The support is there if you know where to find it
Once you’ve decided on the industry and franchise for you, there are many financing options available that will allow you to get your business up and running in no time.
You’re excited and ready to start your franchise, but you need to provide the initial investment to acquire all the collateral needed to set up your business.
Most entrepreneurs don’t have this cash lying around, so you needn’t fret, there are a range of financing options available to you, so you don’t have to go at it alone.
Taking out a loan
One of the oldest and most commonly utilised options for entrepreneurs starting a business is to take out a business loan from the bank. There are many options available to investors in terms of business loans and the big banks provide competitive options so you can find the right loan terms for you.
While many new investors are sceptical their loan will be approved, in recent years, the big banks are more inclined to approve the loans of franchisees as franchises have a higher rate of success, with 9 out of 10 franchises becoming profitable.
It’s important when you make your loan application that you demonstrate ‘three imperative points’. According to Domini Stuart, expert on financing a franchise they are:
1. Demonstrating that you’re able to competently run the business profitably
You can do this by showing a well thought out business plan with relevant information from your franchise as to its business model and success rates.
2. Showing your projected cash flow and how it will cover your expenses
This is best done in using information from the franchise and any relevant market research. Remember the more specific you are, the more likely you are to be approved.
3. Providing sufficient collateral to back up the loan
If you can commit enough of your own estate to the loan then the banks are more likely to support your venture, as they won’t be at such a loss if the franchise fails. Remember with the success rates of franchises in the UK so high, this is an unlikely result.
So that you choose the correct loan agreement for you, check out an extensive comparison here.
Work with the UK government
For the past few years, the UK government has been pushing to stimulate the economy by encouraging the population to invest in entrepreneurial pursuits by starting a business. Resources such as the Business Finance Support Finder are excellent ways to find any government grants or financing options that you may be eligible for to start your business. Additionally, you may benefit from consulting the British Private Equity & Venture Capital Association for other available grants or assistance plans.
Invest with a partner
Whether you’re applying for a business loan, a grant or simply using your own savings to fund your franchise, working with a partner can be a great way to spread the financial burden and managerial responsibilities. You’ll be more likely to receive a loan or a grant as you can provide more collateral and make a more convincing proposal, plus working with a partner provides you with an additional support network to ensure your ventures are successful.
There’s always a way
While you may choose to finance your franchise with your own savings, it is important to remember that there are an array of financing options available to you from business loans to government grants. However you choose to finance your franchise, you’ll enjoy the full support of the franchisors and Reed Commercial. You can search a range of franchises and filter the options to suit your budget with Reed Commercial now.Tags: business, investing