Many newbie and even serial entrepreneurs turn to franchising as a way to get started or continue their dreams of being their own boss. With key advantages such as an established operational process and a well-known product or service, franchising can enable you to run your own business with less risk than building your business from scratch. Generally speaking there are fewer unknowns and more how-to manuals and support associated with franchising.
A Heady Startup Cost Can Hurt Franchise Finance
Yet securing franchise financing can be as challenging as securing any other type of financing to start a new business. Depending on your type of franchise, according to Entrepreneur.com, funding the dollar amount remains difficult because, oftentimes, a large amount is required up front, sometimes larger than a solo, standalone startup. Due to the nature of financing a franchise, the business owner may have less flexibility when it comes to determining startup costs. Years ago, franchise business financing was oftentimes viewed as less risky by banks and other financial lenders. Today, however, some evidence suggests those who seek franchise finance are having the same level of difficulty as those small business owners seeking non-franchise based funding.
Finance Franchise with Factoring Receivables
As an alternative to traditional lenders, many franchise business owners may satisfy their financing needs with factoring accounts receivables. As third-party financial institutions, invoice factoring companies provide less rigid and more fluid terms that are generally considered to be more suitable to startups and less established small businesses including franchises. By selling your most current invoices for cash, you can get paid immediately rather than waiting 30 days or more. The factoring company takes a percentage or fee for processing the transaction and the entire cycle repeats itself month after month for as long as you need. Committed to customer service, factoring receivables experts can work with you individually to find a franchise financing solution to fit your needs.