The Benefits of Franchise Financing

Franchise financing can help you secure the business of your choice and allow you to follow your dream. Finding a good franchise is one of the best investments that you could possibly make. Some people get hung up on the money and need to consider franchise financing. Here are a few things to consider when thinking about financing your first franchise.

Increased Options

The money that you have been saving might not be enough to buy every franchise out there. You may be able to afford some of the less expensive, new franchises. The problem with that is, hundreds of new franchises spring up all the time. Only a fraction of those actually go on to become successful name brand franchises. For every successful McDonald's out there, hundreds of restaurants that did not work out.

Established and reputable brands cost more. However, the rewards that you will reap from joining will be well worth it. Franchise financing allows you to get a much better franchise than you normally could afford with savings. It is better to pay a little more and get a franchise that you know will work out. 

In-House Financing

Many franchises offer in-house financing or can direct you to the proper channels to get it. This can be a huge advantage over traditional financing avenues. When you go through traditional lenders, you are forced to sell your vision of the new business to them. Many times that will require you to come up with a business plan and convince someone across the desk from you that this plan will work.

Franchises, on the other hand, have most of this taken care of for you. They already have shown the lenders that the business plan works and you can count on it again. Even if you have to get outside financing, the franchise should have a successful business plan that you can demonstrate.

Different Criteria

The unique thing about a commercial loan is that the lender reviews the security and stability of a business more than they analyze your personal financial picture. When you look for a mortgage for your house, the only thing the lender is concerned about is your credit score or the ability to pay back the mortgage.

With small business financing, they want to know all about the business. If they think the franchise will be successful, they will be much more likely to give you the money you need. 

Franchise Help

When you secure franchise loans, you are not simply going off of your good name. The franchise itself has a stake in your success. The last thing that the franchise wants is to see one of their franchisees struggling. When franchises close down it reflects negatively on the franchise itself. Therefore, your franchise will do everything in their power to help you succeed once you secure financing because you have a shared, common interest of success.