And here's how to raise the money (Daily Mail franchise story - UK Franchise opportunities)
posted on 28-Oct-2008
And here's how to raise the money...
By: Linda WhitneyDON’T let fears of being unable to raise funds put you off a franchise.
Bankers say money is still available. ‘We have lent more money to franchisee start-ups so far this year than we did in the whole of 2007, and we will lend for any strong business proposition, particularly established franchises,’ says Richard Holden of Lloyds TSB.
Mark Scott of NatWest’s franchising arm says: ‘We still have money to lend to people wanting to set up with proven, established franchises. Most sectors of franchising are still performing well.
With newer franchises, we look hard at their structure and the performance of pilot schemes.’
If you want to raise money, you will need a cast-iron business plan (franchisors will help you with this).
Lenders might also want you to provide security, typically a charge on your home.
If you have not got the necessary security, bankers may recommend the Small Firms Loan Guarantee Scheme, which can help good ideas get funding.
LINDA MANNION (left) invested £35,000 in a franchise with X-Press Legal Services in 2006 with the help of a £10,000 overdraft from Lloyds TSB.
‘I considered various ways of raising the money, including borrowing the lot, but in the end I decided to remortgage my house, as it was the cheapest way of raising the money, and asking for a £10,000 overdraft facility,’ says Linda, 50, from Alveston, Glos.
She provides searches for solicitors and others involved in property transactions.
When she was looking for finance, it helped that she had drawn up a business plan.
‘I used a CD-rom from Lloyds TSB’s business banking department,’ she says.
‘The franchisor gave me typical projections for the first year in business, and I tweaked them to suit my particular circumstances.
‘Consider all your financial options and the interest rates on any borrowing.
‘Draw up a business plan beforehand, and work out how much money you will need to live on while the business starts to provide a reasonable income.’
The X-Press Legal Services franchise costs £24,500, plus working capital.
- X-PRESS Legal Services: 01925 577 377.
