Once you have made the decision to purchase a franchise, you need to obtain funding. Determining if you can find the necessary investment capital may affect your decision to start a franchise. This is an important part of your business plan, and it can be a much harder goal to achieve than you may realize.

In fact, many people give up their dream of purchasing a franchise because they are unable to find the money required to do so. Fortunately, there are many available funding options if you just know where to look. I’m going to discuss some potential funding sources so you can purchase a successful franchise of your own.

Obtain a Special Franchise Loan

Depending on the country in which you live, you may be able to obtain a special franchise loan to start a franchise. For example, the United States offers a lending program that has resulted in a huge number of successful franchises. They offer what is called SBA-backed loans to successful applicants. You should discuss the situation with your financial institution to see if you quality for an SBA-backed loan for your franchise. Many banks also provide a list of the specific franchises they are willing to fund.

Many British banks also operate a franchise unit that is specifically designed to provide financing to franchisees. Banks such as NatWest and Ulster Bank provide funding to many franchisers and franchisees. This can simplify the process of obtaining funding, since specific lending criteria have already been established. You may qualify for a “soft” loan; they require very minimal or no personal collateral as security, and they are generally offered at a much lower interest rate than traditional business loans.

Look For a Venture Capitalist

Another option to fund your franchise is to seek the assistance of a venture capitalist. You will generally be required to provide an extremely detailed business plan and an outline of every aspect of your proposed business. In order to obtain venture capital, you may also have to sacrifice as much as 50 percent of your business to obtain the required funding.

Consider Family Equity

Even if you manage to find funding for your franchise, you will need to invest some of your own money or “equity” into running the business. Hence, you need to make sure you are able to pay your bills every month and can handle all the necessary personal and business expenses. You should consider discussing your business with trusted friends and family members. They may be willing to invest in your new business venture if they see how determined you are to succeed.

Seek an Angel Investor

When I refer to angel investors, I don’t mean the kind with shiny halos and white wings. This term refers to an individual who is wealthy and is not a professional venture capitalist. This person has investment money ready for a lucrative investment opportunity or one that will net higher returns than traditional investment methods such as the stock market.

Most angel investors will only consider providing funding for investment opportunities that will earn them annual returns of 25 percent or higher. Many of these individuals are long-term investors who have helped many entrepreneurial ventures get off the ground.

Talk to the Franchiser

Last but not least, be sure to discuss the situation with the franchiser. According to recent statistics, approximately 30 percent of all franchisers are willing to provide financing to the franchisee directly or via a third-party lender. Your franchising agreement will normally indicate if direct financing is available. Even if this is the case, you will most likely need to consider alternate sources of funding as well. Most franchisers will not cover 100 percent of the required funding to run the business.

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However, franchise loans are not just personal loans you can obtain with little hassles. The requirements for approval are more complex because the amounts involved tend to be significantly higher. Therefore you will need to show proof of several facts and meet different requirements to demonstrate that you are fitting and reliable. Only then a lender will provide the funds to finance a project that, apart from the borrower, has risks of its own.

Who Provides Franchise Loans?

Franchise loans are available for many different types of businesses. As regards to the lenders that provide these loans, prime lenders that deal with commercial and business loans usually offer franchise loans among their financial products. Also, there are local lenders that provide this kind of financial assistance. And finally, the very companies offering to sell franchises may be associated with a lender or have a financial institution of their own that provides financing for their projects.

Tips for Starting up

A good franchise record will make financing a more attractive investment for the lender. Therefore, choosing a well established business with products that have been proved to be marketable and appealing to customers is the most important presentation card you can offer. With your application you should include as much documentation as possible regarding the franchise you are planning to purchase with the loan.

Also, it is important to prepare information about your business. You need to think about logistics, prepare your financial statements, stock and inventory, etc. All this information needs to be clear and free from obscurities. The lender needs to see your franchise project and know that you will be making enough money out of it so you can repay the loan without hassles.

Where To Find Opportunities on Franchises And Financing

If you have not decided yet which kind of business plan you are going to undertake, and even if you do but you still do not have the financing for starting up and need to find a lender, the place to go to find the information and contact details to get started is the internet. There are many online sites offering tons of data about different franchises and even reviews by those who purchased a franchise or forums where ideas for optimizing the businesses are shared.

As regards to the lenders, if the franchise does not offer financing too or the franchiser is not associated with a particular financial institution, you will need to resort to either traditional lenders, banks or financial institutions you are familiar with or do some research. Again, for that purpose, the internet will come in handy. There are many online lenders offering promotions on franchise loans and they can provide you with any additional information and forms you will need to fill either online or offline in order to effectively apply for your franchise loan

Franchise? If you are like many people, your first thought at the word “franchise” was probably a restaurant. And a restaurant, of course, is usually anything but low-cost and home-based! As the world of franchising has grown literally by leaps and bounds, however, the types of franchises available have increased exponentially.

And among the following home-based, low cost franchises, one might just be the perfect opportunity for which you have been looking!

All About Honeymoons
When companies like Entrepreneur Magazine and Franchise Times name a franchise as one of the best and/or fastest growing, that franchise deserves not only a second look but also a third and fourth look! Such is the case with All About Honeymoons, the home-based business that provides resort wedding and honeymoon planning for engaged couples. All About Honeymoons is more than a travel agency. It is a comprehensive planning experience that equips couples with their own personal travel webpage where family and friends can view the couple’s news and even make financial contributions to the couple’s wedding or honeymoon.

With a start-up cost ranging from just $9,000 to $29,000, All About Honeymoons provides franchisers with complete training to help them get their business off the ground and give couples the wedding or honeymoon vacation of their dreams.

360 Solutions
Have you always dreamed of helping people achieve their full potentials but doubted you had the expertise to do so? With the training and support provided to you by 360 Solutions, you can be well on your way to owning and operating your own home-based consulting and coaching firm.

360 Solutions takes equipping its franchisers seriously and proves this fact by offering extensive trainings designed to help affiliates not only learn the art of coaching and consulting but also learn the basics of running a business.

In addition, the $10,000 capital investment makes 360 Solutions an extremely appealing option for anyone looking to start a low cost, work-at-home franchise.

MonitorClosely.com
In today’s world of dedication to heightened security and safety, you can be a part of the growing security industry by owning your own digital surveillance systems franchise.

MonitorClosely.com is a low cost, work-at-home franchise that offers entrepreneurs the opportunity to marketing digital surveillance systems to customers such as schools, retail businesses, restaurants, homes, and many, many more. And, because customers can now monitor surveillance cameras from anywhere in the world by using an Internet-connected computer, these systems are even more appealing than ever before.

Total capital investment ranges from only $7,000 to $29,000, and financial assistance is available.

Brazilian Springs
Water – it’s one of the very few things that humans literally cannot live without. Why not capitalize on this perpetual need by owning your own home-based water distribution business?

Brazilian Springs carries a price tag of only $10,000 and offers entrepreneurs the chance to provide pure spring water to a thirsty public. The company offers both training and support, and because Brazilian Springs is relatively new in the United States, the opportunity is ripe to make this cheap franchise into a high-profit business venture for you and your family.

CaribbeanCruiseLines.travel
Do you enjoy cruising? Do tropical paradises and luxury liners intrude into your daydreams? If so, than you may have just found your calling with this home-based cruise-planning franchise!

Serving an industry in which 81% of first-time cruisers become repeat customers, CaribbeanCruiseLines.travel franchisers sell cruise vacations online to customers who can literally be anywhere in the world! For under $10,000 – only $9,600 to be exact – this home-based business opportunity can be your ticket to entrepreneurial success.

Millennium Plus
When Global Positioning Systems (GPS) burst on the consumer scene a few years ago, the potential for the technology was quickly apparent. Now, with your own Millennium Plus vehicle tracking franchise, you can secure your piece of the GPS economic pie.

Millennium Plus allows your customers to keep tabs on where and how far their car has been driven, an ideal capability for parents of teenagers or anyone concerned about their vehicle’s safety. Additionally, with Millennium Plus technology, customers never again have to worry about locking their keys in their car as Millennium enables them to unlock their car from any location via the Internet.

This home-based business can be yours for a total capital investment of only $10,000; financing assistance is available, and training and support are provided.

CruiseOne
Be a part of the top-ranked cruise-only travel agency franchise by owning your own, home-based CruiseOne business! As a CruiseOne franchisee, you have access to comprehensive training, extensive marketing support, and top-of-the-line commission opportunities.

With a total capital investment as low as $9,800 to $26,300, this work-at-home franchise offers enormous earning potential combined with flexibility and a company support system that is unparalleled in excellence.

CHIP The Child ID Program
Child safety is, without a doubt, a parent’s greatest concern. As a CHIP franchise owner, you can help alleviate parents’ worries by providing them one of the best methods available for keeping their children safe.

The CHIP franchise has received high rankings by Entrepreneur Magazine in numerous categories, including the #76-ranked home-based business opportunity and the #71-ranked top low-cost franchise.

With a total capital investment of just $10,995 to $23,500, CHIP The Child ID Program is the perfect choice for entrepreneurs intrigued by a low-cost franchise that not only produces income but also helps keep children safe.

Lease One
A growing area of franchise opportunities lies in the financial sector, and if finance and leasing are your business fortes, then consider starting your own Lease One commercial equipment leasing home-based franchise.

As a Lease One broker, you will be a part of the fastest-growing industry in the financial sector. The total investment capital required is just $19,900, but your income potential is six-figures! Even better, no financial background is required. Company experts are with you every step along the way, providing their industry expertise to help you make your business grow.

So take a moment to check out this fantastic work-from-home business opportunity. It may be just the franchise you are looking for!

Drama Kids International
If someone said that you could work from home and help children in the process, what would you say? Impossible?

It’s not with Drama Kids International, the dramatic arts enrichment programs franchise that you can own and operate right from the comfort of your own home office! With investment levels starting at just $17,000, this low-cost franchise opportunity allows you to work for yourself while giving to children a gift that will literally last a lifetime.

Drama Kids International provides curriculum, lesson plans, inclusive training, support, and marketing materials to help you get your franchise off the ground and grow it into a successful business venture.

If you’ve been wondering if you can own your own successful home-based business without investing an arm and a leg, these cheap franchise options answer this question with an unequivocal YES! Low-cost franchise opportunities are available to help you achieve your dream. All you have to do is select the one that’s right for you!

Find low cost franchises, home based franchise opportunities and information for entrepreneurs at Franchise Gator.

Author: Raymond Lawrence
Article Source: EzineArticles.com
Provided by: Guest blogger

A franchise is commonly sold as a business in a box. You pay a start-up fee and royalties for access to a supposedly proven brand and product, and after a few weeks of coaching, you’re off and running toward success and profits. For some corporate refugees, purchasing a franchise can appear as secure as taking another company job, but with the ability to make more cash and not be hounded by a boss. Sounds simple, no?
A 2002 survey of franchisees, conducted by Frank Wadsworth, a lecturer at Indiana University Southeast, commends that a franchisee’s relationships with both his business and his franchiser are anything apart from simple or sure.

rated it below average or poor ) and 67% say their franchise has a good brand. although about two thirds have been rewarding at some particular point, only 44% say they’ve seen a good return on their investment. How can folk who are not happy with the monetary outcome of their business still be nearly satisfied with the business itself? Dr. ‘If you’ve put all this money into a franchise, you wish to think well of the choice you’ve made,’ Dr. Wadsworth notes.

An enormous Investment
Troy xmas, who owns a Money Mailer LLC franchise in Berkeley, Calif, highlights that, at least at the outset, franchisees are extraordinarily dependent upon their franchiser. ( money Mailer, of Garden Grove, Calif, sends envelopes of chits from local firms to homeowners. ‘When you’re starting out, you’re clueless, and all you know is keep your nose to the grindstone and do as the system tells you because it worked for other people,’ he says. Christmas reports that he is’s OK with cash Mailer, and he has received additional training and consulting when he’s's required them. Even so, he sees how franchisers can use that dependence to their advantage.

You’re feeling like they’re supporting you, even if there is not anything they can basically do to help you,’ he is saying. ‘The message you’re receiving from all this is if you are not doing well, it isn’t their fault, it’s your fault.’

Dr. ‘But none give their folks total freedom.’
And that is the way most franchisees want it. While less than half of the franchisees surveyed say they’re permitted to’exercise their entrepreneurial abilities’ or innovate with new products and services on their lonesome, 60% say they have as much autonomy as they desire.
‘The key to a franchise’s success is consistency ; getting the same sandwich or hotel room or service in Orlando ( FL ) as in Dallas ( TX ). So if you are a real businessman, you most likely do not want to have a franchise,’ Ken Hollowell, President of Profran Consultants says.

Outgrowing relations
David Boyuka, a Woodcraft Supply Corp. ‘There’s a price to pay for that, but you acknowledge that that’s the deal you struck.’

Profran Consultants can answer your franchise development questions. If you need funding for your franchise business we can help .

Ken Hollowell, President/CEO of Profran Consultants has over 30 years been consulting with companies wanting to become a franchisor and develop a franchise system. Ken Hollowell has developed over 800 franchise business throughout the world. He is one of the most sought after franchise consultants in the USA. In addition to the franchise development work, Ken prepares private placement offering for companies needing to raise funds for their projects or companies. Ken can be contacted at www.pro

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