Purchasing a franchise has become a popular option amongst many business people who are unwilling or lack the resources to start an enterprise from scratch. If you fall under this category, you understand the essence of getting franchise financing to ensure that the business you purchase is successful. However, the main challenge comes when it comes to getting the sources of the funds you need to run the enterprise. That forms the basis for this piece, where you will learn how to get capital for your franchise.
Sources of Franchise Financing
Alternative Lenders
Today, there has been a sudden upsurge in the number of alternative lenders, considering their loans are easy to qualify for and have low-interest rates. However, these lenders offer a lower loan amount and the repayment period is shorter than for SBA and traditional bank loans. Nonetheless, it is an appropriate option if you are looking for fast funding, for instance, to take advantage of an urgent opportunity. That is because alternative lenders process their loans faster. You can even get the funding you need within hours of application.
Commercial Bank Loans
Banks have been there to offer funds to small businesses. Therefore, getting a traditional bank loan is one of the options you have for franchise financing. However, the downside of such funding is that it takes time to be processed, has a higher interest rate, and requires you to provide collateral.
SBA Loans
This is one of the funding options that has gained popularity over the last few years. They are not so different from traditional bank loans. However, SBA loans come in at a lower interest rate and more extended repayment periods since the U.S Small Business Administration backs them. Nonetheless, regardless of how reliable and appropriate this type of franchise financing is, you should ensure you have a good credit rating to qualify for such funding.
Franchise financing has become a common challenge to franchisers who want to focus on that business sector. Nonetheless, there are several funding options, with alternative lending being among the best. Talk to Jasema Capital today to get the best financing to purchase or successfully run a franchise.