At some point, you'll probably turn to your local banker. If you have a relationship with your bank, talk to people there first. If they can't help you directly, they're likely to know other banks in your community that can be of assistance. Look for banks experienced in lending to small businesses. And remember, bankers are competitive today and the Web is full of sites that can give you comparative information on banks and interest rates.
Before you meet with any banker, make certain that you come prepared with the information he or she needs to make a lending decision. Prepare a business plan on your future franchise. Include not only the information provided by the franchisor (brochures, disclosure documents, etc.) but also information about the business you want to establish (investment, competitive information, market information, projections) and about yourself. Ask your accountant for help preparing a proper business plan and presentation.
Another source of advice on developing business plans and getting started in business is SCORE. The Service Corps of Retired Executives is a nationwide nonprofit association with 11,500 volunteer members and 389 chapters throughout the United States and its territories. It's also a resource partner with the SBA. Besides providing business advice for free, the volunteers at SCOREhave years of experience in helping businesspeople and consequently do a terrific job handing out advice.
Whether you're speaking with your banker, your accountant or a SCORE representative, you're likely to hear a lot about SBA loans. The SBA loan program is not a direct source of money, but rather a source of loan guarantees to the lending institutions from which you'll be borrowing. Most lenders are familiar with the SBA loan programs and can help you complete the information the SBA requires. You can find information on the many programs the SBA offers at http://www.sba.gov.
A relatively new program established by the SBA is the Franchise Registry. The Web site lists approximately 150 franchise systems that have submitted their franchise documents to the SBA for review and approval. By pre-clearing their documents, the franchisor enables prospective franchisees to get expedited loan approval from the SBA.
Other sources for leasing programs and funding can be found through the International Franchise Association's Council of Franchise Suppliers.
The money you need to get into business is out there. Make certain you know how much money you really need, and be realistic. Remember, once you borrow money to start your business, you have another mouth to feed: the loan source. Principal and interest on the loan has to be repaid, and your franchise needs the cash flow to make those payments.
|A Few Pieces Of Advice|