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Veterans in Franchising AUGUST 2017

the dry boys gets off to a quick

www.franchisingusamagazine.com

start by offering Exclusivity

why making the bed sets

ground work for success eight questions for veterans

to ask about franchising Franchising USA


SAME DRIVE. DIFFERENT BATTLEFIELD. TAKE THE NEXT STEP > VETFRAN.COM OFFERING FINANCIAL SUPPORT, TRAINING & MENTORSHIP Veterans interested in franchising can take their skills learned in the military to successfully own and develop small businesses. Learn more and support veterans in franchising at www.vetfran.com.

• 650 franchise companies participating • 151,000 veterans and their spouses found careers in the franchise industry • 5,100 veteran franchise owners


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V e t e r a n s i n F r a n c h i s i n g Suppl e m e n t august 2017 Our Veterans in Franchising special supplement has become a regular feature of Franchising USA. To share your story in the next issue, please contact Vikki Bradbury, Publisher Phone: 778 426 2446 Email: vikki@cgbpublishing.com

Contents On the Cover

News and Expert Advice

48 The Dry Boys: New Franchise in Drying Industry Looks to Get Off to Quick Start by Offering Exclusivity

50 Why Making the Bed Sets Ground Work for Success Dr. Chris Tomshack, Founder and CEO,

50 Why Making the Bed Sets Ground Work for Success 52 Eight Questions for Veterans to Ask About Franchising

HealthSource

52 Eight Questions for Veterans to Ask About Franchising Tim Mackin, Owner of FirstLight Home Care, York 54 VBS is Raising Money Through KIVA to Change Veteran’s Lives Jim Mingey, Founder and Managing Director, VBS

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V e t er ans in Fr anchising

T he D r y B oys

New Franchise in Drying Industry

Looks to Get Off to Quick Start by Offering Exclusivity

A brand new water damage restoration franchise aims to leave the competition high and dry by offering special incentives, including exclusivity of territory. The Dry Boys, co-founded by Leo Goldberger and Curt Swanson, currently has two corporate locations in Albany and Brooklyn, NY. Unlike other restoration companies, The Dry Boys concentrates solely on water damage and restoration caused by floods, natural disasters or some kind of failure within residential and commercial properties. “We will find the source of the water, we will stop the water, we will extract the water, we will remove the affected

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materials, we will put in drying equipment, dehumidifiers — we have many different sizes and types of dehumidifiers — as well as air movers or fans,” Swanson explained during a recent interview. “Depending on the application, we might use air scrubbers to clean the air because we’re moving air inside an affected location and we will monitor the location until we have dried to industry standards.” The Dry Boys will also apply an antimicrobial solution to the affected area to prevent mold, pores and mildew growth, he added. With so many homes flooded across the United States each year, The Dry Boys is filling a need that many homeowners will require at some point, Goldberger noted. “Every day in the United States, over 50,000 homes are flooded,” he said. “Every year in the United States, two percent of basements are flooded. Every basement in the world will be flooded at least twice in its lifetime.”

Whether it’s from floods, washing machine malfunctions, leaking or broken pipes, water damage is something that happens every single day across the country, he added.

Exclusivity In addition to its singular focus on drying and water damage restoration, The Dry Boys offers its franchisees something that Goldberger says no other restoration franchise offers; exclusive territory, even during a natural disaster. The market service area for The Dry Boys franchisees will be around 300,000 people, which is much larger than what other restoration franchises offer, Goldberger said, and even if something like a hurricane hits an area, a franchisee’s exclusivity will not be compromised. This is in contrast to how other drying franchises operate. If a hurricane or other disaster strikes an area, Goldberger explained, other drying franchises will


“We’re here to help the franchisee. If they’re successful, we’re successful.” - Curt Swanson encourage all their nearby franchisees to flock to that area with their equipment to make money. With The Dry Boys, however, if a major disaster were to happen in a given area, only the franchisees in that area would get access that business, the co-founder continued. This is because as a corporation, The Dry Boys owns approximately $2 million worth of drying equipment and it can strike a deal with the local franchisees in the affected area to use the corporate equipment so they won’t lose any potential business to other franchisees coming into the area. Their only competition would come from other companies. Now is an ideal time for entrepreneurs to join The Dry Boys, Goldberger said, because they’re just getting started and have opportunities available all over the country. Swanson’s 25 years of experience in the drying and restoration industry and Goldberger’s experience starting and growing successful franchises — The Inspection Boys and The Patch Boys were also founded by him — also bode well for potential franchisees. Goldberger said The Dry Boys franchising costs are lower than other restoration franchising startup costs and the company can also offer in-house financing to help franchisees get started. As an added bonus, the franchise can start off as a home-based business to further save on costs. On top of all that, veterans get a 20 percent discount. Both Goldberger and Swanson have veterans in their families and the cofounders feel a great deal of gratitude toward them.

“We always want to give back to those people who serve our country,” Goldberger said. Veterans usually have an outstanding work ethic, he noted, and can diligently follow a plan, which is what makes them ideal candidates for The Dry Boys.

No Experience Necessary Franchisees need not have any experience in the drying or restoration industry. Swanson will be in charge of training to make sure all franchisees are educated accordingly. The Dry Boys has a training facility in Albany where they can replicate realworld flooding scenarios in buildings. Franchisees will have two to four days in the training facility where they go over various scenarios. The training includes both classroom and hands-on training. After going through The Dry Boys training, the franchise will require that its franchisees get certified by the Institute of Inspection Cleaning and Restoration Certification, which is a national industry standard among drying and cleaning companies. In addition to training, The Dry Boys will also provide ongoing support in the

form of continuous training, marketing, lead generation and employee training. The company will also keep franchisees up-to-date with the latest technology in the industry. Swanson said he will always be available to assist franchisees and while the company is getting started, he will be available to travel to a franchisee’s area to offer support and training on-location. “We’re here to help the franchisee,” Swanson declared. “If they’re successful, we’re successful.” Perhaps the biggest indicator of future success for the company, as outlined by Goldberger, is the fact that The Dry Boys operates in an industry where clients have no choice but to engage their services when required. “This kind of business is a need business,” Goldberger said. “When you come home after work and see your basement flooded, it’s not a question of whether you want to fix it, you need to fix it.” For veterans and civilian entrepreneurs alike The Dry Boys offers an excellent opportunity to get in on the ground floor of a franchise poised for success. www.TheDryBoys.com

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Dr. Chris Tomshack, Founder & CEO, HealthSource

Why Making the Bed Sets Ground Work for Success Franchising USA


“Boot camp would be hell if we weren’t passionate about serving our country! So proudly serve your community with a business in which you believe for ultimate fulfillment.” Civilians never guess the most valuable business lesson I learned from my military career is to make my bed every morning. It seems unrelated when it comes to business but proves how even small tasks can leave a positive lasting mark. I’m forever indebted to the military for my college education and numerous life lessons my officers taught me. With all I learned in the classroom and on duty, the military provided me the tools necessary to become a successful businessman and franchisor. From the way I hired my first employees and how I initially selected franchise partners to how I continuously train the franchise system and further develop my brand – the military has been influential in how I operate as a franchisor.

Let Passions Lead Your Path As veterans transition to civilian life, the first thing we typically seek is our next career move. I launched my own chiropractic business, which quickly grew to four, and then solidified systems in order to franchise the concept. When contemplating a career after the military, it’s important for veterans to follow their passion. Selecting a career based on the money will eventually become bland and the business won’t be successful. Produce something you love. If you love health, go into something medical or involving exercise. If you love to eat, go into the restaurant business. It seems basic enough, but many entrepreneurs go into businesses

for the wrong reasons. Soldiers rely on passion to be effective so the same needs to be applied to a professional career. Boot camp would be hell if we weren’t passionate about serving our country! So proudly serve your community with a business in which you believe for ultimate fulfillment.

Leave Your Ego at the Door The military has the right mindset when it comes to training – leaders leading leaders. We put ego aside to get the task done. Not having an ego is important when it comes to running a strong organization. When I was first commissioned as an operations officer, I was put in a position to lead people who were 35 years older than me. Listening to someone with little experience who is less than half your age isn’t the easiest thing to do, but every person treated me with respect. That’s what the military teaches you – selflessness. The best example of military-instilled selflessness is World War II General, George Marshall. President Franklin D. Roosevelt relied on Gen. Marshall to strategize the war behind closed doors, without receiving the notoriety or glory of other generals – including General Dwight Eisenhower who would become the President of the United States. I try to embody that way of thinking and also instill the same within my franchisees. Put your ego aside and do what needs to be done to accomplish the greatest good for all.

Be Prepared The military will give you the tools to be ready for anything. Unbeknownst to me, I was on the receiving end of infinite pseudo drills and situations doled out by my superiors. Now I understand that they wanted to see how I would react

Dr. Chris Tomshack

in real-time and determine whether or not I could accomplish my assigned task successfully. I use this same method within the HealthSource franchise system. I want my franchisees to be ready for any feasible situation that could occur. When dealing with an issue like a physical injury or storm damage to a clinic, I learned that the best way to find a solution is to explain the situation and clarify what happens if the job doesn’t get resolved quickly. After identifying the ramifications of the situation if we don’t overcome, the solution usually becomes clear on how to work together to complete the task. It’s pure military methodology to translate a person’s level of disciple to their success. Having the discipline day-in and day-out to accomplish small, routine acts is how greater amounts of success in business are achieved. That is why I make my bed every morning, as it sets the tone to do the small things throughout the day to reach my fullest potential. Dr. Chris Tomshack is the founder and CEO of HealthSource – America’s Chiropractor®, the largest and fastestgrowing chiropractic franchise in the world, with more than 360 domestic and international clinics serving more than six million patients. Dr. Tomshack was in the Airforce ROTC at Ohio University and served in the National Guard. He has also authored “The Ultimate Practice Adjustment” and co-authored “Freedom from Fat.” www.healthsourcechiro.com

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Tim Mackin, Owner of FirstLight Home Care, York

Eight Questions for Veterans to Ask About Franchising Franchising USA

After careers spent serving their country, veterans of the U.S. Armed Forces can be at a loss looking for a career beyond the military. Opportunities exist in the franchise industry, but there are questions that need to be asked to determine if a franchisor is the best fit for you.


1 How do they treat veterans? You’ve found what looks like a good business opportunity, but as a veteran entering the business world, it’s important to find an organization that truly values those who serve. How does the franchise treat veterans? Does the corporate leadership of the franchise recognize service? Is there a franchise fee discount?

2 Does their leadership walk the talk?

Does the franchise leadership believe in what they stand for? More importantly, do they put their words into action? The leaders have to walk the talk. They need to understand their industry and be committed to the greater good for their franchise partners and customers. You need to look for corporate leaders who are supportive and will be there every time you need them.

3 What is their culture?

What is the corporate culture of the franchise? What are the values of the leadership? Getting a new franchise business up to speed isn’t easy. It will take up much of your time and finding out after the fact that you’ve locked yourself into a toxic corporate culture is a recipe for burnout and failure. Be patient and find a franchise with corporate values that are compatible with your own. In my own case, it was the deeply ingrained culture of care at FirstLight Home Care that made me decide to invest.

5 Does the corporate leadership communicate well?

Effective leaders are effective communicators. It’s a principle just as valid in the business world as the military. Are there clear lines of communication with the franchise leadership? Are they engaged and proactive? Do they answer all your questions?

When I was researching business opportunities, the executive director of franchise development for FirstLight Home Care took time out of his busy schedule to answer questions and walk me through its policies and procedures. The other franchisors didn’t do that. They weren’t really forthcoming enough to help me make a good business decision.

6 Do they have discovery days?

When it comes to learning about a franchise, face time with the leadership is invaluable. Attending a franchise discovery day will give you a chance to get to know the people in charge of a franchise and experience the culture of the business firsthand.

When I entered the franchise industry, it was a discovery day that was the game-changer for me. It made me feel comfortable with investing in a FirstLight Home Care opportunity. Getting to know the leadership of my franchise was the driving factor of my decision-making process. I also met the leadership of two other home care franchises during their discovery days but did not have the same comfort level with them.

4 What does Google say?

When looking for a franchise opportunity, there are three very important words to remember: Research, research, and, research. The internet should be the first stop for informing yourself about the reputation and financial well-being of a franchise. Do your homework. Start out by avoiding the sales pitches and reading up on franchises at the Small Business Administration and Federal Trade Commission websites.

7 Are veterans part of their client base?

As a veteran, it’s important to support other veterans. It’s good to look for a franchise that serves veterans as part of its client base. If you can make a living while making a difference in the lives of your brother and sister veterans,

Tim Mackin

you’ll be succeeding at much more than business.

8 Are franchise businesses a good choice for veterans?

The answer to that question is yes – if you find the right franchise opportunity. The skills you learn in the military are beneficial when it comes to running your own business. Understanding logistics and being used to working with people of very diverse backgrounds makes it easy to transition into the ownership of a company. I see a franchise as a good investment. If you follow the business model and business plan, you will succeed.

The bottom line Veterans should know there are good opportunities in the franchise industry to be the owners of their own businesses. Don’t allow yourselves to get caught up by the belief that you don’t have all the needed experience to succeed. Business is not brain surgery or rocket science. You have all the skills you need to accomplish anything you want to do. With a successful franchise system as blueprint for your business, the sky is the limit. Tim Mackin is the owner of FirstLight Home Care, York. The FirstLight network is an award-winning provider of non-medical home care, providing more than 85,000 hours of service each week and caring for clients right where they live.

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V e t er ans in Fr anchising

Jim Mingey, Founder & Managing Director, VBS

VBS is raising money through Kiva to change Veterans lives When Veterans try to obtain a “grant” for their small business from the VA they realize there aren’t any grants. What exists at the VA is a small business program to help Service Disabled Veterans that have at least 20% disability rating. But it’s not a grant and doesn’t provide cash. Franchising USA

What it does provide is comprehensive training and support for their business idea through a VA self-employment plan. However, many challenges exist for eligible Veterans in the program because the VA understandably expects that any Veteran receiving its support will have their own “skin in the game” too. That requires the Veteran to show capital is available from their own resources and/ or a bank. Since most banks don’t like startup loans, the Veteran without capital can have a difficult problem.

Enter Kiva and Veterans Business Services! Kiva celebrates and supports people

looking to create a better future for themselves, their families and their communities. That includes the Veteran community. Kiva is an international nonprofit, founded in 2005 and based in San Francisco. Kiva solicits loans from individuals around the world in increments as little as $25. Kiva then lends as much as $5,000 to first time borrowers at 0% interest for time frames up to 3 years. Kiva never takes a fee from lenders, which means 100% of the funds lent on Kiva go to supporting borrowers’ loans. Kiva’s own lenders crowdfund an average of $2.5 million in loans each week, creating a unique, renewable pool of funds that are reshaping access to


V e t er ans in Fr anchising

else in the world." And what could be bett community too. Page 55

Veterans Business Services (VBS) is laun Kiva for their own self-employment plans. develop plans to obtain their own “skin in comprehensive training from the VA and acquire franchises. VBS has been succes go to [ ] to help VBS do more for Veteran

VBS is looking for Veteran partners who w State by State basis. Prospective partner www.veteransbusinessservices.us

VBS has been designated by VA as a sm Rehabilitation and Employment (VRE). S

A Veteran who wishes to apply for VRE b https://www.vabenefits.vba.va.gov/vonap

VBS Founder and Managing Director, Jim proud military background. An entreprene Jim Mingey personal level to the needs of the veteran knowledge to implement his experience in at Purdue University, has been a mentor approved franchise acquisition training pr Employment (VR&E) Program at Veteran first equity fund in the United States exclu franchises. Jim and his wife, Nancy, live i

VBS is raising money through K Veterans lives

VBS is raising money through Kiva to somewhere else in the world.” And what A Veteran who wishes tochange apply for Veterans lives When toWhenaobtain a “grant” for their small business from t Hyperlink image below to https://www.vab VRE benefits should click here: couldVeterans be better than try helping Veteran life Veterans try to obtain a “grant” for their small business from the VA they realize there aren’t any grants. What exists at the VA is a small business program to help Service Disabled and helping their own community too. aren’t any grants. What exists atdisability therating. VA business program Veterans that have at least 20% But it’sis not aa grantsmall and doesn’t provide cash. What it does provide is comprehensive training and support for their business idea through a VA self-employment plan. However, many challenges exist for eligible Veterans in the program because the VA understandably expects that any Veteran receiving its support will have their own “skin in the game” too. That requires the Veteran to show capital is available from their own resources and/or a bank. Since most banks don’t like startup loans, the Veteran without capital can have a difficult problem.

Veterans Business Services is 20% disability rating. But it’s not a grant Veterans that have at(VBS) least launching its own Kiva campaign to assist What it does provide is comprehensive training and support for their Veterans to use Kiva for their own selfEnter Kiva and Veterans Business Services! self-employment plan. However, many challenges exist for eligible V employment plans. This will help Veterans because the Rehabilitation VA understandably expects that any Veteran in Vocational develop plans VBS Founder and Managing Director,receiving obtain their own “skin in the too. game”.That requires ownto“skin in the game” the Veteran to show capita Jim Mingey, is a decorated Vietnam And these same Veterans will also receive veteran raised from a proud military resources and/or a bank. Since most banks don’t like startup loans, comprehensive training from the VA and background. An entrepreneur for Please use new head shot image below: canmentor haveother a difficult problem. Veterans who want to start more than 35 years, Jim can relate Kiva celebrates and supports people looking to create a better future for themselves, their families and their communities. That includes the Veteran community. Kiva is an international nonprofit, founded in 2005 and based in San Francisco. Kiva solicits loans from individuals around the world in increments as little as $25. Kiva then lends as much as $5,000 to first time borrowers at 0% interest for time frames up to 3 years. Kiva never takes a fee from lenders, which means 100% of the funds lent on Kiva go to supporting borrowers’ loans. Kiva own lenders crowdfund an average of $2.5 million in loans each week, creating a unique, renewable pool of funds that are reshaping access to financial services around the world. Kiva crowdfunds loans for borrowers in more than 80 countries who are often excluded and can’t access other fair and affordable sources of credit. In the U.S., Kiva can provide loans for Veterans whose small businesses are creating social impact in their communities.

financial services around the world. Kiva As stated by the Huffington Post, "In lieu of a financial profit from the money you lend, you get something that, in myhas opinion, is more the chance to make ato tangible businesses or acquire franchises. VBS onvaluable: a personal level thedifference needsin the of the crowdfunds loans for borrowers in more world and to impact a stranger's life in a positive, permanent way. Kiva is not about investing been successful using Kiva to develop its veteran small businessperson, and than 80 countries who are often excluded business model. Please go to Kiva.org and possesses the practical knowledge to and can’t access other fair and affordable implement his experience in today’s search on ‘Veterans Business Services to Kiva celebrates and supports people looking to create a better future sources of credit. In the U.S., Kiva can market. Jim participated in the EBV help.’ provide loans for Veterans whose small families and their communities. That includes the Veteran communit Program at Purdue University, has businesses are creating social impact in nonprofit, VBS is looking for Veteran founded in partners 2005 and based in San Francisco. Kiva solicits been a mentor at American Corporate their communities. who would like to replicate the VBS around the world in increments asPartners, little as $25.the Kiva then lends as m developed first approved business model on a State by State As stated by the Huffington Post, “In franchise acquisition training program borrowers at 0% interest basis. Prospective partners should for time frames up to 3 years. Kiva never ta lieu of a financial profit from the money for the Vocational Rehabilitation and contact us at VBS website of at: the funds lent on Kiva go to supporting borrow means 100% you lend, you get something that, in my which Employment (VR&E) Program at www.veteransbusinessservices.us opinion, is more valuable: the chance to lenders crowdfund an average of Veterans $2.5 million in loans each week, cr Administration, and was make a tangible difference in the world poolVBS has been designated by VA as a small instrumental in forming the first equity around of funds that are reshaping access to financial services and to impact a stranger’s life in a positive, business service provider for Vocational fund in the United States exclusively loans for borrowers in more than 80 countries who are often exclude permanent way. Kiva is not about investing Rehabilitation and Employment (VRE). for veteran owned small businesses and and affordable sources In the canlive provide lo money in the traditional sense; it’s about fair See Veterans Administration’s M28R of credit. franchises. JimU.S., and his Kiva wife, Nancy, in Oregon City, Oregon. using your excess cash to jump start a lifesmall Manual. businesses are creating social impact in their communities.

Enter Kiva and Veterans Business Services!

Franchising USA As stated by the Huffington Post, "In lieu of a financial profit from the


ex per t advice

Jeff Grandfield & Dale Willerton, The Lease Coach

The Importance of

Time, Timelines, and Timing with Your Commercial Lease – For Franchise Tenants without it costing you more capital or rent. At The Lease Coach, we have heard from many franchisees who have explained how they felt pressured by real estate agents who keep pushing them to make a deal or sign a letter of intent. Many of those same franchisees have regretted caving in to that pressure and making hasty decisions. Often you will get a call from the agent saying that someone else is looking at the space you looked at last week, so you had better hurry and sign an offer to lease. Don’t let things like that sway you. Pace yourself. Go your own speed and get it done right.

The leasing process can take differing amounts of time, depending on whether you’re opening your first or fifth franchise location. You can discover a lot during your first few lease deals that you can carry forward – potentially saving you both time and money with further leasing projects. The key is to give yourself ample time so you can recover from setbacks and delays

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Time is also money for many successful franchisees who can better spend their time doing what they do best or what only they can do for themselves and their businesses. Many commercial tenants hire professionals to save them time so why not use a professional lease consultant to handle your commercial leasing matters too? The entire lease process can take 20 to 40 hours stretched over many months – this is time that you may better delegate to someone who does this for a living. Pay attention to timelines as well as these can be critically important. Most often, any condition stated in the offer to lease may be for a finite period of time (e.g. ten days). If you know up front that you

need more time to get your financing in order or have your contractor look over the commercial space, then ask for more days in advance. It is better to have a 20-day condition period rather than your having to keep extending five-day condition periods. Timing plays a key role with your lease renewal. Ideally, a franchise tenant will want to start the lease renewal process 12 – 15 months in advance of their lease expiration date. More precisely, look at your renewal-option clause. If this says your cutoff date for exercising your lease-renewal is six months before your lease expires, you would need to start the renewal process six months before that – or a total of 12 months in advance. Note that your strength or leverage may lessen the closer you get to the cutoff deadline, so the farther in advance you can find out what the landlord wants to do with your tenancy and rental rate, the more time you have to react. If you’re going to get bad news, you will want that information sooner rather than later. Do keep in mind that most landlords appreciate franchise tenants as long-term tenants which can attract other tenants (and shoppers) to a commercial property and want (and plan) to have them renew, so you’re usually on the same page plan-wise anyway. This also applies in cases where you don’t


“Timing plays a key role with your lease renewal. Ideally, a franchise tenant will want to start the lease renewal process 12 – 15 months in advance of their lease expiration date.”

have a renewal option and want to remain in your same location. The closer you get to the end of your term the less relocation time you have, and it becomes clearer to the landlord that you can’t (or don’t) intend to consider relocating. Doing this all in advance also impacts your own peaceof-mind … when you can put the lease renewal to bed earlier, it reduces your own stress dramatically. Dale Willerton and Jeff Grandfield The Lease Coach are Commercial Lease Consultants who work exclusively for tenants. Dale and Jeff are professional speakers and co-authors of Negotiating Commercial Leases & Renewals FOR DUMMIES (Wiley, 2013). www.TheLeaseCoach.com

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ex per t advice

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H AVE YOU R SAY

Paul Bosley, Managing Member of Business Finance Depot

The Most Versatile Commercial Loan Product Do you want to expand your business or open a new location?

Do you want to refinance your existing debt to lower your monthly overhead? Are you tired of paying rent to a landlord and would rather own the real estate you operate your business? Do you want to open a new franchise and need financing to do it?

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If you answered “yes” to any of these questions, the Small Business Administration (SBA) 7(a) loan may be your answer. This national loan program designed by the federal government is offered by many national lenders and can be used for a wide variety of business purposes. The SBA offers loan guarantees ranging from 50% up to 90% of the loan amount to reduce the lender’s risk which, in turn, makes securing an approval more likely. The following information is being provided in outline form to simplify the features of the variety of uses for this loan program. The SBA 7(a) Loan Program’s Four (4) Main Uses:

1

Finance a Start -up Business

• The SBA 7(a) Loan will finance up to 80% of the total project costs which typically includes the equipment needed to operate your business, organization costs, buildout, deposits, inventory, operating working capital and franchise fees. • The owners’ equity injection must be at least 20% of the total costs and cannot be borrowed money such as a home equity loan. • Good resume showing experience, transferable skills and/or related education

2

Finance the Expansion of an Existing Businesses

• Use of Funds to finance up to 80% of the total costs which typically includes the equipment needed to operate the business, working capital, buildout, deposits and franchise fees. • Owners’ Equity injection must be at least 20% of the total costs and cannot be borrowed money such as a home equity loan.

3

Debt Consolidation for an Existing Business

• The funds are used to refinance existing business debt which can include existing

equipment leases and loans of all types. • The refinancing can include existing credit card debt only if the debt was incurred for business purposes and can be easily identified. • The resulting monthly payment must reduce the total monthly payments of all debt be consolidated by 10%.

Common Criteria, Terms and Conditions for the Three (3) Uses Listed Above • The collateral for the loan is all business assets. Addition collateral is often required which is typically residential real estate only up to the loan $ amount. • Good personal credit typically 675 credit score or above • 10-year loan repayment term • Prepayment penalties typically range from 1-4% over the initial term period • The interest rate is typically prime rate as published in the Wall Street Journal (4.25%) plus a risk premium typically 2.75% = 7%. • Closing Costs are typically 3% of loan amount. The closing costs are typically added to the amount being financed. • Timing to close - 90 days which varies with the bank work load & the responsiveness of the borrower. Since it takes time to close the SBA 7(a) loan, advanced planning and attention to detail is required.

4

Real Estate – Commercial Mortgages

• The SBA loan will finance up to 90% of the real estate acquisition cost. • The owners’ equity injections is at least 10% of the acquisition cost of the real estate and cannot be borrowed money such as a home equity loan. • The business must occupy at least 50% of the useable space which provides an opportunity to lease out up to 49% of the useable space. • Terms and Conditions: o The collateral is real estate being purchased

Paul Bosley

o Good personal credit typically 675 credit score or above o Loan Repayment Term ranges from 20-25 years o Fully amortized loan with no balloon payment o Prepayment penalties – range from 1-4% over the initial term period o Interest Rate – Prime (4.25%) plus a risk premium typically 1.75% = 6% o Closing Cost – Typically 3% of loan amount added to the amount financed at closing Timing to close - 90 days. Varies with bank work load, time for real estate appraisal & borrower responsiveness. Since it takes time to close the SBA 7(a) loan, advanced planning and attention to detail is required. There are many benefits of using the SBA 7(a) program to finance your business. There is only one monthly debt payment which is amortized over the longest repayment term available with no significant prepayment penalty. The use of funds is nearly unlimited to any legitimate business purpose. Since the SBA 7(a) loan is backed by the federal government, it offers the lowest APR available. Consequently, it is our recommendation that you strongly consider this form of financing for the wide variety of uses that this flexible loan product offers for business financing. Paul Bosley is a Managing Member of Business Finance Depot. www.businessfinancedepot.com

Franchising USA

H AVE YOU R SAY

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The Ultimate Professional Franchise Opportunity

www.interfacefinancial.com/franchise

Franchising Franchising USA USA

August 2017 Veterans in Franchising usa 5#10 3  

Veterans in Franchising is a monthly publication produced by Franchising USA which is also a monthly consumer publication bringing you all t...

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