15 Tips for Franchise Financing

Franchises are an integral part of U.S. business, they exist around every corner, providing goods and services in the most consistent manner possible. As an existing or budding entrepreneur the benefits are extremely valuable, providing you with a proven template for potential success. However, before you create the next Dunkin Donuts, SuperCuts, or Hampton Hotels, you need to acquire financing to help you do so.  Pelagic Capital has worked with franchisees for decades and understands the ins and outs of getting your franchise on its’ feet. We think these tips pulled from an article in the Entrepreneur were 15 of the best tips for franchise financing.

 

  1. Talk to your franchisor before searching for outside financing; get approved or pre-qualified.

  2. The most common source of start-up capital is friends and family. Use them.

  3. Seek out lenders that understand not just small business but franchising as well.

  4. Be totally honest and upfront with lenders. Hide nothing. Be prepared to explain everything.

  5. Neatness counts. Fill out your credit and loan applications clearly. Typed is better.

  6. Don’t weigh down your loan application with attached documents.

  7. Don’t exhaust your liquidity by paying off outstanding debts before filing a loan application. Lenders want you to have capital available.

  8. If you lack liquidity, find a partner with money.

  9. Consider equipment leasing to conserve start-up capital and improve the appearance of your balance sheet.

  10. Keep debts and expenses to a minimum. Many business owners take on too much debt, forgetting that cash flow must pay that debt.

  11. Consider buying used equipment, furniture, vehicles, etc.

  12. Let your fingers do the walking on the Internet before wasting time, energy, gas and phone calls. You’ll find useful information. Some sites even allow you to file loan applications online.

  13. Don’t overlook angel investors and venture capitalists.

  14. Avoid dipping into your retirement money or your kids’ college funds. Any startup-even a franchise-is a risk.

  15. Don’t give up.

 

We hope this article was informative and gave you some of the best tips for franchise financing.

Whether your needs include replacing equipment, upgrading equipment, or acquiring new equipment for growth, Pelagic Capital Corporation is here to help with all of your equipment financing and leasing needs. Having prior funded hundreds of millions of dollars of equipment we understand the ins and outs of getting you funded.

Call or email today (203)956-4873 or info@pelagiccapitalcorp.com

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