19 Feb Financing Your Custom Closets Franchise
Many people who want to own their own business choose to take the franchising route. Franchising is a popular and effective way to be your own boss while reaping the benefits of operating under an established business model that has been tried and tested.
Once you’ve chosen the right franchise for you, it’s time to find the money to make it happen. Do you know how to find financing for your franchise? Don’t worry, we’re here to help you know more about how to finance your franchise and make your dreams of business ownership a reality.
Understand Your Investment Details Early
Investing in a franchise is a great way to save time and effort by not having to build a business from scratch. However, it can require a fair amount of capital to get things going. This is why it is important to do your research and have a clear understanding of your investment details before you start.
Many companies require potential franchisees to have a certain net worth before they will even begin the process of bringing someone on board. This is for the benefit of the franchisee as well as the company. It helps to ensure that you have the money to handle the responsibilities of owning your own business while letting the company know that its brand is in good hands.
Of course, franchisors also understand that this can be a lot of money to invest at once. That’s why there are plenty of financing options available for those willing to look. Here are a couple of the most popular franchise financing options and how you can get started.
See If SBA Loans Are Right for You
There are many financing options available for franchisees looking to get started. Among these, one of the most popular is an SBA loan. What is an SBA loan? These are loans guaranteed by the Small Business Administration and designed specifically for business owners.
You can use an SBA loan to pay for all sorts of things for your business. These expenses can range from improving your working capital to purchasing real estate or new equipment for your business. With competitive interest rates and terms that can go up to 25 years, it’s no surprise that SBA loans are so popular. Of course, this is also a reason why it can be difficult to qualify for an SBA loan. Having a trusted franchisor in your corner can go a long way when it comes to approval.
The SBA Franchise Directory is a list compiled by the Small Business Administration that is used by lenders and certified development companies (CDCs) to better evaluate the eligibility of a business for a loan. The best franchisors are pre-approved by the SBA Franchise Directory to help streamline the lending process and make approval for franchisees simpler and more straightforward. Of course, this is not a guarantee for approval, but it helps. Closets by Design is pre-approved by the SBA Franchise Directory for the benefit of its franchisees.
Consider a Commercial Bank Loan
However, SBA loans are not the only game in town when it comes to financing your franchise. Beyond the Small Business Administration, there are also commercial bank loans to consider. Commercial banks provide financing for franchises all the time, and they may be a good option for your business.
As with any loan, there are things to consider before you apply. Chief among these will be your credit score and the source of your down payment. You can expect to provide a 10 to 20 percent down payment on any loan you plan to take from a commercial bank.
Find More Info About Franchise Financing
This is by no means a complete list of your options for franchise financing, but it should help you get started. The best way to learn about your available avenues for franchise financing is to speak directly with your franchisor. Get more information about how you can start your custom closets franchise with Closets by Design today.