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Digg it UP - How to Finance a Franchise
Anthony Robbins said, "Successful people ask better questions, and as a result, they get better answers."There are only two types of questions: Those that get negative or negligible results, and those that get great results. What questions are you asking yourself and your associates, employees and customers that can result in a better bottom line? What questions will reduce customer attrition, improve loyalty and profits and motivate the people you work with?The answers to the questions we ask should result in answers that inspire, motivate and initiate innovation and positive action. They should encourage, cheer, challenge, energize and drive. And the more specific the answers, the better. Specific is terrific. By designing the right questions to ask those involved in our business, we direct the
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
In general most of us have extremely fast paced lives with no time to waste. Therefore if a service or product we rely on has a problem, we need that particular company to provide us with excellent fast customer service.Is this the type of service we are receiving?With some of the companies we deal with absolutely, I would have to say businesses with the personal touches are becoming more old school thinking. With technology advancing at such a rapid pace, businesses are trying new ideas how they can save money, and still provide clients with customer service.Has situations like this happened to you?All of sudden you are having trouble receiving and sending e-mail. The problem has gone on for over an hour; you happen to be waiting for an important message to come threw. So you decid
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 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 a
Not many are aware that as of the 23rd of May, Ebay has introduced a new seller policy that all international cross sellers. (i.e sellers who are registered at one country but also list their items in another country) can no longer list their items in any other country other than their registered country unless they have a verified paypal account.Now Ebay's reason for doing this is to claim it is to prevent fraud, but one may ask how about those sellers who do not use paypal, who only accept cheques or bank wire? A service acknowledged by the banks themselves as extremely safe for both parties, as a trace can be placed on the bank account in the case of any irregularities or seller non performance. Ebay is still adamant that such sellers, still must have a verified paypal account in
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 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
Warehousing is an arrangement for storing imported articles in the custom stores, without the payment of duties until the goods are taken out for use. If these articles are exported again, they are not charged with a duty. Ware housing involves the storing of goods in a warehouse or a customhouse store. It is occasionally needed and accessed to complement inbound and outbound transportation services. There are four different kinds of warehousing available, depending on the load. There are warehouses for finished goods, raw materials and for vendor- managed inventories.A warehouse is a commercial building, which acts as a storeroom for goods. Manufacturers, importers, exporters, wholesalers, transport businesses and customs utilize these warehouses. These are huge buildings and are generally situated in
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 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
Each time we throw a scoundrel out of public office we see the problems of disruption in organizational capital and in business we too see this all the time with management turnover, mergers or simply normal attrition. In the Public Sector it can be far worse as one team or staff is not re-elected by their constituents and a team is voted into office.Yet the issues are the same really and imagine the disruption when your entire team is thrown out of a corporation, an on-going company and a new team is put in place. Fine they get there and then what? Exactly the problem indeed, now what.Well in the private sector this often happens and then everything is disrupted, bad decisions are made and a new person comes into office, with a whole new staff and team. Guess who really loses in all of this? You
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 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
Bringing together a start-up has many perils as is evidence by the large percentage that fail before they ever get to be a start-up. The facts about this increasingly important phenomenon in commerce tells many stories of failed friendships, broken marriages, lost opportunities and wondrous successes. Today’s installment comes from with all the worn and usual caveats of concealing the names because the tale is not done – so don’t burn your bridges – that is just yet. Don’t for a second think that my current venture of Changed Life Ltd is the sole source for this tale. I’ll be the first to admit that I suffer from being a serial dreamer, planner, entrepreneur, and learner with an alpha dog personality. So my life is littered with events that this article is being drawn. I’d go so far and bring in the t
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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But every day, business owners and managers let their hard earned money go right out the door and don't even know it.
It leaves due to lack of attention, lack of focus and lack of long-term thinking. And here's what you can do to make it stop!
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