Startup financing easier to find for franchises
It’s no secret that obtaining small business loans in today’s tough economy is harder than ever, even for established businesses. But, for people absolutely determined to begin their own businesses, startup loans for franchises might be easier to find.
Lenders hate risk, and there are fewer loans riskier than startup loans. Franchises, however, have always had an edge of other small businesses because there is less perceived risk associated with franchises for a number of reasons:
• Franchises have stronger brand presence;
• Franchises benefit from large national marketing campaigns;
• Franchises offer training, mentoring and proprietary software;
• Franchise owners enjoy—and can pass on—low prices negotiated at corporate headquarters.
Those advantages have always resulted in a higher success rate than that of independent businesses—maybe not as high as the 95% frequently cited, but because that’s the perceived success rate, it might as well be when it comes to getting startup loans.
The International Franchise Association has also made it easier for their constituents to receive startup loans by making a concerted effort to teach lending officers about financing franchises. Regional banks have been extending more small business loans than the mega-banks, so the franchise associations are doing all they can to steer more of that money to their constituents.
No business is recession proof, but banks are more likely to give startup loans to a franchise that offers an essential service rather than one providing luxury items. For instance, home fires occur just as often during a recession as when the economy is strong, so restoration business that specialize in fire and smoke damage are more like to receive startup loans.
Other franchise businesses more likely to fare well at the bank and in the market include low-budget family hair salons, child care centers, clothes or furniture consignment shops, and almost any home-based business with very low overhead.
America One Unsecured is one of the largest loan-consulting firms in the country. They have helped their clients secure hundreds of millions of dollars in personal and small business loans since 1999. Click here to learn more about America One Unsecured and how they can help you.
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