One of the crucial factors that influence the viability of funding sources is the sector of the prospective business. Most funders hardly approve loans for high-risk ventures. Unfortunately, financial institutions consider new businesses a high risk.
The good news is that most funders have vested interested in supporting women franchisees due to the impressive success rates recorded over the years. Below are five ways through which women raise capital to fund franchised businesses.
The initial investment required for starting a franchised business is often huge. Many women resort to selling their assets to raise the capital they need, while some seek financial assistance from friends and family members. Other women opt for partnerships with financiers that provide the money. In such cases, it is best to use the service of an attorney to make the partnership official.
Crowdfunding demands that the prospective business owner pitches the business idea and request for funding through donations from the public. This method leverages the power of the internet to reach out to people and business that donates out of goodwill. The adage that “little drops of water makes a mighty ocean” is applicable here. Some women have raised impressive capital to start their franchised business through crowdfunding. Use Google to research crowdfunding platforms you can use.
Small Business Mentors
Partnering with a small business mentorship (SDM) organization is another viable means of raising funds for your franchised business. SDMs provide mentorship, education, and general support to small businesses, including franchises at little or no cost. These organizations may not offer direct funding to your franchised business, but they can assist you in obtaining funds successfully.
This is the conventional route to funding your business. You stand a higher chance of getting a loan approval if you have an impressive business plan. The fact that you will be financing a franchise is an added advantage. Financial institutions will readily fund a franchise platform that has a track record of successful franchisees.
Small Business Administration (SBAs)
The SBAs have confidence in franchisors. That is why they support startup franchises in several ways. For instance, they provide advance loans with no collateral and guarantee bonds and loans. They even assist businesses in accessing government grants. SBA does not give out loans directly; they disburse partner lenders. The interest rate of SBA loans is relatively lower, and the terms are favorable.
Explore the avenues listed above for accessing funding for your future franchised business. If you are persistent, you will find the one that works for you. Once you cross the financing hurdles, your dream of owning a franchised business will soon come true.