Why It’s Smart To Have Professional Assistance With Franchise Financing
Franchise financing can be an incredible tool for getting started with your own business. Not all franchises offer to finance directly, so there’s a good chance you may need to obtain capital from an alternate source. Fortunately, there are financing professionals that take care of this type of loan on a regular basis. They can help you make smart decisions. Here are a few ways they help:
1. Helping You Figure Out the Total Cost of Financing
Great lenders have experience as financial advisers. They don’t just give you capital; they explain how you can use it to enjoy business success. Always look for a lender with a great reputation. Trustworthy professionals help you calculate the total cost of financing, including closing costs and interest rates. There are usually several different options available, providing a balance between the best interest and the longest repayment terms.
2. Explaining Loan Amortization and Monthly Payments
Franchise financing can involve fixed payments or variable interest rates. The best choice for you depends on your projected cash flow. If you need the stability of paying the same amount every month, then fixed payments are right for you. On the other hand, you may save money in the long run with variable rates. Make sure to talk with your adviser about the type of franchise you’re looking at so he or she can make recommendations for loans.
3. Covering the Small Print
For a lender to be able to offer franchise financing that meets your needs, contracts have to include provisions that guarantee repayment. It’s normal for lenders to put in stipulations of what happens if you default on the loan. Depending on your personal credit score, they may also request collateral as a guarantee. Talking with an expert lender is good because they’re not afraid to explain the details to you. That way everyone wins, and you get the franchise of your dreams.
4. Working With You for Your Business Needs
When you’re getting started with your first franchise, there are a lot of variables to consider. Every franchise is unique, and so are the capital requirements. Sometimes you need to get financing for real estate, franchise fees and working capital all rolled into one. The best lenders are willing to adapt to your needs. That way you have money for launch day, hiring employees, and business operations for the first six months or so.
In addition to working with a financial professional that has experience with franchise financing, it’s good to contact a lawyer for certain details. For example, it pays to review the Franchise Disclosure Document with a legal expert. That way you can be sure that the franchise is a good fit for your business.