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7/25/2018

Financial Solutions for Franchisees

Franchise Financing

It’s tough to be a franchisee. With surprise costs, staff changes, and other unforeseen hurdles occurring regularly, it’s important to be aware of the tools that can make running your business easier. Financing options are one tool you might find is perfect for your business tool belt. Options like working capital loans and equipment leases can help you cover upgrades from refurbishments to new store acquisitions. While there are many opportunities for financing options to help your business, let’s consider four of the most common scenarios.

Example 1: Corporate is Mandating Another Equipment Upgrade

Deadlines for corporate-mandated store updates can be hard to meet if you’re paying for costs out of pocket, especially if you have multiple locations. Preserve your cash flow with an Equipment Finance Agreement (EFA). An EFA gives you immediate access to cash that you can use on any aspect of your business, like upgrades, refurbishments, and store refreshes. You’ll pay for the cost of the upgrades over time and avoid an upfront payment that you didn’t budget for.

Example 2: Your Tax Bill Impacts Your Cash Flow Unexpectedly

Tax season is difficult for any business owner, including franchisees, many of whom own several stores and manage the taxes for those locations separately. Handing over that chunk of cash all at once can strain your quarterly budget, so you might consider utilizing a short-term working capital loan. Working capital loans offer flexibility and control over paying your business’ taxes. Protect your money for when you need it by opting for manageable monthly payments instead of paying one lump sum.

Example 3: Outdated Décor Means Your Store Needs a Facelift

The look of your store contributes to the first impression your business makes on customers, so it’s imperative to keep it fresh and updated. Old or worn-out furniture and décor can turn potential customers away or lead to some negative reviews.  Modernize your stores without depleting your resources by taking advantage of a business loan. Business loans can empower you to do a storewide refresh rather than just fixing the small things that you can afford with your typical budget.

Arby’s franchisee Jim Raffel reached out to CIT Direct Capital when he needed help refreshing his stores. “It helped me stay current with equipment,” he explained to us. “There were times when I didn’t have the cash flow to buy things and it was very helpful for me to update my stores.” More than eight years after first contacting CIT Direct Capital, Raffel now has a long-standing relationship with the company and has completed 19 financing transactions.

Example 4: Your Business Partner Is Ready to Move On

It’s never easy to lose a business partner, and if it happens suddenly, you might be financially unprepared. Turn a negative situation into an opportunity by considering partner buyout financing. Time is of the essence in this type of transaction, so it’s helpful to work with a dependable lender like CIT Direct Capital who has a strong reputation of turning financing deals around quickly. Working capital can help you increase your stake in your business without suffering any interruptions as a result of your partner’s departure.

The next time you find yourself in one of these scenarios, or you have another franchise financing need, contact us to discuss your options. We want you to make the most of your money, and we’re here to help.

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