SBA Loans & Franchising

In a recent discussion the question came up whether or not SBA loans are designed for startup businesses or if they are better for established ones. Understand, SBA loans are designed for both established businesses and startups, particularly successful franchise startups. And just why are they so good for franchise startups? In a word, reliability.

The benefits of Franchise models is they work from a playbook of successful start ups and expansions. It is more of a plug and play system than winging it with a new concept, even if that concept is a mirror image of a franchise name.  Most people prefer to buy from a known name than a no-name firm. And for a lender the stability and reliability of a known franchise can be one more point in favor of granting the loan.

Of course, not all franchises are equal, and due diligence is as important here as when developing an independent startup. The buyer MUST check the message boards, blogs and other websites that provide critiques to the best and worst of franchises.

On the other hand, there are some people who do NOT want a franchise. They are not comfortable with the herd mentality of the franchise system. They want something truly unique in their business and are not inclined to work from some other business playbook.

So how do you decide which direction is right for you? Think like this: Do you prefer football or golf?

If you are a football player you have a play book and follow it to win. You take directions from your coach, who is a master of the playbook. Everyone on the team (the other franchise owners) works from that same playbook, follows the same directions, and plays for the same coach. Don’t get me wrong, there is nothing wrong with being part of a franchise “team” if that is what you are most comfortable with. But not everyone is cut out to be a part of a directed team, which is where the golfer comes in.

If you golf, you have formal rules but you are not a team player. You go it alone, although any successful golfer has a mentor to work with. But as a golfer you call your own shots, decide on your own clubs, and win or lose on your own. If this is your personality, a franchise might not be the best way for you to go.

Knowing your traits is a vital component of self knowledge and understanding who you are and your
 
motivations when entering a business environment. Once committed to the process of starting and building a business, there is no going back. You are all in, and being “all in” is total commitment.

Whether you choose to go the football/franchise route or the independent golfer route, having mentors and advisers - i.e. coaches - can greatly improve your likelihood of success. When preparing to seek financing, having someone with a background in the process can make the process less of a challenge. With over thirty-five years in the financial industry, I can provide the guidance a new business needs to secure funding. Sign up for two complementary reports and let’s talk about your business.

Craig G. Francis is the owner of Francis Financial and The SBA Loan Store. He has been a top producer of SBA Loans since 1981, and has worked with Dun & Bradstreet and Bank of Commerce. Craig Francis has the expertise to steer clients through the often confusing rules and regulations associated with SBA Loans, having helped over 2,000 businesses acquire over a billion dollars in loans. He can be contacted through CraigGFrancis.com, SBALoanStore.com, on LinkedIn, or at 888-666-9722.