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Financing Options

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When looking for financing options in order to purchase a new franchise, there are two hurdles that entrepreneurs in today's economy face: (1) formulating a comprehensive business plan and (2) coming up with at least a quarter of the total capital required.  While securing franchise financing may be easier than traditional commercial loans because of the established trademark and marketplace experience of the VR brand, it is most definitely not a walk in the park.  Here is a list of the most common requirements from traditional lenders:
 
1) 25% cash injection of total deal; banks will look to lend the other 75%. 
2) 100% collateral secured by either real estate, stocks, bonds, 401K, etc. 
3) Related business experience for at least three years.
4) Owner must NOT rely on income from the franchise for the first 12 months.
 
VR Business Brokers is an SBA-approved franchise.  The SBA (Small Business Administration) offers competitive rates and generally longer terms than other commercial sources. Loans are typically made by a private bank or other lending institution, with a portion guaranteed by the US government agency. The SBA offers many programs designed to meet a variety of small-business needs, including its popular 7(a) guaranteed business lending program. The low documentation SBA program, introduced in 1994 to secure loans of $100,000 or less, is now the fastest growing franchise loan program.
 
If you have good credit (above a 700 credit score) you may also qualify for other personal financing options available from most banks.  These include signature loans,  personal and business lines of credit, 401(K) rollover products, and conventional personal credit offerings.  Another form of financing can be found through investors – friends, family members, and acquaintances who believe in you and your ability to make a franchise work.

Regardless of which financing option may work best for you, take the time to speak with one of our VR career focus advisors by contacting us online today.
 

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