Becoming a first-time business owner can be a tedious process. Potential franchisees have a lot of decisions to make along the way that can leave a lasting effect. Not only do they need to nail down what franchise to buy into, they need to understand when to buy, where to buy and what they can afford.
, a New York-based online loan marketplace, helps educate prospective business owners on the process of financing a franchise. The company introduces prospective owners to lenders that can help them afford their new business venture. Mike Rozman, chief executive officer of BoeFly
, said a large part of the learning curve for new owners begins with discovering their financial options.
“One of the first things we do to help is to determine their capacity – both based upon current assets and their credit score. We make sure that they have the capital they need to succeed,” Rozman said. “The simple fact of the matter is, if you have a good capital base and solid credit we can help you get competitive financing and you’ll be able to afford a more capital-intensive business."
By utilizing state-of-the-art technology, combined with a team of experts, BoeFly significantly reduces stress for franchisees. A dedicated BoeFly expert works with each franchisee to capture the most important information to potential lenders. The information is securely loaded onto BoeFly’s online marketplace where it is matched to appropriate lending institutions. It is compared in real-time and scored against the specific preferences from thousands of business lenders to ensure only the best match is made between the business owner and the lender.
Existing and prospective small business owners can access their bQual
report. bQual provides information that includes the credit score required by the Small Business Administration (SBA), the FICO consumer credit score, educational content explaining the scores, insight into why they scored the way they did and how lenders typically view the score. Rozman said tools like bQual can transform the process for a franchisee, making it much easier to find the proper lender.
“We want to make sure the franchisee is aware of how banks will ultimately judge them — it’s like an open book test. We know the questions, so we help answer those questions before they’re asked,” he said.
Sometimes things don’t necessarily work out the way a potential franchisee envisioned. When the financing isn’t there, what’s a hopeful business owner to do?
BoeFly is available to work with small business owners to discover what they can afford.
“If they can’t get a score above 140 on the score required by SBA lenders, they will have a difficult time getting SBA financing,” he said. “But there are some practical remedies to help.”
Rozman said there are some ways around the hurdles of financial strife. If a new business owner has a low credit score, he suggests establishing a partnership with someone who has a stronger score or more capital. Another option is considering the widest possible array of lenders.
“Make sure you are fishing in the largest pond of lenders. We’re big believers in making sure the franchisee is connecting with lenders from across the country, and with a full spectrum of credit products."
Many of the franchisees BoeFly works with are directed to the company by franchisors. But sometimes individuals discover the lending-liaison through their own diligence. Rozman said that one piece of advice he offers those entering on their own merit is to consider their options thoroughly.
He suggests people consider their passions and the lifestyle they want to lead, as well as what’s affordable.
“If you like working with cars, maybe you should want to pursue a Meineke,” he said. “When a prospect comes on their own, we work with them and introduce them to good brands. We want to make sure they are successful in financing, but we also want to make sure they find a good match.”
“From an investment standpoint, when someone has good credit with the appropriate liquid assets, these brands present a great option,” Rozman said. “If you’re looking to stay away from restaurants and stick with retail, Wireless Zone is an opportunity for someone with good credit. The brand is growing fast.”