You may have dreamed of being a business owner and while skimming the internet or franchise directories just because you ended up finding a franchise for sale that is exactly what you want. However, you cannot call the franchisor because you know you do not have the financing available in your bank accounts or other assets.
Your train of thought remains the same: if you had a franchise, you could make the money you need in order to buy the franchise.
The problem is how do you get that money in the first place?
For many, it may feel like buying a franchise for sale is impossible because of their financial situation. However, the marketplace is full of incentives, grants, and financial programs in order to help new franchisees hit the market and create a stronger economy. If you’re not sure how you can come to own that franchise for sale that you want, consider looking into some of the following:
Create a Business Plan
In order to find the financing you need to buy a franchise for sale, you’re going to have to legitimately build a business plan. You are going to want to be as thorough as possible in creating this business plan because it will be one of the documents you use to obtain financial support.
In many cases for grants and financial handouts, the money-giver will want to see the thought you have put into the franchise for sale in order to insure that you know what you’re doing and to prove that you going to buy a franchise. You can seek outside help to build a stronger business plan. There are professionals, business guides, and software that can help you along the way.
Check if the Franchisor Finances
Check with the franchisor that you’re interested in to see if they offer any form of franchise financing. Many do, but many also don’t. You should never pick a franchise for sale solely on whether the franchisor offers to finance of any kind.
Even if they say they do not offer to finance, ask if they have any resources for financial support as many franchisors will have resources for different grants, loans, and other financial support opportunities. When a franchisor finds a franchisee they like, they want to see that individual succeed.
Research Sources of Financing
Whether you get a list from the franchisor you’re interested in or not, you should do as much research as possible on the options that exist for you. When you’re looking at financial options for the franchise for sale, keep in mind just what you’re willing to do and how much risk it is going to be depending on the amount of money you need. Some options that exist include:
- Bank Loans
- Borrowing from Friends or Relatives
- Demographic-Related Grants
- Finance Companies
- Financial Support Associations for Franchising
- Home Mortgages
- Industry-Related Grants
- Investors or Angel Investors
- SBA Loans
- Veteran Loans
If you are thinking of borrowing money from someone you know, consider the risk that comes with that. Consider that they may want some ownership of the franchise for sale that you found, they may want to make decisions with you, or they may get angry if you use their money and you do not successfully open your franchise.
Because buying a franchise is such a big deal, make sure you have a support system in place for your mental, physical, and emotional needs. Opening a franchise is great, but it can also be very stressful and you will need the support of someone dear to you.