Sufficient capitalization is very important for any business start up and underfunding is a leading cause for failure. Unfortunately for many Franchise buyers funding is the last consideration. While I firmly believe “where there is a will, there is a way” intelligently planning how you will a fund a start up is vital to success but may also determine which franchises you should even consider!
Here are a few Funding Sources that clients have used and we refer you to experts in financing franchise start ups during our consulting process.
- The obvious one is your cash and liquid savings
- Home Equity is popular and relatively simple to access. I used this on my first franchise purchase and ramp up
- Commercial Loans & Government Insured SBA Loans
- Self Directed 401K & IRA rollover. This has gotten very popular. You can access retirement funds with NO tax consequences or penalties
- Credit Lines (Secured and Unsecured) offer a lot of flexibility if you are planning multiple units
- Family and Friends. Many clients have family looking for good investments and willing to help
- Equipment Funding. If you are starting a business like a restaurant, a business with specialty vehicles or any business with a high equipment investment, you can frequently get equipment financed separately
Fund My Franchise & Al Lesko
Pango Financial & Candice Caruso