When opening a new business, entrepreneurs are primarily concerned with that business’ profitability, and whether…
With many cell phone franchises to choose from, prospective franchisees find themselves doing careful research on the differences between investments. Starting any new business requires a significant initial investment, and a cell phone franchise is no exception. At Experimax, we provide a comprehensive breakdown of what’s included when you partner with us and how much you should expect to spend. Many of our franchisees opt to secure financing to help cover some of these costs. If you’re apprehensive about financing, you should know that it’s actually a great option for many people. Check out a few common myths about franchise financing below.
If I Need Financing, Should I Really Be Making This Investment?
It’s a good sign that you’re assessing your readiness to make the investment. Having adequate cash on hand is an important consideration. You’ll want to be prepared to nurture your business during the early months while you’re still establishing a customer base. However, financing can help franchisees to manage the investment without significantly impacting their day-to-day life. Many franchisees rely on financing to manage parts of their initial investment.
At Experimax, our years in business have helped us formulate a good idea of how much money franchisees should have in the bank vs. how much they should cover with financing. Among other financial requirements, we ask that our franchisees have $50K in liquid capital when they sign their cell phone franchise agreement. Even if you have enough capital to manage the entire investment on your own, we still advise franchise to secure financing in case they need it later Having access to higher capital can be a major asset as you grow your business.
I Don’t Want to Be Penalized for Early Repayment
It’s true that some business loans do penalize borrowers for early repayment. However, many loans provide flexible repayment options without penalties for early payoffs. There are so many options when it comes to business loans, and the terms for each will be different. We encourage prospective franchisees to do some research and see for themselves the range of flexible terms available.
I Don’t Want to Get Trapped in a High-Interest Loan
This is certainly a valid concern. High-interest loans can be a major problem for business owners who may find themselves struggling to keep up with payments years later. However, not all business loans come with high interest rates. In particular, we encourage prospective franchisees to check out Small Business Administration (SBA) loans. Backed by the SBA, lenders are able to offer these loans with remarkably low interest rates. Factors like good credit do come into play when qualifying for an SBA loan. Many lenders also want to see a business plan from applicants. Borrowers who are interested in opening one or more cell phone franchises with Experimax may find themselves with a distinct advantage here – our years of experience have allowed us to develop comprehensive business plans that are attractive to many SBA lenders.
Want to learn more about the investment in an Experimax cell phone franchise? Contact us today!