Other Financing Options

Franchisees and small business owners who need capital have financing options beyond using loans, mortgages and even retirement accounts. There are several options for those who seek additional means of financing their franchise or small business. These other options include using equity financing, collaborating with friends and family, or using personal credit cards or credit lines.

Equity financing involves selling a portion of the business to someone who would provide capital in exchange for a percentage of ownership in the business or rights to a portion of the business’s profits.

Loans from friends and family are also potential sources of financing. A friend or family member might be interested in becoming an equity investor by contributing capital or may be willing to simply lend money to help get a new franchise off the ground. Friends and family are also potential partners.

Personal credit is commonly utilized to finance a portion of the intial costs of opening a franchise. This could involve using personal credit cards or credit lines to purchase equipment and supplies.