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How to Finance a Franchise Resale

Buying a franchise…..especially a resale opens the door to many funding options. They include but are not limited to:

The Franchisor. The franchisor is likely to have some recommendations for funding sources that have successfully financed recent resales in their system…and today many franchisors offer incentives to buyers in a variety of forms;

Home Equity Loans. If you have been able to retain substantial value in your home…with a bit more paper work and patience this is still available;

Retirement Funds. There are companies out there that specialize in this process where you actually create a C corp that can be used to buy stock in your new business;

Conventional Sources like local and regional banks, credit unions, and the Small Business Administration (SBA) are still available but to a much smaller pool of borrowers.   The SBA does not make the loan, they guarantee a significant portion of a loan. In principle this minimizes the risk for bank lenders, making them more keen to lend to new businesses. For the most current information, visit the SBA's website (www.sba.gov).

That is just a short list available to motivated buyers. With the tough economic climate that has limited access to traditional lending, franchise resale buyers can also seek out Angel investor or see if the seller is willing to finance the purchase themselves.

Lastly there are a number of options available for Veterans and Minorities that want to buy a business. So roll up your sleeves and start moving….…there are many roads that will get you to the funding necessary!

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