People who are contemplating to start a franchise business often start by looking at track records of existing ones to gauge which have been around for a while and are thus believed to be operationally sustainable. Although this is a key step in choosing a franchise business, it should not be the first one.
In today's economic climate, it's more important to get your financial strategy down first before looking through available franchises. If you're not sure about how to get funding for such a venture, the following options may be helpful.
The Patriot Express
The Patriot Express is a lending program administered by the Small Business Administration or SBA. The program is geared towards:
- Retiring military personnel
- Military veterans
- Members of the National Guard
- Military spouses
Borrowers may take out loans of up to $500,000 under this program. The SBA doesn't offer this loan itself, but instead guarantees 75-85% of it for other lenders. This means banks and moneylenders carry much less risk when giving out such loans, which in turn means it's relatively easier to get the loan. In addition, the credit score requirement is not very high.
Interest rates under this program are also quite low. For loans that take seven years or less to pay, the maximum interest rate is 2.25%. For longer-term loans, the highest rate is only 2.75%.
A detailed explanation of eligibility criteria set by the SBA can be found on their website but these typically include:
- The size of the business
- How the money will be used
- Type of business
- Alternate funding sources
The VetFran
The Veterans Transition Franchise Initiative or VetFran was initiated by the International Franchise Association (IFA) to help military veterans. The IFA partners with more than 350 franchise corporations and encourages veterans to go into franchising by extending financial incentives. The program itself does not offer funding, but the IFA's franchise partners do provide financing or help applicants choose the right lending program.
Franchise Funding Specialists
Finance professionals specializing in franchises can help develop a financial plan for your prospective franchise. You only need to provide them with information about yourself and your plans, and they will do all the work.
Consulting franchise funding specialists is advantageous because they are well-versed in the ins and outs of franchising. They have a wide network with which they have cultivated relationships so your applications will go along much more quickly and smoothly.
It is also wise to use the help of specialists because you do not actually have to pay them until you receive the loan that they helped you secure. Even before that, they can already assist you with fund sourcing and getting a grip of the figures that you will be working with.
In today's economic climate, it's more important to get your financial strategy down first before looking through available franchises. If you're not sure about how to get funding for such a venture, the following options may be helpful.
The Patriot Express
The Patriot Express is a lending program administered by the Small Business Administration or SBA. The program is geared towards:
- Retiring military personnel
- Military veterans
- Members of the National Guard
- Military spouses
Borrowers may take out loans of up to $500,000 under this program. The SBA doesn't offer this loan itself, but instead guarantees 75-85% of it for other lenders. This means banks and moneylenders carry much less risk when giving out such loans, which in turn means it's relatively easier to get the loan. In addition, the credit score requirement is not very high.
Interest rates under this program are also quite low. For loans that take seven years or less to pay, the maximum interest rate is 2.25%. For longer-term loans, the highest rate is only 2.75%.
A detailed explanation of eligibility criteria set by the SBA can be found on their website but these typically include:
- The size of the business
- How the money will be used
- Type of business
- Alternate funding sources
The VetFran
The Veterans Transition Franchise Initiative or VetFran was initiated by the International Franchise Association (IFA) to help military veterans. The IFA partners with more than 350 franchise corporations and encourages veterans to go into franchising by extending financial incentives. The program itself does not offer funding, but the IFA's franchise partners do provide financing or help applicants choose the right lending program.
Franchise Funding Specialists
Finance professionals specializing in franchises can help develop a financial plan for your prospective franchise. You only need to provide them with information about yourself and your plans, and they will do all the work.
Consulting franchise funding specialists is advantageous because they are well-versed in the ins and outs of franchising. They have a wide network with which they have cultivated relationships so your applications will go along much more quickly and smoothly.
It is also wise to use the help of specialists because you do not actually have to pay them until you receive the loan that they helped you secure. Even before that, they can already assist you with fund sourcing and getting a grip of the figures that you will be working with.
About the Author:
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