How do I go about financing a franchise?

There are several things you can do to help your application for finance successful.

First, talk to your franchisor before seeking finance. You will require franchisor approval and be pre-qualified before a bank will consider your application. Seek out lenders that understand small businesses and franchises so they can assist you with problems, challenges and business solutions.

Be totally honest with your lenders, if they uncover something that you have been hiding you can say goodbye to their financial assistance. Neatness counts, fill in your application neatly and all required fields and don’t attach any unnecessary documents.

Make sure you have paid off all existing debt and you have a clear credit record. Have a well thought out business plan to show your banker which includes means to save money – such as leasing or buying used equipment. Finally, don’t give up. Try several financers and learn from each attempt to improve the next one.

Tracy Lee Nicol
About the Author
Tracy-Lee Nicol is the managing editor of Franchise Zone Magazine and deputy editor of Entrepreneur Magazine. She studied her Masters degree in Art History and Visual Culture at Rhodes University and spent the next two years working and travelling in Asia. Her love of people, business and teaching is reflected in telling the stories of entrepreneurs, franchisees and franchisors, inspiring others to take the leap to being their own boss and bringing about positive change in South Africa.

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