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Financial Solutions for Franchisees

When you’re a franchisee, you live in a world of surprises. Sudden staff changes, unexpected corporate mandates, equipment breakdowns—you have to deal with it all. Chances are you may not have cash on hand to cover these unexpected expenses. But working capital loans, equipment leases, and similar financing options can help you cover everything from equipment upgrades to new store acquisitions. While there are many situations in which franchise financing options can help your business, let’s consider four of the most common scenarios.

Example 1: Corporate mandates an equipment upgrade

Deadlines for corporate-mandated store updates can be hard to meet if you’re paying for costs out of pocket, especially if you have multiple locations. Preserve your cash flow with an Equipment Finance Agreement (EFA). An EFA gives you immediate access to cash that you can use for upgrades, refurbishments, store refreshes, or any other aspect of your business. It lets you pay over time, comfortably, so you avoid a budget-challenging upfront payment.

Example 2: Your tax bill threatens your cash flow

Tax season is difficult for franchisees, many of whom own several stores and manage the taxes for those locations separately. If handing over that chunk of cash all at once strains your quarterly budget, consider a short-term working capital loan. These loans give you flexibility and control in paying your business’s taxes. By opting for manageable monthly payments--instead of paying one lump sum—you’ll keep your money for when you need it, and keep your budget on track.

Example 3: Outdated décor means your store needs a facelift

The look of your store is crucial to the first impression your business makes on customers. Old or worn-out furniture and décor can turn potential customers away or lead to negative reviews.  Modernize your stores without depleting your resources by taking advantage of a business loan. Business loans can empower you to do a storewide refresh rather than just fixing the small things that you can afford with your typical budget.

Arby’s franchisee Jim Raffel reached out to CIT when he needed help refreshing his stores. “It helped me stay current with equipment,” he explained to us. “There were times when I didn’t have the cash flow to buy things and it was very helpful for me to update my stores.” More than eight years after first contacting CIT, Raffel now has a long-standing relationship with the company and has completed 19 financing transactions.

Example 4: Your business partner is ready to move on

It’s never easy to lose a business partner, and if it happens suddenly, you might be financially unprepared. But you can turn a negative situation into an opportunity through partner buyout financing. In this type of transaction, time is of the essence, so it’s helpful to work with a dependable lender like CIT, well known for turning deals around quickly. Working capital can help you increase your stake in your business without suffering any interruptions as a result of your partner’s departure.

Any time you find yourself in situations like the ones above, or have another franchise financing need, contact us to discuss your options. We want you to make the most of your money, and we’re here to help.

Looking for more business tips? Check out our Business Education section.

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