| How Do I Finance
Buying A Tanning Salon Franchise? Despite the Department of Commerce
having proclaimed the success rate of franchises to be 90% compared to other small
businesses success rate of only 40%, you will still find it difficult to borrow
money to start your franchise.
Tanning salon franchises
require a large initial investment and liquid capital available for the franchise
company to use as insurance. There are several different ways to attain the capital
needed to open your tanning salon franchise. You can obtain a loan from the bank
or family and friends. A bank tends to be more difficult to
borrow from than family and it also charges a higher interest rate. However, most
families do not have a large amount of money to spare. You can also use your credit
card, but you must watch those high finance charge rates. If you are unable
to secure a loan or use your credit cards as equity, then you should try reaching
the United States Small Business Association. The SBA offers guarantees on 90%
of loans up to $155,000 and 85% of the remainder up to $750,000 total. The interest
rates on these loans vary but are usually quite reasonable. The terms of the agreement
range from 5 to 25 years. Some state and local governments also offer financing
options for franchise owners to encourage small business development. However,
each state varies on what they do and don't offer. Check in with your local government
to see what options they have available.
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