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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]
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.

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.


Ideally, your Instagram profile picture should be an image of your logo and be the same one displayed on your website and other social media platforms. For the mobile app, your profile picture should be a minimum of 110 pixels width x 110 pixels height. Your picture will be shown in a circle, so your logo has to be clear when cropped. Have a look at how Deputy’s logo is clearly displayed on our Instagram account.
Although you’ll often need to make a specific financial commitment and meet certain regulations to open a franchise, there’s a lot you get in return. You’ll get the built-in name recognition that brings customers in, as well as guidance on everything from hiring to keeping local regulators happy. Before you get started, there are a few important things to know.
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.
2. You can do it because there is a business appropriate for just about everyone’s interests, experience, passions or expertise. “Starting a business” really only comes down to figuring out your business idea, doing your paperwork, and sorting out the money. Given the number of funding resources available today, you shouldn’t have too much of a problem getting that initial startup cash, especially if you focus on a lean business model or MVP route to market.
Ideally, your Instagram profile picture should be an image of your logo and be the same one displayed on your website and other social media platforms. For the mobile app, your profile picture should be a minimum of 110 pixels width x 110 pixels height. Your picture will be shown in a circle, so your logo has to be clear when cropped. Have a look at how Deputy’s logo is clearly displayed on our Instagram account.

Startups should also understand that the venture process can be very time consuming—just getting a meeting with a principal of a VC firm can take weeks; followed up with more meetings and conversations; followed by a presentation to all of the partners of the venture capital fund; followed by the issuance and negotiation of a term sheet, with continued due diligence; and finally the drafting and negotiation by lawyers on both sides of numerous legal documents to evidence the investment.
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.
A ROBS isn’t a loan, so there’s no debt or interest to pay back. This lets ROBS-financed franchises conserve more of their income, and as a result, they may be more successful in the long run. You do have to pay monthly administration fees when you do a ROBS, but compared to a loan the monthly fees are about 11x cheaper! This sets you up for a greater chance at long-term success than other financing methods.

There are a few companies that specialize in helping franchise businesses find funding, usually by matching franchisees with financing options. Considering the overwhelming options for franchising and the intimidating array of options for financing your endeavor, referring to or working with one of these matchmaker-advisers can be a good idea, especially for those who don’t have a clear idea of what type of franchise they are most interested in.
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.

Franchise equipment leasing allows the franchisee to attain needed equipment and machinery to operate the franchise, without paying the full upfront costs. Once the franchise identifies a piece of equipment its looking to obtain, they will apply through a leasing company to purchase the equipment for the small business, and then the leasing company will provide a lease of the equipment for up to 10 years.
Spend the next week working on your pitch, your business plan, and on researching your financing options. Remember that your business plan isn’t set in stone. It should remain a “live” document as you progress and as you grow. Don’t stress about it, just use this week to focus your thoughts and bring everything you thought about and learned in week one together.

Bank loan: You’ll need excellent business and personal credit to qualify for an SBA-backed bank loan. The U.S. Small Business Administration provides general small-business loans through banks with its 7(a) loan program. According to NerdWallet, the average SBA loan size is $371,000, although amounts can vary between $5,000 and $5 million. To qualify, you’ll need to provide:


Richard D. Harroch is a Managing Director and Global Head of M&A at VantagePoint Capital Partners, a large venture capital fund in the San Francisco area. His focus is on Internet, digital media, and software companies, and he was the founder of several Internet companies. His articles have appeared online in Forbes, Fortune, MSN, Yahoo, FoxBusiness, and AllBusiness.com. Richard is the author of several books on startups and, co-author of Poker for Dummies and Mergers and Acquisitions of Privately Held Companies (Bloomberg), and a Wall Street Journal-bestselling book on small business. He was also a corporate and M&A partner at the law firm of Orrick, Herrington & Sutcliffe, with experience in startups, mergers and acquisitions, and venture capital. He has been involved in over 200 M&A transactions and 250 startup financings. He can be reached through LinkedIn.

Startups requiring a lot more funding up front may want to consider an investor. Investors usually provide several million dollars or more to a fledgling company, with the expectation that the backers will have a hands-on role in running your business. Alternatively, you could launch an equity crowdfunding campaign to raise smaller amounts of money from multiple backers.


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.

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.
Start by learning about various franchise shops and restaurants in your preferred specialty. If you’re a fan of Panera Bread, for instance, go to the company’s franchise Information page and read up on the opportunity. If you need inspiration, Franchise.com keeps a running list of franchise opportunities, complete with a monthly featured franchise.

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.
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.

Some things we like about StreetShares include its excellent customer service, easy application, competitive rates, and speedy time-to-funding. You don’t even need to put up any business collateral for a StreetShares loan (though you will need a business guarantor who is willing to essentially “co-sign” your loan). Another thing that makes StreetShares special is that franchise owners who are also veterans and/or who have an interesting business backstory are preferred. See our StreetShares review to learn more about this alternative lending leader.


If you own a home, and have 20-30% equity in it, then you may be able to get a home equity line of credit (HELOC) with a low interest rate. These funds are great to start a business, and can be used for any of your startup fees, including your franchise fees. With a HELOC you can get access to a lump sum immediately and draw against the total as you need it. Like a normal business line of credit, you only pay interest on what you’re using.

Starting a business entails understanding and dealing with many issues—legal, financing, sales and marketing, intellectual property protection, liability protection, human resources, and more. But interest in entrepreneurship is at an all-time high. And there have been spectacular success stories of early stage startups growing to be multi-billion-dollar companies, such as Uber, Facebook, WhatsApp, Airbnb, and many others.
One basic way to protect proprietary company information is through the use of a Confidentiality and Invention Assignment Agreement. This type of agreement deals with confidentiality issues, but can also ensure that the ideas, work product, and inventions the employee creates that are related to company business belong to the company—not the employee.
Business financing options other than traditional loans or lines of credit include personal loans for business or business credit cards. A personal loan for business is a good option if your business is still young and you don’t qualify for traditional financing. Personal-loan providers look at your personal credit score and income instead of your business history.
Accounts receivable financing. An accounts receivable line of credit is a credit facility secured by the company’s accounts receivable (AR). The AR line allows you to get cash immediately depending on the level of your accounts receivable, and the interest rate is variable. The AR line is paid down as the accounts receivable are paid by your customers.
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.
A lender is primarily concerned about the ability of the borrower to repay the loan. To the extent that a security interest can be given to the lender on company assets (company equipment, property, accounts receivable, etc.), the borrower should be able to increase its chances of getting a loan on favorable terms. Some lenders may insist upon the personal guarantee of the principal owner of the business. That is best avoided if possible as it puts the owner’s personal assets, and not just the business assets, at risk.
ApplePie currently has partnerships with 42 franchises, such as 7 Eleven, Dunkin’ Donuts, Jimmy John’s Pizza, and Wetzel’s Pretzels. Other franchise brands can get loans through ApplePie, though the process might take a little longer. ApplePie offers loans for both new and existing franchises, including franchise startup loans, loans to purchase an existing franchise, franchise equipment loans, franchise refinancing loans, and more.

There are several loan programs aimed at helping first-time entrepreneurs set up their business. The Small Business Administration (SBA) operates the loan programs offered by the U.S. government. To qualify for the loan, your business must meet some criteria such as your business must operate in the United States, your business must qualify as a small business according to SBA guidelines, you must operate for profit and you should have a good credit score.
StreetShares (see our review) is a P2P lending service that brings together business owners and investors. StreetShares is especially geared toward veteran-owned businesses. Indeed, owning a franchise can be a good transition for veterans transitioning to civilian life. However, even if you’re not a veteran, you can still use this innovative loans marketplace to get an unsecured short-term business loan or line of credit of up to $100,000. You will need to have been in business a year, or in some cases only 6 months, in order to qualify.

The challenge is even greater for franchise owners looking to open new locations. They must pay a “franchise fee” amounting to tens of thousands of dollars, and the aforementioned deductions begin as soon as the new location opens its doors. Combine these expenses with inevitabilities like new equipment or furniture and you can see why business loans are popular for franchises. Multiple large expenses can easily pile up at the same time, making it extremely difficult to raise profits or save money.


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.
You can arrange to borrow from ordinary commercial banks or credit unions for your new venture. According to the Small Business Administration (SBA), new franchise owners have a higher tendency to borrow from commercial banks than new business owners. Lenders prefer advancing cash to new franchises over other new businesses since they already have trust in the brand and business model of the business being funded.
Information and views are general in nature for your consideration and are not legal, tax, or investment advice. Wells Fargo makes no warranties as to accuracy or completeness of information, does not endorse any non-Wells Fargo companies, products, or services described here, and takes no liability for your use of this information. Information and suggestions regarding business risk management and safeguards do not necessarily represent Wells Fargo's business practices or experience. Please contact your own legal, tax, or financial advisors regarding your specific business needs before taking any action based upon this information.
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