Funding for franchises
There are numerous routes available to you when it comes to raising money for a franchise. During a typical year we are actively involved in appointing hundreds of franchises. So, we know a thing or two about funding for a franchise! From our experience, these are the most commonly used ways that franchisees fund a franchise purchase.
Cash – If you’re lucky enough to possess enough cash to buy a franchise outright you’ll never have to report to the bank manager. That’s no bad thing. We see around 20% of franchises funded this way.
Personal Loan – Now this is an interesting one because banks have many pots to lend from. At lower investment levels we still see a lot of franchises funded by personal loans. This is a quick and easy loan to get. It is a fact that we see a lot of franchisees obtain consumer loans and use it for a business. No business plan required. No cash flow needed. Usually you get an agreement in principle within a day or two! As a result personal loans are very popular ways to get funding for franchises.
Business Lending – Get your business plan done along with a spreadsheet because that’s what you’ll need for a business lend.
Startup loans scheme – The Government Start Up Loans Scheme will fund 100% of the franchise fee. The online process is very straightforward as you are assigned a mentor to help you navigate through the application process. You can borrow up to £25,000 and the interest rate is just 6% and repayment can be up to 5 years. A decision in principle is very quick and you could receive funding within 2 weeks. Consequently this is a very popular offer! If you need any assistance or further information please talk to any one of the Lime team. You can get more details of the scheme at https://www.startuploans.co.uk. There are Delivery Partners in each region of the UK who will help and mentor you throughout the process. As a result you don’t need to orientate yourself around the huge .Gov website!
Pension Led Funding
The chancellor recently outlined government plans to release pension money. So, individuals can draw out pension monies from the age of 55. This means that you, or your partner, or parents can help you. If they have a pension fund it can provide the cash to buy a franchise. This removes the need for a bank loan entirely!