funding franchise purchase

Funding a franchise purchase

Franchise Business
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How can you fund your franchise purchase? Investing some capital into the business is a crucial element of buying a franchise. Franchisers want to see that as a franchisee you’re prepared to risk some of your own money to make the business work. It’s called skin in the game. So typically purchases are made with a mix of savings and loans.

It’s common for franchise buyers to approach a bank for a loan to help boost their savings.

What happens though if you want to source money from elsewhere? Franchisees may turn to their family for a loan, or consider remortgaging their home.

In this podcast we discuss some of the pros and cons of both options.

This short podcast is neither intended to be an exhaustive commentary, nor can it be taken as financial advice.

Every franchise buyer should seek independent financial advice before deciding on which franchise funding option best suits their circumstances.

Show notes

The big four banks all support the franchising sector; the volume of franchise loans they provide varies between institutions and over time.

Alternative lenders generally focus on helping existing businesses develop and expand.

Prospective franchisees can use the Australian Franchise Registry as a tool to find out whether their potential franchise brands have lender profiles available. If they do, that enables funding institutions to easily assess their financial capabilities.

In the podcast we talk about banks and the franchisor having priority over family members if the business fails.

The Personal Property Securities Register is an official government register, a public noticeboard of security interests in personal property – that includes cars and company assets.

Check out what costs you will need to consider when you buy the franchise