Most franchisees need to fund their purchases beyond their available cash. Here are a host of financial resources and options for funding for a franchise. At Franchise MatchMakers, we can refer you to financial experts who are experienced in helping people set up new franchise businesses with the appropriate franchise funds.
Funding for a franchise options include:
SBA loans are backed by the Small Business Association. SBA partners with lending banks to help increase small business access to loans. There are several types of SBA loans: 7(a) loans, 504 loans, microloans and SBA Express loans. Franchise MatchMakers has existing relationships with financial organizations that can help you set up the right type of franchise loans.
A loan for a franchise business can utilize the equity in your home. Many franchisees use the equity in their homes to obtain a Home Equity Loan or a Home Equity Line of Credit (HELOC).
Another source for a business loan for a franchise startup is your local bank or online resource to help finance your purchase. Be sure to determine if interest rates are variable or fixed.
Secured loans require you have some collateral, which puts your assets at risk should you be unable to meet payment obligations. Unsecured loans do not require collateral. Be sure to understand these terms of any franchise loans you take out.
An intriguing way of funding for a franchise is to access your existing 401(k) funds. This can be done without withdrawing the funds and therefore avoiding any interest or penalty payments. The IRS has issued specific rules to qualify and set up a ROBS (Rollovers as Business Startups). It has some interesting income deferral advantages that you might find useful. Check with a reliable ROBS funding source that Franchise MatchMakers can recommend.
