Franchises are the definition of “big business”; which explains why they are an ever-growing preference for commercial real estate investors. However, as you have probably surmised, there is a hefty financial barrier to entry. This is why business funding sources are instrumental to seeing you through from petition to ownership. In particular, a fitness franchise tends to start at the ground floor of $800,000. Which often ends to be far over what the average person possesses as liquid cash.
Business Funding Option: Federal Government
Specifically, the federal option encompasses the Small Business Administration (SBA) and the myriad of private lending partners that fly under its flag. The primary benefit of having access to an SBA loan is that the federal government backs the loan. This makes it more secure than any other possible financial institution. This reduction in risk leads to industry-low interest rates. As well as having the majority of the loan-backed in the event of forfeiture (by you, the borrower). One drawback is the amount of time and paperwork it can take to secure this form of business funding.
Community Funding via Crowdfunding
Although this form of business funding has been around for a long time, never has it seen greater potential than with the explosion of social networks – spurred on by modern mobile technology. If you’ve got an especially attractive idea for a fitness franchise, then you might benefit from going the creative crowdfunding route.
Traditional Bank Loans
This is, of course, the most obvious form of business funding, and usually the first option for most people. In this case, your credit history will be of paramount importance, since you aren’t being backed by the federal government as in the case of an SBA loan. The interest rate you eventually end up with will be largely dependent on your creditworthiness – as well as how much cash you have on hand (assets count, as well).
If you’re considering a fitness franchise and need finance knowledge of any kind, the experts here at 360 Commercial Capital are well-positioned to aid you in this endeavor. You can reach us via our website form or email.