I'd like to talk to you about how to get the money to buy a franchise that you want. There's four ways that I want to discuss today.
The first is that you're going to get a loan from the SBA, the SBA, works with banks, and they actually guarantee the loan to the bank. So the banks are like, Okay, if the SBA is backing us, then they're more likely to loan, the interest rates are low. And if it's under $250,000, it can have the they have expressed loans, that happened quickly, you need to put down 20% of that loan of your own money, it cannot be borrowed, cannot be financed, you just have to have 20%. So if the initial startup cost for that franchise is $100,000, you'll need to put down $20,000.
The next way to getting a loan is using your own 401 K, you can borrow money out of your 401k and pay it back, you have to pay it back with interest. But the good news is, you pay the interest back to yourself. I like this method, it costs about $5,000 to get this process, taking care of. But it's a very interesting way of reimbursing yourself, you're borrowing your own money and paying it back which I like. And at the interest rate.
Another way is if you have equity in your home, and you can borrow 80% of the equity that you have in your home. And what I like about this was the whole is a be a line of credit is you can pay back interest only in the beginning. So if you're not getting a lot of revenue coming in and you're not you're not getting able to pay yourself in the early stages, you can just make interest payments only. And the other benefit of this is as if you do end up paying that loan back early, there's no penalty and you can borrow it again if you need it if you want to continue to invest in the company, so it's always like a line of credit.
The final way is some franchises will actually be the lender for you. You can borrow from them and you'll pay back with either monthly payments or a higher royalty rate. I hope this has been helpful for you.
9 сен 2024
