Franchise Financing, who knew?

I preface this posting by saying, "I work here everyday, I should know this stuff."  

I had heard the chatter in the office and at our last Quarterly Meeting about a new financing program that we had been selected to tap into at United Franchise Group. Not being from that side of our business, I half listened and therefore only half understood this to be financing that people could use to start a franchise. Traditionally, we help candidiates secure financing to launch a new business.  Some get there own sources independently, some use SBA, others opt for financing we provide.  This Franchise Financing program is just that, but it is also good for established franchisees looking to grow or restructure their business.

I had a brief conversation with Tim Phillips, our expert here on all things financing.  That's how I learned new entrepreneurs aren't the only ones using Franchise Financing.  He reports that existing franchisees are also using this "line of credit" style financing to boost their business in their community.  These are some examples Tim shared with me, UFG franchisees can:

• Grow your business through expansion of facilities, new staff, new product offerings, new equipment, new services offered to customers.
• Dive into a niche market you've had your eye on.
• Buy-out competitors, taking on their customer lists and incorporating their business into yours.
• Consolidate credit and make sense of spending and borrowing that might have occurred over the last two years.
• Support large deposits. When a significant project is secured, can you proceed with the confidence that you can fund the job with your vendors before being paid in full by the customer? This financing has proven to be the piggy bank buffer some franchisees need to service larger accounts and deliver higher volume sales.

In many cases, this approach is better than what some would hatch on their own. Some attempt to borrow moeny from family members... a daunting task with long tenticles.  Others say they are reluctant to apply for financing because of their credit history or past transgressions - here's where family can help. A family member can secure this type of financing on behalf of your business, freeing their money from being the source of your growth.  In speaking with Tim, he says franchisees are usually pre-approved in 24-36 hrs, with the bulk of approved applicants receiving their funding in 2-4 weeks. 

I am not the financial advisor for our franchisees as many people know, but I have great contact with many of our franchisees over the course of a week.  I told Tim I'd like to get the word out, this could be just what some of our franchise operators are looking for to pull their business to new heights!

Link to post with Franchise Financing Press Release info.