Financing A Franchise With TeamLogic IT
Why Finance a Franchise?
More entrepreneurs than ever are moving off the sidelines and opening their own franchise business. Several are looking at the many ways of financing a franchise, since of course, financials are a big part of the process. That can get complicated, because there are many ways to secure financing to open a business, some more complicated than others.
For those considering a TeamLogic IT managed IT services franchise, there’s good news: There are many financial pathways to ownership! Below we’ll explore how a TeamLogic IT franchise can be purchased, and of course the TeamLogic IT team is on hand to answer any questions. So, let’s dig in:
Conventional Commercial Loan
Many people pursue a conventional commercial loan because they are familiar with the process. It’s how consumers purchase cars and other big-ticket items, and is not too dissimilar from mortgage financing. Lenders want to see proof of income, assets, and overall creditworthiness.
For business financing, having solid credit is non-negotiable. It’s the first thing a bank will be looking at, because this is a significant loan. Another element will be collateral, which can come in many forms. Some entrepreneurs put up their house, for instance, as a backstop for the loan, while others may use land or other tangible assets. Banks are happy to review their loan procedures, guidelines, and requirements. If you have a solid banking relationship, that’s the best place to start.
The U.S. Small Business Administration is also a great place to go when financing a franchise. These loans do not come from the SBA, however, the agency acts as a guarantor for a bank loan, making the loan itself different from the commercial options discussed above.
The same considerations — creditworthiness, other assets — will apply. It’s also important to know that, unlike a conventional loan, an SBA loan may have some requirements around how the money can be spent. For instance, you may have to spend a certain percentage on equipment. Like commercial loans, SBA loans do differ, so once again consult with your banking partner to determine what might be the right route for you. One option might be a 7(a) loan, which is the most common and can be used for buying a franchise. It offers up to $5 million with 10 to 25 years of payback periods. Another SBA loan, the 504, serves businesses looking to purchase real estate, fixed assets, machinery, or equipment.
If going through a financial institution isn’t on the table, there are other routes to financing a franchise. Consider going to friends and family, for instance, and securing them as investors in your business. These are people who know and trust you, and they are likely to see this as a good investment that will yield dividends for them down the road.
That said, no one’s going to write checks without a sound business plan in place. Just as you would with a commercial lender, be sure to have a solid business plan outlining the opportunity, how you’ll operate, and what the payback plan would look like. It’s wise to have an attorney draw up any kind of agreement, so there are no misunderstandings around everyone’s role, and how things will unfold as the business gets up and running.
Start a Conversation about Financing today!
TeamLogic IT has almost 20 years’ experience helping excited, enthusiastic entrepreneurs secure the help they need financing a franchise. We can speak with you about the pluses and minuses of all the options listed above, as well as connect you with lenders we’ve built relationships with over the years.
Don’t let fear over the financial commitment keep you from starting and growing an asset that can pay back that initial expense many, many times over. We’re ready to speak with you about the financial side of opening a franchise, as well as all the ways that TeamLogic IT stands out in the managed IT services industry as a best-bet business to own.
TeamLogic IT is the technology franchise small and medium-sized businesses increasingly rely on for turnkey support. TeamLogic IT’s managed IT services contracts give clients peace of mind around their technology needs, and provide franchise owners with a steady, predictable revenue stream. The company now serves a wide and growing variety of clients in every business sector, from tourism and hospitality to healthcare, legal and accounting. Along the way, TeamLogic IT has grown to more than 250 locations around North America and continues to expand in both new and existing markets.
For in-depth details about the TeamLogic IT franchise opportunity, fill out our inquiry form here for a copy of our Franchise Information Report. You can also learn more by visiting our research pages here.