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If you have a good credit history, and if they feel you have the necessary business personality to achieve success with one of their operations, they'll do everything within their power to get you in a franchise outlet.
Keep this in mind the next time you see an advertisement or a promising franchise opportunity requiring a substantial amount of cash outlay. You don't necessarily have to have all the money. They want you, and they'll help you!
Many people seem to be unaware that most of today's largest corporations started on a shoestring- on borrowed money- and leverage.
Many people seem to feel that unless they've got it all "in hand" in savings, then they'll have to keep plugging away until they can save up enough to take the big plunge.
Nothing could be farther from the truth.
Look to your family and friends for financial help. Approach them in a business-like manner; tell them about your idea or plans, and ask them for a loan. Agree to sign a formal statement to pay them back in one, three, five or ten years, with interest or equity.
When you have your proposal assembled, you strongly consider a L.L.C. or even a JV Partnership arrangement as a way to finance your project.
In any kind of partnership, each partner shares in the profits of the company, but in a limited partnership, each person's loss liability is limited to the amount of money he initially invested.
The truth is, in this kind of situation- you'll be doing all the work and sharing your gain with your partners; but then it's a fairly sure way to obtain needed financing.
Another common method of obtaining business financing is through second mortgage loans on a home or existing piece of property.
Say you purchased a home ten years ago for $35,000, and today the assessed valuation is $85,000, with a mortgage of $25,000 still outstanding. A lender may consider your home to be security or collateral for a loan up to $60,000.
In many instances, this is the easiest and surest way to getting the money needed for franchise or other business investment.
And, it makes sense; you've got "net worth" available that is doing nothing but sitting there. Take this equity and invest it in a worthwhile business, and you could double or triple your net worth each year for the rest of your life.
The important point here is that all business opportunities involve risk and sacrifice. It's up to you to determine the feasibility of your success with your proposed venture, then decide on the best way possible to proceed.
In every instance where you run into reluctance on the part of a lender to lend you the money you need, explore the feasibilities of "two-name" or "co-signed" loans. You can have the franchiser sign with you, or one of your suppliers, a business associate or even a friend.
Oftentimes you can borrow or rent collateral such as stocks, bonds, time certificates, business equipment or real estate, and in this way give greater confidence to the lender in your abilities to repay the loan.
Whenever you can show a contract from someone who has agreed to purchase a certain number of your products or services over a specified period of time.
You have another important piece of paper that most lenders will accept as collateral.
Still another possibility might be to get a bank or a firm that has loaned you money in the past to guarantee your loan. They simply guarantee that they'll lend you money in the future if ever the need should arise.
Going straight to your neighborhood bank, applying for a business loan and walking out with the money is just about the most unlikely of all your possibilities; hitting a big lotto has a better probability!
Banks want to lend money, and they must lend money in order to stay in business.
But most banks are notoriously conservative and extremely reluctant to lend you money unless you have a "regular income" that "guarantees" repayment; or a co-signer that can do the same.