Franchise Information

Get the Money for Your Pet Store Franchise with These Ideas

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When it comes to buying a franchise, one of the biggest things to consider is how you will come up with the money. Sure there are generally financing options, but this will not be for the entire amount. This is why it is helpful to know some of the ways you can get the funding you need without having to go with a conventional loan for the pet store franchise you are looking for.

 

Use Your Savings

Sure this is often the first thing people think about when buying a pet store franchise, but it deserves to be said. You want to look at your mutual funds and any other liquid assets you may have so you can see where the best place to take from will be. You do not have to use all of this but rather you can use it in conjunction with other options on this list for your franchise funding needs.

 

Borrow from Your Retirement Account

One of the ways that you can come up with the money you need for the pet store franchise you want to buy is to borrow from your retirement account. This could be an IRA, a 401(k), or one of the many other options out there. You just want to make sure you look at the financial repercussions of borrowing against this to ensure that it will not cost you more in the long run than it is worth.

 

Home Equity Line of Credit

If you own a home and have a significant amount of equity built into the home, then this can be an excellent opportunity for you to get ahead. This is a great choice for your pet store franchise in many instances because the interest rates are generally low. They are generally much easier to obtain than a conventional loan.

 

Borrow From Friends and Family

Do you have support group that wants to see you succeed? If so, then you may want to talk with some of them about borrowing some of the funds to get your pet store franchise off the ground. A good rule of thumb with this is to set clear boundaries about how you will pay them back and what they expect to keep from having any issues with the loan in the future.

 

Lines of Credit

You should not forget to look into getting a line of credit. While this may not be important to paying the franchise fee, it is important for buying the things you need for your investment, which is part of the costs to open the business. You can talk with your banker or credit union to find out if they have lines of credit.

 

These are just a few of the ways you can get the money you need to open your pet store franchise. You want to make sure that you look at each opportunity so you can find what will work best for you and give you the funding you need.

How to Finance a Pet Franchise

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So you know the franchise you want to buy. You are dreaming of what your life will look like when the business is yours and you can proudly say you own your own business. While this is a great way to create the life you want, the first step of this is to close on the franchise. Unless you have a large sum of money, chances are you will need to finance your pet franchise. Here are a few tips that can help you with the financing process.

 

Get Your Credit in Order First

Before you even start hunting for a lender, the first thing you should do is make sure your credit is in order. There are many creditors that can give you a profile of your credit as well as sites such as CreditKarma.com. These will allow you to see where your credit currently is as well as ways you can improve upon it. Even though you may be able to get financed with your current credit score, the better you make it, the lower your APR will be. This means the loan will cost you less in the long run.

 

Be Prepared for a Good Chunk Down

Many lenders will require you to put down 20% for financing your pet franchise. This is pretty standard. Some lenders may not require as much but they will still require some. So make sure you are prepared for this in addition to the money you will need to provide the franchise, keep for your financial needs over the coming months and more. While this may impact the franchise you buy as you can only get so much financing, it is something you need to think about.

 

Think About the Tax Implications

Some people think they will just get the extra money they need for financing the pet franchise from their retirement accounts. The problem with this is that you may be taxed on it which can take a substantial amount out of this. You may not otherwise receive this tax if you wait until retirement age to take the money from your 401k or IRA. Talk with a financial advisor to find out if this is the most beneficial way to get the extra money you need for starting up your business.

 

Look at Multiple Sources

You may think that conventional loans are the only option when it comes to financing your pet franchise. While this may be a great option for many people, it simply is not the only option out there. You should also know about the many types of loans.  For a franchise ,the SBA may be a good option. However, if your franchise is not on their approved list this gets much trickier. There are other non-conventional ways you can finance the business such as angel investing.