Are you looking to buy a franchise but aren’t sure you can handle the costs involved? It’s true, an average middle-class salary alone probably won’t be enough to make your dream a reality, but that doesn’t mean starting a franchise is impossible even on a limited budget. You just have to know where to find the assistance you need.
What can you Afford?
In order to determine what you can afford to invest in a new business, you need to have a good understanding of your current finances. You can start figuring your net worth by compiling a balance sheet that lists all assets and liabilities. Some franchise experts believe you should not invest more than 15% of your own money, but this percentage may vary. Seeking the consult of a financial advisory is wise because they can help you determine how much of your own money you can afford to invest based on your specific financial situation.
Traditional Bank Loans
Borrowers with good credit and collateral may be able to get a traditional loan from a bank or credit union. Most lenders are more likely to offer financing for a franchised business because they are associated with an established brand that has been proven in the marketplace. However, if you are interested in investing in a lesser-known brand such as an emerging franchise or don’t have a stellar credit rating or collateral, a traditional lender may not be an option and you will need to look elsewhere for funding.