Small Business Financing And Why This Is The Time For Low Cost Franchises
Small Business Financing And Why This Is The Time For Low Cost Franchises
Financing Options
There are many financing avenues by which an entrepreneur can attain the monetary support necessary to start a franchise, and one of the most common ways is through the Small Business Administration. If the business that a buyer is interested in has already been registered with the SBA, going through them to take out a commercial loan is infinitely easier than going directly through a commercial institution. That’s because the SBA works to promote the founding of viably strong small businesses by offering a 75% guarantee on behalf of the entrepreneur to any institution that will provide a loan to help purchase or initiate the business opportunity.
Without the assistance of the SBA, there are still normally many financial institutions that will lend funds to startup businesses. If the requested loan is less than $100,000, lenders will often grant an unsecured loan based solely the borrower’s credit history. If the request is for a loan of greater than $100,000, it may be harder to attain, requiring work experience relevant to the business in question, to ensure that it has a fighting chance of success, as well as some form of collateral to put up against the loan. Though it’s a tempting course of action to take, going this route can often be risky, as the interest rates may be higher and repayment is tricky if you make no profit.
Other means of financing a business are home equity loans and credit cards. The latter is almost always a bad idea, costing far more in interest than any other financing method. A home equity loan, however, can be profitable; providing some of the best interest rates available, but it’s only worth the risk under very specific conditions. A single man offering up his home as collateral might be making a decent move, but if you have a family to think about, leveraging their home to support your business is probably more of a risk than it’s worth.
The Problem of Finding a Lender
Remember, however, that these means of financing a business are plausible options under normal economic conditions, and today’s economy is anything but normal. In fact, it’s as volatile as it ever has been, and one of the industries most heavily hit by this recession, unfortunately, is the banking industry.
These days, there isn’t any bank that’s really doing well. For those who remember, it hasn’t been more than a couple months since Washington Mutual folded and was rescued and enveloped by JPMorgan Chase, and it’s been an even shorter time since Wachovia was overtaken by Citigroup. And, perhaps because the economy is so destitute, those acquisitions and a stalwart commitment to avoiding risky mortgage lending have done absolutely nothing to help JP Morgan Chase and Citigroup. Despite touting a "fortress balance sheet," JP Morgan Chase is seeing continual decline in stock prices, which are now down to $23 a share, a price they haven’t seen since 2003. November 19th and 20th, Citigroup stocks suffered roughly 25% value losses for two straight days. Even the presumed indefatigable power of Goldman Sachs suffered a 6% loss that week. All of which is to say that few, if any, banks are in a position to lend money to prospective entrepreneurs.
An Alternative
That doesn’t mean that finding a lender is impossible, just that it’s more difficult than it has been for a long time, and waiting to find that lender may not be a very profitable endeavor. Unless you have your sights set on a particular franchise, it may be time to think about starting your life as a small business entrepreneur a little more cheaply than you may have anticipated, so that you can perhaps afford to start into business without anyone else’s help. And a low cost franchise may be just the way to do it. Here are a few cheap franchises to get your mind running on possible business opportunities that won’t require the investment of a bank.
CompuChild
With a very minimal price tag of only $20,000-30,000, this educational home based business is a great opportunity for anyone who loves technology and kids and wants to work regular business hours. Establishing business relationships with local schools, franchisees bring computer equipment into daycare facilities and preschools to offer children a head start in their understanding of technology.
Furniture Medic
Part of the largest family of franchises, this home business is regarded as one of the best names in wood and furniture restoration and repair. The franchise package comes complete with full initial training, ongoing support, and all the equipment necessary to serve a wide variety of clients, including homeowners, hotels, and furniture retailers. And if the $25,000 price is still too high, in-house financing is available.
National Property Inspections
Property inspection is a profitable trade in any economic condition, and with National Property Inspections, anyone can learn to enter the field and profit from it. Trained on site at central headquarters and at home in his own office, a work from home franchisee is prepared to take the business in any direction he wants, running it as an owner/operator or the manager of a large staff, and it all costs less than $30,000 to start.
The fact that the lending market is in a crunch is no reason to not pursue the business opportunity that may just be your ticket out of your own economic slump, but it is reason to perhaps change your approach. If you don’t currently have the finances to initiate a small business, remember that starting smaller and in your price range is a very real and profitable alternative, and it may be just what you’re looking for.
Small Business Financing And Why This Is The Time For Low Cost Franchises - To learn more about this author, visit Candice Clem's Website.
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Paying for a small business is never an easy matter, and frankly, it’s the part of the transaction that people least want to think about. Often the purchase of a business requires some kind of loan, and under usual economic conditions, finding the financial support to afford a franchise business may be uncomfortable, but it’s far from impossible.
Financing Options
There are many financing avenues by which an entrepreneur can attain the monetary support necessary to start a franchise, and one of the most common ways is through the Small Business Administration. If the business that a buyer is interested in has already been registered with the SBA, going through them to take out a commercial loan is infinitely easier than going directly through a commercial institution. That’s because the SBA works to promote the founding of viably strong small businesses by offering a 75% guarantee on behalf of the entrepreneur to any institution that will provide a loan to help purchase or initiate the business opportunity.
Without the assistance of the SBA, there are still normally many financial institutions that will lend funds to startup businesses. If the requested loan is less than $100,000, lenders will often grant an unsecured loan based solely the borrower’s credit history. If the request is for a loan of greater than $100,000, it may be harder to attain, requiring work experience relevant to the business in question, to ensure that it has a fighting chance of success, as well as some form of collateral to put up against the loan. Though it’s a tempting course of action to take, going this route can often be risky, as the interest rates may be higher and repayment is tricky if you make no profit.
Other means of financing a business are home equity loans and credit cards. The latter is almost always a bad idea, costing far more in interest than any other financing method. A home equity loan, however, can be profitable; providing some of the best interest rates available, but it’s only worth the risk under very specific conditions. A single man offering up his home as collateral might be making a decent move, but if you have a family to think about, leveraging their home to support your business is probably more of a risk than it’s worth.
The Problem of Finding a Lender
Remember, however, that these means of financing a business are plausible options under normal economic conditions, and today’s economy is anything but normal. In fact, it’s as volatile as it ever has been, and one of the industries most heavily hit by this recession, unfortunately, is the banking industry.
These days, there isn’t any bank that’s really doing well. For those who remember, it hasn’t been more than a couple months since Washington Mutual folded and was rescued and enveloped by JPMorgan Chase, and it’s been an even shorter time since Wachovia was overtaken by Citigroup. And, perhaps because the economy is so destitute, those acquisitions and a stalwart commitment to avoiding risky mortgage lending have done absolutely nothing to help JP Morgan Chase and Citigroup. Despite touting a "fortress balance sheet," JP Morgan Chase is seeing continual decline in stock prices, which are now down to $23 a share, a price they haven’t seen since 2003. November 19th and 20th, Citigroup stocks suffered roughly 25% value losses for two straight days. Even the presumed indefatigable power of Goldman Sachs suffered a 6% loss that week. All of which is to say that few, if any, banks are in a position to lend money to prospective entrepreneurs.
An Alternative
That doesn’t mean that finding a lender is impossible, just that it’s more difficult than it has been for a long time, and waiting to find that lender may not be a very profitable endeavor. Unless you have your sights set on a particular franchise, it may be time to think about starting your life as a small business entrepreneur a little more cheaply than you may have anticipated, so that you can perhaps afford to start into business without anyone else’s help. And a low cost franchise may be just the way to do it. Here are a few cheap franchises to get your mind running on possible business opportunities that won’t require the investment of a bank.
CompuChild
With a very minimal price tag of only $20,000-30,000, this educational home based business is a great opportunity for anyone who loves technology and kids and wants to work regular business hours. Establishing business relationships with local schools, franchisees bring computer equipment into daycare facilities and preschools to offer children a head start in their understanding of technology.
Furniture Medic
Part of the largest family of franchises, this home business is regarded as one of the best names in wood and furniture restoration and repair. The franchise package comes complete with full initial training, ongoing support, and all the equipment necessary to serve a wide variety of clients, including homeowners, hotels, and furniture retailers. And if the $25,000 price is still too high, in-house financing is available.
National Property Inspections
Property inspection is a profitable trade in any economic condition, and with National Property Inspections, anyone can learn to enter the field and profit from it. Trained on site at central headquarters and at home in his own office, a work from home franchisee is prepared to take the business in any direction he wants, running it as an owner/operator or the manager of a large staff, and it all costs less than $30,000 to start.
The fact that the lending market is in a crunch is no reason to not pursue the business opportunity that may just be your ticket out of your own economic slump, but it is reason to perhaps change your approach. If you don’t currently have the finances to initiate a small business, remember that starting smaller and in your price range is a very real and profitable alternative, and it may be just what you’re looking for.
Small Business Financing And Why This Is The Time For Low Cost Franchises - To learn more about this author, visit Candice Clem's Website.
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John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
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Kim CastleWith nearly two decades in the advertising and design business, with clients like Domino's Pizza, General Motors, Direct TV, Pedigree, Wolfgang Puck, Higher Octave Music, Hollywood Celebrity Products, Disney, and Paramount, as well as thousands of entrepreneurs around the world define, structure, communicate, and position their business for greater profits, BrandU(R) co-creators Kim Castle and W. Vito Montone discovered that entrepreneurs could experience the same power that big brands command for a fraction of the cost with the world's only process-based results-drive Integral approach to business creation. BrandU(R) is helping entrepreneurs grow with the power of extreme clarity from idea...to brand...to market(TM) and helping one million entrepreneurs become successful and whole so that they can make a difference in the world. Are you one of them? If you want to experience clarity all the way to the bank(TM), get started now at http://www.brandu.com. - Visit Kim Castle's Website |
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Joe DagerJoe Dager is President of Business901, a progressive coaching company providing no-nonsense direction in areas such as Lean Six Sigma Marketing and organized referral marketing. What others say: In the past 20 years, Joe and I have collaborated on many difficult issues. Joe’s ability to combine his expertise with “out of the box” thinking is unsurpassed. He has always delivered quickly, cost effectively and with ingenuity. A brilliant mind that is always a pleasure to work with.” - James R. If you want to learn more about Business901, start a conversation with us. We can be found @ Web/Blog: Business901.com Web/Blog: FundingYourNonprofit.com LinkedIn Profile Follow me on Twitter - Visit Joe Dager's Website |
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Cheryl MatthynssensCheryl is a life skills coach, licensed Chemical Dependency Counselor and a 20 year entrepreneur. Cheryl's dedication to achieving a life of balance led to her expanding her teaching from the simple managing of life's daily challenges to adding financial well being as well. A direct marketer with DrinkACT, she is gaining ground in the online community with her concepts of making sure business owners, entreprenuers and employees have well rounded life styles. She opened up a small affiliate site - The Balance Guide- to help others find resources for mental and emotional well being. Visit Cheryl's blog to see more of the diversity beyond business she has began offering online at www.thebalanceguide.blogspot.com - Visit Cheryl Matthynssens's Website |
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John AlexanderJohn has taught keyword research and SEO skills to small groups of business owners and Webmasters from over 80 different countries world wide since 2002. John is also the Director of Search Engine Academy ; Co-director of Training at Search Engine Workshops offering live, SEO Workshops with his partner SEO educator Robin Nobles, author of the very first comprehensive online search engine marketing courses at SEO Training Online and the SEO Workshop Resource Center. I look forward to hearing from you! - Visit John Alexander's Website |
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John BrennanJohn Brennan Ed.D. Dr. Brennan is President of Interpersonal Development, LLC, a training and development firm. Interpersonal Development has provided sales training and coaching to more than 3,000 sales reps from over 100 companies. A native of Australia, Dr. Brennan received his doctorate from the University of Rochester. His dissertation researched the effectiveness of Behavioral Modeling Technology in training people in interpersonal skills. While he has spent most of his career designing or delivering training, he was also a Vice-President of Sales of a training and development franchise with operations in 25 markets. Dr. Brennan has designed and delivered sales training in North America, Asia, Europe, Australia and the Middle East. He has been a guest speaker at numerous national and regional professional conferences. When Microsoft wanted Best Practices articles on sales for their web site, they called Dr. Brennan. The results are at http://office.microsoft.com/en-us/FX011387391033.aspx His firm’s clients have included Volvo, The Prudential, Merrill Lynch, Eastman Kodak, Gannett, Equifax Europe, the Economist Group and countless small businesses. - Visit John Brennan's Website |
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David BarrDavid Barr is the President of Venture Opportunities, Inc. David has been a professional business broker/intermediary since 1980 focusing on General Business Brokerage and Mergers and Acquisitions representing client transaction value from $400,000 to $20,000,000. Mr. Barr has handled the sale of over four hundred and fifty companies. David earned a university degree from the State University of New York majoring in economics and business. David holds the Mergers and Acquisition Master Intermediary and the Certified Business Intermediary designations from the International Business Brokers Association. He is also a Senior Business Analyst and a Texas licensed Real Estate Agent. For more information about David and Venture Opportunities, visit www.bizdealmaker.com. - Visit David Barr's Website |
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Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
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