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Overcoming Franchise Funding Fears

Contributed by Franchise Financing Partner Guidant Financial Group.

You want to dip your toe into the waters of business ownership and have decided to jump into a franchise. Maybe you’ve zeroed in on which franchise is right for you or perhaps you’re still exploring the options. Whatever you decide, you’ll need a way to finance the venture, and that can be intimidating. Getting a business loan can be tricky… even as the economy begins to heal. If you’ve got money, banks and credit unions will line up to loan you even more. If you don’t have money? Well, take heart—here are some alternative funding options that can put you at the helm of your own franchise:

  1. 401(k) Rollover, or ROBS (Rollover as Business Startup) If you have a retirement account, there’s a way to use it to finance your entrepreneurial dreams. Here’s how it works: You form a C-Corp that will operate your new business. You create a new 401(k) into which you rollover your existing retirement account. Then the new 401(k) buys stock in the C-Corp, and you’re in business. The caveat is it needs to be set up meticulously to avoid tax and penalties. Our partners at Guidant Financial are the dream team for this sort of financing.
  2. Portfolio Stock Loans - Tapping the value of fully-paid stock can be a way to secure cash for your business. Investors are basically pledging the value of their stock portfolio as collateral for a loan. In the best case scenario, your stock’s value will increase over the loan period enough to cover the interest. If your money is tied up in your stock portfolio and you need cash to get your business off the ground, this is a viable option.
  3. Unsecured Credit It’s called “unsecured” because the debtor does not provide any collateral. If you don’t want—or are unable to—put property or equity in property up as collateral and your personal credit is very good, an unsecured line of business credit can be a good way to get your hands on start-up capital. For a new business your application will most likely include a business plan and up to three years of earnings projections.

If you’ve got ambition and drive, but lack the liquid funds to purchase your slice of the American Dream, one of these alternative funding options may be the right choice for you. Remember to investigate business opportunities and financing options diligently.

To request information on Guidant Financial, CLICK HERE

The Best Senior Care Franchises

Before we get to the individual business profiles, however, a quick background on what senior care and home care businesses do and why they serve such an acute need: An increasing number of elderly Americans want the opportunity to remain at home as they age. Unfortunately, to do so, many of these individuals require personal assistance beyond what their families can provide. The best senior care franchises and homecare franchises manage to meet this need cost- effectively -- to the great relief of worried family members -- by providing compassionate non-medical care, such as transportation assistance, light housekeeping, meal preparation, companionship, assistance with taking medication, and, in certain cases, medical services.

The Best Franchise Blogs

Out on the web, there's more than enough entertaining and interesting information to make your head spin. While the Internet of a half decade ago was held hostage by professionals and degree-touting experts reporting in the same old monotone voices, passionate topic bloggers soon tore that model apart, and helped open up the medium to anyone with something to say.

Chick-fil-A Wants You to Eat Less Kale?

Several other big-name corporations have been in the news recently for raising similar issues. Nike recently sent a letter to someone selling “Just Jesu It” t-shirts. Best Buy sent a letter to Geek On. Hell’s Angels sent a letter to a designer in California.