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!!!!!!!!
If you do decide you’re going to need space, consider the number of employees you’re going to need and the equipment that will fill the space—chairs, photocopying machines, a fridge, a coffee machine, a reception area, a meeting room, and so on. Furthermore, how quickly do you expect to grow? If rapid growth is in the books, rent a space where there is room for growth and so that you don’t have to change your business address.
A well-thought-out business plan can make the difference between having your loan application accepted or rejected. A complete business plan should always include an intimate, technical study of the business you plan to go into; accurate pro formas, projections and cost analyses; estimates of working capital; an indication of your "people skills"; and a suitable marketing plan. It should also include certified statements of your net worth and several credit references.
You can get an approval decision right after you submit your franchise financing application. Our automated decision-making technology will review your application, and we will let you know if you qualify immediately thereafter. There is no need to waste time gathering up a bunch of your financial statements and copies of your tax returns. You will be happy to know that we look at all credit scores. In addition, you have a limited credit history and still be can a good candidate.
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:
Drew entered the world of academia after a highly successful business career. He spent 17 years with Johnson & Johnson in marketing, mergers and acquisitions, and international development. Before Johnson & Johnson, Drew worked with United Airlines, in sales, marketing, and strategic planning. He was one of the early pioneers of strategic partnerships between airline carriers that led to the creation of the Star Alliance.
Many new franchisees will need to find financing in order to fund the startup costs of their business. Franchise financing options can include ROBS, SBA loans, crowdfunding, home equity lines of credit, and even raising money from friends and family. We’ll cover these options in more detail, but first let’s take a look at the summary of each option in the table below.
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.
Personal Assets – Getting a traditional loan for a franchise can be difficult. The more personal resources you can bring to the table, such as retirement funds and personal savings, the easier it will be to buy a franchise. If you’re planning to get a bank loan or an SBA loan, then you at a minimum need a 10-20% down payment and some collateral (if the franchise involves the purchase of real estate, that can be used as collateral).
If you start your company with co-founders, you should agree early on about the details of your business relationship. Not doing so can potentially cause significant legal problems down the road (a good example of this is the infamous Zuckerberg/Winklevoss Facebook litigation). In a way, think of the founder agreement as a form of “pre-nuptial agreement.” Here are the key deal terms your written founder agreement needs to address:
One type of financing you'll want to think twice about is a home equity loan. While you'll be personally responsible for repaying any loan your business takes out if you are a sole proprietor or a co-signer, a home equity loan carries a level of risk that unsecured debt doesn't. Your credit could be hurt if your business doesn't repay money you borrowed, but your house isn't at risk in most circumstances unless you've taken a home equity loan.
Starting any business has a price, so you need to determine how you're going to cover those costs. Do you have the means to fund your startup, or will you need to borrow money? If you're planning to leave your current job to focus on your business, do you have some money put away to support yourself until you start making a profit? Find out how much you're going to need.
Think about your daily routine, you might stop at a coffee shop in the morning, perhaps you workout at the gym in the afternoon or go for dinner with friends in the evening. Every place that you visit, and every business you connect with during that day, exists because of an idea and an entrepreneur. Whether that entrepreneur comes from a family of business owners, or is starting out on their own with no previous experience, running their business requires a set of key skills. But what are the skills you need and how do you acquire them?
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.
For-profit lenders are reluctant to issue loans to anyone who does not have a strong credit report and financial history. That is not the case with government small business loans. Obviously, a decent credit report is important, and you will have to follow the guidelines regarding the repayment period and the interest rate set by the government, but usually the interest rates charged by government loans are lower than those you could expect in the private sector.