Alternative Lending Sources

So you want to own a franchise. You’ve done your due diligence, researched countless industries you could see yourself investing in and finally found a brand that you believe in and now; now you have to pay for it.

Ask a franchisee the biggest challenge in opening their business, or what the scariest moment was and nine times out of 10 you’ll get the same answer: paying for it. Taking out a loan, often for tens or hundreds of thousands of dollars, places the fate of your financial future in the hands of you and the brand you’ve partnered with.

But what if there was another way? Alternative sources have been around for decades, they gained popularity during the Recession when getting a loan was next to impossible, even with decent credit. Now as the market recovers fewer entrepreneurs are relying solely on the bank for the financial security of their business.

Lending sources like Rollover 401K plans have become increasingly popular. After working for decades accruing unseen capital through your 401K, there are plans and services that help match you with a business lender that leverages that money into a new business.

"Alternative lending sources like Rollover 401K plans are a great way to get your business up and running without the debt and taxes that some other traditional financing methods come with," said Mike Rozeman, CEO and Co-Founderat BoeFly. "By reducing, or even eliminating, bank loans from the process franchisees are able to utilize the capital in their retirement plan that they've been working to build their whole careers."

Sarah Ordover, owner of the Assisted Living Locators Los Angeles franchise, chose this option when she purchased her territory in summer of 2015.

“I took part of my retirement to invest in my business because I’m banking on the fact that I can get a better return on my money as an entrepreneur than I could by investing it in mutual funds and other traditional retirement vehicles.”

Ordover used BeneTrends, one of the top lending companies for small business funding. BeneTrends and its competitors like Guidant Financial, SD Cooper and BoeFly make a business out of funding small business.

When you rollover your 401K the money is tax-deferred and penalty-free, unlike taking out your 401K out or a traditional loan. Companies like BeneTrends Guidant Financial, SD Cooper and BoeFly make the process easy- they structure the process to make sure your money is allocated properly and accounted for.

With retirement an uncertainty in 2016, more and more Baby Boomers are choosing this option and retiring into business ownership. While running a franchise probably isn’t the lazy golf afternoons and knitting clubs you imagined for your Twilight Years, rolling over your 401K into a franchise gives you the opportunity to continue to build capital.

Nick Powills, CFE, founded No Limit Agency in 2008 and serves as Chief Brand Strategist for the Chicago-based firm. No Limit is a full-service communications agency that establishes and elevates brands by bridging Public Relations, Social Media, Marketing, Advertising, Digital, and a lot of creativity, to best strategize well-rounded and successful campaigns for 50+ global franchise brands. By presenting visionary ideas and building real relationships, No Limit is able to create effective media branding strategies to help companies grow. Nick currently leads a staff of writers, media strategists, designers, social media experts and digital producers in an office think-tank where brands are humanized for strong, compelling media stories. Prior to starting No Limit at the age of 27, Nick spent four years working at a franchise PR agency where he mastered the art of building rapport with media outlets and creating newsworthy pitches for earned media placements. He holds a Bachelor of Journalism from Drake University in Iowa.

Alternative Lending Sources

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