or any security.
There are some apps that help to enhance your business on Instagram. One such app is liketoknow.it. This fashion app lets social media influencers tag their Instagram photos with the items in the picture as well as a link to a retail partner of liketoknow.it. If a follower buys an item through the link, both liketoknow.it and the influencer get a part of the profit. This app helps to introduces Instagram users to new items as well as allows influencers to be paid for their work.

If you have all of the answers above, and are still unsure of what to do then we suggest working with your franchisor to find the best option for your new business. This can be the best place to start when searching for franchise financing, because they’re very experienced with where other franchises like yours have gotten their financing from.The franchisor also has a vested interest in you being able to purchase the franchise and will often provide some kind of help.
Whitney Johnson is a leading thinker on driving innovation via personal disruption and cofounder of Clayton Christensen's investment firm. She is a regular contributor for Harvard Business Review and LinkedIn, and the author of Disrupt Yourself, which Publisher's Weekly called "superb, savvy, wise." Whitney also speaks and consults with Fortune 100 Companies. Recently, her work was recognized by the Thinkers50, which named her as a finalist for the 2013 Future Thinker Award. You can find her at whitneyjohnson.com.
Your answer needs to be more detailed than simply “I don’t have any money.” What specifically will you be using the loan for? Start up? Day-to-day management? As a safety net? To answer this question, you will need to spend a lot of time figuring out your budget along with the amount of money that you realistically can put up as capital. Take your time with this step since it will have a big impact on whether or not you actually get a loan that can cover your expenses.
Depending on the size of your loan, your financial statements and accounting records will be reviewed carefully by the lender. So make sure they are complete, correct, and thorough—including balance sheet, income and loss statements, and cash flow statements. The lender will analyze your cash flow, gross margin, debt-to-equity ratio, accounts payable, accounts receivable, EBITDA, and more, so be prepared to answer questions on those topics. Consider having your accountant look over your financial statements to anticipate issues a lender may raise.
×