Down economy creates a welcome sign for franchise funding

Posted on October 28, 2010 by Stacey Fousse

The economic slowdown has changed the game for many in the business community. Whereas in the past an entrepreneur would find it fairly easy to get a small business loan from a bank, thanks to a tightening of the credit markets, times have never been tougher. But as traditional banks have cut down on loans, another business sector has given more incentives than ever to those looking to enter the market - franchises.

According to franchising experts Lane Fisher and F. Joseph Dunn, franchisors have made owning a brand easier than ever, loaning out more money and forcing those interested to pay less than in previous years.

"Five years ago, franchisors didn't need to offer financing because there was an abundance of credit; plenty of local, regional and national lenders; and enough financially qualified prospects to fuel growth," the two wrote in an article for Franchise Update. "According to the IFA, franchising is expected to seek $10.1 billion in capital this year, while banks are expected to lend only $6.7 billion."

While the economy has struggled to get back on its feet, many have found success with franchise endeavors. Not only will a franchisee be working with a well-known brand, but often there is a strong support system in place to help them along the way.