Congratulations on your exploration of owning your own franchise!
Franchising is a great way to be in business for yourself but not by yourself.
The franchisor provides the procedures, systems, branding, and support that allow you to hit the ground running without having to start from scratch.
Now that you have made the decision to move forward with becoming a franchisee, you need to think about how you will fund your new business venture.
Don’t worry, you are not alone.
In this blog post, we will explore some of the options available to help you fund your franchise. Let’s get started!
Personal Savings
One of the most common ways people fund their franchise is through personal savings.
If you have been diligently putting money away over the years, now is the time to cash in those savings and put them towards your franchise business.
Before using your personal savings to fund your franchise, make sure you speak with a financial advisor to figure out exactly how much you can afford to spend so that you do not put yourself in a difficult financial situation.
Small Business Loan
Another option available to help fund your franchise is through small business loans.
There are many lenders out there who are willing to help people finance their franchise businesses.
The downside of loans is that they need to be repaid with interest, which can eat into your profits.
As with using personal savings, it is important that you speak with a financial advisor before taking out a loan so that you understand all the terms and conditions involved.
Franchise Financing Program
Some franchisors offer some type of financing program to help their franchisees get started.
The advantage of these programs is that they are specifically designed for franchises, so the terms and conditions are usually more favorable than those offered by traditional lenders.
However, not all franchisors offer financing programs, so be sure to ask about this when doing your research on different options to fund your franchise.
401K/Retirement Funds Rollover
Although this is one of the most popular ways to fund a franchise investment, it’s also the one that many people don’t even realize is an option.
It’s known as the ROBS program—Rollover for Business Startup—and it allows you to use qualified retirement funds to invest in a business with no tax and no penalty.
There are strict regulations involved with this funding option, so be sure to consult with a company that specializes in these unique programs.
It can be a good way to self-fund while also diversifying your investment portfolio.
There are many different ways that you can fund your franchise business.
The best way to figure out which option is right for you is through careful planning and research.
Be sure to consider all your options and speak with a financial advisor before making any decisions so you can make the best choice for your future franchise business!
Franchise Matchmakers is a team of franchising professionals that are dedicated to helping people explore business ownership as a career path.
Contact us at info@franchisematchmakers.com to find out more about franchising options that may suit you.
