Franchise opportunities provide the best of both worlds for aspiring entrepreneurs as they give you the freedom and independence to operate your own business while also having the backing and support of a major organization. For aspiring business owners, franchises can provide a great way to realize a stable income with great opportunity for growth and expansion.

One of the biggest challenges for potential franchise owners, however, is finding cost effective ways to finance the startup or expansion of a particular franchise. While traditional sources such as bank loans may not be an ideal option for franchise owners, there are some great ways to ensure effective financing of your new franchise that still gives you control over everyday operations.

Company Initiatives

One effective way to finance a new franchise opportunity is to look into direct loans from the company's central ownership. Many times, you can fund a new startup with a minimal down payment and reasonable financing rates from the company's central office. These rates are generally reasonable relative to the conditions placed by external lenders, and have built-in flexibility to allow you to begin to pay off the principal based on the return of your new business. With an integrated lending and training program, expanding companies work with potential franchisees to offer cost effective options for new franchise openings, as well as providing low-interest loans for expansion into new territories. Since companies want to actively encourage the development of successful franchise owners, they will often lend a hand with initial financial constraints.

Traditional Funding

Many Franchises will have credit links with specific banks. Even if the bank you talk with has not got an agreement in place with your specific franchise, providing you present a compelling business plan encompassing a recognised franchise that should ensure you are looked at more favorably.

An Angel From Heaven

Another option that many potential franchise owners turn to is angel funding, which is early stage capital from investors, friends and family in return for partial ownership. If purchasing a franchise directly is out of your reach, then it may be an option to work with several business partners to build up your capital base.

Make sure that you work well with your business partners as their input will be valuable as minority owners in the new business. In addition to gaining important access to new working capital, your business partners can provide ideas, connections and other valuable assets for your company. Especially if you are a first-time business owner, working with experienced business professionals as minority partners can help accelerate your learning curve in the process.

Being Creative

The single most effective way to finance your new business franchise is to find creative ways to save by reducing your monthly expenses, while at the same time generating an additional income. Putting in the hard work to save up enough to finance the new venture can provide a cost-effective way to get better results from your business, as well as instilling the necessary discipline within your organisation from the very top.

Look at franchise opportunities that require limited start up costs, such as service organizations or online, so that you can provide as much self-financing for the new venture as possible. While it's likely that you will have to resort to external funding initially, try and limit your borrowing for the essentials so that you create a sustainable balance sheet going forward.

Master Stroke

When I was looking at traditional franchises I was looking at £15000 - £25000 investment but the fact is the best franchises don't have to be expensive. People only think of traditional high ticket price franchises, but the fact is there are some incredibly powerful online franchise opportunities which you can join with minimal investment and therefore minimal financing.

Think laterally about the financing opportunities available and you will easily be able to finance entry into an effective franchise very easily.

Catherine Shanahan is a Business Entrepreneur and Internet Mentor who shares all the tools and strategies to enable others to be successful online, and generate recession proof incomes. See the most powerful online franchise available with the most lucrative compensation plan on the internet and discover how with the right training, support and mentoring, anyone can generate a sustainable, residual income online. Find out more about Catherine at http://www.whoiscatherineshanahan.com.

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