Orange County Franchise Financing Company
Best Franchise Loan Programs Available By Peach Capital Funding
Learn about franchise financing and how you can get approved for financing your new franchise business you plan to buy. Peach Capital Funding is here to help you with deciding on how you will get financing and the best way to go about applying for franchise financing to ensure you get the best financing program available to get your franchise business started.
You have done the leg work and know a franchise is the way you want to get into business, but before you commit, answer this question. Where will you get the money to finance the franchise, royalty fees, inventory and working capital?
The first step before going to a lender is to determine what your net worth is so you can have this number to provide along with proof as well. To do this, use a balance sheet to list your assets. Under assets, cash on hand, checking accounts, savings accounts, real estate, automobiles, bonds, securities, insurance cash values and other assets, then add them up for your assets amount.
The second part of the balance sheet is liabilities. List your bills, your home mortgage, auto loans, finance company loans and so on. Once you’ve done this sheet, get your credit rating. There are key things that all potential lenders look for in a credit rating: stability, income and on time payments.
Most lenders are interested in how long you’ve been at a job or lived in the same location. If your past record doesn’t show a history of stability, then be prepared with good explanations on why to prove you can take on this risk.
The Business Plan
After you’ve gotten your net worth and your credit rating, the final step to take before approaching lenders is putting together your business plan. This part will be key in proving stability and growth/security of them investing or lending to you.
A well written and put together business plan can make the difference between having your loan application accepted or rejected. A complete business plan should always include a technical study of the business you plan to go into, accurate projections and costs, estimates of working capital and an indication of your “people skills” and a sustainable marketing plan.
Sources of Financing
Most franchise owners have utilized these type of loans but at Peach Capital Funding we have many loan programs that can help you acquire the funding you need, SBA loans and equipment financing.
Banks that aren’t willing to work with you based on your financial profile become more open if you suggest working with an SBA loan; these loans are guaranteed up to 90 percent by the SBA. This program is harder to qualify for but may be your best option as long as you can provide all proper documentation they require to provide you with an SBA loan to receive your franchise financing.
Tips to Consider
There are a lot of sources available for franchise financing to help you launch the franchise of your dreams. Operating a franchise with no reserves and walking into a new business blind to unexpected business problems can lead to a financial mess and ruin your credit and much more.
A good rule to remember: Never invest more than 75 percent of your cash reserves. Keep in mind that the price of a franchise doesn’t always reflect the actual cost of the business. Additional costs can include down payments on the building, equipment, fixtures and signs, and can cover inventory, training, marketing costs, administrative costs and even sales commissions if this is part of your franchise business.
Franchise Financing Tips
1. Find lenders that know and understand not just small business but franchising a business as well.
2. Be honest and upfront with lenders. Be prepared to explain everything related to the business in detail.
3. Fill out your credit and loan applications clearly.
4. Don’t spend to much and ruin your liquidity by paying off outstanding debts before filing a loan application.
5. Consider equipment leasing to save start-up capital and improve the appearance of your overall balance sheet.
6. Find and buy used equipment, furniture, vehicles and anything you need at discounted pricing.
Let Peach Capital Funding help you get the right franchise financing and help you receive the funding you need to start your franchise. We are here to provide you with franchise financing options and help you get approved for the right loan to fund your new business.