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Franchise financing is essential in the marketplace today because it can make all the difference between potential entrepreneurs having the cash to invest in a proven business and ultimately missing out on what could have been the best opportunity of their lives. Until recently, franchise financing was limited but the surge in demand for franchises has led to a major change. Now you can find financing from a number of sources, but in order to be able to benefit from it you have to know where you can access it in the first place.

What Is Franchise Financing?

Although many people would love to establish their own businesses and forward their entrepreneurial goals, many do not have the money to do so. Although investing in a franchise may well be a fantastic idea, those individuals do not know about the franchise business financing options that are available. There are many providers that offer you a whole range of products, depending ultimately on your needs, the level of financing required, and what it will be used for.

In effect, franchise financing is there to provide you with the money that you need to be able to invest in a franchise opportunity. Some providers offer help towards your initial investment whereas others will only provide you with financing assistance if you have already invested the initial fee. That type of franchise financing is designed to help you afford real estate, equipment, and the supplies and facilities you need to get started.

Financing A Franchise – Your Options

You have several options when it comes to financing a franchise. You can opt to seek assistance from a reputable bank or alternatively you can choose one of the companies that offer funding exclusively to franchisees, of which there are many today. Not all institutions will offer the same types of loans, but a few of those available are outlined below:

· SBA (Small Business Administration) Loan – This type of franchise financing is offered to small businesses with owners who have already invested some money and can put personal assets forward as security.
· Bridge loans – These loans are available from banks and franchise financing providers to give you start up capital if you are waiting for full funding since some loans can take up to six months to come through.
· Debt restructuring – This type of franchise financing is available only to established franchisees with outstanding debts, and they want to lower or consolidate into one payment. Most banks will offer this service as well as some franchise financing companies.

It is worth investigating the different financing opportunities because some franchises will offer franchise financing themselves or via trusted third parties, whereas others will not help with that side of the business at all. Franchisors that offer third party financing assistance often prefer that you take that route as a result of an ongoing agreement they have with the financing company.

Of course, to access franchise financing you need to be eligible in the first place. Many financing companies request that you have already invested in the franchise and that you have enough security to guarantee the loan. This applies both to financing that you seek independently and to financing that is offered via approved third parties. You should have your finances in order, as this will go a long way to helping your secure franchise financing and make your entrepreneurial dreams come true.

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