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Franchise Financing Becomes a Bright Spot for Economy in Small Business Financing

So the economy may not be percolating to the top quite the way most folks want it to. The unemployment numbers seem to remain stubbornly low and hiring remains decidedly flat. Yet there are reasons to be optimistic. According to a recently year-end 2013 report from the International Franchise Association, small business franchising grew more rapidly and produced more jobs than the larger economy as a whole.
Franchise Financing for Business OwnersEven better, the association predicts that this trend will continue well into 2014 in part because people, growing frustrated with a fruitless job search, have taken it upon themselves to start a franchise. Funding such efforts remains a challenge as lack of sufficient startup money is a key reason small businesses don’t launch. Specifically, the experts predict 193,000 new jobs, 13,000 new businesses and $38 billion more in economic output will be generated from franchising in 2014.

Funding For Small Business Remains a Challenge for Many

As with any other small business financing, franchise financing can require a little creativity and resourcefulness. Some may choose to borrow from friends or family while others may go to traditional banks for small business funding. Another option for financing a franchise is accounts receivable factoring where a business sells its invoices for cash right away while the factoring company collects payment within the typical 30-day payment window. Factoring receivables can help ensure regular cash infusions in order to maintain a healthy cash flow for your business. Such franchise funding can also be used for startup, equipment, payroll and overhead costs. Specialists at such factoring companies can also work with you to negotiate payment agreements for things like startup franchise fees.

Franchise Business Financing Still Involves a Gamble

Though considered by some safer than starting a non-franchise business, finance franchise still does involve some risk and is by no means a sure thing. Many people underestimate the amount of working capital and cash reserves they will need to keep the business up and running, especially in the beginning. This is why regular cash payments from factoring receivables for instance can prevent business gridlock due to lack of capital.

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About the Author:

author image Since 1991 I specialize in Invoice Factoring, PO financing and ABL facilities. I currently work internationally with companies in the US and Canada via our internet marketing division. Specialties: Accounts Receivable Factoring and Payroll Funding for Manufacturing, Oil & Gas, Telecommunications, Wholesale Trade Distribution, Staffing and Transportation. I always enjoy helping companies rise to the next level of success.

View More Posts By Robert Bernfeld