Franchise Financing - Flexible Options
Franchise ownership and management is an exciting new experience for the first-time entrepreneur. Whether you’re looking into franchising to achieve an ideal work-life balance, to nurture a more comfortable “nest egg” or to try out a new career opportunity, proper financing is the key to long-term success and profitability. Funding your franchise with the most optimal financing opportunity based on your unique goals, financial situation and background can help eliminate many of the pitfalls that those without experience or industry expertise may encounter.
The UPS Store proudly offers financing options that help to ensure that every franchisee within our growing network starts off their journey on the right track. We also offer special discounts for veterans to support active and former military members’ entrepreneurial ambitions. At The UPS Store, veterans can save $10,000 off our standard franchise fee which includes 50 percent off the initial application fee. Learn more about our veteran franchise opportunities.
The UPS Store Franchise Financing Tool
To provide the best franchise loan options for potential franchisees, The UPS Store teamed up with Guidant Financial, a leading financial institution. Guidant Financial knows our franchise business, our models and operating systems and can offer an array of funding options for prospective franchisees who qualify for franchise loans.
Additionally, Guidant Financial provides a full suite of financing options, including 401(k) business funding, SBA loans, portfolio loans, unsecured loans and more.
Financing Options Explained
If you’re just starting out the process of finding a franchise to invest in, you may have a lot of questions about the financing options available to you. Here’s a quick breakdown of the financing options from Guidant Financial listed above.
- 401(k) Business Funding: This financing option allows you to buy a franchise location with money from your previous or existing employer 401(k) plan without having to worry about any tax penalties. The Employee Retirement Income Security Act (ERISA) protects the cash in your 401(k) from additional taxes when it’s used to start a new business. This option is especially popular in the franchise world.
- SBA Loan: A small business loan that is partially guaranteed by the government through the Small Business Administration (SBA). SBA loans eliminate some of the risks for the financial institution issuing the loan. The SBA doesn’t actually issue the loan, they work with a network of approved financial institutions that frequently work with small businesses. Since the SBA partially guarantees the loans, the financial institution can offer small businesses better terms.
- Portfolio Loan: For borrowers, portfolio loans are typically more ideal than many other loan options. In many cases, loans are packaged with other loans and sold off to other institutions by the lender. With a portfolio loan, the lender keeps the loan as a part of their investment portfolio. This method tends to work out better for the borrower as they have direct access to the lender if any issues arise.
- Unsecured Loan: With an unsecured loan, lenders use the creditworthiness of the borrower when distributing the loan, rather than requiring them to put down any collateral. Because unsecured loans don’t require any collateral like a piece of property, the terms of each loan are usually determined by the borrower’s credit score. Outside of franchising, common examples of unsecured loans include credit cards and student loans.
Additional Ways The UPS Store Supports Franchise Financing
With The UPS Store, you’re in business for yourself, not by yourself. Along with providing initial financing options and support, The UPS Store also helps you along the way with tips to help you save and make more money.
For example, did you know there are various tax breaks that come along with franchise ownership? Franchise businesses are eligible for breaks related to location and license costs, as well as regular expenses like internet, fax, phone and service fees, along with less-common costs like repairs or theft.
We encourage you to speak to our Franchise Development Team for additional details about franchise costs, financial requirements, available financing opportunities and everything else you need to know to open your own The UPS Store center.