Raining Capital To Start A Franchise Business

Even with the economy not doing so well, certain franchises are still extremely successful

. Places such as Dunkin Donuts and Subway still generate enough business to bring profits to the franchise owner. The reason these franchises are so successful are many.

For starters, the product pricing is competitive, the franchise owners benefit from corporate advertising and promotions, and let's face it -- everyone loves quick coffee and sandwiches. For those reasons and many more, many people believe that buying a franchise will provide them with steadily growing incomes. The next logical step is wondering how to get the funding to purchase one of these establishments.

There are many ways that an individual can raise business capital to purchase a franchise. One way of obtaining business funding is from friends and family members. Supporters who believe in the person's potential will be more than willing to make the investment.

Another way one can gain funding to purchase a franchise is through government assistance. Several grants are available for serious individuals who want to start their own franchise. Single mothers and minorities have more opportunities available.

Another way to raise money to start a franchise is to sell assets. Selling things like automobiles, jewelry, and electronics will help the person to gather the funds needed to get started in the business world. One can make quite a bit of money by auctioning off expensive items.

Banks also loan money for starting a franchise business. The trick to getting a bank to finance a franchise is to show them the money you'll make with your venture. This involves coming up with an accurate business plan. The business plan will have to show potential growth for the franchise. It will also need to show how the customer will be able to use income from the franchise to pay the loan back. The business plan must cover all aspects of the franchise's moneymaking ability.

Banks are also very nervous about lending money to a person who has an adverse credit history. The individual should have a good credit history at the very least. A good credit history shows the bank that their investment in the franchise will not go unpaid. Excellent credit history shows them that they can trust the individual with their money. Business loan rates vary widely depending on the credit worthiness of the borrower.

With the right plan and credentials, it can be very easy for a person to convince a bank to finance a business venture. While different franchise opportunities all have different requirements for net worth and available capital, it is possible for creative entrepreneurs to raise the capital needed. All it takes is careful planning, organization, and total honesty on the part of the applicant.

by: Jim Daniels

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