Optimism for Financing of Franchises as Mortgage Approval Rate increases
Joel Caws - Technical Director, Select Your Franchise
Reports from the BBC that the number of mortgages approved during October grew slightly might be an early sign that obtaining lending from banks is becoming easier. This could be good news for the franchise industry as many franchise opportunities depend on access to financing in order to setup and trade. There is a huge price range of franchise options with some investment levels low enough to be funded from a simple overdraft to larger five figure investment franchises which may require more in the way of a business loan.
Undoubtedly, the high street Banks are still being cautious but appear willing to lend where there are higher levels of security. A franchise based business can represent a lower risk to a bank than a brand new business start up with no previous track record or history.
A franchise business benefits from the proven system on which it is based. This gives a much more secure opportunity for the bank to provide finance options since they can see on paper that the franchise model has been run successfully already. In addition, the franchise sections of the bank are often familiar with most of the popular franchise options in the marketplace. This can also provide some extra insight for franchise buyers by how willing the bank is to provide finance.
Tags: borrowing, franchise, franchise business, Franchise Finance, franchise investment, joel caws
