If you've been thinking about opening up your own bookkeeping service business and starting from the ground up, you might want to think again. The bookkeeping industry is certainly booming, but there might be a better option than building your own business from scratch. That option is to invest in a bookkeeping franchise, such as Supporting Strategies, instead.
Although there are many advantages to investing in a franchise over starting your own business, one that sticks out for many is the cost of franchising. Not only is the cost of franchising generally more affordable than setting up your own business, but the funds needed to cover the costs are generally easier to obtain as well.
Franchise Financing Options
The following are some of the options that are available to you when it comes to obtaining financing for your Supporting Strategies franchise:
1. Traditional Bank Loans
For most business owners, traditional bank loans are often out of the question. This is because lenders will often refuse loans to small business owners because of the risk that's involved. However, if you're investing in a franchise, there's much less of a risk. This is because unlike startup companies, which often fail in the first year, franchise businesses are much more likely to have abundant success due to having the support of an already established brand. Lenders recognize this.
2. Small Business Loans
A better option than a traditional bank loan is an SBA (Small Business Administration) loan. These loans are created specifically for new business owners and tend to have low rates and flexible terms. The SBA loan program is a program in which the SBA will guarantee the loans issued by participating lenders. If you're interested in applying for an SBA loan, make sure that your bank is participating in the program as not all lenders do.
3. Franchise Financing Company Loans
If obtaining a loan from your bank, whether it's a traditional loan or an SBA-backed loan, is out of the question for whatever reason, then you could try turning to a franchise financing company. These types of companies focus specifically on financing franchises. They can lend you the money you need directly or they can match you to a different lender. Some of these franchise financing services include Franchise America Finance and BoeFly.
4. Franchisor Financing
There are many franchisors out there who may offer investors financing as well. Some of the larger franchisors will often team up with third-party financing services to make it easier for potential franchisees to get a loan. Franchisors that do offer financing will typically advertise this fact on their website. If they don't, you can always contact them directly for information about potential financing options, or by checking their Franchise Disclosure Document. Keep in mind that just because a franchisor offers financing doesn't mean that you have to go through them. It's just another option for you to consider.
These are four ways that you can finance the cost of your franchise. Remember that just because franchises are considered by many lenders to be relatively safe investments, doesn't mean you'll automatically qualify for a loan. You still need to have a strong credit score and history. For more information about our franchise, contact us at Supporting Strategies today.