In an increasingly competitive economy, small business owners have had to find effective methods to obtain adequate financing for their budding company. New reports show that many owners have had trouble acquiring loans in recent months, though other studies imply small business lending has trended upward during the same period.
This is a sign that entrepreneurs are launching new ventures at a fast rate – which could be good news for the economy at large – but has created a gap between the needs of borrowers and supplies of lenders. Forbes reports that new data from the International Franchise Association shows this gap was huge, and stifled many chances of economic expansion.
According to the news provider, the IFA said the discrepancy between needs and supplies was around $2 billion, which it further notes could have led to the creation of more than 90,000 jobs throughout 10,000 would-be franchise establishments. For obvious reasons, this was viewed as a clear call to action by franchise industry advocates.
BoeFly released a new infographic that explains some of the most effective strategies to obtain franchise loans. The firm begins by explaining that a strong business plan and understanding of the desired franchise’s brand are imperative before beginning the loan application process.
To prepare, a potential franchisee will need to put together several documents, such as the business plan itself, a personal financial statement, franchise disclosure document, credit check and resume, as well as tax returns, collateral and business projections, BoeFly notes.
The lending market should be studied, as unconventional methods could prove most suitable, the firm explained. Additionally, Small Business Administration loan offerings, such as the flagship SBA 7(a) loan program, are especially helpful for new businesses, as they allow financial institutions to provide loans to borrowers which may not have been possible otherwise.
In the infographic, BoeFly lists several funding options, such as conventional loans, merchant cash advances, factoring, investments from family or friends, franchisor provided loans, loans against 401Ks and more.
The company suggests always making rational requests when looking for franchise financing. Information that will shape what is considered rational can be obtained by inquiring with existing franchisees under the desired brand.
BoeFly works as a loan-matching portal, and can help you obtain the franchise financing you need with its advanced algorithms and extensive expertise in the industry. Through just one, simple loan application, you will be matched with thousands of lenders, while the matching process itself will ensure you receive funding from the best-suited financier.
With the amount of support now available from myriad organizations, such as the IFA, SBA, BoeFly and more, now is an excellent time to begin the process of opening a franchise location. Lending volumes have trended upward in recent months, and these organizations will continue to foster growth in the franchise industry to boost economic improvement.