Buying a franchise is definitely not a cheap endeavor. However, it shouldn’t be impossible for anyone who wants to take control of their financial future. What’s cost today is actually an investment in a better, more stable future for your family. With that said, if you’re looking to buy a franchise for sale, consider these financing tips to help get you started and well on your way.
1. Talk to the Franchisor
A lot of big franchisors may also offer financing options for prospects they want. If you find a franchise for sale that does not list financing options, consider contacting them anyways to ask if they have any resources. Many franchisors will know just where to send the prospects they want. Even if they don’t, it’s a good place to start.
2. Family and Friends are Common Resources
You may be surprised to hear that one of the most common sources for franchising finances isn’t private lenders, but actually family and friends. If you’re looking at a franchise for sale, talk to the friends and family you trust. If you decide to borrow from friends and family, be prepared for the relationship dynamics to change, especially if you do not pay them back when they expect it.
3. Be Honest. Be Prepared
Whether you’re going to the franchisor, family and friends, or a private loan company, be prepared to be honest about your intentions. Also be prepared to answer questions about your intentions, why this franchise for sale, and how much of the cost will you be able to cover, if any. Lying will not help anyone and buying a franchise for sale is definitely not something you want to do with insufficient funds as it more or less can ensure the failure of your startup.
4. Don’t Exhaust Your Liquid Assets
If you currently have any credit lines, consider paying off some of them if possible before you apply to lenders. Lenders want to see the applicants have capital available on their accounts. This betters your chances of getting financing to help you buy the franchise for sale. If you do not have any liquid assets or credit lines, it’s highly suggested that you find a business partner who does.
5. Consider Buying Used Equipment or Renting Furniture
After you’ve bought the franchise for sale and you’re building the facilities, consider purchasing second hand equipment if it meets your franchisor’s regulations. This can help save on capital a lot. Only do this if the furniture meets franchisor-set regulations and is in good working condition. You do not want to look cheap, broken, or have damaged equipment if it’s necessary to do your job.
6. Know Which Options to Try
If you have college funds for your kids or a retirement fund for yourself, try to avoid using it when possible. Many looking at a franchise for sale may dip into their retirement fund as a franchise is a future investment. You should only do this as a last resort. At the end of the day, buying a franchise for sale is still a risk so there is still the chance that the money may not return to you.
7. Don’t Give up
If you really want that franchise for sale, keep going after it. Research, exhaust your options, look for angel investors and venture capitalists. If you believe and you work for it, you will be able to buy a franchise and secure your future finances. Sometimes it’s just a little more work than what was originally assumed.