Funding your franchise
Thursday 12th July 2018
Are you considering purchasing a franchise but unsure on funding options? This article explores funding your franchise and the options available to you.
The UK economy is continuing its journey on the road to recovery. Franchising has emerged as a sector with real growth opportunities. This is based on the benefits that are offered by a tried, tested and proven business model. Including the initial training and ongoing support from the franchisor.
Yet, how do franchisees go about growing their business in order to expand their customer base and improve financial returns?
Firstly aside from organic customer growth, franchisees should have a robust local marketing strategy to win crucial new business. Investors in well-established franchise networks benefit from marketing strategies that have been proven successful.
Often franchisees do not budget enough funds to fully realise their marketing plans. It is important to maximise the full potential of the business. The best was is by ensuring that there is sufficient capital from the outset. Banks that specialise in franchising have a range of financial solutions to assist franchisees.
The innovative Funding for Lending scheme is one solution. It aims to boost lending by making funding available to a diverse range of businesses, reducing borrowing costs, and as a result speed the growth of the economy. Both franchisees and franchisors have the potential to benefit from this new scheme. It offers a one per cent discount on the bank’s standard lending rates.
Lenders will undertake a full review of the business and the personal circumstances of the franchisee, which will enable them to make an informed lending decision, based on facts. With this in mind, when investigating lending opportunities franchisees need to be honest about how much money they will need to take out of the business in order to live.
To conclude FLS is just one of the solutions available to franchisees to grow their business. It is key that a sound financial and business plan and a strategic review of where money will be spent is undertaken. This will help individuals to set attainable goals and objectives and also allow them to see when progress is being made.
Author: Richard Holden
Richard Holden is the head of franchising at Lloyds TSB Commercial. He comments on how financial solutions can work for business owners operating in the franchise sector.
Lloyds TSB Commercial has 50 trained franchise managers located throughout the UK. All of whom have experience of working with and providing guidance and support to those operating in the franchise industry.