People who are contemplating to start a franchise business often start by looking at track records of existing ones to gauge which have been around for a while and are thus believed to be operationally sustainable. Although this is a key step in choosing a franchise business, it should not be the first one.
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.
The Patriot Express is a lending program administered by the Small Business Administration or SBA. The program is geared towards:
- Retiring military personnel
- Veterans
- Members of the National Guard
- Military spouses
Under the Patriot Express program, borrowers may borrow up to $500,000. Although the SBA does not provide this loan to applicants, many lender participants are eager to offer this loan because the SBA guarantees 75 to 85 percent of the loan. This means there are considerably fewer risks shouldered by the lending agency and so they are much friendlier to potential borrowers. It is also easier to qualify as the credit score required for it is not set so high.
Interest rates under this program are also quite low. For loans that take seven years or less to pay, the maximum interest rate is 2.25%. For longer-term loans, the highest rate is only 2.75%.
To be eligible for the loan, there are certain criteria that have to be met, including:
- Business size
- How the loan will be spent
- The kind of business
- Other ways to get funding
The Veterans Transition Franchise Initiative or VetFran was initiated by the International Franchise Association (IFA) to help military veterans. The IFA partners with more than 350 franchise corporations and encourages veterans to go into franchising by extending financial incentives. The program itself does not offer funding, but the IFA's franchise partners do provide financing or help applicants choose the right lending program.
Finance professionals specializing in franchises can help develop a financial plan for your prospective franchise. You only need to provide them with information about yourself and your plans, and they will do all the work.
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. Depending on your situation, these specialists will draw up a list of available lending options for you as well as come up with the actual figures that you have to work with. Franchise funding specialists usually don't charge a fee for their services until after you have received your loan. This is another feature that works in your favor as you get actual help without shelling out cash first.

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Article Submitted By: HunterFisher
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