Small Business Loans For Franchisees
If you’re planning to start a franchise, one of the first things you’ll need to consider is how you’re going to finance startup and operating costs. Numerous funding options exist, each with significantly different terms. Choosing the right small business loans for franchise for your needs is critical to the success of your business.
Can you finance a franchise?
Traditional term loans from commercial banks are a common way to obtain funding to open a franchise. These lenders typically review your credit history and business plan to assess your creditworthiness. The stronger your financial history and higher your credit score, the better the terms and interest rate of your loan will be.
Lastly, many people turn to friends and family for financial assistance when starting a franchise. While this is a viable option, it can often come at a cost—especially if there’s a disagreement between the borrower and lender over repayment terms.
Franchisors can also offer their own financing programs to new franchisees. These may include waived or reduced franchise fees and royalties for qualified borrowers, as well as lender recommendations and assistance with the loan application process. These options are worth considering, but you should always compare the franchisor’s offer with those of outside lenders to ensure you’re getting the best deal.