New Funding Program Expands Access to Franchise Ownership

When we see big opportunities for our candidates to pursue their dreams it is usually a new franchise brand, product or service that has appeared. 

In the past weeks a very different game changing benefit has appeared, a funding solution that could open up franchise ownership to a group of candidates that could not find the funding to pursue their dreams before.

Franchise buyers can now borrow up to $150,000 with a signed franchise agreement from an approved franchise brand and with very approachable qualification criteria.

Here is your part of the equation:

  • $10,000 available to invest in a franchise
  • Credit score of 680+
  • The ability to cover your household expenses and this loan payment for 9 months, could qualify with a working spouse as well.

That may have just doubled the number of potential new franchise owners!

A few months ago if a candidate called in with that position we would have had to regretfully tell them that they would have few, if any, options to consider.  In fact, we are currently sorting through our databases trying to track down all of those past candidates that we could not do much for and walking them through this program.  The response so far has been great, our phones are ringing off the hook.

The franchisor has to qualify in their own way just so their franchisees can apply for this loan.  The franchisor first has to be listed on the SBA registry, an industry resource that tells lenders if a brands documents, most specifically their franchise agreement, have been reviewed by the SBA.

The second step a franchisor has to take is to apply with the specific lender to be part of the program, this may entail a closer look at the brand and how it operates.  The reason these steps are being taken is that the lender is taking a low down payment and will find most of their security in what they feel to be your ability to make future loan payments, though they are not attesting you your likelihood for success or that you will achieve any particular numbers.

There is a small but fast growing list of franchise firms that are applying for this program.  At this point it would make more sense to pick a high quality opportunity and then see if they have applied and qualified for the program than to try to keep up with the fast changing list.

With these criteria met my both you and the franchisor the lending process is quite simple.  A quick application with the lender, should only take you a little time to put that together.  Once the lender has received the application they do a review and approval can be as quick as one business day.

With an approved loan, funding can come in as fast as a week.  So, not only have they made it easy to qualify, they have made it easy to apply and they get you money to pursue your dreams FAST.

How do you start moving forward with this and pursuing your dreams?

The key, as always, is finding the right franchise for you.  Your perfect match should be a quality company where your skills, drive and desire can leverage their proven model.

To get approved and funded you have to sign a franchise agreement from an approved franchise company so your process likely begins with the franchise investigation to select a company you feel comfortable moving forward with.  There is no obligation to look at a franchise company but signing a franchise agreement would make you a franchisee so let’s make sure you pick the best options in front of you.  If you need assistance in this step feel free to contact me.

We would guide our candidates go through a full search and investigation beginning with building a model of their skills, strengths, desired work role and lifestyle goals.  Then we look at the companies that match the combination of their model and the financial parameters of the lending program.

To begin the application process for the loan you will need to be well into a targeted franchise investigation.  We would brief the lender on why you are considering the franchises you are investigating and on where your skills matched the business.  Having expert guidance in this lending process could work to your advantage in getting approved.

Since you would be targeting franchises below $150,000 in total investment you would most likely be looking at proven brands in a range of service categories.  To keep costs down it would be unlikely that you would be looking at restaurants or similar businesses with a big commercial location or a lot of equipment, inventory or staff.  In general service businesses offer:  low start-up cost, high margin and faster ramp up speeds.

In selecting a franchise that fits both you and this lending program you would not need to exclude businesses with a commercial location, but you would simply need to choose wisely when it comes to startup costs.

Both full time and semi-absentee businesses may be possible targets in this franchise search.  The big benefit of any semi-absentee franchise model that applies is that you would have the added income to show as a method to cover living expenses and loan payments.

Candidates in our free franchise consulting program will be using all of our resources to maximize their franchise search and use this new loan program.  We will be encouraging top franchisors to apply for the program when we see they are not yet involved.  Our goal is to get great candidates lined up with top franchisors and make sure the resources they need to pursue their goals are available to them.

If you have been sitting on the sidelines thinking you could not afford to pursue your dreams then it may be time to get in the game and look at your options.  Lending programs are not around forever, you may want to aggressively pursue this option while it is available.

Mr. Knauf is a highly sought after trusted advisor to many companies; Public, Independent and Franchised of all sizes and in many markets. His 20 plus years of experience in both start-up and mature business operations makes him uniquely qualified to advise individuals that have dreamed of going into business for themselves in order to gain more control, independence, time flexibility and to be able to earn in proportion to their real contribution.

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