Business Development Resource Center

• Business Coaching

                       Association of Small Business Development Centers  

                       Association of Women’s Business Centers

• Chamber of Commerce

• Financing Options

• Insurance

• Healthcare Providers

• Marketing Support

• Real Estate Support

Personal Savings – If you currently have the funds to acquire a specific franchise, keep in mind that, in addition to the costs associated with starting a franchise, a franchisor will recommend that you have the ability to cover your living expenses for up to a year or more. Furthermore, you will probably have to pay for your own healthcare coverage that was previously provided by an employer. It would be beneficial if your spouse can continue working in a position that will cover all or a major portion of your living expenses and perhaps provide healthcare benefits.

Home Equity Loans – Home equity loans can be a good resource for starting a business. The primary advantage is that, unlike a conventional loan whereby you are servicing debt on the full amount from day one, your debt service on an equity loan is only on the total amount drawn at a given time. If you only need a portion of the full loan amount to start the business, you are in a better position in terms of debt service.

Financing with your IRA or 401(K) – This form of financing is becoming increasingly popular as people become aware of its attributes. For those who have a healthy retirement account, this option can be very beneficial in starting a business. Advantages include:

• Using retirement funds means other personal funds are freed up to invest back into your company.
• Investing in your business with your IRA or 401(k) increases your success rate by eliminating debt payments to loans, and thus, reducing your business overhead.
• There are no early withdrawal penalties or taxes to be paid when rolling over your existing IRA or 401(k) into your new business.
• Tapping into retirement funds enables you to further diversify your portfolio.
• Just like investing in the stock market with your IRA, as your business grows so your retirement account will grow too.
Click here to get free information about this process from Guidant Financial Group

Family, Friends and Investors – Investors and partnerships can take many forms. A franchisor will typically require all parties to complete a background questionnaire and to sign the franchise agreement. Lenders will also require partners and investors to sign loan agreements.

Conventional Commercial Loans – There are lenders who may assist you in funding your business. Your ability to secure financing is based on the funds required, your cash infusion, your credit rating, collateral and a quality business plan. A commercial lender will require answers to the following questions:

1. How will you use the loan?
2. How much do you need to borrow?
3. How will you repay the loan?

Your local Small Business Development Center or Women’s Business Center will provide assistance in developing a business plan and other considerations related to starting a business.

Call the FranFit Loan Department at 866-733-4109 for information about a commercial loan.

SBA Loans – Commercial lenders also provide SBA loans. Interest rates are variable, may not exceed 2.75% over the New York prime rate, and are established between the lender and borrower. They may be slightly higher on loans under $50,000. A borrower’s capital contribution generally must be 20% to 33% of the total projected costs. Once a complete loan package is submitted to the SBA, turnaround approval time is typically within 10 business days. Franchisors listed on the SBA registry are pre-approved for SBA financing, which expedites the approval process. Your local Small Business Development Center or Women’s Business Center can provide assistance in developing a business plan and preparing SBA paperwork. Click on any of the companies listed below to learn about its SBA lending procedures.