If you want to buy a franchise, one of the biggest challenges you’ll face is raising capital. Luckily, there are a lot of funding options available. Here’s a look at just a few.
The Rainmaker Plan® is one of the most popular IRA rollover plans and boasts an impressive track record, providing funding for more than 10,000 entrepreneurs over the last 30 years. It allows you to invest your retirement funds in your franchise without taxes or penalties. Plus, the returns on your money can far exceed what you might get in a 401(k). After all, you’re betting on yourself and not the stock market! To see how it works, check out this helpful infographic.
Or view this video to see why JunkAway founder Paula Lewis chose this plan.
A range of loans is available in this category, but the SBA 7A loan, typically ranging from $100k to $5MM, is the most common. If you need to buy real estate or equipment for your franchise, you can qualify for a SBA 504, ranging from $500k to $5MM. You’ll need collateral and a good credit history for both, but you’ll pay less of a down payment with the 504.
Leasing is another option if you need equipment for your franchise, such as machinery, computers, or company vehicles. An equipment lease has several advantages, including 100% financing, no down payment, simple application, quick approval, and reasonable rates.
More To Explore
These are just a few of the many funding options available. To pinpoint the one that’s right for you, check out this convenient online module. The International Franchise Association is also a good resource to find special financing programs for veterans, minorities and women. Also check with your city and state economic development officials for local incentives that could provide lending.
Plan Your Pitch
You’ll be making the pitch to the bank or funding source so you’ll need to have your vision, strategy and business plan down cold before presenting. Your business plan should include detailed information about the sources of your cash flow, as well its uses. With careful shopping and planning, along with your personal determination and persistence, you’ll soon be in the money and on your way.