Where to Find Funds to Expand Your Franchise

You have been pretty successful as a business owner. Now, you want to expand beyond a single-unit and let your product/concept reach as many people as possible. All the machinery is in place and the only thing that is stopping you from rolling the engine is money! Make no mistake; franchising takes lots of money and you have to get at least some of it, before you actually start meeting potential franchisees. The money will be essential for developing your UFOC, franchise-agreement papers, registering your trademark, researching the market and lastly, advertising for potential franchisees. The next question is where to get all the money from. Getting from one’s own business is possible, if one has a good working capital. Existing business can be used to finance the franchising business, but make sure that you keep enough funds for the parent company aside.

Another way of getting money is to open a company-owned unit first. It will not only help you to gain experience of working with more than one unit, but also can be the flagship store for your franchising business. The company-owned unit can also be an additional source of income. The next way is to get money from investors. For that, you have to get your financial papers in perfect shape. The company is supposed to make enough profit in the last few years prior to the opening of franchising business. The product or concept too should have a bright future. Getting public fund is another option, if you have a major franchising plan for future. Also, you should boast of a well-recognized brand name. It will help you to get money from the market. An SBA loan is another good option, but very few people know about it. Everyone thinks that SBA loan is only for people starting a small business. But actually, it too can be taken to expand a business.

To get SBA loan, first see whether you qualify as a small business. It is different for each category; for example, in manufacturing units, a company employing less than 500 people is considered small whereas in retail industry, annual sales of below $13.5 million will make you a candidate for SBA loans. You have to approach a SBA lender with your up-to-date balance sheet and income-proofs to get your loan sanctioned. The banks that actually give the loan will see further criteria such as cash flow and profitability factor in the future. These loans are better than loans from outside lenders, because of the low market-rates and longer repayment terms. That definitely means more cash flow to expand your business!

But, no matter where you take the finance from, contact the brandEXPANSION associates who can oversee the whole process.

~~View all Franchise Opportunities~~