The Top Three Questions Every Prospective Franchisee Asks

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Part 1 of 3: How do I secure financing to cover the initial investment cost of franchising?

Understandably, the finance process can seem daunting from afar, and prove to be a bit overwhelming at first glance – especially if you have little to no previous experience. The most important things to keep in mind when exploring financing options is that support is never far away and there are different lending options available.

Option #1 – Find Investors

Do not be afraid to seek out investment partners to back the concept and oversee the successful operation of the franchise alongside you.  Some investors are the silent, high-level overview type, while others will be hands-on and involved in the day-to-day operation with you.

Option #2 – Conventional Loan

A conventional loan is the most common type of loan and is offered by traditional commercial banking institutions. The terms and conditions of conventional lending options will weigh heavily upon the strength of your business plan, personal credit history and score, existing liabilities, debt-to-income ratio and pledged collateral.

Option #3 – SBA Loan

A Small Business Administration (SBA) loan is another option if a borrower doesn’t meet traditional underwriting criteria. This loan is backed by the federal government, therefore these loans typically have lower rates than conventional loans.  Orange Leaf Frozen Yogurt has been pre-approved by SBA thus, the strength of our franchise brand provides extra support during the qualification process. Click here for a checklist of items necessary during the SBA loan process.

Option #4 – Boefly

Boefly has successfully matched businesses with more than four billion dollars for their concepts, thanks to partnerships with over 5,000 participating lenders. Boefly has both a self-service and full-service package available (we suggest the full package) and will guide you through the pre-qualification process, preparing a loan request, reviewing bids from compatible lenders and getting approved.