Securing the right funding partner is an important step on the road to expansion. Here are the key questions to ask when choosing yours
Choosing the right funding partner is vitally important to your brand’s successful growth. Not all funding partners provide the same level of service or financing solutions, which is why it’s necessary to explore different companies to see what best fits your needs. Being able to clearly articulate the characteristics of your start-ups vs. resales and the candidate characteristics you desire can help a funding partner share success stories and demonstrate to you that they have and can successfully meet your needs.
Here are five key questions to ask yourself when looking at potential funding partners:
1. Do they provide multiple avenues to make small business ownership a reality?
Becoming a small business owner can be an exciting and overwhelming time. Choosing a funding partner that offers multiple financing solutions will only increase your client’s chances of getting the capital they need to make their investment into that business. There are many ways to finance your small business such as Rollovers for Business Start-ups (ROBS); SBA loans; unsecured financing; home equity line of credit (HELOC); conventional loans; etc. Ensuring you partner with a provider that offers a full suite of services is a crucial element of the partnership.
2. Are you confident in their capabilities and do you trust their expertise?
Often, candidates will seek out their local bank to access the capital they need. This experience usually doesn’t end well because lenders don’t really understand franchise lending. A funding partner should educate, rather than advise. Every candidate will be different with regards to the amount of debt they want when opening their doors to operate. A funding partner that can inform them of all the various ways they can make that happen will be instrumental to your candidate’s success. In addition, confirm that funding partner will have a team in place to assist you and your candidates, so you’re not chasing down answers and updates.
3. Will you be supported through technology and marketing components?
Having insight as to where your candidates are at in the franchising process is a necessity. A funding partner should be able to provide you with the real-time status of your pipeline 24/7, give weekly updates via email and phone, create prequalification tools for your candidates to easily educate themselves on the funding solutions available to them, and also develop co-branded collateral, videos, infographics, and blogs that you can share with your candidates.
4. Does the funding partner align with your company values?
Choosing a funding partner that has the same goals and value creates a strong partnership. Ask yourself if are they in the business of empowering entrepreneurs? Will they think outside the box to ensure your candidate has all the options available to them? Will they treat your candidates with respect and essentially be an extension and representation of your brand? Will they be passionate about your brand and work with your team in unity? Do they care about the success of your candidate long-term?
5. Will that funding partner go the distance to understand your brand, your team, and your needs?
A funding partner should be able to understand your brand inside and out. This means knowing your investment costs, net worth requirements, multi-unit awards, closing timeline, and even your development schedule. Further, your funding partner should be able to put together programs for qualified candidates specific to your investment. This includes identifying lenders that have an appetite to consume loans for your brand and want to do so on a more expedited basis.
It’s critical to choose a funding partner that offers financing solutions tailored to your brand, who also has the knowledge and expertise to execute. Your candidates need to understand their options to lead to success for years to come. We all know that the brand succeeds when their franchisees are succeeding; if you choose a funding partner can offer all the elements above, you will be able to focus on the growth of your brand while trusting that your candidates are in capable hands to access the capital they need.
ABOUT THE AUTHOR
Allison Zorich is the Director of Business Development at Guidant Financial. With a background in finance and 15+ years of experience in sales and business development, Allison leads her team in supporting Guidant’s partners by helping candidates access the capital they need.
