Raising funds for becoming a franchisee was never so easy!
Years ago, raising capital for a franchise investment was a daunting process but nowadays this is much easier.
Despite the current credit crunch, many banks offer a special section to cater to all franchise related queries and cater to financing requirements of individuals who wish to buy a franchise. These individuals are then assessed for their financial soundness and capabilities to repay the loan, who may borrow more for starting a franchised business as compared to what they would have asked for if they were to start up a conventional business.
The borrowing is usually considered on a fixed rate loan basis repayable over the term of the franchise agreement. To get a loan on variable interest rates, the banks do also offer variable rate loans although there are less of these in the current market. The VAT is usually funded through an overdraft amount, until the same is refunded by HM customs. The lending rates are based on the contribution, security deposit and track record of the loan seekers.