A very important step when buying a franchise is arranging your finances to invest in your new business. Getting financing for a business is not easy, especially for those who do not have prior business venture experience. Here are some of the common sources of finance that you can opt to try for your new business’ financing.
1. Bank Loans
Bank loans are a great source of financial support for your business. In fact, some franchisors will have close relationships with specific banks. Regardless of which bank you choose to approach, you will need to develop a well-organized document that clearly outlines your financing needs, a conservative expectation of the franchise’s performance and how you expect to repay the funds. Supporting documents such as tax returns, financial statements, credit history, will also be required. When it comes to financing franchises with a good brand reputation and recognition, there are higher chances of your loan being approved. And a supportive, reputable franchisor may be able to help you with what you need to prepare your financing proposal.
2. Government Programs
There are many government-backed small business loans that you can apply for as a source of financing for your new franchise business, including the Government of Canada. A great place to start is www.canada.ca/en/services/business/grants. Remember that government-approved loans can take some time to materialize, so ensure that all your documents are in good order to avoid unnecessary delays.
3. Personal or Family Savings
For many people, using personal savings or securing a loan from a family member is one of the first options they think of. These funds would be quicker to access than most other sources of funding, and likely have much less red tape. If your investment mix includes a loan from a family member, be sure to work together to clearly dictate the terms of the loan to avoid disagreements in future.
4. Franchisor Financing
Some franchisors will offer financing options to their franchisees. That may come in the form of a loan, or perhaps in the form of reduced fees.
Interested in franchising opportunities with The UPS Store Canada? The UPS Store Canada has been in the business of franchising for more than 40 years, with over 30 here in Canada. Consult our experts today to learn more. Call our toll-free number 1-800-661-6232 or email us at [email protected].