October 30, 2019
A portable storage franchise is a sound investment that delivers a strong, reliable return. It is a relatively safe, recession-resistant business model that can be scaled gradually to increase profit margins as time—and ambition—progress. But getting it started may require assistance in funding.
Though some entrepreneurs may have capital of their own ready to put into launching a business, most need to obtain funding from outside sources to become a franchise partner. Here are a few ways to do that.
Friends and Family
If you have a wealthy relative or benefactor who believes in the franchise you seek to open, you may want to try this avenue first. Such an interested party may offer better terms for repayment and interest than would a commercial lender.
Get the agreement in writing, though, because, unfortunately, familial and friendly relationships sometimes have a way of going sour in business. Hope for the best, but sign a contract or promissory note containing detailed terms. The lending party should want it in writing themselves, anyway.
Small Business Administration Loans
Another great option is to check with the SBA (U.S. Small Business Administration). In many cases, a franchise company may be registered with the SBA, which means the SBA has examined the business model and considers it a viable endeavor. A portable storage franchise is a sound investment and likely to be found favorable.
The SBA does not lend money directly to the small business owner but rather sets guidelines for loans its partnering lenders, community development organizations, and micro-lending institutions make. The loans are backed in part by the SBA and funded by their partner lenders.
Because the government partially guarantees the loans against default, lenders often give these borrowers loans with lower interest rates and a longer term for repayment than may be typical in a traditional bank loan.
For more detail about the ins and outs of SBA loans, click here.
A traditional bank loan is a very common form of business financing. The lender will require a business plan and will do a credit check. If approved, the loan typically will require repayment over a given term, with interest.
As with an SBA-backed loan, your credit score can make or break you here. As for the viability of the purpose of the loan, if you are looking to launch a location of an established, successful franchise brand, it helps a great deal. Your business plan in that case will be fueled to a large extent by the helpful wisdom and planning of your franchise brand.
It’s also a major plus when the business concept specifically is a portable storage franchise. A rock-solid business concept with a plan for consistent profitability can make the difference in getting approval. Banks like low-risk propositions.
Collateral is almost always required for a commercial bank loan, and these loans may require a down payment.
U.S. News & World Report recently published guide to the best available small business loans of 2019, with data on lenders, types of loans, and more. Check it out here.
If bad credit is a problem, an entrepreneur may consider tapping into a 401(k) or IRA account. But be warned: this way of funding a business carries the risk of eating up retirement funds if the business fails, and anyone considering this route should consult a trusted tax expert, because cashing out these accounts bring tax consequences.
Do you have a large network and the ability to influence people? Crowdfunding may be an alternative way to fund your dream of opening a business, if other avenues are not available due to credit issues or other obstacles.
This option can be attractive if you have an interesting, inspiring story to tell about why you want to open your particular business.
FitsSmallBusiness.com took the time to put together a list of the 35 Best Crowdfunding Sites for Small Business in 2019, with a detailed look at the ins and outs of each.
Ask the Franchisor
It’s a good idea to ask the franchise company from whom you seek to open a location if they offer franchising; even if they do not, most companies offering franchises have relationships with lenders and can provide advice on the best ways to get financing.
The strength of the brand’s reputation and track record, as well as their putting a good word in, can increase an entrepreneur’s chances of being approved for a loan and for more favorable terms when they do get the green light.
Regardless what source(s) of funding you secure, opening a franchise business puts you a much stronger position to get a return on the investment. The systems and roadmap for success that a franchise company has already tried, tested, and adapted enables a well-funded entrepreneur many advantages.
Founded by Michael McAlhany in 2004, the mission of UNITS Moving and Portable Storage is to provide personal customer service while supplying the most innovative equipment in order to eliminate frustrations associated with moving and storage space issues.
UNITS Moving and Portable Storage currently has 24 franchised and three corporate territories across the United States. With a presence in more than 40 markets, and growing, the brand is looking to expand with the right people in the right markets.
For more information on how to take advantage of this opportunity, or simply to learn more about the moving and portable storage industry, visit https://www.unitsfranchisegroup.com/ and fill out the inquiry form. We will reach out to you to talk more about your interest in our brand, and how UNITS Moving and Portable Storage can help you reach your personal and financial goals.