Where to Go When You Can't Find the Dough

Turn to Your Franchisor

Many franchisors have stepped up their financing assistance to help new franchisees get started despite the tight lending market. Here's a sampler of franchisor offers. --C.T.

Franchisor: CruiseOne
Location: Fort Lauderdale, Fla.
Offer: Providing loans for up to $7,300 of the $9,800 franchise fee, which usually makes up the bulk of a new franchisee's startup cost.

Franchisor: Edible Arrangements
Location: Wallingford, Conn.
Offer: Up to $100,000 in equipment leasing financed through new company subsidiary Farid Capital Corp., which has raised $5 million privately and hopes to expand the fund to $10 million.

Franchisor: Marco's Franchising
Location: Toledo, Ohio
Offer: Marco's leasing company, MFS Leasing, lends money to franchisees to cover construction, equipment and other store-opening costs. Last summer, a Marco's affiliate also introduced an equity fund that plans to raise $5 million to lend to franchisees, granting Marco's a minority stake in the franchise until the funding is repaid.

Franchisor: Million Dollar Hole In One
Location: Valrico, Fla.
Offer: Willing to finance $10,000 of the $25,000 franchise fee. Franchisees repay the loan gradually as they purchase tickets wholesale from the franchisor for the hole-in-one contests the franchise puts on at golf courses. Franchisees pay a higher rate for the tickets until the loan is repaid.

Franchisor: Volvo Construction Equipment Rents
Asheville, N.C.
Offer: The carmaker's construction-rental division utilizes a finance affiliate, Volvo Financial Services, helping speed loan approvals. The franchisor enhanced its finance offerings in 2009, offering several months of no payments, depending on the economy. It also upped its loan limits to include loans for working capital and other intangibles, so qualified franchisees can now tap Volvo to finance up to their full startup cost of more than $5 million.

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The author is an Entrepreneur contributor. The opinions expressed are those of the writer.

Carol Tice, a freelance writer, is chief executive of TiceWrites Inc. in Bainbridge Island, Wash. She blogs about freelance writing at Make a Living Writing. Email her at carol@caroltice.com.

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This article was originally published in the January 2010 print edition of Entrepreneur with the headline: Where to Go When You Can't Find the Dough.

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