3 tips for getting your franchise funded

The Beatles said money can’t buy love, but their catalogue is conspicuously silent when it comes to funding a franchise. Which is to say, if you’re looking to get a franchise off the ground, funding should be your chief concern. The Fab Four would be sure to agree.

Of course, knowing you need money and actually acquiring it are two very different things. Fortunately, with a little forward planning, funding your franchise can be made much easier. The following are three tips intended to streamline the franchise funding process.

Save your own money first
The odds of you having all the money you’ll need to enter the franchise game are slim to none, but that doesn’t mean you should rely on a lender to provide you with 100 percent of your financing.

Having a significant portion of your start-up costs already saved will make obtaining a loan easier, especially as some lenders require borrowers to have a sizeable down payment. Entrepreneur recommended saving between 20 and 30 percent for upfront costs and borrowing the rest.

Take advantage of franchise financing programs
Following the “Great Recession,” acquiring business financing become more difficult for entrepreneurs of all stripes. The franchise industry understood this and took steps to make funding easier.

As highlighted by the U.S. Small Business Administration, many franchisors offer special financing options to first-time and multi-unit owners. These programs can include the elimination of specific start-up costs, lower license fees and various other offerings intended to reduce expenses.

Don’t let planning fall by the wayside
Becoming a franchisee means running your own business while also having a major company in your corner. Unfortunately, some people view this as an excuse to slack off when it comes to the planning phase.

Even if you have a well-known name to drop when applying for funding, showing that you’ve planned out how your business will work can go a long way in the eyes of lenders. A detailed strategy that incorporates essentials like current market analysis and cash flow projections will show prospective lenders you’re serious about success, something that will fill them with more confidence and hopefully make getting the money you need easier.