What security can I use to secure funding for a franchise?
answered by Brain DuckettChairman of The Franchising Centre
Brian Duckett writes:
The most common asset used for security for a small business loan is property, including residential, commercial and rural land, although in some instances a lender may accept other balance sheet assets to secure a loan, including your cars and equipment.
In the end, it usually boils down to your home, assuming there is sufficient equity in it once any existing mortgage is taken into account, or perhaps the home of another family member or friend, depending on your circumstances. Possibly, commodities such as gold, silver or even antique furniture or paintings can be used, but not personal pension funds.
Whatever asset you use to secure your business loan, you can still sell it if you need to during the loan term, provided you obtain consent from the lender and offer another form of security to take its place.
Deciding whether or not to provide personal security for a business loan is a big decision, but then so is going into business in the first place. It’s also a sign of confidence and commitment. If you’re not prepared to back your own business plan, why should anyone else?
Brian Duckett is chairman of The Franchising Centre, part of the world’s largest network of specialist franchise consultants.
Want to be your own boss? Start today!
Relooking is a beauty franchise, offering a variety of skin care and anti-aging treatments... find out more£18,000 Minimum Investment
Sweets and Treats Vending is a confectionery distribution franchise company... find out more£9,950 Minimum Investment
SuperGreen Solutions is an advisor, supplier, and installer of energy-efficient solutions to… find out more£178,000 Minimum Investment
Enquire now from
You have pending
Here's just five reasons why you should join our FREE newsletter!
New articles added every week
Hand picked franchise opportunities just for you
First class help and advice for franchising and business
We have the industries best contributors on board
Inspiring and insightful franchise case studies