5 Top Ways of Financing Your Campsite Franchise Venture
A campground franchise business provides an excellent opportunity to become an entrepreneur. It allows you to have independent and flexible operations, while also offering you the support structure and infrastructure of a large business corporation. But before signing the dotted line on the contract papers provided by your franchisor, where can you get the finances to invest in real estate?
Unless you have ready money to buy a camping site outright, you’ll need to seek one or more lenders to get enough finances. You’ll also need a good business plan. This post presents to you some five top financing options that can help you in acquiring a franchise campground site from big franchisors.
Why Do You Need A Business Plan?
Before getting funds to invest in real estate, you’ll need to have a clear business plan. Opening franchises requires large amounts of money, which includes high franchise fees, marketing costs, and ongoing royalty payments. As such, you have to seek for lenders that can offer you finances.
But all lenders can’t lend you any money before knowing your creditworthiness and venture plans. So, you have to provide your credit score or rating and net worth alongside a well-crafted business plan. The plan should show your understanding and analysis of the business, projections on expected performance, marketing plan, working capital estimates, cost analyses, and many other intricate details about your venture.
This plan will determine whether you can get funding or not. If you can’t create a good business plan, then you should seek the help of a business planning specialist or a business plan preparation software.
Here are some popular financing options that can help you invest in real estate.
Most franchisors provide various forms of debt financing to their franchisees. Some franchisors may offer partial loan grants, or they may fund the entire loan through their financing companies. Financing plans provided by such franchisors include operational costs, franchise fees, equipment financing plans, or a combination of any of these offers.
All these loans get structured in different ways, which get determined by the agreements reached between the franchisee and franchisor.
You may have to find a partner to make your franchise venture fruitful. You can find an interested friend, relative, or spouse who can partner with you to raise enough money.
You can also use your home as collateral if it has attained significant value. But you should be careful not to lose your home by defaulting on paying the loan amount advanced to you.
Conventional Bank Loans
You can also source funding from a credit union or bank. Such institutions may give you loans with great ease because they’re often comfortable working with a business that will be part of a significant venture, instead of dealing with an unknown startup. But you have to put all your financial paperwork in order and show that you’re creditworthy.
If you also make an upfront deposit as part of the percentage of the loan that you need, then the banks may lend you the money without much ado.
Take an SBA Loan to Invest In Real Estate
Small business administration (SBA) loans are credit facilities given under the supervision of the U.S small business administration body. These loans have favorable repayment rates and options than conventional bank loans. These loans are ideal for new ventures, but you have to meet the criteria set by the body in charge of giving the loans.
At least one or more people from 6 out of 10 homes in the U.S. have gone out at one time or another for camping activities. This fact implies that there is a big camping business in America. The demand for campgrounds or campsites by recreational vehicle (RV) owners is also high.
If your looking into investing into a camping franchise, then give us a call today. LSI, Inc. Can help you determine your best practices.