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Franchise Business Financing: When Writing a Check isn’t an Option

Deciding to own your own franchise business can be a scary step to take in your life. I know, I’ve built a franchise business from the ground up. It takes hard work, a lot of hours, time away from your family, a commitment to a dream, and yes, it takes money. But, a lack of monetary resources should not be something that keeps you from owning a franchise business.

When my partners and I were building A Place at Home, a senior-focused care company, we encountered a lot of families who were hesitant about their finances and how they would be able to pay for their loved one’s care. We made it a priority to help families discover ways to pay for care services. From long term care policies to veteran’s assistance and government programs such as the League of Human Dignity and Medicaid to more inventive ways such as grants and taking a look at their own assets in a different way, we were able to assist these families to make the financial burden more manageable.

I come back to this experience each time I talk to someone about how to finance buying a franchise. It seems to me, people often view buying a franchise as meaning they need to have their own cash in hand, and without the ability to write that check immediately, they become dissuaded. It doesn’t have to be like that. Just because you don’t have the liquid funds, doesn’t mean you won’t be a good business owner. It’s time to get creative.

Like the ways we helped families discover ways to pay for care, we have uncovered options to help you realize that goal of owning and controlling your own business.  Of course you can visit with your banker for a traditional business loan, use equity you have in your home or even find friends who might be willing to invest, but when writing a check isn’t an option, here are some resources to consider:

Small Business Loans – Small business loans are loans guaranteed through the Small Business Administration and are usually issued by banks that participate in the SBA program. SBA loans are not just limited to buying or starting a company, there are loan programs for disaster assistance, military reservist economic injury, and short-term working capital needs. Read about the SBA loan types on the SBA site and also read this blog from nerdwallet.com on Why SBA Loans Rock.

Loans for Veterans – From SBA-backed VA small business loans to the Angel Investment Group Hivers and Strivers program to grants, there are a lot of funding sources and opportunities for veterans. If you are looking for franchise-specific funding, VetFran, an initiative of the International Franchise Association has great resources and offers a $10,000 grant opportunity for qualified VetFran franchisees. Here’s a great article from fundra.com on The 26 Best Places to Find Small Business Loans for Veterans.

Use your 401k or IRA – One of the more interesting programs I’ve run into recently is the Entrepreneur Rollover Stock Ownership Plan on ERSOP.com. This company helps you take money that is tied up in your 401k, IRAs, or other qualified retirement plan to fund your business without the withdrawal being considered a distribution.

At NorEast Franchise Group, we look at those who are considering investing in our current offering, A Place at Home, as partners. Beyond assisting those that are awarded franchises build their companies, we understand that people need options, and we can help you uncover ways to pay so that you can start on the right foot to owning your own business.

Jerod Evanich, President and Co-founder of A Place at Home