Finance Your Franchise Business Plan And Your Peers Loan

Business establish and funding your franchise business is no easy task regardless if you are just starting out or looking to grow an existing business.

Banks and other traditional lenders - while they do like franchise businesses for several reasons like proven track records, experience and huge brand recognition - are still not jumping up and down to fund these organizations. And, it might not be due to the franchise industry itself but more to do with the financial markets in general and lenders just not wanting to take any risks at all.

Even the SBA - a huge backer of franchise businesses - are at the mercy of banks and other preferred lenders when it comes to funding (or not funding) franchisees.

So, where does a current or potential franchise business owner turn to start or grow their business?

Look To Your Peers

Peer-to-peer lending - organically started in the United Kingdom (UK) - is more about helping individuals get low cost, non-bank loans from people just like you. Peer-to-peer lending works like this. Savers (those with additional money that they want to invest in ways that provide them some type of return on those funds - more than banks are currently giving) will sign up on a platform to look for other individuals that are seeking loans for personal needs - like consolidating debt, taking a vacation, fixing a vehicle or covering emergency needs.

The person wanting a loan also signs on to the platform, gets to tell his or her story and, after being scored by the platform, gets many different savers (individual lenders) to fund their request.

It is faster, cheaper and with a lot less hassle then a bank or other traditional lenders - if those sources would even approve your loan request that is. And, these platforms look beyond credit scores when making decisions.

So, what does this do for businesses or franchises as these peer-to-peer loans are for personal needs?

Peer Loans For Franchises 

Again, started in the UK but now in North America, a company decided that they wanted to take the peer-to-peer lending industry to the business world. Thus, this company, Funding Circle, created a business loan peer-to-peer platform for both conventional businesses and franchises.

The platform offers franchise loans from $25,000 up to $500,000 - to be used to start or grow your business. These loans offer rates from 9.99% to 20.99% and can come with terms of three to five years.

Not bad for a business loan - try to get that from your bank!

From the platform;

"Full application takes less than 10 minutes and applicants receive pre-approval confirmation within 48 hours and the money in their account within 5-14 days of submitting the application."

And, according to their website, the company has put out over $525 million in small business loans worldwide.

Lastly, Funding Circle is not alone. Lending Club, a U.S. based peer-to-peer lender is also offering true business loans up to $100,000 for one to five years at rates starting as low as 5.9%.

    "We cut the cost and complexities of traditional bank loans and pass the savings on to borrowers with easy online applications, low fixed rates, fixed monthly payments, flexible terms, no prepayment penalties, no hidden fees and friendly service."

 

And, again, since these business loans do not come from banks or other traditional lenders, they come with less hassle for approval and much less red tape.

Why Do These Loans Matter To Franchise Businesses?

Normally, we do not promote specific businesses. However, these companies are pioneering new ways in which to fund businesses and franchises - trying to do what they can to fill the funding gaps left open by banks and similar business lenders.

They are by-passing traditional underwriting methods and standards (whom many say no longer work in this new economy) and finding ways to say 'yes'. And, through these peer-to-peer platforms, they are essentially taking the middle-man out (the problem to some) and letting those with money provide those funds directly to franchise owners who need it.

Image the shoe on the other foot. A well known franchise - one that you might frequent often - is asking for a loan and is willing to provide a fixed rate of interest in return. You have some additional money and help fund that loan knowing full well how good that business or franchise chain is. Not only do you help support a company you know well but you earn a fair return on your money (more then you would from keeping your money in a bank). This is a win/win situation.

Now, back to your franchise. Yes, you can apply and hope that a credit committee of a traditional lender approves your request (more likely they will drag it out for months and hope that you just go away) or you can use one of these new, peer based lending system, that puts your request in front of hundreds if not thousands of individuals who not only like and know your brand but have the money collectively to get you the loan your business needs.

Low Cost Franchise Opportunities From $ 10000?

It's an established fact that you don't need a lot of money to set up your own franchise. Today, there are several low cost franchise opportunities wherein you can invest your little cash and make reasonable profits. Here, you would find some help as you research various industries you can find a good deal.

Finding Your Own Business Franchises

Of course, it's good to start a business that is small to manage so that you can avoid the bureaucracy that is typical of established and popular franchises. You would have more freedom with respect to marketing; it would also be possible to tailor the business franchise to suit your specific location.

 Most low cost franchise opportunities require $10,000 to $50,000. Your research for a franchise deal should start online. You would find websites where there are lists of credible franchisors in the USA. In most cases, the lists would include companies that are already screened and certified as credible and profitable in their business operations. The reviews on franchise deals would help you to choose an affordable one that suits your preferences in terms of personal budget and passion.

 Profitable Low Cost Franchise Opportunities

At this juncture, it is worth stating that browsing through websites for available cheap franchises may not be enough. The first step to your success when you are planning to invest your little capital is to carry out an industrial analysis with respect to the current trends in the marketplace. This is the prime factor that would affect the bottom line of your business pursuit. Have it in mind that it usually takes much time to be able to identify and understand the implications of market trends in any industry under consideration, most especially if you are not working in such a sector.

Nevertheless, this is not to state that you have to spend time writing an industry analysis report. Searching through the Internet, you would find out that experts already have helpful details on market trends in various niches/fields. So, based on expert findings, here are some of the most profitable industries where you can find low cost franchise opportunities:

    Children's Franchises

    Education Franchises
    Senior Care Franchises
    Cleaning Franchises
    Food Franchises
    Fitness & Beauty Franchises
    Computer & Internet Franchises
    Home Services Franchises
    Healthcare Franchises
    Hotel & Travel Franchises
    Photography Franchises
    Retail Franchises
    Women's Franchises

There are proven results that you can make good profits in the above industries because there is a significant market demand for products and services that most companies offer. Once you find a good deal that that best matches your budget and interests, go ahead and fill in the request form of the company in order to receive free information on the way you can set up your own business.

Important Facts to Know

You can't just start a business without having some background information on it. Depending on the kind of franchise you want to buy, you need to find answers to some questions on any offer you may find.

Is there any hidden cost?

Is there any capped rent?

Are there any upgrade costs?

Does it involve any support for franchisees?

Is there any unpaid loan on the business?

If every aspect of the business is alright for you, you can take an advantage of the cheap deal. Make sure you understand the terms of the franchise deal before you sign up the contract.

Examples of $10,000 - $25,000 Franchise Brands

Healthier 4U Vending: it's a premier delivery system that provides healthy diets for people on the go. With $25,000 start-up capital, the brand lets you become an independent operator, and there are different investment levels within the franchise.

Prime National Credit Repair: with $20,000 start-up capital, you can profit from the large market demand on credit repair.

U-Turn Vending: it's a bulk candy machine for those who are interested in the vending business. Only $9,995 is required to obtain the franchise.

Dryer Vent Wizard: this is often employed in the inspection and cleaning of clothing dryers in homes as well as workplaces. $25,000 is required to start the business.

The foregoing examples are meant to serve as an eye opener as regard the unlimited possibilities you can find today as far as low cost franchise opportunities are concerned.

As noted earlier on, the need for proper understanding of the low cost franchise opportunities you find is very important before you invest your money in any of them. Indeed, a low cost business is quite easy to manage and grow.

Good Business Model Of A Franchise

The good business model when developing a franchise. This is a plan that is implemented by a parent company to generate income and help make a profit. Good business models improve the odds that your franchise will be successful. You must always do research on the territory, location, and availability of customers.

A good business model is a foundation where a business can be constructed. There are many franchise models available and some of the best include Anytime Fitness, Papa Morphy's and Subway franchises. These models contain some of the same principles and are based on good business practices.

• Fitness franchise models include finding a compact and neighborhood fitness clubs where members can access the business 24/7/365. The model includes software and surveillance technology. There is also a great and recurring revenue stream by controlling fees and availability of service. Find a fitness franchise that is based on cleanliness, security, and minimum of staffing

Take and bake pizza franchises are unique since they are a take-out business or restaurant and have no baking done in store. Customers purchased prepared and uncooked pizza and take the pizza home to bake. Less investment is required since there is no cooking, little or no dine-in components, and no customer cleanup. The expenses include employees' salaries which can be minimal, store front which is also minimal and inventory which can be varied due to combinations that are offered. Since the expenses are somewhat low, the profit potential is high.

• The fast food franchise is attractive since you can streamline operations and provide fast and friendly service. One sandwich franchise advertises and uses fresh ingredients and there is little or no cooking in the store. This model requires inventory, employees and a storefront but the profits are potentially great.

• Service franchises need to make sure that there are discounts offered and customer service is high. This best franchise model is one that focuses on ease of finding the location, high customer service and relatively low-cost.

A franchise business model must also include the ability to communicate and receive advice from the parent company. The profits must be shared with the major share going to the franchisee. Franchise models give standardized practices. The logo is usually familiar to the public, and practices must be patterned after the parent company. A franchise business model generally does not vary from site to site, and this creates brand loyalty and recognition for the customer.

For help determining a model for your franchise, seek advice from franchise experts including franchise consultants. They can offer you example documented models with contracts, basic franchise rules, regulations and other documentation to review and adjust accordingly for your own business model.