The UK Franchise Market

Franchise Sector still growing: The 2015 Nat West survey into the UK franchise market shows that ·Annual turnover rose by two per cent to £12.65 billion. There are currently 320,000 franchisees 92% of which say they are profitable. "Franchise Market" Contains answers to all the important questions about franchising and why it is successful. Why should you buy a franchise, what should you look for etc. The answers are all here. Best Franchises or Franchising Opportunities

Financing A Franchise


Financing A Franchise

Whether buying a franchise or starting your own business, securing finance for the venture is probably one of the most important decisions you'll be faced with.

To help you through this mine field The Franchise Market has outlined the key-points to consider.

Preparing to finance your franchise

When considering financing, preparation is the most important aspect. This involves answering three basic questions:

1. Can I afford the debt?
2. Is the finance package offered the right one for me?
3. What security can I offer a lender?

Within franchising all good franchisors will insist that such issues have been considered as part of their standard recruitment procedures.

Lenders such as the bank, being risk-averse, also want to have their lending secured. There may be equity in your property or other assets such as a life policies or insurance policies with some value as security. As a general rule, the stronger the security, the lower the cost of the debt (interest) will be.

Lenders require applications to be presented to them, usually on their own documentation. The application forms should be submitted along with the business plans and budget. It is important to assure a prospective lender that all three of the above questions have been addressed.

Often franchisors have relationships with one or more financiers, who will understand the business and the specific financing needs of a franchisee. Sometimes, because of this relationship, the franchisor will be able to negotiate favourable interest rates for the franchisees.


Types of Lending

There are various options available to you as a prospective franchisee to borrow money, the most popular of which include:

1. Loans Secured by Mortgages over property

2. Bank Loans

3. Credit Cards

4. Small Firms Loan Guarantee Scheme

5. Personal Loan from family or friends

 

1. Loans Secured by Mortgage

If you have sufficient equity in the family home or another property, the lowest cost borrowing will be obtained from raising a loan based on a mortgage security over such assets. Lenders of funds secured by mortgages can usually offer the longest repayment terms and the lowest interest rates.


2. Bank Loans

Banks tend to loan monies for shorter terms. Securities vary from property to assets and sometimes (but rarely) small loans are made without security. Interest rates on loans are more likely to be variable which would usually make this a more expensive form of borrowing.


3. Credit Cards

The use of credit card facilities is probably the most expensive form of funding and should only be seen as a short term measure.


4. Small Firms Loan Guarantee Scheme

 

This is a government-backed scheme and will guarantee borrowing where security is not available. For details refer to: www.businesslink.gov.uk/bdotg/action/detail?type=RESOURCES&itemId=1074447105


5. Personal Loans from family or friends

Asking a family member or friend to loan you the money to finance your franchise should be the cheapest form of borrowing.


Personal Guarantees

A second form of security is a personal guarantee. Often these are provided by supportive family members. These guarantors take the risk that they will have to repay the lender if the borrowers business fails.

Many franchisors recommend their franchisees trade as companies of limited liability partnerships (corporate entities). When lenders make loans to corporate entities, it is normal practice for them to require personal guarantees from the directors and/or shareholders.

 

Providers



Obtaining some franchise finance is often the biggest hurdle for anyone seeking to start a franchise in the UK. Starting any business can have risks, and as we know risks can be costly. It is therefore vital that you invest a lot of time and effort into researching those franchises that you are interested in. You need to be confident that it is an ethical franchise as well as the right franchise for you. Remember, there is not such a thing as too much research!


WARNING: Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured against it.

 

------------------------------------------------------------------------------------------------------------------

New Franchise Opportunities for 2015 | Best Performing Franchises | UK Franchises |

Now - New Franchise 2015-2015

 

Available marketing tools and options:

  • Fully designed, hosted and updated website, based on www.clearsky.co.uk
  • Full colour brochures showing the luxury properties
  • Use of our prestigious head office in London (subject to availability)
  • In-house design studio capable of producing one off literature
  • Window cards and posters promoting the properties
  • Corporate Identity package including letterheads, business cards, compliment slips
  • Our own bespoke database management system
  • Training on the various products and areas (optional overseas training offered subject to availability)
  • To discuss our opportunities, please fill in the enquiry form or call us on 0905 225012
  • Now part of bcsd-nsr.co.uk

franchise opportunities | franchise definition | starbucks franchise

mcdonalds franchise | franchise shows | subway franchise | define franchise

franchise business

We provide best quality services