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Casual Articles - How to Finance a Franchise
GroupwareGroupware is a software or hardware that manages documents on which organizations and groups collaborate. Groupware, of some form or another, has become a much sought after technology among businesses. Each groupware package includes tools which are meant to meet the needs of a business. Don’t be alarmed that when your business begins its search for a groupware package that 5,590,000 indexed pages will greet you on Google, 3,820,000 on Yahoo, and 950,316 on MSN. The fact is the market knows that your business needs a groupware package.In today’s Information Age, business collaboration is only harnessed by the speed and efficiency of its technology. Businesses, large and small, maintain some sort of groupware technology in order to manage document sharing quickly and efficiently. S
The lesson here is to be very careful about what the lender actually uses as security on the loan because it may limit your options in the future.
In terms of the true, all-in cost of the financing, this can be a complex subject. Unfortunately, some lenders like it that way. They will quote a low interest rate but not the points and loan fees involved. They won't take the time to educate a borrower on the differences between variable rate financing and fixed rate financing. They won't fully disclose all the charges that are incurred during the life of the loan.
The lesson here is to get
Researcher, Nancy Adler conducted a monumental study in the mid 1980’s to address myths about women and international business. Her study investigated if commonly held myths about women in international business were true including: women are not interested in International business, women were not willing to travel overseas for a variety of reasons namely family responsibilities and women would not be viewed as credible in overseas business due to the local perception of women. Her study results revealed that many of these false perceptions were indeed myths often held by male managers and HR personnel, and that women were interested and willing to conduct business overseas.Today many of these same myths still exist despite the dramatic increase of women in business and women owned businesses and wome
Generally speaking, in financing your franchise business, you have three basic options:
- Option I: Finance it out of your own pocket, either by writing a check from savings, cashing out retirement assets, or some other means,
- Option II: Take out a loan secured by your personal assets, such as an equity loan or an SBA loan, or
- Option III: Take out a commercial business loan for franchise financing.
However, if you have the resources to open the first location, and plan to rely on using cash flow from the first one to open the second, third, etc, be careful. Remember, if you have cash in the bank or equity in your personal assets, you can always use that for working capital or expansions later. If you plan to rely on commercial financing at any time, financing the first one is what gives you the greatest flexibility.
That's the downside of this option. Having your personal money tied up in a business limits your flexibility in the future. You may or may not be able to take advantage of a future opportunity when it comes along. Many books are available that discuss the value of using OPM (Other People's Money) in opening and growing a successful business.
Option II: Take out a loan secured by your personal assets This Option provides greater flexibility than Option I. Your liquid assets remain liquid giving you the ability to respond as needed to changing business requirements. The net, after tax difference between interest earned and interest paid can be low making this a viable alternative to Option I.
The downside of this Option comes in two forms: (1) tying up the personal assets you pledge as security, and (2) the true, all-in cost of the financing.
Tying up your personal assets limits your choice and flexibility in the future. As an example, we recently funded a 2nd location for a certain franchisee. He had taken out an SBA loan for his first location using his home a security. He knew the lender was also filing a lien against his first location but no one thought this would be a problem since we planned to secure our loan with only his new location.
What we discovered during the title search was that when the original lender filed their lien against the franchisee's business, they listed the location they were financing and included the phrase "all future locations" in the lien filing. Those three little words meant that any and all locations this franchisee would open at any time in the future were going to be considered security against his original loan! We were eventually able to resolve this but needed to negotiate a subordination agreement with the original lender.
The lesson here is to be very careful about what the lender actually uses as security on the loan because it may limit your options in the future.
In terms of the true, all-in cost of the financing, this can be a complex subject. Unfortunately, some lenders like it that way. They will quote a low interest rate but not the points and loan fees involved. They won't take the time to educate a borrower on the differences between variable rate financing and fixed rate financing. They won't fully disclose all the charges that are incurred during the life of the loan.
The lesson here is to get e
"Sixteen squirts."I didn't know what my wife was talking about. I was busy counting out money for my popcorn at the AMC refreshment stand. "He put sixteen squirts of butter in your popcorn," she answered my confused expression.I looked over as the movie attendant filled my small bag of popcorn with more popcorn and then squirted in more butter. I had asked for "lots of butter." I don't usually get it. This time, I got it.I received the bag and carried it like a bag of gold dust. It was almost that heavy. The bag was warm and a wonderful smell drifted up to my face.I entered the darkened theatre and walked down the aisle lifting the bag to my mouth so my tongue could pick up the fluffy popped kernels as I looked for a seat. I felt like an anteater at a buttered ant buffet.I sa
However, if you have the resources to open the first location, and plan to rely on using cash flow from the first one to open the second, third, etc, be careful. Remember, if you have cash in the bank or equity in your personal assets, you can always use that for working capital or expansions later. If you plan to rely on commercial financing at any time, financing the first one is what gives you the greatest flexibility.
That's the downside of this option. Having your personal money tied up in a business limits your flexibility in the future. You may or may not be able to take advantage of a future opportunity when it comes along. Many books are available that discuss the value of using OPM (Other People's Money) in opening and growing a successful business.
Option II: Take out a loan secured by your personal assets This Option provides greater flexibility than Option I. Your liquid assets remain liquid giving you the ability to respond as needed to changing business requirements. The net, after tax difference between interest earned and interest paid can be low making this a viable alternative to Option I.
The downside of this Option comes in two forms: (1) tying up the personal assets you pledge as security, and (2) the true, all-in cost of the financing.
Tying up your personal assets limits your choice and flexibility in the future. As an example, we recently funded a 2nd location for a certain franchisee. He had taken out an SBA loan for his first location using his home a security. He knew the lender was also filing a lien against his first location but no one thought this would be a problem since we planned to secure our loan with only his new location.
What we discovered during the title search was that when the original lender filed their lien against the franchisee's business, they listed the location they were financing and included the phrase "all future locations" in the lien filing. Those three little words meant that any and all locations this franchisee would open at any time in the future were going to be considered security against his original loan! We were eventually able to resolve this but needed to negotiate a subordination agreement with the original lender.
The lesson here is to be very careful about what the lender actually uses as security on the loan because it may limit your options in the future.
In terms of the true, all-in cost of the financing, this can be a complex subject. Unfortunately, some lenders like it that way. They will quote a low interest rate but not the points and loan fees involved. They won't take the time to educate a borrower on the differences between variable rate financing and fixed rate financing. They won't fully disclose all the charges that are incurred during the life of the loan.
The lesson here is to get
Construction civil engineers have a great deal of responsibilities in their field. They are directly responsible for the management and planning when it comes to constructing reservoirs, dams, buildings, railroads, airports, bridges, and highways. Not only do they aid in designing but they also take part in estimating costs, scheduling, planning, obtaining materials, selecting equipment used, and controlling costs.In the field of construction civil engineer, design of the process of construction, analysis, science, and mathematics are all necessary. What is more, is that construction civil engineers are directly responsible for many of the buildings and structures you use on an everyday basis. The bridges you drive over, the tunnels you drive through, the dams you see, the homes you live in, the busines
That's the downside of this option. Having your personal money tied up in a business limits your flexibility in the future. You may or may not be able to take advantage of a future opportunity when it comes along. Many books are available that discuss the value of using OPM (Other People's Money) in opening and growing a successful business.
Option II: Take out a loan secured by your personal assets This Option provides greater flexibility than Option I. Your liquid assets remain liquid giving you the ability to respond as needed to changing business requirements. The net, after tax difference between interest earned and interest paid can be low making this a viable alternative to Option I.
The downside of this Option comes in two forms: (1) tying up the personal assets you pledge as security, and (2) the true, all-in cost of the financing.
Tying up your personal assets limits your choice and flexibility in the future. As an example, we recently funded a 2nd location for a certain franchisee. He had taken out an SBA loan for his first location using his home a security. He knew the lender was also filing a lien against his first location but no one thought this would be a problem since we planned to secure our loan with only his new location.
What we discovered during the title search was that when the original lender filed their lien against the franchisee's business, they listed the location they were financing and included the phrase "all future locations" in the lien filing. Those three little words meant that any and all locations this franchisee would open at any time in the future were going to be considered security against his original loan! We were eventually able to resolve this but needed to negotiate a subordination agreement with the original lender.
The lesson here is to be very careful about what the lender actually uses as security on the loan because it may limit your options in the future.
In terms of the true, all-in cost of the financing, this can be a complex subject. Unfortunately, some lenders like it that way. They will quote a low interest rate but not the points and loan fees involved. They won't take the time to educate a borrower on the differences between variable rate financing and fixed rate financing. They won't fully disclose all the charges that are incurred during the life of the loan.
The lesson here is to get
When you want something, the best way to get it is to make your request in a straightforward and positive way. You should not expect your boss or co-workers to read your mind and know what your expectations and desires are. Nor should you brood about the fact that someone else has not recognized what you think is obvious to everyone.If it is important to you and you really want it, then bring it to your boss’ attention. Here are 8 steps you can take to get your requests granted at work.How to Succeed at Getting What You Want at Work Think through your request. Spend some time planning and/or writing what you will say, how you will say it and any anticipated reactions (positive or negative) to your request.Describe the WIFT (What’s In It for The
The downside of this Option comes in two forms: (1) tying up the personal assets you pledge as security, and (2) the true, all-in cost of the financing.
Tying up your personal assets limits your choice and flexibility in the future. As an example, we recently funded a 2nd location for a certain franchisee. He had taken out an SBA loan for his first location using his home a security. He knew the lender was also filing a lien against his first location but no one thought this would be a problem since we planned to secure our loan with only his new location.
What we discovered during the title search was that when the original lender filed their lien against the franchisee's business, they listed the location they were financing and included the phrase "all future locations" in the lien filing. Those three little words meant that any and all locations this franchisee would open at any time in the future were going to be considered security against his original loan! We were eventually able to resolve this but needed to negotiate a subordination agreement with the original lender.
The lesson here is to be very careful about what the lender actually uses as security on the loan because it may limit your options in the future.
In terms of the true, all-in cost of the financing, this can be a complex subject. Unfortunately, some lenders like it that way. They will quote a low interest rate but not the points and loan fees involved. They won't take the time to educate a borrower on the differences between variable rate financing and fixed rate financing. They won't fully disclose all the charges that are incurred during the life of the loan.
The lesson here is to get
How many people do you know who find excuses for everything? I remember telling my friends that I was going to rent out my house rather than sell it to use as a deposit on a new one. I received all sorts of advice, mostly negative. Here's the kind of things that people said regarding the idea: Don't do it because house prices might crash What if the tenant trashes the place? You might not be able to find a tenant at all, then what? Mortgage rates are going up so you might not make a profit Now's not the right time, wait a while to see if the market improves Short of saying "what if the sky falls in?" I received every other reason why not to do it.So, in my usual style I did it anyway. Since then, house prices have doubled, I have
The lesson here is to be very careful about what the lender actually uses as security on the loan because it may limit your options in the future.
In terms of the true, all-in cost of the financing, this can be a complex subject. Unfortunately, some lenders like it that way. They will quote a low interest rate but not the points and loan fees involved. They won't take the time to educate a borrower on the differences between variable rate financing and fixed rate financing. They won't fully disclose all the charges that are incurred during the life of the loan.
The lesson here is to get everything in writing and review it with a trusted advisor. Most reputable lenders will issue a proposal or term sheet that includes detailed information about payments, fees, terms, security, etc.
Option III: Take out a commercial business loan for franchise financing. This option tends to offer the greatest flexibility to most franchisees. Franchise loans are typically secured only with the assets of the franchise, leaving all personal assets unencumbered. Pay close attention to what franchise assets are being used as security (See the story under option II).
In terms of the true, all-in cost of this type of financing, as we mentioned under Option II, this can be a complex subject. All of the items mentioned in connection with Option II apply here with option III. Get proposals in writing, review those proposals with a trusted advisor, and make a fully informed decision.
About InSource Capital Services, Inc. We specialize in franchise financing. As proud members of our local Better Business Bureau and the NAELB, we promote and subscribe to a Business Code of Ethics. We are committed to "raising the bar" when it comes to fair and honest business dealings with all of our clients and business partners.
Features of our Franchise Financing programs include:
- Fixed rate loans to 84 months
- No outside collateral, other than the assets of the franchise and your good credit
- Pre-Funding, we can pay your Vendors directly
- Credit approvals in as little as 5 working days.
- Fast Turnaround Times
- Clear Answers to your Questions
- Competitive Rates
- Honesty & Integrity
- Finding a Way to get the job done!
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