Franchise Finance NZ

Franchise Finance NZ

Franchise Finance

If you’re sick of working for someone else and feel you want to do your own thing, do you like the idea of working for yourself with low overheads costs and flexible hours?

One of the most frequently asked questions in franchise business loan is – how much can I borrow? Your borrowing power will give you a good idea of how much you can borrow. Loan nz has sourced out information that will help you in getting Franchise finance in nz

When buying a franchise you’ll be getting access to: 

  • A Franchise license

  • A proven business system

  • An existing reputation

  • History (track record)

Before buying a franchise make sure you are doing something that works for you, and that you will enjoy. While many prospective franchisees have equity available in the form of a home or other savings, they often need to obtain finance and working capital.

In New Zealand, the proportion of small business ownership has always been high. However, it is only recent that the idea of owning your own business through buying a franchise has come to the forward.

If you buy an existing business you can look at the outlet or the plant, look at the trading history, see real figures and real customers. But if you buy the rights to set up a franchise in a new territory, doesn't it seem a lot of money to pay for something which doesn't even exist yet?

To get a few ideas as to what is offered by the various lenders it is best to do a research on information that they offer on the Franchise Business Loan with the BASIC questions: 

What ? When ? Where ? How Much ? How Long ?

RESEARCH YOUR BANK - Choose a bank which has expertise in your industry and will provide the range of financial products and services you will require. 

UNDERSTAND YOUR FINANCIAL CAPACITY - Your banker will need to assess your financial capacity. Write down a list of all your assets (what you own) and your liabilities (what you owe). Don’t forget balances in your superannuation funds and limits on your credit cards.

TAX STATEMENTS -  copies of your personal tax returns for the past three to five  years and bank statements for your bank accounts.

PREPARE A BUSINESS PLAN - Take the time to write a detailed, and well thought out business plan. This  is essential when starting or purchasing a business. This will document your business opportunity and how you will run the business.

GET ADVICE - Speak to your business advisors, business accountant and lawyer. They are able to recommend business structures, tax planning, GST obligations and book keeping. They can also assess leases and agreements etc.

Advantages of Franchise Finance

  • There is an existing customer base – no need to waste time and finances to secure a good customer base.

  • A network of suppliers – where discounts/special offers are still valid

  • A recognized brand – an existing image to satisfied customers

  • An established premises

  • Inherit the previous owner’s business plan and then modify it to suit your capabilities or new business plans.

  • A strong financial record which is almost as good as sales

  • An existing staff – provide valuable insight into how the business is run and ways that can be improved.

  • Do not need to recruit and train staff

Disadvantages of Franchise Finance

  • Decisions need to be approved by franchisors

  • The terms and conditions imposed by the investors and franchisors are biased and getting a firm deal with companies safe guarding the interest of both the parties is very complex

  • A lot of time is spent on selecting the right franchise to determine whether it would work or not

  • Numerous complex procedures when heated discussions and disputes occur between business and franchisor.

Where to get Franchise Finance ?

There many finance companies and banks that provide franchise finance loan sin New Zealand. Some of these companies have been providing franchise loans for many years and know what works and what don't.Check out some of the best franchise business loan providers in New Zealand here