Franchisees and the Business Cash Advance

Big corporations aren’t the only one’s being affected by the recession. Franchisees have also been victims of decreased consumer spending, rising costs and tightening bank lending practices.

So what are franchise owners to do in the face of these problems? For many, the business cash advance could provide the funds they need to improve and/or sustain their businesses.

Franchisees featured in a January article posted in Entrepreneur’s website listed finding financing and rising costs as a couple of their most pressing issues during the recession.

Jay Palmer, owner of three Floyd’s 99 Barber Shops had the most difficult time finding the funds to finance the opening of his third store. "We're on store three, and because of the economy being the way it is now, I couldn't get a loan for the life of me, whether it was using my house as collateral or my parents' house as collateral. There [wasn't one] bank that would give us the money because of the market…" said Palmer, in the article.

Fortunately, Palmer was able to turn to a personal investor to finance his business, but for those franchisees that are not lucky enough to have that option, there is still another option - the business cash advance.

Wendy and Todd Diskin, owners of an EmbroidMe franchise found themselves victims of rising costs as the recession headed into full-fledge. "It's almost a 5 percent increase in the cost of goods over last year," state the couple in the article. But instead of attempting to cut expenses in areas that could potentially harm their business, they took a different route. "[We] purchased a continuous marketing software program that sends letters and e-mails so we can stay in front of our customers on a regular basis without a ton of effort on our part." Rather than trying to cut costs across the board, they made an investment, making a purchase that would help them improve their business and in turn increase sales, in order to offset the cost of increases.

But for some franchise owners, the increase in costs has made it impossible to afford such a purchase. This is where the business cash advance comes in.

Now that you know that the business cash advance is an available option, it’s time learned exactly what is and how it works.

A business cash advance is a completely unsecured type of business financing. So, unlike a bank loan, which Palmer couldn’t get even with collateral, the business cash advance makes it possible to receive funds for your business, with no collateral required.

A business cash advance is basically a purchase of a business’s future credit card sales. Borrowers receive their funds (anywhere from $5,000 to $500,000) use them however they choose and repay the advance as their customers make purchases.

It usually takes six to eight months for a business cash advance to be completely repaid.

So why have some franchisees not taken advantage of the business cash advance? Some may be reluctant to use it because they fear it is too expensive. Some may not want to try it because they don’t know of other franchisees that have tried it and found it helpful. Some may even simply not want to change their credit card processors.

It’s true, the business cash advance may be a little on the expensive side, but when put to good use it can definitely be worth it (and has been for many small business owners), especially if other methods of financing are just not an option.

As for not knowing of other franchisees that have tried the business cash advance as a method of financing their franchises, there have been owners of over 24 franchises that have taken advantage of the business cash advance (and this is from one lender alone), many of whom continue to renew their advances.

Some franchisees may not want to change their credit card processors for one reason or another, but doing so is not a difficult process. In fact one lender’s website states, "…you will be upgraded to one of the best processors in the country and we will match or even beat your current processing rates."

Franchisees who need funds for their businesses should look into the business cash advance. It could make a world of difference.

The Business Cash Advance
Finance your franchise with a business cash advance.