5 Best Franchise Loans to Explore

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If you want to start a franchise business but don’t have much money, you’re not out of luck. Franchise loans offer would-be franchisees the chance to begin acquiring their franchises.

There are many benefits to starting a franchise. As a franchisee, you won’t have to worry about all the risks of starting your own business. When you sign your franchise agreement, you’ll take on the company’s branding and intellectual property. Taking on another company gives you a built-in customer base and a proven track record.

So, if you’re low on money, don’t quit now. Use this handy article to find the best franchise loans. We’re confident we’ll get you on the right track.

How Much Do Franchises Cost?

Many would-be franchisees start with the same question: How much do franchises cost? The truth is, the answer can vary considerably. You can find low-budget franchises for less than £10,000, while higher franchises, like McDonald’s and Dominos, can cost upwards of £500,000.

We don’t all have the money required to take a top franchise. No matter your financial situation, you’ll be able to find resources to help you acquire your dream franchise.

The Gift of a Franchisor

Once you’ve paid your franchising fee, you’re in luck. From there, your franchisor (or franchise owner) will walk you through the necessary training to help you get on your feet.

Ideally, this franchisor will remain a mentor throughout the process, helping you across the board, from hiring to training new employees. So, once you pay your fee, you’re in good hands. But how can someone with small finances get there in the first place? That’s where loans come in.

The Best Franchise Loan Options to Explore

How to Find Franchise Loans in the UK

There are many types of loan opportunities available throughout the UK. Start perusing your options today to get your best foot forward.

1. The Start-Up Loan

The “start-up loan” is offered by the UK government to help get businesses on their feet. Fortunately, this loan is unsecured, meaning you won’t have to put your house or property at stake. This loan is outstanding for those just starting and can be secured between 500 and 25,000 – enough to secure a low-cost franchise.

Consider a few starting qualifications:

  • You must live in the UK
  • You must be 18 or older
  • You have (or are planning to have) a UK-based business that’s been trading for at least 24 months.

2. Bank Business Loans

A business bank loan is a loan offered by banks to help fund franchises. The loaned amount will likely vary depending on your specific vendor and the franchise you’re hoping to secure.

Before trying to secure a business bank loan, you need a plan. Come up with a business plan and compile evidence of credit trustworthiness. Unlike a start-up loan, you may have to purchase collateral, like property, to secure a loan.

3. FSB Loans

You won’t just have to rely on banks or the government for funding as a franchisee. The Federation of Small Businesses (or FSB) provides many loan options to help out business owners like franchisees. The SBA comes with favourable terms like lower interest rates and extended repayment periods.

Conversely, the FSB’s application process can be lengthy– and a loan may be more challenging to secure.

4. Equipment Financing

Specific franchise industries come with equipment-based fees. Examples of these franchises include:

  • Manufacturing equipment such as machinery and tools
  • Office equipment like computers, phones, and printers
  • Transportation equipment like delivery vans and trucks

No matter your franchise, you’ll likely have to invest in equipment. Fortunately, equipment financing helps buy new or used equipment. Depending on your credit history, these loans can range from secured to unsecured. Often, the promised equipment will be used as collateral.

5. Venture Capital

If the above options don’t satisfy you, you can try reaching out to investors. For franchisees, venture capital can be used to finance the purchase of a franchise or even help its growth.

However, this financing likely means you will have to give up a portion of your ownership. Ensure the deal is worth it before giving up a part of your return.

Crowd Walks

How to Acquire a Franchise on a Budget

If you’re hoping to start a franchise business, you don’t have to rely on a loan. Many zero-cost franchises allow you to purchase a franchise at no cost. Of course, don’t stick to the first opportunity you see. Utilise reviews to determine if a zero-cost franchise is reliable.

Furthermore, there are many low-cost options. Our website lets you navigate different budgetary ranges, including those under £10,000. Wherever you are, we have options.

Use Franchise Local to Your Benefit

Whatever your financial situation, don’t give up on franchising. This business model comes with too many advantages and can lead to your monetary success.

We recommend looking at accessible government and bank loans and low-cost franchises. These processes often take time and research, so take your time. As you progress, continue to learn and grow. Our articles will illuminate you and prepare you to take over the industry. Learn how to start a care franchise and how to start a franchise with no money.

Even better, our Ultimate Guide will pack all the necessary information. We can’t recommend it enough.

Franchises aren’t just made for the elite. The business is accessible and profitable– as long as you know where to look!

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