Most people think that to successfully operate a franchise business, it is vital to look at the track record of available franchises to determine which one will most achieve longevity in the industry. While it is true that choosing the right type of franchise is key, this is actually not the first step that you need to consider.
In today’s economic climate, it’s more important to get your financial strategy down first before looking through available franchises. If you’re not sure about how to get funding for such a venture, the following options may be helpful.
Patriot Express Program
The Patriot Express is a lending program administered by the Small Business Administration or SBA. The program is geared towards:
- Active duty military personnel who are about to retire
- Veterans
- National Guard personnel
- Spouses of military servicepeople
Borrowers may take out loans of up to $500,000 under this program. The SBA doesn’t offer this loan itself, but instead guarantees 75-85% of it for other lenders. This means banks and moneylenders carry much less risk when giving out such loans, which in turn means it’s relatively easier to get the loan. In addition, the credit score requirement is not very high.
The program also carries comparably low loan rates. Loans that are payable in seven years or less, charge only as high as 2.25%. Loans payable in longer terms carry only a maximum interest of 2.75%.
To be eligible for the loan, there are certain criteria that have to be met, including:
- Business size
- Use of funding
- Business type
- Alternative sources of funding
The VetFran Initiative
The VetFran (Veterans Transition Franchise Initiative) assists veterans of the military service through its partnership with the IFA or International Franchise Association. The IFA has links with more than 350 franchise operators in the country. The VetFran Program does not provide the loan but its partners can help veterans find loan sources and select franchises to put their money into. Getting into a franchise business is a good way for veterans to continue earning money and staying active at the same time.
Franchise Funding Specialists
Franchise funding specialists can help you devise a financing strategy so that you may narrow down the best lending options available to you. All you have to do is provide them with all the necessary information and they will do the leg work for you.
It is worthwhile to enlist the help of franchise specialists because of their knowledge and experience about the ins and outs of franchise operations. Their extensive network in the franchise business is also a big plus, freeing you from unnecessary stress and saving you time.
It is also wise to use the help of specialists because you do not actually have to pay them until you receive the loan that they helped you secure. Even before that, they can already assist you with fund sourcing and getting a grip of the figures that you will be working with.
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