With the challenges that franchisees face in attracting lending, it can't be denied that entrepreneurs that need a bit of help where financing is concerned. SBA loans are certainly one route available.
Smartmoney.com has profiled the story of one man who perfectly demonstrates the power of SBA loans. Alan Green is a 59-year-old television-news photographer from Utah who had worked as an advertising and marketing director. He was seeking a new career option, and looked to purchase a Molly Maid franchise in his hometown Salt Lake City, but could not finance the project on his own. He turned to the SBA and his franchsing dream came true.
"I was going to finance it with credit cards, but in just three weeks I had a check in my hands," Green told Smartmoney. The story explains how SBA loans work but also shows exactly what SBA loans deliver.
Green was in a grocery store on New Year's Eve when the bank called to okay his application for a $130,000 seven-year loan at 6%. To qualify, he put up about 10% from his personal savings. "I don't think they would have approved it for a start-up," Green says. "This was a business that had and could be profitable, and I had strong management and marketing experience in my favor."
But look what the loan has helped deliver: sales are up 22% at Green's unit and expected to rise to 30% by the end of the year. He's hired six new employees and expects to have the loan paid back in just 7 years.
If you're desperate to open a franchise but can't access a funding, check out our directory of SBA-Approved franchises.