You did your research, and you are now convinced that this franchise is the right franchise opportunity for you. You have assessed your working capital and realized that you need to maximize your cash flow. So now it’s time to apply for small business finance and get pre-approved. You will initially need to complete an application form and sign legal documents when you apply for a franchise loan — this is the paperwork stage and your chances of success are much greater if you come prepared!

It is important to collect all the necessary information and prepare the requested documents to make sure that your application is complete. Failure to complete the requirements may delay the application process and affect the overall operations of your franchise business. If you are not comfortable preparing this information yourself, you should consult your accountant or engage the services of a finance broker.

Here is a list of some of the typical documents you will need to prepare to present to your small business finance provider:

A fully completed and signed application form. Indicate the details of your franchise business information, ABN, business operations, franchise/license agreements, working capital, etc. You may also be required to sign a consent or privacy agreement and provide a statement of assets and liabilities.

Your business plan. Don’t underestimate the importance of a business plan with lenders. Make sure it is in an easy to read format and get to the point. A long business plan doesn’t mean it is better than a short but to the point plan. State your goals as well as your business strategies. Include your timelines, business objectives, financial projections and performance metrics. Discuss also your initiatives and approach to achieving your goals. Mention your action plans on products, pricing, staff, advertising and marketing, and sales and distribution. You could include a SWOT analysis. There are actually many templates online that you can use to help you put your own business plan together.

Your cash flow forecast. Prepare at least a 12-month projection of your profitability and cash flow. Lenders ideally like to see 3 years, but 12 months is a minimum. You should also ensure that that your forecasts include the repayments of the franchise loan so that lenders can see how the business can service the loan. You may need the help of your accountant on this requirement.

Your tax returns. Lenders may request either personal tax returns or if you are already in business or franchise, they may ask for your business tax returns. Submit this document to help assist your loan provider in verifying your income.

Contracts, deeds, and agreements. This includes the lease for space as appropriate for your franchise and credit agreements with the suppliers and vendors of your franchisor.

This list is not exhaustive and there may well be other documents or details your franchise loan provider may require to support your application.

The loan approval and release of credit depends on the time it takes for the loan provider to process your application, so if you can make it easy for them by providing all of the information then you should expect a faster decision.

CFI Finance

CFI Finance, is a specialist franchise equipment finance company and the only equipment-funder focused solely on the Australian franchise industry. CFI Finance can fund just a single piece of equipment through to an entire fit-out for your new franchise. By using CFI Finance you do not take on any asset risk. You have flexible options to pay out the contract whenever you like and purchase the equipment or you could return the equipment if it is not quite right for your franchise without any further obligation. CFI Finance takes the stress out of financing your franchise equipment with a simple online application that only takes about 10 minutes to complete. For more information about CFI Finance franchise equipment finance, visit www.cfifinance.com.au.

To buy, or not to buy, that is the question. As clichéd as it may sound, in order to make the most of your capital, deciding on whether or not to use equipment loans or your money can create a dilemma. In the case of a franchise owner, it’s good to know you have options, as regardless of whether your business is a start-up or in expansion, choosing to buy your franchise equipment over financing equipment can make all the difference. This is where a detailed understanding of franchise equipment loans pay off big time.

Outright purchase

To purchase franchise equipment by paying for it in full up front is an expensive way to fund your growth and will drastically reduce your working capital. It may seem like the cheapest way to acquire the franchise equipment you need, but there are hidden costs associated with buying your equipment outright. Depreciation is the single largest expense of owning your equipment outright, then there is ongoing maintenance and repairs. You may also need to make upgrades and pay for add-ons again reducing your capital. But I think the largest hidden cost is the opportunity foregone by using all of your capital. We regularly hear from franchisees who wish they had of financed their equipment as it would have given them the funds to more quickly buy another franchise, or they could have had more funds for marketing and growing the business.

Equipment Finance

Leasing or renting the equipment required in your franchise, is an affordable and much smarter option – especially during start-up when your cash flow needs to be at their most flexible. Franchise equipment finance preserves your working capital because you pay only a fixed rental (usually weekly or monthly, depending on your chosen payment terms) for the equipment while you use it to earn income. Some funders will also provide flexible options with equipment loans like being able to upgrade your equipment, payout whenever it suits you, or even return franchise equipment that is no longer required in the business.

CFI Finance

CFI Finance, is a specialist franchise equipment finance company and the only equipment-funder focused solely on the Australian franchise industry. CFI Finance can fund just a single piece of equipment through to an entire fit-out for your new franchise. By using CFI Finance you do not take on any asset risk. You have flexible options to pay out the contract whenever you like and purchase the equipment or you could return the equipment if it is not quite right for your franchise without any further obligation. CFI Finance takes the stress out of financing your franchise equipment with a simple online application that only takes about 10 minutes to complete. For more information about CFI Finance franchise equipment finance, visit www.cfifinance.com.au.

Starting any business or franchise poses great challenges to every entrepreneur. The total amount of money that you need to put into your franchise is a major consideration and depends on the nature of your enterprise. During the start-up stages, your cash flows are often expended quicker than you plan as unexpected costs arise. However, you can find the business finance needed for your newly established franchise. There are many types of business finance available for your franchise, and it can be tailor-made for your specific needs.

Debt Finance
One option is debt finance from banks and financial institutions. These loans come with a payment obligation schedule and a fixed interest rate depending on your chosen terms (either short-term or long-term payments). An established relationship with your bank is advantageous before attempting to secure a loan for your franchise. Debt finance usually requires personal collateral as security, such as your home.

Grants
Another finance option is through grants, especially if you are establishing a technology-oriented franchise. Grant opportunities given by governments or by private investors are highly competitive because they are giving you free money. These grants correspond with strict guidelines though, and can have on going obligations on you depending on the type of grant.

Equity Finance
This option is simply taking funds in exchange for a share in the ownership of your franchise. Equity finance generally does not involve you taking on debt or re-paying the money for a specific period. The downside of equity finance is that you do not have full control of your business. The “additional” investors mean you won’t have 100% ownership of your small business.

Equipment Finance
Franchise equipment finance is another option available to would-be franchisees trying to secure their new small business. Equipment finance is a great way to acquire the equipment needed in your franchise. Typically you won’t need to put up assets like your home as collateral because the equipment funder will use the equipment itself as security. Equipment finance also gives you numerous flexible options around choosing terms, payouts, ownership or even returning your equipment. Do your research and learn from other franchisees, so that you will be guided on what is best for your particular franchise’s success and growth.

CFI Finance
CFI Finance, is a specialist franchise equipment finance company and the only equipment-funder focused solely on the Australian franchise industry. CFI Finance can fund just a single piece of equipment through to an entire fit-out for your new franchise. By using CFI Finance you do not take on any asset risk. You have flexible options to pay out the contract whenever you like and purchase the equipment or you could return the equipment if it is not quite right for your franchise without any further obligation. CFI Finance takes the stress out of financing your franchise equipment with a simple online application that only takes about 10 minutes to complete. For more information about CFI Finance franchise equipment finance, visit www.cfifinance.com.au.