Home restoration has become a popular franchise choice for many individuals with an interest in helping others to rebuild their homes after a natural disaster. The home and restoration market continues to grow, and with that growth comes additional opportunities to break into the industry and eventually scale the business. Here are three steps involved in successfully funding a restoration franchise.
1. Research Available Loans
Many prospective franchisees will be unable to fully fund a franchise on their own, which is why it’s important to meet with a bank or another financial institution to see what loan options are available. Before meeting with a lender, franchisees will need to show them that they’re trustworthy by preparing a resume that includes their personal background and work history. A franchisee’s paperwork might also include financial statements and credit history, in addition to a business plan detailing their plan for running the franchise.
After all the documents are ready, the franchisee can learn more about the loan options available to them. These might include Small Business Administration (SBA) loans, traditional loans, or even loans from online lenders. All loans have different requirements, so it’s important to check over all the stipulations before formally applying.
2. Apply for a Loan
During the loan application process, lenders vet the franchisee they’re planning to grant funds to, in addition to the franchise system as a whole. Typically, franchisees have to fill out an application before the lender can grant them the loan. SBA loans are often a popular choice among franchisees, and these loans require a franchisee to fill out an application form, provide a copy of the signed franchise agreement, hold a business license, provide a copy of any personal or financial statements, and provide any records of previous loans. Other loans may have similar requirements.
3. Consider Alternative Financing Methods
Besides traditional or SBA loans, franchisees often consider a variety of other ways to fund their restoration franchise. In some cases, restoration franchisees seek assistance from close family or friends. Before accepting any financing, it’s important to create an agreement so all parties are fully aware of their obligations. Sometimes, the restoration franchise itself might provide the franchisee with a loan under the condition they stay with the franchise for a certain amount of time and keep profitability up.
Alternative lenders may also offer additional capital to supplement a traditional or SBA loan. These lenders generally have less stringent requirements and offer a wider variety of loan options, depending on the size of the franchise.
Individuals with an interest in buying a restoration franchise should consider all of their available options. Getting a loan can be challenging, but with the right help, it doesn’t have to be. Anyone with an interest in breaking into the home restoration and cleaning industry and owning their own business should consider owning a Steamatic franchise. Learn more about franchise ownership and all that it entails by filling out our contact form or leaving us a message at 817-332-1575. Get started in no time with our vast resources.