The Best Franchise Opportunities for Hispanics!






Franchise News


October 19, 2010

Through the SBA obtaining a franchise loan can be easy


To help small franchise owners get on the right track the SBA provides resources that can link a franchisee to an abundance of helpful programs and information.


The best bet for an entrepreneur to take who is full of spirit and has the drive to make a profit is buying an existing franchise.

Cutting out a hefty portion of the risk that is involved in the setting up of a business is similar to the aspect of buying a franchise. There are two forms of franchises that provide people with the right to use the name and trademarks of an already existing business. These forms eliminate any risk associated with setting up an unknown new business and the forms are known as Product/Trade Name Franchising and Business Format Franchising.

While the risks do still exist they are substantially lowered when either of the two forms is used. When someone opts with the Product/Trade Name Franchise they are buying only the rights to the businesses trademarks. When someone opts with the Business Format Franchise the relationship with the buyer and franchisor is deepened, and the franchisor selects the site of the business, and any training, product supply, marketing plans, or financial assistance related to the business.

Financial assistance can come in many forms, either through financing from one of the franchisor’s self owned businesses, a source of personal funding, or a purchaser can get funding through a franchising loan which comes from a commercial lending establishment.

It is always wise to see if you qualify for a Small Business Administration (SBA) guaranty on a loan if a franchisor proposes to help you obtain funding from a bank. You can go about this process by first contacting a local SBA office. If you find that you are eligible for the guaranty and the franchise is not registered with the SBA then steps should be taken to ensure that it becomes registered. It is comforting to know that if the franchise is already registered the process of receiving the funding through a loan will be quicker than if it was not.

A SBA guarantees up to 75% of franchise loans that are given out by a commercial lending foundation, but they do not actually loan any money. Loan amounts can be given out in amounts up to $2,000,000 which can help entrepreneurs have the financial means to boost and start their franchise so that high profits are easily obtainable. These loans are taken out through the 7(a) loan program for franchises.

To help small franchise owners get on the right track the SBA provides resources that can link a franchisee to an abundance of helpful programs and information. Sometimes a bank will require a franchisee to go through the SBA if the franchisee does not have the required capital or collateral to receive a loan for the start up of a business.

The SBA allows franchise owners to access funds that were not previously accessible due to capital limitations.

Through the Small Business Administration obtaining a franchise loan can be easy.

Category: Financial Services


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